- Further Growth of the main KPIs:
- Revenues: €1,830.6 million (+10.7%)
- EBITDA: €100.3 million (+11.3% vs. H1 2017 proforma)
- Backlog at €6.9 billion
- Order intake of €2.2 billion YTD, of which €1.5 billion in the first semester
Milan, 26 July 2018 – Today Maire Tecnimont S.p.A.’s Board of Directors has reviewed and approved the 2018 Half Year Report, which reports a Net Income of €59.9 million.
CONSOLIDATED HIGHLIGHTS
(in Euro millions) | H1 2018 | H1 2017* | Change % |
---|---|---|---|
Revenues | 1,830.6 | 1,653.1 | 10.7% |
Business Profit (1) | 138.1 | 131.7 | 4.8% |
Business Margin | 7.5% | 8.0% | |
EBITDA | 100.3 | 90.1(2) | 11.3% |
EBITDA Margin | 5.5% | 5.5% | |
Pre-Tax Income | 88.4 | 72.6 (3) | 21.6% |
Tax Rate | 32.2% | 35.2% | |
Consolidated Net Income | 59.9 | 47.1(3) | 27.1% |
* In order to facilitate the comparison with H1 2018, H1 2017 figures have been adjusted
according to notes 2 and 3
(1) “Business Profit” is the industrial margin before the allocation of general and administrative costs and research and development expenses.
(2) Pro-forma, calculated retroactively applying the IFRS 15 accounting principles to 2017, which implies a €6.1 million negative effect on the EBITDA.
(3) Pro-forma, calculated both retroactively applying the IFRS 15 accounting principles to 2017 (which implies a €6.1 million negative effect on the EBITDA), both excluding a positive one-off impact of €22.1 million related to derivatives related to the convertible bond.
(in Euro millions) | 30.6.2018 | 31.12.2017 | Change |
---|---|---|---|
Net Cash | 81.0** | 108.0 | (27.0) |
** Net of €21.6 million of Non-Recourse Project Financing Debt related to project for the construction and
management in concession of the Alba/Bra hospital (Infrastructure BU)
ORDER INTAKE AND BACKLOG
(in Euro millions) | H1 2018 | H1 2017 | Change |
---|---|---|---|
Order Intake | 1,536.7 | 3,977.3 | (2,440.6) |
(in Euro millions) | 30.6.2018 | 31.12.2017 | Change |
---|---|---|---|
Backlog | 6,904.2 | 7,229.4 | (325.2) |
FINANCIAL HIGHLIGHTS BY BUSINESS UNIT
(in Euro millions) | H1 2018 | % on Revenues | H1 2017 | % on Revenues |
---|---|---|---|---|
Technology, Engineering & Construction | ||||
Revenues | 1,743.2 | 1,592.0 | ||
Business Profit | 134.6 | 7.7% | 123,2 | 7.7% |
EBITDA | 99.7 | 5.7% | 89.9(2) | 5.6% |
Infrastructure & Civil Engineering | ||||
Revenues | 87.4 | 61.1 | ||
Business Profit | 3.5 | 4.0% | 2.4 | 3.9% |
EBITDA | 0.5 | 0.6% | 0.2 | 0.3% |
(2) Pro-forma, calculated retroactively applying the IFRS 15 accounting principles to 2017, which implies a €6.1 million negative effect on the EBITDA
ORDER INTAKE BY BUSINESS UNIT
(in Euro millions) | H1 2018 | H1 2017 | Change |
Technology, Engineering & Construction | 1,491.9 | 3,966.0 | (2,474.1) |
Infrastructure & Civil Engineering | 44.7 | 11.3 | 33.4 |
BACKLOG BY BUSINESS UNIT
(in Euro millions) | 31.6.2018 | 31.12.2017 | Change | |
Technology, Engineering & Construction | 6,569.5 | 6,864.3 | (294.8) | |
Infrastructure & Civil Engineering | 334.7 | 365.1 | (30.4) | |
The changes reported refer to H1 2018 versus H1 2017, unless otherwise stated.
Consolidated Financial Results as at 30 June 2018
Maire Tecnimont Group Revenues were €1,830.6 million, up 10.7%. This increase is related to the progress of projects in the backlog, mainly EPCs, that are in their construction phase.
Business Profit was €138.1 million, up 4.8%. The Business Margin was 7.5% versus 8.0%. The change in marginality is related to the progress of the projects in the Technology, Engineering & Construction BU, reflecting a different mix of projects under execution as at 30 June 2018, compared to the same period last year, but in line with the last quarters.
G&A costs were €35.5 million, up approx. €2.8 million as non-recurring savings were recorded in H1 2018. These costs’ incidence over revenues has nevertheless decreased from 2.0% to 1.9%, in line with the last few quarters.
EBITDA was €100.3 million, up 11.3% vs. the 2017 pro-forma number. The margin was 5.5%, unchanged.
Amortization, Depreciation, Write-downs and Provisions were €4.3 million, slightlyup €0.7 million, due to the amortization of new assets related to the Group’s activity.
EBIT was €96.0 million, up 10.9% vs. the 2017 pro-forma number.
Net Financial Charges were €7.6 million, up €6.3 million vs. a 2017 pro-forma number of €13.9 million. The H1 2018 number includes a negative net component of €1.8 million related to the time value of the FX derivatives.
Pre-tax Income was €88.4 million, up 21.6% vs. the 2017 pro-forma number. Estimated taxes of €28.5 million have been provisioned. The effective tax rate was approx. 32.2%, improving when compared to last year’s average tax rate, based on the various jurisdictions where operations have been carried out.
Consolidated Net Income was €59.9 million, up 27.1%.
Net Cash (not including the Project Finance Debt mentioned above) at 30 June 2018 was €81.0 million, vs. 31 December 2017 when it was equal to €108.0 million. Such a change is mainly due to the conversion of the convertible bond for €79.6 million, outflows of €24.9 million for the acquisition of Treasury Shares related to the share conversion of the equity-linked bond and for the Group’s Employees Share Ownership Plan, as well as the payment of €42.1 million for the dividend payment related to FY2017. The Net Cash position was also negatively affected by a €25.0 million FX impact related to the projects’ derivative positions.
Consolidated Shareholders’ Equity was €291.9 million, up €8.1 million vs. December 31, 2017, thanks to the income for the period, the capital increase and the reduction of the Treasury Shares reserve following the share conversion of the equity-linked bond. It also takes into account the dividend payment mentioned above, the negative change of the Cash Flow Hedge reserve generated by hedging derivatives, and an approx. €27.8 million negative adjustment due to the implementation of the new IFRS 9 and 15 accounting principles.
Performance by Business Unit
Technology, Engineering & Construction BU
Revenues were €1,743.2 million, up 9.5%, thanks to the progress of the projects in the backlog, EPCs in particular, that became fully operational and in continuity with the last few quarters in 2017. Business Profit was €134.6 million, up 9.3%, leading to a Business Margin of 7.7%, unchanged, due to the same reasons outlined above. EBITDA was €99.7 million (5.7% margin), up 10.9% vs. the 2017 pro-forma number.
Infrastructure & Civil Engineering BU
Revenues were €87.4 million, up 43.0%, due to the progress of the projects in the Backlog, including large-scale renewables. Business Profit was €3.5 million, up €1.1 million. The Business Margin was 4.0%. EBITDA was €0.5 million, up €0.374 million, thanks to a higher contribution of the renewable energy activities.
Order Intake and Backlog
Thanks to €1,536.7 million of new orders generated during the period, the Group’s Backlog at June 30, 2018 was €6,904.2 million, versus December 31, 2017, when it was equal to €7,229.4 million.
In particular, the main projects awarded to the Group include the following:
- The upgrade and revamping of the Heydar Aliyev Refinery based in Baku, Azerbaijan, on behalf of SOCAR (USD800 million)
- The “Delayed Coking Unit (DCU)” project, inside the Omsk refinery, in the Russian Federation, on behalf of JSC Gazprom Neft – Omsk Refinery (USD215 million)
- The implementation of a new High-Density Polyethylene unit and the upgrade of a Polypropylene unit, located in Batangas City, in the Philippines, on behalf of JG Summit Petrochemical Corporation (USD180 million)
Subsequent Events
On July 10, the Buyback program servicing the Second Cycle (2017) of the 2016-2018 Share Ownership Plan dedicated to the Maire Tecnimont Group’s employees has been completed.
On July 13, new projects and additional works relating to existing projects, worth USD 730 million, have been announced. The projects are located in Europe, the Middle-East, South-East Asia, and the Americas.
On July 16, Tecnimont S.p.A. has agreed a new medium/long term loan for a maximum amount of €285 million. The new loan will refinance the residual portion of the existing loan for €175 million, will top up the existing loan for €10 million, and will increase an existing Revolving Facility by €50 million. This refinancing will decrease the interest rate from 1.95% to 1.70%, while extending the maturity by 15 months and rescheduling the repayments.
On July 23, two EPC contracts with Lukoil worth USD527 million were announced. The contracts are related to 5 refinery process units, to be implemented inside the Kstovo refinery, in Central Russia, as part of the oil residue upgrading project. The EP portion of the contracts, worth USD156 million, had already been awarded to our Group and announced in November 2017, and was included in the backlog as of December 31, 2017.
Outlook
The Group expects to manly execute EPC projects in the second half of the year, thanks to the significant existing backlog driven by the new contracts signed with international clients since the beginning of the year, and including those awarded after the end of the semester. Second half revenues are expected to be in line with the first half, with a marginality typical of this kind of contracts.
Cash flows are expected to generate a financial performance in line with the first semester, also considering recent acquisitions of new orders.
In spite of the on-going expansion of both the organizational structure and the geographic diversification, efficiency improvement targets will continue to be maintained, even if such improvements have already led to the lowest G&A-Revenues ratio in the industry.
Even though the market environment is expected to remain challenging, a high level of backlog is to be maintained, thanks to our well-recognized technological expertise, which is continuously being developed and expanded to include adjacent technologies in synergy with the existing ones, and to a flexible business model that can offer innovative products and services, which are able to anticipate the market trends.
This outlook is supported by a significant commercial pipeline that is expected to generate new contracts by the end of this year.
***
The following information is provided upon a request by CONSOB:
Maire Tecnimont Group and Maire Tecnimont S.p.A. Net Financial Position
The Maire Tecnimont Group Net Financial Position is presented below:
NET FINANCIAL POSITION | 30 June 2018 | 31 December 2017 | Change |
(in Euro thousands) | |||
Short-term borrowings | 156,916 | 103,943 | 52,973 |
Other current financial liabilities | 330 | 79,911 | (79,581) |
Financial instruments - Current derivatives | 18,917 | 9,876 | 9,042 |
Financial debt net of current portion | 164,888 | 324,602 | (159,714) |
Financial instruments - Non-current derivatives | 5,030 | 249 | 4,781 |
Other non-current financial liabilities | 202,517 | 39,719 | 162,798 |
Total debt | 548,598 | 558,299 | (9,702) |
Cash and cash equivalents | (582,662) | (630,868) | 48,206 |
Other current financial assets | (5,703) | (5,356) | (347) |
Financial instruments - Current derivatives | (7,578) | (19,976) | 12,398 |
Financial instruments - Non-current derivatives | (2,490) | (1,222) | (1,269) |
Other non-current financial assets | (9,493) | (8,920) | (573) |
Total cash and cash equivalents | (607,926) | (666,341) | 58,415 |
Other financial liabilities of assets for sale | 0 | 0 | 0 |
Other financial assets of assets for sale | 0 | 0 | 0 |
Net financial position (Net Cash) | (59,329) | (108,042) | 48,713 |
Non-recourse Project Financing (Alba-Bra) | (21,647) | 0 | (21,647) |
Adjusted Net financial position (Net Cash) | (80,975) | (108,042) | 27,067 |
The Net Financial Position of the Parent Company Maire Tecnimont S.p.A. is presented below:
NET FINANCIAL POSITION (MET S.p.A.) | 30 June 2018 | 31 December 2017 | Change |
(in Euro thousands) | |||
Short-term borrowings | 965 | 1,964 | (999) |
Financial instruments - Current derivatives | 1.140 | 0 | 1.140 |
Other current liabilities – Equity-Linked Bond | 0 | 79,581 | (79.581) |
Other non-current fin. liabilities – non-convertible bonds | 202.517 | 39,719 | 162.798 |
Other non-current financial liabilities | 170.263 | 332,805 | (162.542) |
Total Debt | 374.885 | 454,069 | (79.184) |
Cash and cash equivalents | (6.797) | (2,124) | (4.673) |
Financial instruments - Current derivatives | 0 | (5,404) | 5.404 |
Other current financial assets | (3.200) | (3,200) | 0 |
Other non-current financial assets | (62.195) | (62,195) | 0 |
Total Cash and Cash Equivalents | (72.192) | (72,923) | 731 |
Net Financial Position | 302.693 | 381,146 | (78.453) |
Related party transactions
With reference to the information on related party transactions, all transactions with related parties are settled at market conditions. The Company’s receivables/payables (including financial) and cost/revenue transactions with related parties at 30 June 2018 are presented in the tables below.
31/3/2018 (in Euro thousands) | Trade Receivables | Trade Payables | Costs | Revenues |
G.L.V. Capital S.p.A. | 0 | (34) | (282) | 0 |
Maire Investments Group | 4 | (103) | (188) | 3 |
Total | 4 | (137) | (470) | 3 |
In particular, payable contracts refer to the lease of office buildings to Group companies, the use of the “Maire” trademark and other minor charges by parent company GLV Capital S.p.A. and to existing relations with Maire Investments Group, a company linked to Maire Tecnimont S.p.A.’s main shareholder for the lease of office buildings and other spaces assigned to La Sapienza University’s research center as a result of a cooperation agreement signed with them. The remaining payable and receivable contracts refer to administrative and facility management services respectively.
Transactions with other non-consolidated and/or associated Group companies are purely commercial and relate to specific activities linked to projects; in addition, certain consortia are in liquidation, having substantially concluded their operations:
31/3/2018 (in Euro thousands) | Trade Receivables | Trade Payables | Financial Receivables | Financial Payables | Costs | Revenues | |||||
MCM Servizi Roma S.c.a.r.l. in liquidazione | 0 | (95) | 0 | 0 | 0 | 0 | |||||
Studio Geotecnico Italiano | 0 | (342) | 0 | 0 | (456) | 0 | |||||
Villaggio Olimpico MOI S.c.a.r.l. In liquidazione | 0 | (4) | 69 | 0 | 0 | 0 | |||||
Desimont Contracting | 1.724 | 0 | 0 | (371) | 0 | 0 | |||||
Biolevano S.r.l | 612 | 0 | 0 | 0 | 0 | 1.573 | |||||
Processi Innovativi S.r.l | 106 | (409) | 0 | 0 | (136) | 48 | |||||
BIO P S.r.l | 7 | (23) | 18 | 0 | (74) | 7 | |||||
TCM KTR LLP | 9 | 0 | 209 | 0 | 0 | 4 | |||||
Exportadora de Ingenieria y Servicios Tcm Spa | 0 | 0 | 0 | (67) | 0 | 0 | |||||
Volgafert LLc | 2.591 | 0 | 0 | 0 | 0 | 866 | |||||
Total | 5.049 | (873) | 296 | (438) | (666) | 2.497 | |||||
***
Webcast Conference Call
The H1 2018 financial results will be outlined today at 5:30pm CEST during an audio-webcast conference call held by the top management.
The conference call may be followed as a webcast by connecting to the website (www.mairetecnimont.com) and clicking on the “H1 2018 Financial Results” banner on the Home Page or through the following url:
http://services.choruscall.eu/links/mairetecnimont180726.html
Alternatively, you may participate in the conference call by calling one of the following numbers:
Italy: +39 02 805-8811
UK: +44 121 281-8003
USA: +1 718 705-8794
The presentation given by the top management will be available at the start of the conference call in the “Investors/Documents&Presentations” section of Maire Tecnimont’s website
(http://www.mairetecnimont.com/en/investors/documents-presentations/annual-interim-reports). The presentation shall also be made available on the 1info storage mechanism (www.1info.it).
***
Dario Michelangeli, as Executive for Financial Reporting, declares - in accordance with paragraph 2, Article 154-bis of Legislative Decree No. 58/1998 (“Consolidated Finance Act”) - that the accounting information included in this press release corresponds to the underlying accounting records.
The 2018 Half Year Report will be available to the public at the registered office in Rome, at the operative office in Milan, at Borsa Italiana S.p.A., on the Company website www.mairetecnimont.com atInvestors/Documents & Presentations section, and on the authorized storage device “1info” (www.1info.it), according to the timing allowed by law.
This press release, and in particular the “Outlook” section contains forecasts. The declarations are based on current estimates and projections of the Group concerning future events and, by their nature, are subject to risk and uncertainty. Actual results may differ significantly than the estimates made in such declarations due to a wide range of factors, including the continued volatility and further decline of the capital and finance markets, raw material price changes, altered economic conditions and growth trends and other changes in business conditions, in addition to other factors, the majority of which outside the control of the Group.
Maire Tecnimont S.p.A.
Maire Tecnimont S.p.A. is a company listed with the Milan stock exchange. It heads an industrial group (the Maire Tecnimont Group) that leads the international Engineering & Construction (E&C), Technology & Licensing and Energy Business Development & Ventures markets, with specific competences in plants, particularly in the hydrocarbons segment (Oil & Gas Refining, Petrochemicals and Fertilizers), as well as in Power Generation and Infrastructures. The Maire Tecnimont Group operates in approximately 40 different countries, numbering around 50 operative companies and a workforce of about 5,500 employees, along with approximately 3,000 additional Electrical & Instrumentation professionals. For more information: www.mairetecnimont.com.
Institutional Relations and Communication Carlo Nicolais, Tommaso Verani public.affairs@mairetecnimont.it Media Relations Alfredo Mele, Alessandro Zambetti Tel +39 02 89011300 mairetecnimont@imagebuilding.it Investor Relations Riccardo Guglielmetti Tel +39 02 6313-7823 |
Download here the Consolidated Income Statement, Balance Sheet and Cash Flow Statement