Quarterly Report • Nov 13, 2013
Quarterly Report
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Quartalsbericht 1 2013 / 2014 Interim Report 1 2013 / 2014
Verantwortlich . Erneuerbar . Raffiniert . Biologisch . Innovativ . Optimiert Responsible . Renewable . Refined . Biological . Innovative . Optimized
| Profitability | Q1 2013/2014 |
Q1 2012/2013 |
Q2 2012/2013 |
Q3 2012/2013 |
Q4 2012/2013 |
2012/2013 |
|---|---|---|---|---|---|---|
| Sales | 211.9 | 191.4 | 172.5 | 170.1 | 171.2 | 705.2 |
| EBITDA 1) | 10.2 | 2.5 | 4.5 | – 7.8 | 4.4 | 3.6 |
| EBIT 1) | 4.7 | – 3.3 | – 0.9 | – 13.6 | – 2.2 | – 20.0 |
| EBIT-margin (%) | 2.2 | – 1.7 | – 0.5 | – 8.0 | – 1.3 | – 2.8 |
| EBT 1) | 3.8 | – 4.2 | – 1.9 | – 14.7 | – 3.4 | – 24.2 |
| period result 1) | 4.1 | – 6.5 | – 2.3 | – 32.2 | – 12.2 | – 53.2 |
| earnings per share (EUR) | 0.06 | – 0.10 | – 0.04 | – 2.10 | – 0.18 | – 2.42 |
| Operating data | Q1 2013/2014 |
Q1 2012/2013 |
Q2 2012/2013 |
Q3 2012/2013 |
Q4 2012/2013 |
2012/2013 |
| Productions (tons) | 153,134 | 116,542 | 140,943 | 119,434 | 115,869 | 492,788 |
| Utilization Biodiesel/ Bioethanol (%) 2) |
85.1 | 66.8 | 80.8 | 68.5 | 66.4 | 70.7 |
| Investments in property, plant and equipment |
1.6 | 10.5 | 10.1 | 10.5 | 5.1 | 36.2 |
| Number of employees 3) | 645 | 875 | 842 | 780 | 762 | 762 |
| Net asset position | 09/30/2013 | 09/30/2012 | 12/31/2012 | 03/31/2013 | 06/30/2013 | 06/30/2013 |
| Net financial assets | – 74.1 | – 100.0 | – 102.0 | – 107.6 | – 94.3 | – 94.3 |
| Equity | 183.0 | 327.6 | 325.4 | 189.8 | 178.3 | 178.3 |
| Equity ratio (%) | 46.9 | 45.2 | 48.9 | 35.8 | 43.4 | 43.4 |
| Balanca sheet total | 390.5 | 725.2 | 666.1 | 530.4 | 410.4 | 410.4 |
| Financial position | Q1 2013/2014 |
Q1 2012/2013 |
Q2 2012/2013 |
Q3 2012/2013 |
Q4 2012/2013 |
2012/2013 |
| Operating cash flow | 11.0 | – 134.1 | 14.4 | 38.2 | 62.0 | – 19.5 |
| Operating cash flow per share (EUR) |
0.17 | – 2.13 | 0.23 | 0.61 | 0.98 | – 0.31 |
Cash and cash equivalents 30.7 40.3 28.9 18.5 17.7 17.7
1) excluding impairment write-downs and expenses from the disposal of customer relationships
2) in relation to the production capacity
3) at cutoff date
| Biodiesel | Q1 2013/2014 |
Q1 2012/2013 |
Q2 2012/2013 |
Q3 2012/2013 |
Q4 2012/2013 |
2012/2013 |
|---|---|---|---|---|---|---|
| Third party sales | 124.4 | 132.8 | 102.6 | 94.5 | 91.8 | 421.7 |
| EBITDA 1) | 5.9 | – 2.3 | 4.9 | – 0.9 | – 0.1 | 1.6 |
| EBIT 1) | 4.6 | – 3.9 | 3.3 | – 2.6 | – 1.3 | – 4.5 |
| Production (tons) | 103,364 | 80,258 | 93,129 | 79,640 | 73,840 | 326,867 |
| Utilization (%) 2) | 91.9 | 75.1 | 87.1 | 74.5 | 69.1 | 76.5 |
| Number of employees 3) | 102 | 102 | 98 | 98 | 98 | 98 |
| Bioethanol (inkl. Biomethan) |
Q1 2013/2014 |
Q1 2012/2013 |
Q2 2012/2013 |
Q3 2012/2013 |
Q4 2012/2013 |
2012/2013 |
|---|---|---|---|---|---|---|
| Third party sales | 80.4 | 52.3 | 68.8 | 72.6 | 64.6 | 258.3 |
| EBITDA 1) | 5.4 | 4.6 | 1.1 | – 6.8 | 2.6 | 1.5 |
| EBIT 1) | 1.6 | 0.9 | – 2.6 | – 10.6 | – 1.8 | – 14.1 |
| Production (tons) | 49,770 | 36,284 | 47,814 | 39,794 | 42,029 | 165,921 |
| Utilization (%) 2) | 73.7 | 53.8 | 70.8 | 59.0 | 62.3 | 61.5 |
| Number of employees 3) | 177 | 186 | 190 | 184 | 178 | 178 |
| Other | Q1 2013/2014 |
Q1 2012/2013 |
Q2 2012/2013 |
Q3 2012/2013 |
Q4 2012/2013 |
2012/2013 |
|---|---|---|---|---|---|---|
| Third party sales | 8.5 | 8.8 | 3.6 | 6.2 | 14.9 | 33.5 |
| EBIT | – 1.5 | – 0.3 | – 1.6 | – 0.4 | 0.9 | – 1.4 |
1) excluding impairment write-downs and expenses from the disposal of customer relationships
2) in relation to the production capacity 4) at cutoff date
Biofuels play an important role in climate protection. They help us to become less dependent on fossil fuels and also to reduce CO2 -emissions in the transport sector. We lead by example in that we run our own fleet of trucks on biodiesel and that we have established the largest test fleet for the use of biomethane in trucks in Germany.
for the period July 1 to September 30, 2013
For the years 2013 and 2014, the total biofuel quota to be met by the mineral oil industry in Germany amounts to 6.25 percent. (energetic) and according to the existing legal regulation, will be replaced beginning January 1, 2015 by furnishing proof of the decarburization values to be achieved.
Since January 1, 2011, biofuels can only be taken into account in the biofuel quota, respectively can give claim as a pure fuel to the energy tax relief, if these are produced in accordance with the regulations of the Biofuel Sustainability Regulation (Biokraft-NachV) and are put on the market.
The mandatory target of reaching a blending quota of 10 percent (energetic) renewable energy by 2020 in the transportation sector, respectively the greenhouse gas reduction targets in the amount of at least 6 percent, in the year 2020 compared to 2010 continue to be in force.
Also, the change in the Biofuel Sustainability Regulation that was decided by the Federal Cabinet, effective January 1, 2011, whereby biofuels which are produced by certain raw materials or waste products can be doubly credited to the biofuel quota, has remained unchanged. Effective January 1, 2013, the control mechanism for double-credited biofuels, especially biodiesel sourced from waste cooking oil, were massively tightened through an amendment to the 36th ordinance on the implementation of the Federal Immission Control Act (BImSchV), in order to put a stop to fraudulent practices.
Since January 1, 2013 energy tax for pure biodiesel (B100) is at 45.0 cents/liter. With this, it represents almost the tax on fossil diesel.
Remaining tax-free are fuels whose bioethanol portion is above 70 percent, and biomethane. As the law stands at present, the fuel E85 (gasoline with an ethanol portion of 85 percent) and biomethane are exempted from the energy tax until the year 2015.
As additional fuels, natural gas and liquefied petroleum gas are tax-privileged. Until 2018, a reduced tax rate of 1.39 cent/kWh or 18.03 cent/kg applies to these fuels.
In the first eight months of calendar year 2013, the market for the blending of biodiesel to diesel fuel significantly decreased by 12.7 percent in comparison to the same period of the previous year.
The import volume of subsidized biodiesel from Argentina and Indonesia has decreased significantly, according to industry information. The sanctions imposed by the EU Commission (anti-dumping duties) are having their effect. The amounts of biodiesel from used cooking oil, which is able to be doubly offset against the fulfillment of the biofuel quota (UCOME – Used Cooking Oil Methyl Ester), have also declined, due to the stricter provisions of the 36th BlmSchV (Regulation implementing the German Federal Immission Protection Ordinance), which first entered into force on January 1, 2013.
These developments, which in themselves improve the market environment, are marred by the aforementioned meager blending.
Based on the figures from the German Federal Office of Economics and Export Control (BAFA), sales of diesel and gasoline in the months of January to August 2013 were at 34.7 million tons, a slight decline of 0.3 percent compared with the same period of the previous year, a fact which is attributed to the decline of petrol (– 1.7 percent).
The market for B100, pure biodiesel fuel, has once again slumped dramatically and, with a consumption amount from January to August 2013 amounting to 0.02 million tons, can be described as no longer existing. The decrease compared to the same period of the previous year is nearly 69 percent.
The amount of consumed ethanol decreased by 5.3 percent compared to the same period of the previous year for both the blending amount as well as the amount of the blending component ETBE. This means a sharper decline than for gasoline, due to the reduced blending and the continuing low market share of E10 on the gasoline market. In the first eight months of 2013, the average market share of E10 was 15 percent, almost unchanged from the corresponding prior-year period. This proves that consumer acceptance of E10 fuel has apparently not increased further.
Fuel grade E85 (gasoline with 85 percent ethanol) has continued to lose market significance. The consumption of E85 in the period of January to August 2013 was 10 thousand tons, a decline of 34 percent compared to the previous year.
The importance of biomethane as a biofuel, however, is continuing to increase steadily in Germany. This trend is reinforced by the vehicles which have recently entered the market from the volume segment of vehicles run by CNG as a standard. It is estimated that in Germany, a total of 20 percent of the natural gas at gas stations has been replaced by biomethane. VERBIO, as the largest provider of biomethane (verbiogas), with a market share of about 70 percent, has – as at October 2013 – supplied 136 of the 166 natural gas stations that offer pure, 100-percent biomethane.
The prices for cereals, oilseeds and feedstuffs consolidated in terms of good harvests worldwide and an accompanying balanced supply and demand situation at a comparatively low level in the first quarter of 2013/2014. The future price development depends on the growth conditions of the coming harvests in Australia and South America. The table below shows the average price development of selected commodities in international markets.
The price of wheat rose slightly in late September 2013. This is due to a slowdown in harvest pressure in connection with speculation about a potentially lower Argentine wheat crop and weather-related delays of the harvest in the Black Sea region. The future price development and the supply situation are significantly influenced by the climatic conditions in the world's main wheat growing regions and the resulting crop yields.
The price decrease of rapeseed reflects the good worldwide harvest and the lower demand for rapeseed oil for biodiesel production at the time of harvesting in Europe, since rapeseed oil has been and will continue to be increasingly substituted by palm oil products. The good demand for rapeseed meal, the price approximation of palm and rapeseed oil prices and the concomitant slight increase in demand for rapeseed oil have stabilized the rapeseed price at a low level. Starting from a stable market for rapeseed meal, the future price development of rapeseed will mainly be influenced by the demand on the part of biodiesel producers for rapeseed oil, along with the price development of substitutes, such as soybean and palm oil.
The price of sugar fell again on average in the first quarter of fiscal year 2013/2014 significantly below the level of the previous quarter. The main reasons for this are good crops and a consequent good to very good supply situation.
| Movement of selected raw materials Average price |
Q 1 2012/2013 |
Q 2 2012/2013 |
Q 3 2012/2013 |
Q4 2012/2013 |
2012/2013 | Q 1 2013/2014 |
|---|---|---|---|---|---|---|
| Crude oil (Brent; USD/barrel) | 110 | 111 | 114 | 103 | 110 | 112 |
| Mineral diesel (EUR/ton) | 782 | 761 | 737 | 682 | 741 | 716 |
| Rapseed oil (EUR/ton) | 989 | 923 | 906 | 868 | 922 | 752 |
| Palm oil (EUR/ton) | 792 | 623 | 639 | 650 | 676 | 636 |
| Wheat (MATIF; EUR/ton) | 259 | 264 | 245 | 221 | 247 | 189 |
| Sugar (EUR/ton) | 370 | 334 | 308 | 289 | 325 | 278 |
As of March 31, 2013 the Management Board with the approval of the Supervisory Board made the decision to sell Märka GmbH. Contrary to the original intention to sell Märka GmbH entirely, the sale of individual storage locations of Märka GmbH was assumed as of June 30, 2013. Due to the decision to terminate the trading activities of Märka GmbH, the results of Märka GmbH are presented as discontinued operations in the statement of comprehensive income. Income and expenses are shown separately and all comparative periods are correspondingly adjusted. The explanations regarding the development of revenues and the result relate first of all to the continuing operations.
The amount of biodiesel and bioethanol produced by VERBIO in the first three months of
fiscal year 2013/2014 amounted to 153,134 tons, following 116,542 tons in the same period of the previous year, a significant increase of 31 percent.
Due to the increased production and sales volume of biodiesel and bioethanol, revenues have increased significantly (EUR 211.9 million; Q1 2012/2013: EUR 191.4 million), up 11 percent over the previous year's value. Reference is also made to the analysis of the individual segments.
Other operating income amounted to EUR 3.5 million (Q1 2012/2013: EUR 4.2 million). The decrease is primarily due to the income in the previous year from insurance settlements and the sale of emission rights.
The cost of materials amounted to EUR 192.7 million (Q1 2012/2013: EUR 183.2 million), EUR 9.5 million higher than the prior-year figure. Taking into account the changes in inventories of unfinished and finished goods, a gross margin of EUR 18.2 million (Q1 2012/2013: EUR 15.7 million) results. The increase of the gross margin is primarily due to the increased production and sales volumes.
Personnel expenses for the reporting period amounted to EUR 5.6 million in the first three months of fiscal year 2013/2014 (Q1 2012/2013: EUR 6.2 million). The decrease is primarily due to savings from the consistent implementation of the cost reduction program and the other associated lower average number of employees.
Other operating expenses in the reporting period amounted to EUR 6.7 million (Q1 2012/2013: EUR 7.0 million) and show a slight decrease when compared to the same period of the previous year. They are mainly comprised of expenses for necessary repairs, shipping costs, vehicle costs, as well as expenses for insurance and contributions.
Due to the higher gross margin, reduced staff costs and other operating expenses, as well as the positive earnings from commodity futures contracts amounting to EUR 0.7 million (Q1 2012/2013: EUR –4.4 million), earnings before interest, taxes, depreciation and amortization (EBITDA) totaled EUR 10.2 million (Q1 2012/2013: EUR 2.5 million), an increase of EUR 7.7 million over the comparable period.
Considering the pending write offs, the Group operating result (EBIT) amounted to EUR 4.7 million, significantly higher than that of the comparable period (Q1 2012/2013: EUR – 3.3 million).
The financial result of EUR –0.9 million (Q1 2012/2013: EUR –0.9 million) consists of interest income of EUR 0.1 million (Q1 2012/2013: EUR 0.0 million) and interest expenses of EUR –1.0 million (Q1 2012/2013: EUR – 1.0 million).
Consolidated earnings before taxes (EBT) for continuing operations amounted to EUR 3.8 million (Q1 2012/2013: EUR –4.2 million); the net profit is reported at 3.6 million (Q1 2012/2013: EUR –4.3 million). This results in earnings per share (un/diluted) of EUR 0.06 (Q1 2012/2013: EUR – 0.07).
For the discontinued operations, the Group statement of comprehensive income after tax earnings shows a result of EUR 0.2 million: (Q1 2012/13: EUR – 2.2 million). For further explanations, please see the comments concerning the individual segments.
Compared to June 30, 2013, the balance sheet total decreased by EUR 19.9 million to EUR 390.5 million (June 30, 2013: EUR 410.4 million). The asset and financial position of VERBIO is suitable to fund future operations, subject to the condition of the prolongation of the syndicated loan agreement in its planned scope by December 31, 2013 at the latest, as well as reaching the objectives provided for in the corporate planning and in consideration of the strategic realignment.
The development of the asset side of the balance sheet is particularly characterized by the reduction of current assets. Long-term asset value has reduced substantially, due to the scheduled depreciation in fixed assets from EUR 197.1 million to EUR 192.9 million. The decrease in current assets by a total of EUR 15.7 million is mainly due to a decrease in trade accounts receivable by EUR 5.1 million and in assets held for sale by EUR 21.9 million from the disposal of these attributable assets.
In contrast, the level of cash and cash equivalents increased by EUR 12.9 million. Due to the positive operating cash flow development and the resulting application of funds, the level of liquid means amounted to EUR 30.7 million on September 30, 2013, including cash and cash equivalents with drawing restrictions.
On the liabilities side of the balance sheet, there is, first of all, the equity of EUR 182.6 million, which represents approximately 46.8 percent (June 30, 2013: 43.4 percent) of total assets. Compared with June 30, 2013, the fixed debt of EUR 43.9 million increased to EUR 45.7 million, while the current debt of EUR 188.2 million decreased to EUR 162.2 million. The development of current debt is primarily due to the reduction of bank loans and other loans (September 30, 2013: EUR 96.3 million; June 30, 2013: EUR 113.2 million) as well as provisions (September 30, 2013: EUR 1.6 million; June 30, 2013: EUR 13.4 million). The bank loans and other loans decreased due to repayments of secured credit transactions and current loans due on June 30, 2013. The development regarding provisions is particularly due to the use of provisions for anticipated losses formed on June 30, 2013, as well as the reclassification of provisions into current and fixed financial liabilities.
The operating cash flow for the reporting period was EUR 11.0 million (Q1 2012/2013: EUR –134.1 million). Based on the positive result for the period, the positive cash flow was mainly due to the decrease in trade accounts receivable (Q1 2013/2014: EUR 5.2 million; Q1 2012/2013: EUR 1.9 million), as well as the other assets (Q1 2013/2014: EUR 4.6 million; Q1 2012/2013: EUR 4 million). In contrast thereto is the decrease in provisions of EUR 12.0 million (Q1 2012/2013: EUR 0.1 million).
Caused mainly by cash inflows from the disposal of assets held for sale, total cash inflows of EUR 18.5 million (Q1 2012/2013: cash outflow of EUR 10.1 million) have been registered for the reporting period 2013/2014. The proceeds from the disposal of tangible assets in the amount of EUR 21.1 million (Q1 2012/2013: EUR 0.3 million) are opposed to payments for investments in tangible assets for the first three months of fiscal year 2013/2014 in the amount of EUR 2.5 million (Q1 2012/2013: EUR 11.0 million).
The cash flow from financing activities amounted to EUR 16.6 million (Q1 2012/2013: EUR 144.3 million). This was influenced by means of payment surpluses from secured loans (Q1 2013/2014: EUR 8.1 million; Q1 2012/2013 surplus payments: EUR 101.3 million) as well as the repayment of financial liabilities (Q1 2013/2014: EUR 8.4 million; Q1 2012/2013: EUR 1.5 million) and the taking on of financial liabilities (Q1 2013/2014: EUR 0 million; Q1 2012/2013: EUR 44.4 million).
Against this background, the cash funds increased by EUR 12.9 million in the period from July 1 to September 30, 2013. Cash and cash equivalents amounted to EUR 30.7 million as of September 30, 2013. For the assessment of the financial position, it should be consider that cash and cash equivalents totaling EUR 24.6 million are limited as to their availability.
As of September 30, 2013, VERBIO had 645 employees in total (09/30/2012: 876 employees), thereof 247 salaried employees (09/30/2012: 352 salaried employees), 374 nonsalaried employees (09/30/2012: 486 non-salaried employees) and 24 trainees (09/30/2012: 38 trainees).
In the first three months of 2013/2014 financial year investments in the amount of EUR 1.6 million were made (Q1 2012/2013: EUR 10.5 million) in property, plant and equipment. With EUR 1.0 million these investments primarily relate to the optimization and expansion of the existing biomethane plants in Schwedt/Oder and Zörbig.
VERBIO has a biodiesel production capacity of 450,000 tons/p.a. In the first quarter, the plants were operating at 91.9 percent capacity (Q1 2012/2013: 71.3 percent), and the production amounted to 103,364 tons (Q1 2012/2013: 80,258 tons) of biodiesel.
Sales of biodiesel in the domestic and foreign blending market were higher than in the corresponding period of the previous year. This is due to the decline in imports of subsidized soy and palm-based biodiesel from Argentina and Indonesia in the German market, the above-mentioned situation concerning the declining UCOME volumes as well as the resulting drop in margin pressure.
In particular, the capacity utilization of the biodiesel plants was able to be greatly enhanced because of increased exports. The export quota for biodiesel increased in the reporting period to around 62 percent, while it was around 22 percent in the same period of the previous year.
In the reporting period 2013/2014, sales revenues of EUR 124.4 million (Q1 2012/2013: EUR 132.8 million) were achieved in the biodiesel segment. The reduction in revenue in spite of higher sales volumes resulted from lower selling prices as well as the decrease in commercial transactions.
The cost of materials amounted to EUR 112.9 million and was thus, in relation to the development in revenues, below the cost of materials for the corresponding period of the previous year (Q1 2012/2013: EUR 127.7 million). Taking into account the changes in inventories, the gross margin increased overall, due to the increased volume and the lower margin pressure, from EUR 7.6 million to EUR 9.5 million.
The personnel costs were nearly unchanged at EUR 1.6 million (Q1 2012/2013: EUR 1.7 million).
Other operating expenses were incurred in the amount of EUR 3.3 million: (Q1 2012/2013: EUR 3.0 million).
The segment operating income was EUR 4.6 million (Q1 2012/2013: EUR –3.9 million). In the first three months of 2013/2014, EUR 0.3 million (Q1 2012/2013: EUR 0.2 million) were invested in fixed assets.
On the reference date of September 30, 2013, 102 staff members were employed in the biodiesel segment (September 30, 2012: 102 employees).
In all, VERBIO has a bioethanol production capacity of 270,000 tons/p.a. With a production of 49,770 tons of bioethanol in the first three months of 2013/2014, the amount produced was significantly higher than that of the corresponding period of the previous year (Q1 2012/2013: 36,284 tons). Due to lower grain prices, the capacity utilization of the ethanol plants were able to be increased in the first three months of fiscal year 2013/2014 to 73.7 percent (Q1 2012/2013: 53.8 percent). In addition, commercial transactions with ethanol were conducted. This resulted in revenues of EUR 80.4 million for the reporting period 2013/2014, which were significantly higher than those of the previous corresponding period (Q1 2012/2013: EUR 52.3 million).
The cost of materials amounted to EUR 73.6 million (Q1 2012/2013: EUR 51.9 million), whereby, taking into account the inventory changes for the segment, a gross margin in the amount of EUR 7.8 million resulted, as compared to EUR 5.3 million in the prior-year period.
Other operating income in this segment in the reporting period amounted to EUR 2.8 million (Q1 2012/2013: EUR 2.7 million), and personnel expenses of EUR 2.4 million (Q1 2012/2013: EUR 2.5 million) were reported. Other operating expenses in the reporting period 2013/2014 were EUR 3.0 million (Q1 2012/2013: EUR 3.5 million).
The segment operating profit in the reporting period 2013/2014 amounted to EUR 1.6 million, after EUR 0.9 million in the corresponding period of the previous year, whereby the segment results for the previous year were influenced by a positive result of commodity futures transactions in the amount of EUR 2.4 million. In the first three months of fiscal year 2013/2014, a total of EUR 1.3 million (Q1 2012/2013: EUR 9.5 million) was invested in this segment. Essentially, this involved investment in the improvement and expansion of the bio-methane plants at the Zörbig and Schwedt/Oder sites in the amount of EUR 1.0 million (Q1 2012/2013: EUR 7.8 million).
On the reference date of September 30, 2013, 177 staff members were employed in the bioethanol segment (September 30, 2012: 186 employees)
In the first three months of 2013/2014, sales of the discontinued operation amounted to EUR 65.1 million (2012/2013 Q1: EUR 80.0 million), whereby these revenues include those from the continuing operations. Revenues of EUR 32.5 million were generated from trade in grain, oilseeds and fertilizers with third parties outside the Group (Q1 2012/2013: EUR 31.6 million). In addition, accounting gains from the disposal of assets held for sale amounting to EUR 2.7 million are included in the income from the discontinued operation.
In contrast, there were total expenses of EUR 35.6 million (Q1 2012/2013: EUR 33.5). In addition, there was a financial result of EUR –0.7 million (Q1 2012/2013: EUR – 0.9 million).
As of September 30, 2013, 93 staff members were employed in the discontinued operation (September 30, 2012: 245 employees).
In the months July 2013 till September 2013 revenues were generated in the "Other" segment, especially from transport and logistics services, in the amount of EUR 8.5 million (Q1 2012/2013: EUR 8.8 million). The segment result amounted to EUR 1.5 million (Q1 2012/2013: EUR 0,3 million).
In the reporting period no changes in the risk and opportunity profile of the VERBIO Group as presented in the detailed risk and opportunity report contained in the Group Management Report for the 2012/2013 financial year occurred.
On October 17, 2012, the EU Commission of the European Parliament and the European Council submitted a draft of an amendment to the "Renewable Energy Directive" and the "Fuel Quality Directive". In charge with respect to the new proposal of the Commission is the environmental committee of the Parliament (ENVI).
On September 11, 2013, the European Parliament adopted the draft of the environmental committee in the first reading. According to this, the use of first- generation biofuels is to be limited to 6.0 percent and for alternative fuels, so-called "advanced fuels" (biofuels that are produced from non-foodstuffs, for example, waste, algae, straw and sewage sludge) a subquota of 2.5 percent is to be put into place. In addition, a credit of iLUC factors is to be mandatory beginning in 2020.
In this way, the Commission wants to improve the climate balance through the production of biofuels in the future, limit the use of first-generation biofuels and create greater incentives for the use of second-generation biofuels.
Both the European Council and the European Parliament have to approve the changes to the directive. In the event that there is no uniform resolution, i. e. no approval of the Council's proposal, the matter will have to be settled in the Joint Committee. In the case that the Joint Committee needs to be involved, the passing of a resolution in the Parliament is be expected at the earliest in May 2014, after the election of the European Parliament.
The amendment proposals of the EU Commission to especially promote biofuels of the second generation in the future are in line with the corporate strategy of VERBIO to increasingly produce biofuels in the future from raw materials which do not compete with foodstuffs. With its proposal, the Commission is creating the long overdue requirement to bring biofuels of the second generation into the market in the future. The fact is that second-generation biofuels from non-foodstuffs are already available, but due to the wrong legal provisions there is only a lesser incentive to actually utilize these. But the fact is also that the biofuel goals of the EU are not reachable without the use of first-generation biofuels, since second-generation biofuels are not available for the foreseeable future to an adequate extent. For this reason, VERBIO anticipates that these biofuels will retain a significant market share, and it will engage itself in supporting this.
The proposal of the Commission strengthens the sustainable European agriculture through the fulfillment of the CO2 reduction goals in the transport area, since large volumes of unused agricultural waste, such as grain straw, corn straw and dung can only be made available in local supply chains.
In the past months, VERBIO has, and will continue in the future to engage itself actively at the national and European level directly and via industry associations in the discussion regarding the European energy and climate protection policy. The main concern is to further develop the European biofuel strategy responsibly and reliably and to reduce CO2 emissions.
From the perspective of VERBIO, the market for second-generation biofuels offers the greatest growth potential. VERBIO is currently the largest producer of biomethane in Europe, supplying the market with large quantities of biomethane as a second-generation biofuel.
As far as the development of the individual markets goes, we assume that the primary sales market for biodiesel will continue to be the blending market. Due to the elimination of tax advantages, the pure biodiesel market (B100) no longer has any significance.
The provisional punitive duties imposed by the EU Commission for biodiesel from Argentina and Indonesia in May 2013, are showing positive effects. In October of this year, the European Commission presented a proposal for a definitive anti-dumping duty. The antidumping duties on biodiesel from Argentina are to be raised to 215-250 EUR/ton. For Indonesia, the Commission is providing for 120-180 EUR/ton. That would be a significant increase over the provisional anti-dumping duties which have been in force since May. The final decision on this matter is expected to be made in November 2013. The anti-subsidy proceedings brought by the EU against Argentina and Indonesia, however, have been discontinued.
Another positive development relates to the containment of imports of waste-cooking-oil-sourced biodiesel from questionable sources from the entire world, which is credited twice to the fulfillment of the biofuel quota. This is due to the tightening of the requirement to provide information according to the revision of the 36th Ordinance on the implementation of the Federal Immission Control Act (BImSchV).
With regard to the possible non-eligibility of the biodiesel volumes sold in 2013 from Argentina and Indonesia for the fulfillment of the quota obligation, this is currently being examined by the German Federal Ministry of Finance. The related risk and the reduced volumes of waste cooking oil biodiesel are leading to higher demand and increasing prices for biofuel quota.
Bioethanol is also primarily a product for the blending market, whereby the acceptance of consumers in Germany to fill with E10 has less not or not at all increased. Both the demand and the sales of bioethanol are stable
The demand for biomethane is stable with an increasing tendency. In this connection, the use of biomethane instead of natural gas, especially for public transportation, has increased, and the filling station network has strongly improved.
According to the German Biofuels Industry Association, the available biofuel production capacity in Germany is very well utilized through the year end.
As of January 1, 2015, the so-called decarbonization strategy, which only aims for a maximum CO2 reduction for the fulfillment of quotas – without taking into account the resource base – is expected to be implemented in Germany.
How the implementation is to take place is currently being discussed and many details are still unclear. What is clear is that this approach contradicts the concerns of the European Commission to promote biofuels depending on their resource base. In this respect, it remains to be seen whether the German government will continue to adhere to its approach.
The further expansion of the biomethane plants in Schwedt and Zörbig will be resumed as soon as concrete political guidelines and stable financing conditions exist.
The abandonment of the previous strategy of regional raw material procurement consequen-tially required the discontinuance of the trading activities of Märka and the reorganization of VERBIOs purchasing department. Up to November 6, 2013, a total of 21 of the 42 own locations of Märka were successfully sold. Various purchasers have expressed interest in the remaining locations. The negotiations were actively continued after the harvest and are ongoing. It is planned to have the sales activities substantially completed by the middle of 2014.
In order to ensure a secure and efficient supply of raw material for the bioethanol plants in the future, the operations of Märka Polska have been integrated directly into VERBIO AG.
The syndicated loan agreement existing until June 30, 2013 had been extended to December 31, 2013. Until the expiry of the syndicated loan agreement on December 31, 2013, the Management Board assumes that there shall be sufficient funding. For the current and the following financial year, the continuation of the operations also requires, in addition to meeting to the liquidity planning, that the required financing continues to be available in the planned volume. The extent of the required financing is set out in the planning prepared by the Management Board for the financial years 2013/2014 and 2014/2015, and due to the strategic measures carried out it is significantly below the financing needs of the past financial years.
The positive business development in the first quarter of 2013/2014 and the current backlog of orders have caused the Board to adjust its earnings forecast for financial year 2013/ 2014. For fiscal year 2013/2014, VERBIO expects revenue in the range from EUR 600 million to EUR 700 million, EBITDA in the amount of EUR 25.0 million (increased from approximately EUR 17.0 million previously) and a largely balanced operating result (EBIT, previously: EUR –5.0 million). The amount of revenue is highly dependent on the prices of raw materials and biofuels in the markets and the extent of individually concluded transactions involving fossil and biogenic fuels. In addition, the operating profit in the current financial year will be affected by liabilities from the still ongoing trading activities and pending sale of Märka warehouse locations.
| KEUR | Q1 2013/2014 | Q1 2012/2013 | |
|---|---|---|---|
| Continuing operations | |||
| 1. | Revenue (including energy taxes collected) | 214,595 | 222,871 |
| less: energy taxes | – 2,727 | – 31,475 | |
| Revenue | 211,868 | 191,396 | |
| 2. | Change in unfinished and finished goods | – 1,000 | 7,456 |
| 3. | Capitalised production of own plant and equipment | 116 | 327 |
| 4. | Other operating income | 3,518 | 4,181 |
| 5. | Cost of materials | ||
| a) Raw materials, consumables and supplies | – 180,646 | – 170,745 | |
| b) Purchased services | – 12,073 | – 12,454 | |
| 6. | Personnel expenses | – 5,564 | – 6,228 |
| 7. | Depreciation and amortisation | – 5,516 | – 5,833 |
| 8. | Other operating expenses | – 6,733 | – 6,981 |
| 9. | Result from commodity forward contracts | 681 | – 4,432 |
| 10. | Operating result | 4,651 | – 3,313 |
| 11. | Interest income | 102 | 91 |
| 12. | Interest expense | – 988 | – 983 |
| 13. | Financial result | – 886 | – 892 |
| 14. | Result before tax | 3,765 | – 4,205 |
| 15. | Income tax expense | – 188 | – 81 |
| 16. | Result from continuing operations | 3,577 | – 4,286 |
| Discontinued operations | |||
| Result after tax of the discontinued operations | 177 | – 2,216 | |
| 17. | Net result for the period | 3,754 | – 6,502 |
| Result attributable to shareholders of the parent company | 3,699 | – 6,465 | |
| Result attributable to non-controlling interests | 55 | – 37 | |
| Income and expenses recognized directly in equity | |||
| Items, to be reclassified either as profit or loss: | |||
| Translation of foreign operations | 18 | 31 | |
| Fair value remeasurement on cash flow hedges | 771 | – 2,040 | |
| Deferred taxes recognized in equity | – 223 | 633 | |
| 18. | Income and expenses recognized directly in equity | 566 | – 1,376 |
| 19. | Comprehensive result | 4,320 | – 7,878 |
| Comprehensive result attributable to shareholders of the parent company | 4,265 | – 7,846 | |
| Comprehensive result attributable to non-controlling interests | 55 | – 32 | |
| Result per share (basic and diluted) | 0.06 | – 0.10 | |
| Result per share (basic and diluted) from continuing operations | 0.06 | – 0.07 |
at September 30, 2013
| KEUR | 09/30/2013 | 06/30/2013 | |
|---|---|---|---|
| Assets | |||
| A. | Noncurrent assets | ||
| I. | Other intangible assets | 259 | 282 |
| II. | Property, plant and equipment | 192,488 | 196,652 |
| III. | Financial assets | 52 | 54 |
| IV. | Deferred tax assets | 76 | 92 |
| Total noncurrent assets | 192,875 | 197,080 | |
| B. | Current assets | ||
| I. | Inventories | 62,998 | 64,071 |
| II. | Trade receivables | 60,936 | 66,194 |
| III. | Derivatives | 552 | 1,157 |
| IV. | Other short-term financial assets | 8,719 | 5,021 |
| V. | Tax refunds | 6,687 | 6,298 |
| VI. | Other assets | 10,414 | 14,292 |
| VII. | Cash and cash equivalents | 30,659 | 17,711 |
| VIII. | Noncurrent assets held for sale | 16,686 | 38,589 |
| Total current assets | 197,651 | 213,333 |
Total assets 390,526 410,413
| KEUR | 09/30/2013 | 06/30/2013 | ||
|---|---|---|---|---|
| Liabilities and equity | ||||
| A. | Equity | |||
| I. | Share capital | 63,000 | 63,000 | |
| II. | Additional paid-in capital | 487,680 | 487,680 | |
| III. | Fair value reserve | – 1,183 | – 1,731 | |
| IV. | Retained earnings | – 367,597 | – 371,296 | |
| V. | Reserve for translation differences | – 37 | – 55 | |
| Total equity, excluding non-controlling interests | 181,863 | 177,598 | ||
| VI. | Non-controlling interests | 765 | 710 | |
| Total equity | 182,628 | 178,308 | ||
| B. | Noncurrent liabilities | |||
| I. | Bank loans and other loans | 30,950 | 31,114 | |
| II. | Provisions | 150 | 150 | |
| III. | Deferred investment grants and subsidies | 11,123 | 11,566 | |
| IV. | Other noncurrent liabilities | 3,429 | 1,099 | |
| Total noncurrent liabilities | 45,652 | 43,929 | ||
| C. Current liabilities | ||||
| I. | Bank loans and other loans | 96,344 | 113,188 | |
| II. | Trade payables | 42,194 | 39,554 | |
| III. | Derivatives | 2,135 | 2,753 | |
| IV. | Other current financial liabilities | 5,262 | 2,985 | |
| V. | Tax liabilities | 8,221 | 8,015 | |
| VI. | Provisions | 1,577 | 13,440 | |
| VII. | Deferred investment grants and subsidies | 1,513 | 1,510 | |
| VIII. | Other current liabilities | 5,000 | 6,731 | |
| Total current liabilities | 162,246 | 188,176 | ||
| Total equity and liabilities | 390,526 | 410,413 |
for the period July 1 to September 30, 2013
| TEUR | Q1 2013/2014 | Q1 2012/2013 |
|---|---|---|
| Net result for the period from continuing operations | 3,577 | – 4,286 |
| Net result for the period from discontinued operations | 177 | – 2,216 |
| Net result for the period | 3,754 | – 6,502 |
| Income taxes expense (prior-year period: income) | 215 | – 169 |
| Interest result | 1,630 | 1,756 |
| Depreciation and amortization | 5,518 | 6,551 |
| Non-cash losses from impairment write-downs | 0 | 259 |
| Non-cash expense | 413 | 0 |
| Non-cash income | – 12 | – 16 |
| Gains on disposal of property, plant and equipment and disposal of invest ment grants |
– 4,088 | 30 |
| Release of deferred investment grants and subsidies | – 403 | – 610 |
| Non-cash changes in derivative fiancial instruments | 1,600 | – 18,927 |
| Decrease in inventories | 231 | – 139,819 |
| Decrease in trade receivables | 5,154 | 1,923 |
| Decrease in other assets and other current financial assets | 4,643 | 4,000 |
| Decrease in provisions | – 12,000 | – 130 |
| Decrease in trade payables | 3,516 | 11,891 |
| Increase in other current financial and non-financial liabilities | 2,897 | 7,822 |
| Interest paid | – 2,244 | – 1,937 |
| Interest received | 346 | 237 |
| Income taxes paid (prior-year period: received) | – 144 | – 469 |
| Cash flows from operating activities | 11,026 | – 134,110 |
| Proceeds from time deposits | 0 | 493 |
| Acquisition of intangible assets | – 23 | – 84 |
| Acquisition of property, plant and equimpment | – 2,519 | – 10,980 |
| Proceeds from disposal of property, plant and equipment | 21,061 | 288 |
| Proceeds from disposal of noncurrent financial assets | 3 | 135 |
| Cash flows from investing activities | 18,522 | – 10,148 |
| TEUR | Q1 2013/2014 | Q1 2012/2013 |
|---|---|---|
| Payments on secured loans | – 33,835 | – 10,344 |
| Proceeds from secured loans | 25,674 | 111,644 |
| Payments for the redemption of financial liabilities | – 8,447 | – 1,459 |
| Proceeds from the asssumption of financial liabilites | 0 | 44,438 |
| Cash flows from financing activities | – 16,608 | 144,279 |
| Cash-effective change in cash funds | 12,940 | 21 |
| Change in cash funds due to effects of exchange rates | 8 | 32 |
| Cash funds at beginning of year | 17,711 | 38,691 |
| Cash funds at end of year | 30,659 | 38,744 |
| Cash funds at year end comprise the following: | ||
| Restricted cash and cash equivalents | 24,610 | 4,200 |
| Cash and cash equivalents | 6,049 | 34,544 |
| Cash funds at end of year | 30,659 | 38,744 |
| Supplemental information: | ||
| Time deposits | 0 | 1,562 |
for the period July 1 to September 30, 2013
| KEUR | Share capital | paid-in capital Additional |
Fair value reserve | Retained earnings | Reserve for translation adjustments |
Total equity excluding non-controlling inter ests |
Non-controlling interests |
equity Total |
|---|---|---|---|---|---|---|---|---|
| July 1, 2013 | 63,000 | 487,680 | – 14 | – 218,783 | – 53 | 331,830 | 3,660 | 335,490 |
| Translation adjustments | 0 | 0 | 0 | 0 | 26 | 26 | 5 | 31 |
| Fair Value changes on cash flow hedges (after tax) |
0 | 0 | – 1,407 | 0 | 0 | – 1,407 | 0 | – 1,407 |
| Income and expenses recognized directly in equity |
0 | 0 | – 1,407 | 0 | 26 | – 1,381 | 5 | – 1,376 |
| Net result for the period | 0 | 0 | 0 | – 6,465 | 0 | – 6,465 | – 37 | – 6,502 |
| Comprehensive result for the period |
0 | 0 | – 1,407 | – 6,465 | 26 | – 7,846 | – 32 | – 7,878 |
| June 30, 2012 | 63,000 | 487,680 | – 1,421 | – 225,248 | – 27 | 323,984 | 3,628 | 327,612 |
| July 1, 2013 | 63,000 | 487,680 | – 1,731 | – 371,296 | – 55 | 177,598 | 710 | 178,308 |
| Translation adjustments | 18 | 18 | 0 | 18 | ||||
| Fair Value changes on cash flow hedges (after tax) |
0 | 0 | 548 | 0 | 0 | 0 | 0 | 548 |
| Income and expenses recognized directly in equity |
0 | 0 | 548 | 0 | 18 | 566 | 0 | 566 |
| Net result for the period | 3,699 | 0 | 3,699 | 55 | 3,754 | |||
| Comprehensive result for the period |
0 | 0 | 548 | 3,699 | 18 | 4,265 | 55 | 5,320 |
| September 30, 2013 | 63,000 | 487,680 | – 1,183 | – 367,597 | – 37 | 181,863 | 765 | 182,628 |
The interim reports of VERBIO Vereinigte BioEnergie AG and also the consolidated financial statements as of June 30, 2013, were prepared in accordance with the requirements of the International Financial Reporting Standards (IFRS) as published by the International Accounting Standards Board (IASB) and adopted by the EU. The rules contained in IAS 34 "Interim Financial Reporting" were applied accordingly. All of the interim financial statements of the companies included within the consolidated financial statements of VERBIO AG were prepared in accordance with standard accounting principles.
These condensed interim financial statements do not include all information relevant for the consolidated financial statements and is therefore to be read in conjunction with the consolidated financial statements as of June 30, 2013.
The consolidated interim financial statements are presented in euros (EUR). To the extent not otherwise stated, all amounts are given in thousand euros (KEUR). Discrepancies may occur in the presentation of the figures as a result of rounding.
The consolidated financial statements have been prepared under the assumption of a going concern.
The syndicated loan agreement existing until June 30, 2013 was extended to December 31, 2013. The Management Board assumes that adequate funding will be available up to the maturity of the syndicated loan agreement on December 31, 2013. For the current and the following financial year, the continuation of the operations also requires, in addition to meeting to the liquidity planning, that the required financing continues to be available in the planned volume. The extent of the required financing is set out in the planning prepared by the Management Board for the financial years 2013/2014 and 2014/2015, and due to the strategic measures carried out it is significantly below the financing needs of the past financial years.
As of March 31, 2013, the Management Board with the approval of the Supervisory Board made the decision to sell shares in Märka GmbH, which represents the trading segment of the VERBIO Group. The sale should be finalized within one year. Contrary to the original plan for an entire sale of Märka GmbH, as of June 30, 2013 a sale of the warehouse locations of Märka GmbH is anticipated. Consequently, as of June 30, 2013, the noncurrent assets of Märka GmbH at these locations have been classified as held for sale and have been combined into a disposal group. This also applies as of September 30, 2013, insofar the respective warehouse locations have actually not been sold.
At the same time, due to the intended termination of the trading activities with the sale of the warehouse locations of Märka GmbH, these operations have been classified as a discontinued operation in the consolidated statement of comprehensive income.
There were no changes in the entities included in the consolidation as of June 30, 2013. Incidentally the consolidation methods as well as the principles for foreign currency translation remain unchanged to those applied for the consolidated financial statements as of June 30, 2013.
Given that the interim financial reports are based on the consolidated financial statements, reference is made to the detailed description of the accounting and consolidation policies contained in the notes to the consolidated financial statements as of June 30, 2013. The accounting and consolidation policies applied are essentially commensurate with those applied in the previous year. The following applies in addition to the accounting and valuation methods described in the notes to the consolidated financial statements as of June 30, 2013:
There were no new and revised standards and interpretations to be applied with effectiveness from July 1 2013 initially with the exception of the amended IAS 19 "Employee Benefits" and "Improvements to IFRS, 2009 – 2011 Cycle". The abovementioned modifications had no material impact.
During the reporting period other operating income amounted to KEUR 3,518 (Q1 2012/2013: KEUR 4,181). In the amount of EUR 1,217 million (Q1 2012/2013: KEUR 0) this item comprises income from disposals of property, plant and equipment, resulting from the sale of warehouse locations from the group of noncurrent assets held for sale. In addition, other operating income contains mainly reimbursements for electricity and mineral oil tax (KEUR 609; Q1 2012/2013: KEUR 545) and income from the release of investment grants (KEUR 403; Q1 2012/2013: KEUR 525). In the previous year's period other operating income was additionally affected by income from the trade with emission rights (KEUR 950) as well as from insurance recoveries (KEUR 630).
The cost of materials can largely be attributed to the procurement of raw materials, consumables and supplies for ongoing production activities and purchased goods. Reference is hereby made to the statements contained in the section entitled "Segment reporting".
For the reporting period other operating expense are shown in the amount of KEUR 6,733 (Q1 2012/2013: KEUR 6,981). The main items under this position are expenses for repair and maintenance (KEUR 1,605; Q1 2012/2013: KEUR 1,365), outgoing freight (KEUR 1,419; Q1 2012/2013: KEUR 1,380), motor vehicle costs (KEUR 613; Q1 2012/2013: KEUR 806) as well as insurances and contributions (KEUR 554; Q1 2012/2013: KEUR 652).
The result from the valuation and closing of positions of forward contracts which do not qualify for hedge accounting, the result from commodity futures using fair value hedge accounting and the ineffective portion of forward contracts that are used for hedge accounting (cash flow hedges) amount in total to KEUR 681 (Q1 2012/2013: KEUR – 4,432).
In addition, included in the discontinued operation is a result from commodity future transactions in the amount of KEUR 194 (Q1 2012/2013: KEUR – 2,351).
Further, as of the balance sheet date the fair-value reserve of the continued operations increased (Q1 2012/2013: decreased) by KEUR 548 (Q1 2012/2013: KEUR –2,034) without profit or loss effect from the valuation of forward commodity transactions, as the result of qualifying as cashflow hedge.
Income tax expense for the period July 1, 2013 to September 30, 2013 in the amount of KEUR 188 (Q1 2012/2013: KEUR 81) comprises current tax expense of KEUR 418 (Q1 2012/2013: KEUR 3) and deferred tax income of KEUR 230 (Q1 2012/2013: deferred tax expense KEUR 78).
The net result from the discontinued operation is presented follows:
| KEUR | Q1 2013/2014 | Q1 2012/2013 |
|---|---|---|
| Income | 36,556 | 31,910 |
| Expense | – 35,606 | – 33,513 |
| Operating result | 950 | – 1,603 |
| Financial result | – 744 | – 863 |
| Result before taxes | 206 | – 2,466 |
| Income taxes | – 29 | 250 |
| Net result from the discontinued operation | 177 | – 2,216 |
The net cash flow of the disposal group or the discontinued operation is composed as follows:
| KEUR | Q1 2013/2014 | Q1 2012/2013 |
|---|---|---|
| Operating activities | 8,013 | – 115,314 |
| Investing activities | 17,341 | – 210 |
| Financing activities | – 8,544 | 144,986 |
| Net cash flow from discontinued operation | 16,810 | 29,462 |
Earnings per share were calculated in accordance with IAS 33. For the calculation of the earnings per share the earnings for the period attributable to shareholders of the parent company were divided by the weighted average number of shares outstanding. VERBIO AG has 63,000,000 no-par shares with a nominal value of EUR 1.00, which have in average been in circulation during the reporting period. There is no dilutive effect. The Group result for the first quarter 2013/2014 relating to the shareholders of the parent company amounts to KEUR 3,699 (Q1 2012/2013: –6,465). The result per share (basic and dilutive) from continuing operations amounts to EUR 0.06 (Q1 2012/2013: –0.07).
| Q1 2013/2014 | Q1 2012/2013 | |
|---|---|---|
| Issued shares on July 1 | 63,000,000 | 63,000,000 |
| Number of average shares outstanding as of September 30 | 63,000,000 | 63,000,000 |
| Result for the period in KEUR | 3,577 | – 4,286 |
| Result per share in EUR | 0.06 | – 0.07 |
The calculation of the result per share for the discontinued operation was based on the above stated number of average shares. The result for the period of the discontinued operation attributable to shareholders of the parent company for the calculation of the result per share was KEUR 177 (Q1 2012/2013: –2,216). Therefore the basic and the dilutive earnings per share from discontinued operation amounts to EUR 0.00 (Q1 2012/2013: EUR –0.03).
The value of property, plant and equipment fell taking into account scheduled depreciations (KEUR 5,516), disposals of fixed assets (KEUR 293), investments in fixed assets (KEUR 1,642) and effects from currency conversions (KEUR 3).
| KEUR | 09/30/2013 | 06/30/2013 |
|---|---|---|
| Raw materials, consumables and supplies | 12,804 | 6,953 |
| Work in process and finished products | 15,689 | 16,689 |
| Merchandise | 34,505 | 40,429 |
| Inventories | 62,998 | 64,071 |
Finished products comprise stocks of biofuel quotas which have already been generated but not yet sold by VERBIO in the amount of KEUR 6,232 (06/30/2013: KEUR 7,241).
The examination of inventories with respect to recoverability resulted in allowances in total of KEUR 4,520 (06/30/2013: KEUR 2,189) to write down inventories to the lower market or net realizable value. Thereof KEUR 4,221 were related to value adjustments for inventories assigned to the disposal group. The allowances for raw materials, consumables and supplies as well as merchandise are shown in the statement of comprehensive income under the position "Cost of materials" (KEUR 4,520; 06/30/2013: KEUR 2,189) and for finished goods under the position "Change in inventories" (KEUR 0; 06/30/2013: KEUR 0). Merchandise assigned to the disposal group with carrying amounts of KEUR 17,605 (06/30/2013: KEUR 23,660) were pledged as security.
Trade receivables at the balance sheet date amounted to KEUR 60,936 (06/30/2013: 66,194) and are disclosed net of valuation allowances of KEUR 1,801(06/30/2013: KEUR 2,025). All trade receivables have a remaining term of up to one year. Of these, KEUR 14,554 relate to receivables which have been sold to a special purpose entity in connection with an ABS program, whereby the analysis of the risk-benefit balance revealed that there is no need for a write off but an assessment analogous to a refinancing of a loan.
Tax refund receivables of KEUR 6,687 (06/30/2013: KEUR 6,298) concern construction withholding tax, corporate tax and trade tax.
Other current financial assets comprise the following:
| KEUR | 09/30/2013 | 06/30/2013 |
|---|---|---|
| Deferral of unrealized results on forward contracts | 4,838 | 0 |
| Security deposits resulting from security agreements and liability declarations | 3,295 | 3,327 |
| Claims for damages | 166 | 166 |
| Insurance recoveries | 18 | 28 |
| Loan receivables | 12 | 24 |
| Deferral of realized gains on forward contracts | 0 | 851 |
| Miscellaneous other assets | 390 | 625 |
| Other financial assets | 8,719 | 5,021 |
Other non-financial assets comprise the following:
| KEUR | 09/30/2013 | 06/30/2013 |
|---|---|---|
| Investment subsidies | 5,851 | 5,890 |
| Reimbursement of electricity and energy tax | 2,141 | 2,311 |
| Value-added tax receivable | 910 | 1,381 |
| Deffered expenses | 828 | 4,272 |
| Miscellaneous other assets | 684 | 438 |
| Other financial assets | 10,414 | 14,292 |
Forward contracts (futures and options) have been entered into with a view to hedging the supply of raw materials for the production of biodiesel, raw material and merchandise inventories of rapeseed and wheat, and fixed obligations arising in connection with purchases of rapeseed and wheat against fluctuations in value. As of September 30, 2013, the positive market value of these derivatives amounted to KEUR 552 (06/30/2013: KEUR 1,157), and the negative market value KEUR 570 (06/30/2013: KEUR 889). With regards to the effects on the consolidated statement of comprehensive income, reference is made to the notes relating to the results from forward contracts.
Interest rate swap transactions have been entered into with a view to hedging variable interest payment obligation. The market value of the interest rate hedging transactions is recorded under derivatives. To the extent that no hedging relationships have been designated, any changes in value are recorded in the financial result. As of the balance sheet date, the negative market value of these interest rate hedging transactions amounted to KEUR 919 (06/30/2013: KEUR 1,075); whereby derivatives with a negative market value in the amount of EUR 183 are assignable to the disposal group. The negative market value of the hedged interest rate swaps amounted to KEUR 646 (06/30/2013: KEUR 778) and was recorded directly in equity.
The derivatives which have been evaluated at their fair value have been allocated to the following fair value hierarchical levels:
In the period July 1, 2013 to September 30, 2013 as well as in the respective comparable previous year's period no reclassifications from one fair value hierarchical level to the other were carried out.
This item includes unrestricted cash and cash equivalents in the amount of KEUR 6,049 (06/30/2013: KEUR 13,761) plus restricted cash in the amount of KEUR 24,610 (06/30/2012: KEUR 3,950).
As of March 31, 2013, the decision was made to sell the shares in Märka GmbH, which represents the trading segment of the VERBIO Group. As of June 30, 2013 and September 30, 2013, the Group assumes a sale of the warehouse locations of Märka GmbH. For this reason, in the balance sheet item "Assets held for sale", primarily the capital assets of Märka are included, since such an intention to sell exists and which were not sold since June 30, 2013. In connection with the classification as "held for sale", the carrying amounts of the locations are compared to their fair value less costs to sell. In the first quarter 2013/2014 no changes in value were recognized for the locations not yet sold; the carrying amount as of September 31, 2013 was at KEUR 16,686. For the warehouse locations sold until September 30, 2013 proceeds in the amount of KEUR 25,890 were recognized, with a corresponding book value decrease in the amount of KEUR 21,903. Corresponding book profits are included in the result from discontinued operation.
The fair value reserves comprise the effective portion of the cumulated changes in the valuation of commodity forward contracts classified as cash flow hedges and also interest rate swaps. During the reporting period, KEUR 423 were reallocated from equity to cost of materials (amount increasing cost of materials; Q1 2012/2013: KEUR 514 increasing cost of materials) and KEUR 77 to interest expense (amount increasing interest expense; Q1 2012/2013: KEUR 139) in the context of cash flow hedge accounting. The change of fair values of the cash flow hedges therefore amounts to KEUR 221. At the balance sheet date deferred taxes are reflected in the amount of KEUR 234 (06/30/2013: KEUR 457).
| KEUR | Investment subsidies | Investment grants | Total |
|---|---|---|---|
| June 30, 2013 | 12,029 | 1,047 | 13,076 |
| Additions | 0 | 0 | 0 |
| Release in current period | – 371 | – 32 | – 403 |
| Disposal | – 37 | 0 | – 37 |
| September 30, 2013 | 11,621 | 1,015 | 12,636 |
| Thereof current | 1,387 | 126 | |
| Thereof noncurrent | 10,234 | 889 |
We refer to the detailed explanations in the consolidated notes for the 2012/2013 financial year.
Tax liabilities comprise trade tax obligations in the amount of KEUR 1,294 (06/30/2013: KEUR 1,321) state-, council and federal tax of Switzerland in the amount of KEUR 157 (06/30/2013: KEUR 157), corporate tax amounting to KEUR 852 (06/30/2013: EUR 619) and, unchanged to June 30, 2013, construction withholding tax in the amount of KEUR 5,918.
Total provisions comprise the following:
| KEUR | 09/30/2013 | 06/30/2013 |
|---|---|---|
| Litigation risks | 212 | 5,250 |
| Impending losses on sales transactions | 1,147 | 7,516 |
| Other provisions | 218 | 674 |
| Total provisions | 1,577 | 13,440 |
With regards to the provision related to the judgment of May 22, 2013 (KEUR 5,007) of VERBIO Diesel Bitterfeld GmbH & Co. KG (VDB) reported in the financial statements as of June 30, 2013 a reclassification of the amount payable to the other financial liabilities (KEUR 4,063) was carried out. The amount payable within one year is KEUR 1,896, long term debt is at KEUR 2,167.
| KEUR | 09/30/2013 | 06/30/2013 |
|---|---|---|
| Energy tax | 2,307 | 1,185 |
| Value added tax | 1,282 | 4,255 |
| Advance payments received on orders | 997 | 927 |
| Miscellaneous other current liabilities | 414 | 364 |
| Total other current liabilities | 5,000 | 6,731 |
The risks and returns of the Group are significantly determined by the business segments. The VERBIO Group is accordingly segmented in line with the internal organizational and management structure into the business segments Biodiesel, Bioethanol and Other. The Other segment, as a collective segment, contains the business area of transport and logistics, the area of energy and the non-allocated portions of the holding charge-outs. Due to its classification as discontinued operation, the segment Märka Trading presented in the comparative period is no longer included in the segment reporting for the current period.
A segmentation on a geographical basis was not made, since such a segmentation is not utilized by the VERBIO.
Revenues in the following are net of energy taxes in the amount of KEUR 2,727 (Q1 2012/2013: KEUR 31,475). The segments Biodiesel and Bioethanol generate revenues from the sale of goods. In the Other segment revenues are generated through the rendering of services. For the segment reporting as well as for transactions between the reportable segments, the same accounting principles are applied as those applied in the consolidated financial statements.
| KEUR | Biodiesel | Bioethanol | Other | Intersegment reveneus and expenses |
Group |
|---|---|---|---|---|---|
| Q1 2013/2014 | Q1 2013/2014 | Q1 2013/2014 | Q1 2013/2014 | Q1 2013/2014 | |
| Sales revenues | 124,417 | 80,408 | 8,506 | – 1,463 | 211,868 |
| Change in finished and unfin ished products |
– 1,970 | 969 | 1 | 0 | – 1,000 |
| Capitalized production of own plant and equipment |
60 | 56 | 0 | 0 | 116 |
| Other operating income | 499 | 2,847 | 227 | – 55 | 3,518 |
| Cost of materials | – 112,910 | – 73,565 | – 7,014 | 770 | – 192,719 |
| Personnel expenses | – 1,572 | – 2,358 | – 1,634 | 0 | – 5,564 |
| Depreciation and amortization | – 1,268 | – 3,821 | – 427 | 0 | – 5,516 |
| Other operating expenses | – 3,334 | – 2,979 | – 1,168 | 748 | – 6,733 |
| Result of forward contract transactions |
681 | 0 | 0 | 0 | 681 |
| Segment result | 4,603 | 1,557 | – 1,509 | 0 | 4,651 |
| Financial result | – 187 | – 665 | – 34 | 0 | – 886 |
| Result before taxes | 4,416 | 892 | – 1,543 | 0 | 3,765 |
| KEUR | Biodiesel | Bioethanol | Other | Intersegment reveneus and expenses |
Group |
|---|---|---|---|---|---|
| Q1 2012/2013 | Q1 2012/2013 | Q1 2012/2013 | Q1 2012/2013 | Q1 2012/2013 | |
| Sales revenues | 132,789 | 52,326 | 8,790 | – 2,509 | 191,396 |
| Change in finished and unfinished products |
2,545 | 4,911 | 0 | 0 | 7,456 |
| Capitalized production of own plant and equipment |
49 | 278 | 0 | 0 | 327 |
| Other operating income | 1,404 | 2,692 | 394 | – 309 | 4,181 |
| Cost of materials | – 127,699 | – 51,908 | – 5,521 | 1,929 | – 183,199 |
| Personnel expenses | – 1,659 | – 2,524 | – 2,045 | 0 | – 6,228 |
| Depreciation and amortization | – 1,637 | – 3,708 | – 488 | 0 | – 5,833 |
| Other operating expenses | – 2,996 | – 3,509 | – 1,365 | 889 | – 6,981 |
| Result of forward contract transactions |
– 6,708 | 2,370 | – 94 | 0 | – 4,432 |
| Segment result | – 3,912 | 928 | -329 | 0 | – 3,313 |
| Financial result | – 310 | – 605 | 23 | 0 | – 892 |
| Result before taxes | – 4,222 | 323 | – 306 | 0 | – 4,205 |
| KEUR | 09/30/2013 | 06/30/2013 |
|---|---|---|
| Biodiesel | 96,762 | 93,876 |
| Bioethanol | 199,158 | 201,573 |
| Other | 70,604 | 68,828 |
| Group | 366,524 | 364,277 |
Effective July 31, 2007, a security deposit insurance contract was entered into between VERBIO and Euler Hermes Kreditversicherungs-AG, Hamburg. As a result, a secured credit line of KEUR 15,000 was arranged for VERBIO which pertains to customs guarantees. The secured credit line can be utilized by the subsidiaries VDB, VDS, VES, and VEZ. To secure the claims of Euler Hermes Kreditversicherungs-AG, Hamburg, VERBIO has made a security deposit of KEUR 3,000. The secured credit line has been utilized as of September 30, 2013 in the amount of KEUR 14,833.
Effective March 27, 2008, VERBIO, VDB, VDS, VES, and VEZ entered into an agreement with Atradius Kreditversicherung, Cologne over the validity of ownership retention rights and the form of their extension. Therein, the parties agreed that the companies will transfer current and future receivables – after processing or compounding/ mixing – in the amount of the respective invoice amounts provided to Atradius by the respective insured entities (suppliers) from the further sale.
Regarding litigations please refer to the information in the consolidated notes for the financial year 2012/2013.
Additional financial commitments of KEUR 11,984 exist from various long-term leasing contracts. Allotted to the following year are KEUR 2,498, KEUR 2,271 are allotted to the next one to five years and KEUR 7,215 for a period exceeding five years.
For further information please refer to the explanations in the consolidated notes for the financial.
As at September 30, 2013 there is an open purchase obligation for investments amounting KEUR 1,533 (06/30/2013: KEUR 1,043).
For further information please refer to the explanations of related party disclosures in the consolidated notes for the 2012/2013 financial year.
There were no significant events subsequent to the end of the reporting period.
The interim financial statements and interim management report on hand were not subject to any form of audit or review by an auditor.
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Alexander von Witzleben Chairman of the Supervisory Board
President, Feintool International Holding AG, Lyss, Switzerland
Other Supervisory Board mandates:
Mandates in comparable controlling bodies:
• Kaefer Isoliertechnik GmbH & Co. KG, Bremen
Member of the Supervisory Board Deputy Chairman of the Supervisory Board
Managing director,
Dr.-Ing. Georg Pollert Member of the Supervisory Board
Chemist and process engineer, Berlin
Deputy Chariman of Arbeitsgemeinschaft Qualitätsmanagement Biodiesel e.V
Claus Sauter
Chairman of the Management Board & CEO
Responsible for strategic corporate development, business development, sales and trading, puchasing (liquid primary products), IT, finance and accounting, taxes, controlling and risk management, press and publicity, investor relations and law
COO Bioethanol/Biomethane Deputy Chairman of the Management Board
Responsible for the Bioethanol/Biomethane segment (production, technical investment planning, research and development, procurement of auxiliary materials and media) and data privacy
COO Biodiesel and Plant Engineering
Responsible for the Biodiesel segment (production, technical investment planning, research and development, procurement of auxiliary materials and media), plant engineering, quality management and workplace safety
COO HR, Procurement and Logistics
Responsible for HR, procurement of solid raw materials, logistics and transport, storage, contract management, fleet and property management and insurances
| November 7, 2013 | Publication of the quaterly financial report up to September 30, 2013 |
|---|---|
| January 24, 2014 | Annual General Meeting, Radisson Blu Hotel, Leipzig |
| February 6, 2014 | Publication of the quaterly financial report up to December 31, 2013 |
| May 8, 2014 | Publication of the quaterly financial report up to March 31, 2014 |
| September 24, 2014 | Publication of consolidated financial statements 2012/2013 Analysts' conference/press conference on financial statements in Frankfurt am Main |
Publisher VERBIO Vereinigte BioEnergie AG Augustusplatz 9 04109 Leipzig Telefon: +49 341 308530-0 Telefax: +49 341 308530-999 www.verbio.de
Anna-Maria Schneider, CIRO Telefon: +49 341 308530-251 Telefax: +49 341 308530-998 E-Mail: [email protected] [email protected]
VERBIO Vereinigte BioEnergie AG, Leipzig
This Annual Report contains statements that relate to the future and are based on assumptions and estimates made by the management of VERBIO Vereinigte BioEnergie AG. Even if the management is of the opinion that these assumptions and estimates are appropriate the actual development and the actual future results may vary from these assumptions and estimates as a result of a variety of factors. These factors include, for example, changes to the overall economic environment, the statutory and regulatory conditions in Germany and the EU and changes in the industry. VERBIO Vereinigte BioEnergie AG makes no guarantee and accepts no liability for future development and the actual results achieved in the future matching the assumptions and estimates stated in this Annual Report. It is neither the intention of VERBIO Vereinigte BioEnergie AG nor does VERBIO Vereinigte BioEnergie AG accept a special obligation to update statements related to the future in order to align them with events or developments that take place after this report is published. The Annual Report is available in German; if there are variances the German version has priority over the English translation. It is available for download in both languages at http://www.verbio.de.
We will be delighted to send you additional copies and further information material on VERBIO Vereinigte BioEnergie AG free of charge on request. Phone: +49 341 308530-251 Fax: +49 341 308530-999 Email: [email protected]
VERBIO Vereinigte BioEnergie AG . Augustusplatz 9 . 04109 Leipzig www.verbio.de
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