Quarterly Report • Jun 3, 2009
Quarterly Report
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Interim Report Q1 2009
| Profitability EUR million |
Q 1 2009 | Q 1 2008 |
|---|---|---|
| Sales | 122.0 | 125.1 |
| EBITDA | -9.2 | 3.3 |
| EBIT | -12.0 | 0.7 |
| EBT | -12.5 | -0.3 |
| Result for the period | -13.8 | -1.4 |
| Earnings per share (EUR ) |
-0.23 | -0.02 |
| Production | ||
| Production (tons) | 121,654 | 107,467 |
| Utilization of production capacity (%) | 69.8 | 61.6 |
| Investments in property, plant, and equipment | 1.4 | 2.6 |
| Assets and liabilities | 31.03.2009 | 31.03.2008 |
| Net interest | 8.4 | 5.4 |
| Equity | 311.2 | 304.6 |
| Equity ratio (%) Balance sheet total |
66.7 466.6 |
59.5 511.6 |
| Financial status | ||
| Operating cash flow | -11.5 | 27.0 |
| Operating cash flow per share (EUR ) |
-0.18 | 0.43 |
| Liquid funds | 54.4 | 60.2 |
| Number of employees | 396 | 408 |
| Segments EUR million |
Q 1 2009 | Q 1 2008 |
|---|---|---|
| Biodiesel | ||
| Sales | 83.9 | 92.6 |
| EBIT | -1.6 | 4.3 |
| Production (tons) | 78,866 | 93,907 |
| Utilization of production capacity (%) | 73.8 | 87.9 |
| Number of employees | 101 | 100 |
| Bioethanol | ||
| Sales | 31.2 | 22.7 |
| EBIT | -11.3 | -6.0 |
| Production (tons) | 42,788 | 13,560 |
| Utilization of production capacity (%) | 63.4 | 20.1 |
| Number of employees | 149 | 171 |
| Energy | ||
| Sales | 5.2 | 8.2 |
| EBIT | 1.0 | 2.5 |
| Other | ||
| Sales | 1.7 | 1.6 |
| EBIT | -0.1 | -0.1 |
4
The released CO2 from the combustion of biomass relates to the quantity a plant picked up during its growth. On the other hand renewable biomass absorbs the released quantity of CO2 . Therefore the CO2 circuit is closed. Basically for this reason biomass is a CO2 neutral energy source. According to the origin, cultivation, and production method, CO2 balances could be, however, utmost different. For example output, uses of fertilizers, transportation, and energy input have to be considered for the biofuel production and the respective replacement of fossil energy sources. The scope of the emissions diversifies between, respectively also within the separate energy sources from biomass.
While for example the output of nitrous oxide through fertilizers, as well as the consumption of fossil diesel, for instance plowing with a tractor, strain the CO2 balance, the recycling of by-products, which are incurred and further disposed at the biofuel production (amongst others: coarse colza meal, slop, process heat, and glycerine), which again credit to the CO2 balance.
Source: Renewable Energy Agency
The financial reporting of VERBIO Vereinigte BioEnergie AG (hereinafter also referred as VERBIO AG or VERBIO) is based on International Financial Reporting Standards (IFRS). The interim report is generally regarded as an update to the annual report and should therefore be read in conjunction with the annual report published for the financial year 2008. The previous period figures disclosed in this report were prepared using the same accounting and valuation methods.
On April 23, 2009 the Federal Parliament approved the act to change the funding of biofuels with partially retroactive effect to January 1, 2009. Herein was agreed to lower the madatory share of blending volume of biofuels for 2009 from 6.25 percent (energetic) to 5.25 percent (energetic) and stipulate the blending volume to 6.25 percent from 2010. The adjustment of the energetic quota to its net contribution for greenhouse gas reduction should take place in 2015.
The tax burden of pure biodiesel (B100) should be according to the government act decreased by 3 cents per liter, so that biodiesel which is sold besides the quota will be assessed with 18 cents instead of 21 cents in 2009.
The up to now assured sales data on hand as well as own calculations and projections of market institutes and associations present that the fuel sales in total and therefore also the biofuel sales in the first quarter of 2009 was under the comparably value of the previous period. Thus from January to March 2009 gasoline sales decreased by 5.7 percent, in contrast the diesel sales remain almost stable with a plus of 0.6 percent.
A part of the biofuel production is delivered to the so-called blending market. This market is the principal customer for the biofuels produced by VERBIO. The blending market for biodiesel and bioethanol increased in the first three month 2009 in contrast to the comparably previous period last year; biodiesel realized a plus of 15 percent and bioethanol recorded an increase of 36 percent.
VERBIO increased its sales in the first quarter 2009 in contrast with the same period last year for the domestic blending market, but exports to Eastern Europe decreased because of the general economic situation. Caused by the weather conditions the sales on B100 market were weak and additionally strained by the low prices for fossil diesel. Through the higher blending volume of bioethanol in German refineries the blending of bioethanol has more than doubled in contrast with the first quarter 2008. This has led to an increased demand of bioethanol also from VERBIO.
The furthermore decreasing demand for pure biodiesel, which would not be compensated through the blending volume, is the main reason for the continuing consolidation on the biodiesel market. In total there is a capacity available of about 5 million tons in contrast to an anticipated need of about 2.5 million tons, which relates to a capacity utilization of about 50 percent.
In the first quarter 2009 the price for crude oil was at an average of 45 USD/Barrel and therefore more than halved in contrast to the quarter of the previous years period. For 2009 the predicted outlook for the global economic condition is less optimistic. Therefore experts expect a less strong demand for crude oil as originally assumed and that the price range could be between 40 and 55 USD/Barrel.1
Since the middle of the year 2008 prices are decreasing for oilseeds and grain and ranged in the first quarter of 2009 explicitly under the comparably previous year's level. The price for sugar slightly increased.
| Price development for selected raw materials | Q 1 2009 | Q 1 2008 | Change |
|---|---|---|---|
| Crude oil (Brent; USD/barrel) | 45 | 98 | -55% |
| Mineral diesel (EUR /ton) |
336 | 600 | -44% |
| Rapeseed oil (EUR /ton) |
602 | 900 | -33% |
| Wheat (MATIF; EUR /ton) |
143 | 264 | -46% |
| Sugar (EUR /ton) |
215 | 196 | +10% |
The following chart presents the price development of raw materials on the international market in the first quarter 2009:
In the first three month of fiscal year 2009 in total 121,654 tons (Q1/2008: 107,467 tons) of biofuels were produced. The revenue in the first quarter 2009 came to EUR 122.0 million (Q1/2008: EUR 125.1 million).
The operating result in the amount of EUR -12.0 million (Q1/2008: EUR 0.7 million) was mainly strained by high material costs (EUR 123.5 million; Q1/2008: EUR 109.7 million) in the first quarter 2009. The manufacturing costs based on the contracted raw material base, could be just partially achieved due to the price decline on the market.
Furthermore, the operating result was influenced by other operating income and expense in the amount of EUR -0.8 million. In the biodiesel segment EUR 11.4 million loss accruals were utilized built December 31, 2008, which is shown in the increase of other operating income. In the bioethanol segment loss accruals in the amount of EUR 7.9 million were built, which are disclosed under other operating expense.
Because of regressive grain financing costs the financial result improved by EUR 0.4 million to EUR -0.6 million (Q1/2008: EUR -1.0 million), and is made up of interest income in the amount of EUR 0.5 million (Q1/2008: EUR 0.7 million), and interest expense in the amount of EUR 1.1 million (Q1/2008: EUR 1.7 million).
This results in a loss for the period in the amount of EUR -13.8 million (Q1/2008: EUR -1.4 million).
| EUR million | 31.03.2009 | Share of total assets |
31.12.2008 | Share of total assets |
|---|---|---|---|---|
| Assets | ||||
| Non-current assets | 273.7 | 59% | 275.2 | 56% |
| Current assets | 192.9 | 41% | 215.9 | 44% |
| Total assets | 466.6 | 100% | 491.1 | 100% |
| Liabilities and equity | ||||
| Equity | 311.2 | 67% | 325.0 | 66% |
| Non-current liabilities | 48.7 | 10% | 50.5 | 10% |
| Current liabilities | 106.7 | 23% | 115.6 | 24% |
| Total liabilities and equity | 466.6 | 100% | 491.1 | 100% |
As of March 31, 2009, VERBIO disposes of liquid funds amounting to EUR 54.4 million, which have therefore decreased by EUR 12.3 million in contrast to the year end 2008 (December 31, 2008: EUR 66.7 million).
The total assets decreased by EUR 24.5 million to EUR 466.6 million (December 31, 2008: EUR 491.1 million). As of the reporting date, the equity ratio was at 66.7 percent (December 31, 2008: 66.2 percent).
The cash funds of EUR 47.4 million only include the cash and cash equivalents reported in the balance sheet. Operating cash flow amounted to EUR -11.5 million (Q1/2008: EUR 27.0 million) and was mainly influenced by the negative result for the period in the amount of EUR -13.8 million. A decrease of trade payables in the amount of EUR 9.9 million was largely compensated by an increase of other liabilities in the amount of EUR 7.0 million.
Positive cash flows from investing activities of EUR 15.8 million (Q1/2008: EUR -2.5 million) result from net backpayments from time deposits in the amount of EUR 14.1 million. Acquisitions of property, plant, and equipment amounted to EUR 1.0 million (Q1/2008: EUR 2.6 million), which are balanced by proceeds from investment grants in the amount of EUR 2.6 million (Q1/2008: EUR 0 million).
The cash flow from financing activities in the amount of EUR -2.4 million (Q1/2008: EUR -21.5 million) was mainly influenced by payments on secured loans in the amount of EUR 23.0 million (Q1/2008: EUR 17.4 million) compared to new subscriptions in the amount of EUR 23.3 million (Q1/2008: EUR 0 million).
At the end of the reporting period cash funds totaled EUR 47.4 million (Q1/2008: EUR 60.2 million).
As of March 31, 2009 the VERBIO Group had 396 employees (December 31, 2008: 390 employees) thereof 125 salaried employees (December 31, 2008: 125 salaried employees), 250 industrial employees (December 31, 2008: 239 industrial employees) and 21 trainees (December 31, 2008: 26 trainees).
In the first three month 2009 investments were made in the amount of EUR 1.4 million in property, plant, and equipment (Q1/2008: EUR 2.6 million), whereby EUR 0.8 million (Q1/2008: EUR 2.5 million) represent construction in process. The investments mainly refer to the construction of biogas plants in Schwedt/Oder and Zörbig (EUR 0.8 million) as well as the bioethanol plant in Schwedt/Oder (EUR 0.3 million).
| Tons | Q 1 2009 | Q 1 2008 |
|---|---|---|
| Nominal capacity p.a. | 450,000 | 450,000 |
| Production capacity p.a. | 427,500 | 427,500 |
| Nominal capacity | 112,500 | 112,500 |
| Production capacity | 106,875 | 106,875 |
| Production | 78,866 | 93,907 |
| Utilization of nominal capacity | 70.1 % | 83.5 % |
| Utilization of production capacity | 73.8 % | 87.9 % |
| Number of employees at end of period (March 31) | 101 | 100 |
In the first quarter of fiscal year 2009, 78,866 tons of biodiesel (Q1/2008: 93,907 tons) were produced and revenues achieved in the amount of EUR 83.9 million (Q1/2008: EUR 92.6 million).
The segment result before interests and tax amounted to EUR -1.6 Mio. (Q1/2008: EUR 4.3 million). It is characterized by the impact on earnings due to the lower capacity utilization of the biodiesel plants.
| Tons | Q 1 2009 | Q 1 2008 |
|---|---|---|
| Nominal capacity p.a. | 300,000 | 300,000 |
| Production capacity p.a. | 270,000 | 270,000 |
| Nominal capacity | 75,000 | 75,000 |
| Production capacity | 67,500 | 67,500 |
| Production | 42,788 | 13,560 |
| Utilization of nominal capacity | 57.1 % | 18.1 % |
| Utilization of production capacity | 63.4 % | 20.1 % |
| Number of employees at end of period (March 31) | 149 | 171 |
While bioethanol was exclusively produced in Zörbig in the first quarter 2008, both plants, in Schwedt/Oder as well as in Zörbig, ran in the first three month of fiscal year 2009.
Thereby 42,788 tons (Q1/2008: 13,560 tons) of bioethanol were produced in the first quarter of 2009. The bioethanol revenue came to EUR 31.2 million (Q1/2008: EUR 22.7 million). The segment result before interests and tax amounted to EUR -11.3 million (Q1/2008: EUR -6.0 million) and is with EUR 7.9 million negatively influenced by an allocation to reserves for contingent losses on existing purchase and sales contracts.
The Energy segment contributed revenues of EUR 5.2 million (Q1/2008: EUR 8.2 million) to the total revenues in the first quarter of fiscal year 2009. The revenue was because of essentially weaker wind months (especially January 2009) under the comparably previous period. The segment income before tax therefore reduced to EUR 0.9 million (Q1/2008: EUR 2.4 million).
The other segment mainly contains fleet services. In the first quarter in this segment revenues in the amount of EUR 1.7 million (Q1/2008: EUR 1.6 million) were generated. The segment income amounted to EUR -0.1 million (Q1/2008: EUR -0.1 million).
For further information on the segment reporting, please see the explanatory notes to the consolidated notes to the interim financial statements.
There were no changes in VERBIO's opportunity and risk profile in the first quarter 2009 in comparison to the opportunities and risks described in detail in the 2008 annual report. From today's perspective there are no existential risks in the Company and none are currently recognizable for the future.
After the approval of the government to the act to change the funding of biofuels, according to the Association Union zur Förderung von Oel- und Proteinpflanzen e.V. (UFOP), it has to be acted on the assumption that the sales of pure biodiesel will be halved. This dramatic development will also not improve by the reduction of the tax increase of 3 cents for pure biodiesel. The claim for a total tax exemption for public passenger and railway transportation could not be realized. For this reason, according to the opinion of experts, the last perspective for future sales of pure biodiesel was taken.
The law also regulates that biofuels, which received another direct governmental funding domestic or abroad, will not be allowable to blending quota respectively tax-advantage in the future. With it the Federal Government reacts to the price dumping by imports. For example imported biodiesel from the USA (so-called B99) receives tax concessions of one US cent per gallon. This leads to a price advantage of about 100 USD/ton in Rotterdam compared to the EU domestic production. With this regulation the significant squeezing out of domestic produced biofuels (B100) will be softening in future.
Due to the Renewable Energy Sources-Directive (approved by the EU), which schedules a quota of minimum ten percent of renewable energies in the traffic sector, the implementation of the fuel E10 (ten percent bioethanol, 90 percent gasoline) on European level is, according to the UFOP, expected. Therefore it is expected that the Federal Parliament furthermore will deal with the subject of the biofuel quota act and that an initiative to correct the act will follow within the scope of the new legislative period.
As a result of the since January 30, 2009 valid diesel standard (quality standard DIN 51628), which allows a biodiesel blending up to seven percent (this complies with 6.3 percent energetic), experts anticipate an annual increase of biodiesel sales of about 500,000 tons from 1.5 million tons to 2.0 million tons. For the present, this increase in sales should not be affected by the approved decrease of the total quota from 6.25 percent to 5.25 percent.
VERBIO produces biodiesel and bioethanol from sustainable, renewable growing raw materials and will be providing biomethan from residual materials of bioethanol production (slop) at the end of 2009.
For the year 2009 no further investment activities excepting the investments in biogas plants in Zörbig and Schwedt/Oder as well as maintenance and repair are planned.
The in 2008 acquired share of 25.2 percent at the Neckermann Renewables Wittenberg GmbH, Wittenberg, was sold to the main shareholder with a contract dated April 1, 2009. Concurrently, a long-term feedstock delivery contract was agreed, so that the aligned aims, related to the originally acquisition to secure raw material supply were accomplished.
Against the background of unsecure commercial and economic data it is currently difficult to make a precise statement according the further business development of VERBIO in 2009. The yield of this year's harvest is not known yet and the effect of the economic crisis to the raw material prices is not predictable at the moment.
A sustainable and explicit improvement of the situation of the biofuel industry and the business of VERBIO is expected by the Management Board with coming into force of the sustainability directive. This is in particular because VERBIO is already today well prepared according the fulfillment of the presumably required greenhouse gas reduction specifications.
VERBIO Vereinigte BioEnergie AG Leipzig, May 14, 2009 The Management Board
as of March 31, 2009
| KEUR | 01.01.-31.03.2009 | 01.01.-31.03.2008 | |
|---|---|---|---|
| 1. | Revenue including energy tax collected | 137,103 | 127,628 |
| Less: energy taxes | -15,071 | -2,530 | |
| Revenue | 122,032 | 125,098 | |
| 2. | Change in unfinished and finished goods | -2,130 | 2,127 |
| 3. | Capitalized production of own plant and equipment | 370 | 347 |
| 4. | Other operating income | 14,960 | 1,299 |
| 5. | Cost of materials | ||
| a) Raw materials, consumables, and supplies | -112,233 | -87,446 | |
| b) Purchased services | -11,256 | -22,298 | |
| 6. | Personnel expenses | -4,377 | -4,022 |
| 7. | Depreciation and amortization | -2,790 | -2,575 |
| 8. | Other operating expenses | -15,740 | -10,180 |
| 9. | Result from commodity forward contracts | -829 | -1,613 |
| 10. | Operating result | -11,993 | 737 |
| 11. | Interest income | 507 | 680 |
| 12. | Interest expense | -1,062 | -1,728 |
| 13. | Financial result | -555 | -1,048 |
| 14. | Loss before taxes | -12,548 | -311 |
| 15. | Income tax expense | -1,297 | -1,053 |
| 16. | Net loss for the period | -13,845 | -1,364 |
| Other comprehensive income: | |||
| Changes in fair value of cash flow hedges | -55 | -12,741 | |
| Income tax on other comprehensive income | 15 | 1,032 | |
| 17. | Other comprehensive income for the period | -40 | -11,709 |
| 18. | Total comprehensive income for the period | -13,885 | -13,073 |
| Loss per share (basic and diluted) | -0.23 | -0.02 |
16
| Assets KEUR |
31.03.2009 | 31.12.2008 | |
|---|---|---|---|
| A. | Non-current assets | ||
| I. | Goodwill | 155,655 | 155,655 |
| II. | Customer relationships | 17,596 | 17,959 |
| III | Other intangible assets | 298 | 337 |
| IV. | Property, plant, and equipment | 97,715 | 98,698 |
| V. | Financial assets | 2,355 | 2,331 |
| VI. | Deferred tax assets | 81 | 175 |
| Total non-current assets | 273,700 | 275,155 | |
| B. | Current assets | ||
| I. | Inventories | 52,401 | 52,932 |
| II. | Trade receivables | 39,555 | 41,303 |
| III | Tax refunds | 10,314 | 9,448 |
| IV. | Other assets | 29,561 | 33,859 |
| V. | Derivatives | 6,596 | 11,666 |
| VI. | Time deposits | 7,000 | 21,100 |
| VII. | Cash and cash equivalents | 47,434 | 45,612 |
| Total current assets | 192,861 | 215,920 | |
| Total assets | 466,561 | 491,075 |
| KEUR | Liabilities | 31.03.2009 | 31.12.2008 |
|---|---|---|---|
| A. | Equity | ||
| I. | Share capital | 63,000 | 63,000 |
| II. | Additional paid-in capital | 483,659 | 483,659 |
| III | Fair value reserve | 3,964 | 4,004 |
| IV. | Reserve for treasury shares | -3,030 | -3,030 |
| V. | Retained earnings | -236,429 | -222,584 |
| Total equity | 311,164 | 325,049 | |
| B. | Non-current liabilities | ||
| I. | Provisions | 522 | 726 |
| II. | Financial liabilities | 15,204 | 15,916 |
| III | Deferred investment grants and subsidies | 11,353 | 12,212 |
| IV. | Other non-current liabilities | 17,693 | 17,671 |
| V. | Deferred tax liabilities | 3,957 | 3,960 |
| Total non-current liabilities | 48,729 | 50,485 | |
| C. | Current liabilities | ||
| I. | Provision for income taxes | 7,489 | 6,961 |
| II. | Provisions | 11,912 | 16,026 |
| III | Financial liabilities | 13,171 | 15,235 |
| IV. | Trade payables | 25,453 | 34,920 |
| V. | Deferred investment grants and subsidies | 2,257 | 1,863 |
| VI. | Other current liabilities | 45,366 | 38,739 |
| VII. | Derivatives | 1,020 | 1,797 |
| Total current liabilities | 106,668 | 115,541 | |
| Total equity and liabilities | 466,561 | 491,075 |
| KEUR | 01.01.-31.03.2009 | 01.01.-31.03.2008 |
|---|---|---|
| Loss for the period | -13,845 | -1,364 |
| Income tax expense | 1,297 | 1,053 |
| Financial result | 555 | 1,048 |
| Depreciation and amortization | 2,790 | 2,575 |
| Loss on disposal of non-current assets | 7 | 4 |
| Release of deferred investment grants and subsidies | -569 | -495 |
| Non-cash changes in derivatives | 3,244 | -2,474 |
| Decrease in inventories | 531 | 16,981 |
| Decrease in trade receivables | 1,748 | 4,554 |
| Decrease in other assets | 1,745 | 8,082 |
| Decrease (increase) in provisions | -4,313 | 525 |
| Decrease in trade payables | -9,909 | -3,064 |
| Increase in other liabilities | 7,015 | 413 |
| Interest paid | -883 | -1,112 |
| Interest received | 611 | 669 |
| Income tax paid | -1,535 | -348 |
| Cash flows from operating activities | -11,511 | 27,047 |
| Investments in time deposits | -7,000 | 0 |
|---|---|---|
| Proceeds from time deposits | 21,100 | 0 |
| Proceeds from the disposal of property, plant, and equipment | 9 | 43 |
| Proceeds from investment grants | 2,641 | 0 |
| Payments for financial investments | -7 | 0 |
| Acquisition of property, plant, and equipment | -975 | -2,579 |
| Acquisition of intangible assets | -4 | -7 |
| Cash flows from investing activities | 15,764 | -2,543 |
| Purchase of treasury shares | 0 | -1,103 |
| Proceeds from secured loans | 23,316 | 0 |
| Payments on secured loans | -22,992 | -17,411 |
| Repayment of financial liabilities | -2,755 | -2,973 |
| Cash flows from financing activities | -2,431 | -21,487 |
| Net cash flows | 1,822 | 3,017 |
| Cash funds at beginning of period | 45,612 | 57,161 |
| Cash funds at end of period | 47,434 | 60,178 |
| The cash funds at the end of the period comprises the following: | ||
| Restricted cash | 7,128 | 17,577 |
| Cash | 40,306 | 42,601 |
| Cash funds at end of period | 47,434 | 60,178 |
KEUR 01.01.-31.03.2009 01.01.-31.03.2008
| KEUR | Share capital | Additional paid-in capital |
Fair value reserve |
Reserve for treasury shares |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|
| December 31, 2007 | 63,000 | 483,659 | 4,908 | -1,131 | -231,659 | 318,777 |
| Revaluation of derivatives (after tax) |
0 | 0 | -11,709 | 0 | 0 | -11,709 |
| Income and expense recorded directly to equity |
0 | 0 | -11,709 | 0 | 0 | -11,709 |
| Net loss for the period | 0 | 0 | 0 | 0 | -1,364 | -1,364 |
| Total income and expense for the period |
0 | 0 | -11,709 | 0 | -1,364 | -13,073 |
| Acquisition of treasury stock | 0 | 0 | 0 | -1,103 | 0 | -1,103 |
| March 31, 2008 | 63,000 | 483,659 | -6,801 | -2,234 | -233,023 | 304,601 |
| December 31, 2008 | 63,000 | 483,659 | 4,004 | -3,030 | -222,584 | 325,049 |
| Revaluation of derivatives (after tax) |
0 | 0 | -40 | 0 | 0 | -40 |
| Income and expense recorded directly to equity |
0 | 0 | -40 | 0 | 0 | -40 |
| Net loss for the period | 0 | 0 | 0 | 0 | -13,845 | -13,845 |
| Total income and expense for the period |
0 | 0 | -40 | 0 | -13,845 | -13,885 |
| March 31, 2009 | 63,000 | 483,659 | 3,964 | -3,030 | -236,429 | 311,164 |
The Group interim report of VERBIO Vereinigte BioEnergie AG as of March 31, 2009 with selected explanatory notes has been basically prepared in accordance with the accounting and valuation methods applied to draw up the IFRS consolidated financial statements of VERBIO Vereinigte BioEnergie AG for the period ending December 31, 2008. Those are represented in the annual report 2008 on page 69 and the following. These interim consolidated financial statements do not include all the information required for the consolidated financial statements to the end of a business year and should therefore be read in conjunction with the consolidated financial statements for the year ended December 31, 2008.
The consolidated interim financial statements are presented in euros (EUR). Unless otherwise mentioned, all amounts are presented in thousands of euros (KEUR). Figures have been rounded and therefore rounding differences are possible.
These consolidated interim financial statements are not subject to any form of audit or review.
Effective from fiscal year 2009 on appliance duty for new standards and interpretations as well as changes of existing standards, especially the changes of IAS 1, "Presentation of the financial statements" to present the direct comprised income and expenses in equity, result in changes of the financial reporting of VERBIO Vereinigte BioEnergie AG. These income and expense are from now on for the first time contained in a offsetting and reconciliation from the result according to the consolidated income statement to the total result in the respective period. For the first time such reconciliation statement is contained in the present consolidated interim financial statements.
In respect of further new standards and interpretations as well as changes of existing standards please refer to the annual report 2008.
Other operating income consists of the following items:
| KEUR | 01.01.-31.03.2009 | 01.01.-31.03.2008 |
|---|---|---|
| Income from utilization of provisions for contingent losses on pending purchase and sales contracts |
11,379 | 0 |
| Release of other provisions and write-off of trade receivables | 946 | 89 |
| Release of investment grants | 569 | 495 |
| Ongoing warehousing charges | 509 | 283 |
| Release of allowances for receivables | 402 | 12 |
| Reimbursement of electricity tax and energy tax | 263 | 141 |
| Miscellaneous | 892 | 279 |
| Other operating income | 14,960 | 1,299 |
The income from utilization of provisions for contingent losses on pending purchase and sales contracts results from the adjustment and revaluation of the provision build in the biodiesel segment on December 31, 2008.
The majority of material expenses relates to the procurement of raw materials, consumables, and supplies. The cost of materials ratio (cost of materials relating to sales, change in unfinished and finished goods, and other capitalized production of own plant and equipment) was 102.7 percent (Q1/2008: 86.0 percent) in the first three month 2009. According to the breakdown of segments it is referred to the segment reporting in this explanatory notes.
23
| KEUR | 01.01.-31.03.2009 | 01.01.-31.03.2008 |
|---|---|---|
| Contingent losses for pending purchase and sales contracts | 7,858 | 1,607 |
| Outgoing freight | 1,954 | 2,832 |
| Warehousing expense | 1,133 | 1,895 |
| Repairs | 1,104 | 1,180 |
| Insurances and dues | 569 | 489 |
| Miscellaneous personnel expense | 524 | 358 |
| Legal and consulting fees | 407 | 252 |
| Motor vehicle costs | 347 | 81 |
| Losses on receivables and increase in allowances | 234 | 8 |
| Sales commission | 218 | 148 |
| Rental and leasing expense | 130 | 339 |
| Miscellaneous | 1,262 | 991 |
| Other operating expense | 15,740 | 10,180 |
In the biodiesel segment a provision for contingent losses for pending purchase and sales contracts was build in the amount of KEUR 7,858. The remuneration of provisions results when manufacturing costs are above expected sales prices.
Forward purchasing of raw materials was carried out in order to hedge volume and price risks. While commodity futures were carried out to hedge the price risk of these purchases, thus affecting net income, changes to the prices of these forward purchases do not affect the balance sheet.
The result from the valuation and realization of futures which do not qualify for hedge accounting as well as the ineffective portion of the futures which do qualify for hedge accounting amounts to KEUR 829. In addition, the other provisions from the valuation of futures decreased by KEUR 40 without an effect on profit and loss after deduction of deferred taxes of KEUR 15 as they qualified as cash flow hedges.
Tax expense for the period January 1, to March 31, 2009 amounting to KEUR 1,297 (Q1/2008: KEUR 1,053) are made up as follows:
| KEUR | 01.01.-31.03.2009 | 01.01.-31.03.2008 |
|---|---|---|
| Current tax expense | 1,187 | 3 |
| Deferred tax expense | 110 | 1,050 |
| Income tax expense | 1,297 | 1,053 |
The earnings per share were calculated in accordance with IAS 33. For the calculation of the earnings per share the earnings for the period were divided by the weighted average number of shares outstanding. There is no diluted effect.
| 2009 | 2008 | |
|---|---|---|
| Issued shares on January 1 | 61,530,000 | 62,627,702 |
| Effect of treasury shares | 0 | -231,008 |
| Weighted average number of shares outstanding on March 31 | 61,530,000 | 62,396,694 |
| Net result for the period in KEUR | -13,845 | -1,364 |
| Result per share in EUR | -0.23 | -0.02 |
Non-current assets
Intangible assets include goodwill, customer relationships, and software licenses. Customer relationships are amortized over 15 years. Goodwill is subject to an annual impairment review in accordance with IAS 36.
After allowance for scheduled depreciation, property, plant, and equipment decreased in value particularly as a result of investments at the Schwedt/Oder and Zörbig sites.
This item comprises a receivable of the subsidiary VERBIO STS (nominal value) which has been deferred without interest charges until December 31, 2009 under consideration of accrued interest (KEUR 1,349) as well as an investment of 25.2 percent in Neckermann Renewables Wittenberg GmbH, Wittenberg, under consideration of additional costs amounting in total to KEUR 1,006. Hereunto it is referred to significant events subsequent to the reporting period.
| KEUR | 31.03.2009 | 31.12.2008 |
|---|---|---|
| Raw materials, consumables, and supplies | 44,594 | 44,543 |
| Finished and unfinished products | 6,227 | 8,358 |
| Merchandise | 1,580 | 31 |
| Inventories | 52,401 | 52,932 |
On March 31, 2009 the review of inventories concerning recoverability resulted in a decline in value of KEUR 8,960 (December 31, 2008: KEUR 7,903) to adjust to the lower market or net residual value. The write-downs for raw materials, consumables, and supplies as well as for merchandise are included in "cost of materials" and for finished products in "change in unfinished and finished goods" in the consolidated statement of comprehensive income
Trade receivables amounted to KEUR 39,555 (December 31, 2008: KEUR 41,303) and are disclosed net after consideration of value adjustments totaling KEUR 335 (December 31, 2008: KEUR 263). The receivables have a residual term of up to one year.
Deferred tax assets of KEUR 10,314 (December 31, 2008: KEUR 9,448) concern construction work withholding tax, corporate tax, and trade tax.
| KEUR | 31.03.2009 | 31.12.2008 | ||
|---|---|---|---|---|
| Investment subsidies | 11,025 | 13,569 | ||
| Security deposits for guaranteed credit lines | 4,656 | 4,749 | ||
| Value-added tax receivables | 3,516 | 3,458 | ||
| Security deposits resulting from security agreements and liability declarations |
3,326 | 3,339 | ||
| Advanced payments for property, plant, and equipment | 2,339 | 778 | ||
| Accrual of realized gains on commodity forward contracts | 1,711 | 3,713 | ||
| Deferred expenses | 1,193 | 362 | ||
| Reimbursements of electricity and energy tax | 399 | 1,007 | ||
| Advanced payments for other receivables | 173 | 0 | ||
| Creditor accounts with debit balances | 36 | 38 | ||
| Advanced payments for inventories | 0 | 1,536 | ||
| Accrual for unrealized gains on commodity forward contracts | 0 | 451 | ||
| Miscellaneous | 1,187 | 859 | ||
| Other assets | 29,561 | 33,859 |
In order to secure the supply of raw materials for biodiesel production, derivatives are used in the form of futures contracts for vegetable oil to hedge against margin-demanding price levels and as a procurement instrument to secure access to the raw materials. As of balance sheet date, the positive market value of these futures came to KEUR 11 (December 31, 2008: KEUR 390) and the negative market values amounting KEUR 542 (December 31, 2008: KEUR 1,694). These market values are recognized directly in equity.
Futures were used to hedge against falling prices from firm obligations for rapeseed. As of the balance sheet date, the positive market value came to KEUR 297 (December 31, 2008: positive market value of KEUR 3,289) and was recognized in the result of commodity futures, affecting net income.
Hedging in the form of fixed diesel sales to counter variable diesel sales was undertaken to secure revenue from sales contracts linked to the mineral diesel price. As of the balance sheet date, the positive and negative market values of these swap-dealings in the amount of KEUR 6,288 respectively KEUR 479 were recognized directly in equity after deduction of non-effectiveness.
There was no pledging to time deposits as of March 31, 2009 while to December 31, 2008 an amount of KEUR 8,574 is pledged as security for credit lines issued as well as financial guarantees and therefore withdrawn from direct availability.
This position includes unrestricted cash and cash equivalents in the amount of KEUR 40,306 (December 31, 2008: KEUR 39,236) and restricted cash amounting KEUR 7,128 (December 31, 2008: KEUR 6,376).
Other reserves comprise the effective portion of changes in the fair value of futures qualifying as cash flow hedges which had not been realized as of March 31, 2009.
Currently, VERBIO holds 1,470,000 treasury shares, representing 2.3 percent of the share capital, which were purchased at an average price of 2.06 EUR per share. The share buy-back program ran from October 26, 2007 to May 31, 2008.
Non-current provisions amounted to KEUR 522 (December 31, 2008: KEUR 726) as of March 31, 2009, with a majority of KEUR 437 (December 31, 2008: KEUR 430) representing dismantling obligations for wind power plants.
In this item it is referred to the detailed explanations in the annual report 2008.
| KEUR | Investments subsidies | Investement grants | Total | |
|---|---|---|---|---|
| Balance as of December 31, 2008 | 11,623 | 2,452 | 14,075 | |
| Addition | 115 | 0 | 115 | |
| Release for current period | -440 | -129 | -569 | |
| Disposal | -11 | 0 | -11 | |
| Balance as of March 31, 2009 | 11,287 | 2,323 | 13,610 | |
| Thereof current | 1,755 | 502 | 2,257 | |
| Thereof non-current | 9,532 | 1,821 | 11,353 |
Tax liabilities compared to December 31, 2008 are trade tax obligations in the amount of KEUR 226 (December 31, 2008: KEUR 790), state-, council- and federal tax of Switzerland in the amount of KEUR 1,317 (December 31, 2008: KEUR 225), and unchanged to December 31, 2008, construction work withholding tax of KEUR 5,918 as well as facility tax of KEUR 28.
| KEUR | 31.03.2009 | 31.12.2008 | ||
|---|---|---|---|---|
| Impending losses on pending purchase and sales contracts | 8,736 | 12,257 | ||
| Impending liabilities for premium guarantees in connection with the energy crop program |
2,375 | 2,968 | ||
| Litigations | 700 | 700 | ||
| Miscellaneous | 101 | 101 | ||
| Provisions | 11,912 | 16,026 |
According to provisions for impending losses on pending purchase and sales contracts please refer to other operating income as well as other operating expense.
A claim for damages is pending against the VERBIO Diesel Bitterfeld in the amount of KEUR 3,400. The Management Board estimates that the remuneration of a provision in the amount of KEUR 700 is accounted for the resulting risk of litigation. This estimation remains unchanged.
| KEUR | 31.03.2009 | 31.12.2008 | |
|---|---|---|---|
| Liabilities from grain transactions | 23,462 | 23,312 | |
| Energy taxes from biofuel quota commitments (2008) | 13,923 | 0 | |
| Value-added tax | 2,310 | 3,697 | |
| Bonuses and special payments | 1,578 | 1,471 | |
| Wages and salaries | 752 | 697 | |
| Other liabilities related to personnel | 617 | 675 | |
| Accrued realized losses from commodity forward contracts | 548 | 1,542 | |
| Property transfer taxes | 386 | 386 | |
| Payments received from unrealized gains from commodity forward contracts |
297 | 3,289 | |
| Other energy taxes | 292 | 367 | |
| Income tax | 195 | 300 | |
| Customers with credit balances | 148 | 0 | |
| Leasing back payments for wind power plants | 97 | 39 | |
| Social security insurance | 91 | 72 | |
| Accrued unrealized losses on commodity forward contracts | 69 | 0 | |
| Liabilities from used guarantees | 0 | 2,016 | |
| Liabilities from customs duties and EU tax | 0 | 531 | |
| Miscellaneous | 601 | 345 | |
| Other current liabilities | 45,366 | 38,739 |
The liability for energy taxes from biofuel quota commitments (2008) reported results from the subsequent taxation for sold biofuel quota for 2008.
The cash funds only include the cash and cash equivalents reported in the balance sheet. Operating cash flow amounted to KEUR -11,511 (Q1/2008: KEUR 27,047) and was mainly influenced by the negative result for the period of KEUR -13,845. The decrease of trade payables in the amount of KEUR 9,909 has been vast compensated by the increase of other liabilities in the amount of KEUR 7,015.
Positive cash flows from investing activities in the amount of KEUR 15,764 (Q1/2008: KEUR -2,543) result from net back payments from time deposits in the amount of KEUR 14,100. Acquisitions of property, plant, and equipment amounted to KEUR 975 (Q1/2008: KEUR 2,579), which are confronted by proceeds from investment grants in the amount of KEUR 2,641.
The cash flow from financing activities of KEUR -2,431 (Q1/2008: KEUR -21,487) was mainly influenced by payments on secured loans in the amount of KEUR 22,992, which are contrasted by proceeds from secured loans by KEUR 23,316.
At the end of the reporting period cash funds totaled KEUR 47,434 (Q1/2008: KEUR 60,178).
The risks and results of the Group are significantly determined by the business segments. These form therefore the primary reporting format. The VERBIO Group is segmented accordingly in accordance with the international organizational and management structure into the business segments biodiesel, bioethanol, energy, and other. The "other" segment includes the business segment transportation and logistics.
The following table shows segmentation revenues and results:
| KEUR | Biodiesel | Bioethanol | Energy | Other | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Q 1 2009 | Q 1 2008 | Q 1 2009 | Q 1 2008 | Q 1 2009 | Q 1 2008 | Q 1 2009 | Q 1 2008 | Q 1 2009 | Q 1 2008 | |
| Revenue Change in finished and unfinished products |
83,889 -1,996 |
92,600 3,373 |
31,225 -134 |
22,684 -1,245 |
5,216 0 |
8,234 0 |
1,702 0 |
1,580 -1 |
122,032 -2,130 |
125,098 2,127 |
| Capitalized produc tion of own plant, and equipment |
6 | 49 | 364 | 298 | 0 | 0 | 0 | 0 | 370 | 347 |
| Other operating income |
12,537 | 652 | 1,544 | 308 | 845 | 229 | 34 | 110 | 14,960 | 1,299 |
| Cost of materials | -87,148 | -83,375 | -31,710 | -20,862 | -3,884 | -4,744 | -747 | -763 | -123,489 | -109,744 |
| Personnel expense | -1,892 | -1,907 | -1,879 | -1,606 | -57 | -61 | -549 | -448 | -4,377 | -4,022 |
| Depreciation and amortization |
-1,547 | -1,377 | -316 | -287 | -621 | -624 | -306 | -287 | -2,790 | -2,575 |
| Other operating expense |
-4,637 | -6,800 | -10,361 | -2,607 | -485 | -540 | -257 | -233 | -15,740 | -10,180 |
| Result from com modity forward contracts |
-811 | 1,069 | -18 | -2,682 | 0 | 0 | 0 | 0 | -829 | -1,613 |
| Segment result | -1,599 | 4,284 | -11,285 | -5,999 | 1,014 | 2,494 | -123 | -42 | -11,993 | 737 |
| Interest income | 343 | 438 | 133 | 189 | 24 | 33 | 7 | 20 | 507 | 680 |
| Interest expense | -607 | -747 | -271 | -728 | -128 | -180 | -56 | -73 | -1,062 | -1,728 |
| Result before taxes | -1,863 | 3,975 | -11,423 | -6,538 | 910 | 2,347 | -172 | -95 | -12,548 | -311 |
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 10,000 was arranged for VERBIO AG, VERBIO Ethanol Zörbig, and VERBIO Ethanol Schwedt that relates to the security for customs as well as the Federal Institute of Agriculture and Nutrition (BLE). As security for all claims of Euler Hermes Kreditversicherungs-AG, Hamburg, VERBIO provided a security deposit of KEUR 3,000. The secured credit line is utilized in the amount of 9,600 at March 31, 2009.
Effective May 11, 2007 Rabobank International, Frankfurt/Main provided a guarantee for Märka GmbH to the Federal Institute of Agriculture and Nutrition (BLE) in the amount of KEUR 14,000. VERBIO AG committed to the Rabobank International to indemnify the bank against all claims, including secondary claims. The outstanding amount of the guarantee at March 31, 2009 is KEUR 9,291. Please refer to the information in the annual report 2008 regarding further contingent liabilities.
Additional financial commitments of KEUR 17,134 exist from various long-term leasing contracts, of which KEUR 9,846 relate to the following year, KEUR 971 to the next one to five years and KEUR 6,317 for a period exceeding five years.
As of March 31, 2009, there is an open purchase obligation for investments amounting KEUR 7,294.
The related party disclosures remain unchanged. Please refer to the information in the annual report 2008.
With the contract dated April 1, 2009, VERBIO Vereinigte BioEnergie AG (VERBIO) sold their shares of 25.2 percent to the main shareholder GATE Global Alternative Energy Holding AG.
Concurrently, a long-term feedstock delivery contract between Neckermann Renewables Wittenberg GmbH, Wittenberg and VERBIO was agreed.
• Responsible for Research and Development, Production, Quality Management, Technical Investment Planning, Work Safety and Human Resources
• Responsible for Finance and Accounting, Taxes, Controlling, Treasury, Investor Relations, and Legal Affairs (until February 28, 2009)
May 14, 2009 Publication of Interim Report Q1 2009
August 13, 2009 Publication of Interim Report 1 HY 2009
August 24, 2009 Annual Shareholders' Meeting
November 12, 2009 Publication of Interim Report Q1-Q3 2009
VERBIO Vereinigte BioEnergie AG Augustusplatz 9 04109 Leipzig T +49 341 30 85 30-90 F +49 341 30 85 30-99 www.verbio.de
Anna-Maria Schneider T +49 341 30 85 30-94 F +49 341 30 85 30-98 [email protected]
Sandra Haacker T +49 341 30 85 30-63 F +49 341 30 85 30-99 [email protected]
Editorial VERBIO Vereinigte BioEnergie AG, Leipzig
Design heureka! – Profitable Communication GmbH, Essen
Images VERBIO Vereinigte BioEnergie AG, Leipzig
These consolidated interim financial statements are also available in German language. In case of divergence from the German version of the interim report Q1 2009 the German version shall prevail.
These consolidated interim financial statements contain forward-looking statements, which are based on assumptions and estimates of the management of VERBIO Vereinigte BioEnergie AG. Also when it is the view of management that the assumptions and estimates are appropriate, the actual future developments and the actual future results can substantially deviate from these assumptions and estimates due to various factors. Such factors include a change in the overall economic environment, in the legal and regulatory environment in Germany and in the EU, as well as changes in the branch. VERBIO does not take any responsibility for or provide any guarantee that the future development and the future actual achieved results are in agreement with the assumptions and estimates expressed in these consolidated interim financial statements.
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