Interim / Quarterly Report • Jul 27, 2017
Interim / Quarterly Report
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Dovre Group Plc Half year financial report July 27, 2017 at 8.45 a.m.
Dovre Group Plc issues today the company's half year financial report for the six months ended on 30 June 2017. The figures presented in this half year financial report are not audited. Last year's corresponding period in parentheses.
Outlook for 2017 (unchanged): Operating result is expected to improve compared to 2016.
| 1-6 | 1-6 | Change | 1-12 | |
|---|---|---|---|---|
| EUR million | 2017 | 2016 | % | 2016 |
| Net sales | 33.1 | 47.8 | -30.8 | 83.8 |
| Operating result | -0.2 | 0.1 | -287.4 | 0.0 |
| % of net sales | -0.7 % | 0.2 % | 0.0 % | |
| Result | -0.5 | -0.8 | 37.9 | -1.7 |
| % of net sales | -1.4 % | -1.6 % | -2.0 % | |
| Net cash flow from operations | -1.0 | -1.7 | 37.0 | 0.6 |
| Net debt | -2.4 | -2.3 | 4.8 | -4.7 |
| Debt-equity ratio (Gearing), % | -10.3 % | -8.9 % | 16.1 | -18.3 % |
| Earnings per share, EUR: | ||||
| Undiluted | -0.00 | -0.01 | 38.1 | -0.02 |
| Diluted | -0.00 | -0.01 | 38.0 | -0.02 |
"Our Q2 operating result was positive although it included Easter this year. The number of billable consultants has increased every month this year, being 15% higher in June than in January. At the end of H1, already almost 45% of our total volume came from energy, infrastructure, and industry projects, and approx. 55% from oil and gas projects. In the oil and gas market prices and margins are still on a low level, although the bottom has probably been reached.
In the Project Personnel business area demand has clearly picked up in our main market Norway. Strong market position, good sales work, and tight cost prudence are bringing results. Volumes have increased strongly also in Singapore, although one major project is coming to an end in the autumn.
Our contract portfolio in Project Personnel business is strong. One example of an industry with new clients is nuclear industry, where we already have assignments in three different projects.
We remain committed to cost effectiveness. We have already implemented additional measures, which further decrease our fixed costs from Q3 onwards by over EUR 0.2 million annually.
Our Consulting business area continues its good performance, and I am pleased, in particular, with the development of our consulting business in Finland. Even if the business area's net sales decreased compared to last year, operating result remained almost on the same level as a year ago."
In January – June, Dovre Group's net sales decreased by 30.8%, totaling EUR 33.1 (47.8) million. Project Personnel accounted for 90 (92) % and Consulting for 10 (8) % of the Group's net sales.
During the period under review, net sales for Project Personnel decreased by 32.3%, totaling EUR 29.9 (44.1) million. Net sales for Consulting decreased by 13.4%, totaling EUR 3.2 (3.7) million.
By market area, EMEA's net sales totaled EUR 22.4 (29.1) million, accounting for 68 (61) % of the Group's net sales during the period under review. Net sales for AMERICAS were EUR 6.9 (9.0) million, accounting for 21 (19) % the Group's net sales. Net sales for APAC were EUR 3.8 (9.7) million, accounting for 11 (20) % the Group's net sales.
Fluctuations in foreign currency exchange rates did not have a significant impact on the Group's net sales during the period under review.
In H1, the Group was successful in securing several new frame agreements. We have published two of them: the Finnish Apotti Oy and the Norwegian Bane NOR SF. The other remain confidential at the request of our clients.
| Net sales by reporting segment EUR million |
1-6 2017 |
1-6 2016 |
Change % |
1-12 2016 |
|---|---|---|---|---|
| Project Personnel | 29.9 | 44.1 | -32.3 | 76.9 |
| Consulting | 3.2 | 3.7 | -13.4 | 6.9 |
| Group total | 33.1 | 47.8 | -30.8 | 83.8 |
| Net sales by market area EUR million |
1-6 2017 |
1-6 2016 |
Change % |
1-12 2016 |
|---|---|---|---|---|
| EMEA | 22.4 | 29.1 | -23.0 | 53.4 |
| AMERICAS | 6.9 | 9.0 | -23.2 | 16.9 |
| APAC | 3.8 | 9.7 | -61.3 | 13.5 |
| Group total | 33.1 | 47.8 | -30.8 | 83.8 |
Dovre Group's market areas are:
During the period under review, the Group's operating result was EUR -0.2 (0.1) million. The Group's operating result was -0.7 (0.2) % of net sales. Project Personnel's operating result was EUR 0.1 (0.5) million. Consulting business area's operating result was EUR 0.5 (0.5) million. The operating result of the Group's Other functions was EUR -0.6 (-0.7) million. The unallocated costs were EUR 0.1 (0.2) million. In H1, the Group reported a total of EUR 0.3 million restructuring costs in the Project Personnel business area.
| Operating result EUR million |
1-6 2017 |
1-6 2016 |
Change % |
1-12 2016 |
|---|---|---|---|---|
| Project Personnel | 0.1 | 0.5 | -89.1 | 0.6 |
| Consulting | 0.5 | 0.5 | -5.5 | 1.0 |
| Other functions | -0.6 | -0.7 | -12.7 | -1.2 |
| Unallocated | -0.1 | -0.2 | -22.7 | -0.3 |
| Group total | -0.2 | 0.1 | -287.4 | 0.0 |
During the period under review, the Group's result before taxes was EUR -0.5 (-0.8) million, including EUR - 0.2 (-0.5) million of finance items. Majority of the finance costs are related to foreign exchange losses, both realized and unrealized. The result also includes the Group's share, EUR -0.1 (-0.4) million, of the result of its joint venture SaraRasa Bioindo Pte Ltd. In 2016, the Group's share of profit and loss in joint ventures included a total of EUR -0.3 million impairment of deferred tax assets.
The Group's result after taxes was EUR -0.5 (-0.8) million. The Group's earnings per share was EUR -0.00 (- 0.01). The Group's return on average capital employed before taxes (ROI) was -0.9 (-2.0) %.
On June 30, 2017, the Group balance sheet total was EUR 39.1 (45.2) million. The Group's cash and cash equivalents totaled EUR 5.4 (7.1) million. In addition, the parent company and the subsidiaries have unused credit limits.
On June 30, 2017, the equity ratio was 59.9 (58.5) % and the debt-equity ratio (gearing) -10.3 (-8.9) %. The interest-bearing liabilities amounted to EUR 3.0 (4.8) million, accounting for 7.7 (10.6) % of the Group's shareholders' equity and liabilities. A total of EUR 1.7 (2.8) million of the Group's interest-bearing liabilities were current and a total of EUR 1.4 (2.0) million non-current.
Net cash flow from operating activities was EUR -1.0 (-1.7) million, which includes EUR -0.7 (-1.6) million change in working capital.
Net cash flow from investing activities was EUR -0.1 (-0.2) million. Gross investments totaled EUR 0.0 (0.2) million. Investments in 2016 related to the Group's joint venture SaraRasa Bioindo Pte. Ltd.
Net cash flow from financing activities was EUR -1.4 (-1.9) million. During the period under review, the Group paid back more loans than it drew out by a total of EUR 0.5 (0.9) million, EUR 0.3 (0.3) million of which was non-current and EUR 0.2 (0.6) current. During the period under review, the Group paid a total of EUR 1.0 (1.0) million in dividends.
The balance sheet goodwill totaled EUR 15.5 (16.1) million on June 30, 2017. No indications of impairment exist.
On June 30, 2017, Dovre Group employed 515 (521) people, 473 (474) of which were employed by Project Personnel, 37 (41) by Consulting, and 5 (6) by Other functions.
During the period under review, the average number of personnel employed by the Group was 477 (596). Project Personnel employed 435 (550) and Consulting 37 (41) people. In the Project Personnel business area 21 (27) % of employees were independent contractors.
| Personnel | 1-6 | 1-6 | Change | 1-12 |
|---|---|---|---|---|
| average | 2017 | 2016 | % | 2016 |
| Project Personnel | 435 | 550 | -20.9 | 498 |
| Consulting | 37 | 41 | -9.8 | 40 |
| Other functions | 5 | 5 | 0.0 | 5 |
| Group total | 477 | 596 | -20.0 | 543 |
During the first quarter Frank Ween, a member of the Group Executive Team, resigned and Ole Olsen, a member of the Group Executive Team, was nominated as a member of the Board of Directors of Dovre Group Plc. As of March 31, 2017, Dovre Group's Group Executive Team consists of Patrick von Essen (CEO), Heidi Karlsson (CFO), Arve Jensen (President, Project Personnel Norway) and Stein Berntsen (President, Consulting).
On June 30, 2017, Dovre Group's share capital was EUR 9,603,084.48 and the total number of shares 100,168,769. There were no changes in the Group's share capital during the period under review. The change in the total number of shares, 300,000 in total, was due to shares subscribed for with the company's 2010C option plan. The increase in the total number of shares has been entered in the Finnish trade register on March 6, 2017.
In January – June 2017, approximately 10.9 (3.8) million Dovre Group shares were exchanged on the Nasdaq Helsinki Ltd., corresponding to a trade of approximately EUR 3.2 (1.2) million. The lowest quotation was EUR 0.27 (0.27) and the highest EUR 0.33 (0.36). On June 30, 2017, the closing quotation was EUR 0.28 (0.30). The period-end market capitalization was approx. EUR 27.7 (30.0) million.
On June 30, 2017, the number of registered shareholders of Dovre Group Plc totaled 3,424 (3,497), including 8 (8) nominee-registers. Of the Group's shares, 0.4 (0.4) % are nominee-registered.
At the end of the period under review, Dovre Group had one open option plan, 2013. Each stock option entitles the holder to subscribe one share in Dovre Group Plc.
Under the 2013 option plan, the total number of stock options offered for subscription to Dovre Group's key personnel is 3,000,000. The share subscription period and price per series under the 2013 option plan are as follows:
No stock options were granted to key personnel under the Group's 2013 stock option plan during the period under review. A total of 100,000 stock options were returned to the company. At the end of the period under review, the company had granted a total of 2,350,000 options under the 2013 option plan and had in reserve a total of 650,000 options.
Dovre Group's 2010 option plan expired in accordance with the terms of the option plan on February 28, 2017, when the subscription period for 2010C option series ended. A total of 505,000 shares were subscribed for with the 2010C option series, a total of 300,000 of which were subscribed for during the period under review. The remaining 270,000 stock options expired as unused.
On June 30, 2017, the Group's CEO Patrick von Essen held a total of 675,000 stock options granted under the 2013A, 2013B, and 2013C option plans. On June 30, 2017, Ole Olsen, member of the Group's Board of Directors, held a total of 50,000 stock options granted under the 2013A option plan.
Dovre Group Plc's Annual General Meeting held on March 30, 2017, adopted the financial statements and consolidated financial statements for 2016 and discharged the members of the Board of Directors and the CEO from liability for the financial year ending on December 31, 2016. The Annual General Meeting decided on the use of the profit shown on the balance sheet and the payment of dividend, the composition and remuneration of the Board of Directors, the election of the auditor, amendment of the Articles of Association, lifting of lock-up of shares in Dovre Group Plc given as consideration to Commuter AS and Visual Engineering AS in connection with the merger with Norwegian Petroleum Consultants Group AS (NPC), the authorization of the Board of Directors to decide on the repurchase of the Company's own shares and on the issuance of shares as well as the issuance of other special rights entitling to shares.
In accordance with the Board's proposal, the Annual General Meeting decided that a dividend of EUR 0.01 per share to be paid for the financial year 2016. The dividend was paid to a shareholder who, on the dividend record date April 3, 2017 is registered as a shareholder in the Company's shareholder register maintained by Euroclear Finland Ltd. The dividend was paid on April 12, 2017.
The Annual General Meeting decided that the number of Board members be set at four (4). Rainer Häggblom, Aloysius (Louis) Harrewijn and Ilari Koskelo were re-elected as members of the Board, and Ole Olsen was elected as a new member of the Board.
The Annual General Meeting resolved that the chairman of the Board is paid EUR 35,000, the vice chairman of the Board EUR 25,000, and each other member of the Board EUR 22,000 per year. In addition, reasonable travel expenses are also compensated. Out of the annual compensation, 40% of the total gross compensation will be used to purchase Dovre Group Plc's shares on regulated market in trading through Nasdaq Helsinki Ltd, or alternatively by using the own shares held by the company. The shares will be purchased and/or granted as soon as possible after the Annual General Meeting. The remaining 60% of the annual compensation that is to be paid in cash will be paid no later than April 30, 2017. The total amount of the annual compensation paid to Board members and the method of payment did not change from the previous year.
The Annual General Meeting re-elected the Authorized Public Accountant entity Ernst & Young Ltd as the Company's auditor. Ernst & Young Ltd has informed that Authorized Public Accountant Toni Halonen will be the principal auditor.
The Annual General Meeting decided to amend Article 9 of the Articles of Association of the Company so that it corresponds to the changed terminology of the Auditing Act. After the amendment, Article 9 of the Articles of Association reads as follows: The company has one Auditor who shall be an audit firm. The auditor's term ends at the end of the first Annual General Meeting following the election.
The Annual General Meeting resolved, in accordance with the Board of Directors' proposal, to accept the termination of the lock-up agreement as from March 30, 2017 as regards the consideration shares in Dovre Group Plc, 18,226,509 in total, given to Commuter AS in connection with the merger with NPC.
The Annual General Meeting also resolved, in accordance with the Board of Directors' proposal, to accept the termination of the lock-up agreement as from March 30, 2017 as regards the consideration shares in Dovre Group Plc, 18,226,509 in total, given to Visual Engineering AS in connection with the merger with NPC.
The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the Company's own shares on the following conditions: the Board is entitled to decide on repurchase of a maximum of 9,900,000 of the Company's own shares, which shall be repurchased in deviation from the proportion to the holdings of the shareholders using the non-restricted equity and acquired through trading at the regulated market organized by Nasdaq Helsinki Ltd at the share price prevailing at the time of acquisition. This number of shares corresponds to approximately a maximum of 10.0% of the total number of shares in the Company. The shares may be repurchased in order to be used as consideration in possible acquisitions or other arrangements related to the Company's business, to finance investments or as part of the Company's incentive program or to be held, otherwise conveyed or cancelled by the Company. The Board of Directors shall decide on other matters related to the repurchase of the Company's own shares. This repurchase authorization is valid until June 30, 2018 and revokes earlier repurchase authorizations.
The Annual General Meeting authorized the Board of Directors to decide on the issuance of new shares and/or the conveyance of own shares held by the Company and/or the granting of special rights referred to in Chapter 10, Section 1 of the Finnish Companies Act on the following conditions:
By virtue of the authorization, the Board may also decide on a directed issue of shares and special rights, i.e. waiving the pre-emptive subscription rights of the shareholders, under the requirements of the law. By virtue of the authorization, a maximum of 9,900,000 shares may be issued, corresponding to approximately a maximum of 10.0% of the Company's existing shares. The Board may use the authorization in one or more instalments. The Board may use the authorization to finance or conclude acquisitions or other arrangements, to strengthen the Company's capital structure, to incentive programs or other purposes decided by the
Board. The new shares may be issued or the Company's own shares conveyed either against payment or free of charge. The new shares may also be issued as an issue without payment to the Company itself. The Board was authorized to decide on other terms of the issuance of shares and special rights. By virtue of the authorization, the Board of Directors may decide on the realization of the Company's own shares possibly held by the Company as pledge. The authorization is valid until June 30, 2018. The authorization revokes earlier authorizations to issue shares and grant option rights and other special rights entitling to shares.
The Board of Directors did not use the authorizations granted by the Annual General Meeting held on March 30, 2017 during the period under review.
In the Project Personnel business area, the Group's most significant risks still include cautious investment policies of oil and gas clients. Market developments in Norway are particularly important for Project Personnel due to the business area's strong position in the Norwegian market. In addition, expansion to new client segments requires expenditure and includes risks. The business area's other challenges are maintaining its competitiveness and profitability. Project Personnel business is project-based by nature, thus adding an element of uncertainty to forecasting. Dovre Group is responsible for the work performed by its consultants. However, the company has no overall responsibility for project delivery.
In the Consulting business area, general economic uncertainty does not affect as directly the demand for the Group's services. This is mainly due to the fact that one of our main clients, the Norwegian public sector, aims to invest counter-cyclically. Project delivery involves minor risks due to both clients and the Group's own personnel such as project delays or loss of key personnel.
Dovre Group holds a minority share in SaraRasa Bioindo Pte. Ltd. (Bioindo), a company producing pellets from waste material. Bioindo's production unit is located in Indonesia and is thus exposed to high country risk. Other significant risks include risks relating to commercial agreements, especially feedstock purchase and end-product sale agreements. Bioindo's financial information involves certain uncertainties, because the implementation of the shareholders' agreement between Bioindo, Bioindo's subsidiary SaraRasa Sinergy Pte. Ltd. and a local Indonesian operator is still ongoing.
The Group's reporting currency is euro. The Group's most important functional currencies are the Norwegian crown, the Canadian dollar, the Singaporean dollar, and the United States dollar. Although the Group's sales and corresponding expenses are mainly in the same currency, currency fluctuations can affect the Group's net sales and operating result. Foreign currency denominated assets and liabilities can also result in foreign exchange gains or losses. Foreign exchange risks are hedged, when necessary, centrally in the Group.
The market is still affected by several uncertainties, including general economic development, oil price, and political instability. Our main markets are in politically and economically stable countries.
In the Project Personnel business area, market outlook has improved in Norway, but globally the price level in the oil and gas industry is still clearly lower than in recent years. Thanks to a strong portfolio of frame agreements as well as cost savings, both implemented and planned, we expect our operating result to improve from 2016.
In the Consulting business area, market outlook remains unchanged.
We expect the Group's operating result to improve compared to 2016.
Espoo, July 26, 2017
DOVRE GROUP PLC BOARD OF DIRECTORS
For additional information, please contact:
Dovre Group Plc Patrick von Essen, CEO ([email protected])
Heidi Karlsson, CFO ([email protected])
tel. +358-20-436 2000 www.dovregroup.com
Dovre Group releases its remaining financial reports in 2017 as follows:
Q3 trading statement for January 1 – September 30, 2017 on Thursday, October 26, 2017
Distribution Nasdaq Helsinki Ltd Major media www.dovregroup.com
The half year financial report is unaudited.
| EUR thousand | 1-6 2017 |
1-6 2016 |
Change % |
1-12 2016 |
|---|---|---|---|---|
| NET SALES | 33 101 | 47 837 | -30.8 | 83 810 |
| Other operating income | 44 | 131 | -66.6 | 178 |
| Material and services | -57 | -54 | 6.9 | -118 |
| Employee benefits expense | -29 978 | -43 251 | -30.7 | -75 617 |
| Depreciation and amortization | -244 | -297 | -17.8 | -578 |
| Other operating expenses | -3 080 | -4 251 | -27.5 | -7 670 |
| OPERATING RESULT | -216 | 115 | -287.4 | 4 |
| Financing income | 34 | 70 | -51.3 | 77 |
| Financing expenses Share of results in joint |
-234 | -553 | -57.7 | -780 |
| ventures | -57 | -405 | -85.9 | -846 |
| RESULT BEFORE TAX Tax on income from |
-472 | -772 | 38.8 | -1 545 |
| operations | 5 | 19 | -74.3 | -124 |
| RESULT FOR THE PERIOD | -468 | -753 | 37.9 | -1 669 |
| Other comprehensive income Other comprehensive income to be classified to profit or loss in subsequent periods: |
||||
| Translation differences Other comprehensive income |
-1 030 | 818 | -225.9 | 1 097 |
| for the period, net of tax TOTAL COMPREHENSIVE |
-1 030 | 818 | -225.9 | 1 097 |
| INCOME FOR THE PERIOD | -1 498 | 65 | -2 414.5 | -572 |
| Earnings/share (EUR) | ||||
| Basic, result for the period | -0.00 | -0.01 | 38.1 | -0.02 |
| Diluted, result for the period | -0.00 | -0.01 | 38.0 | -0.02 |
| 1-6 | 1-6 | 1-12 |
| Average number of shares | 2017 | 2016 | 2016 |
|---|---|---|---|
| Basic | 100,068,769 | 99,868,769 | 99,868,769 |
| Diluted | 100,091,144 | 99,956,200 | 99,932,539 |
| June 30, | June 30, | Dec. 31, | |
| Number of shares, period end | 2017 | 2016 | 2016 |
| Basic | 100,168,769 | 99,868,769 | 99,868,769 |
| Diluted | 100,168,769 | 99,924,991 | 99,896,200 |
| EUR thousand | June 30, 2017 |
June 30, 2016 |
Change % |
Dec 31, 2016 |
|---|---|---|---|---|
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 3 349 | 3 750 | -10.7 | 3 696 |
| Goodwill | 15 531 | 16 084 | -3.4 | 16 198 |
| Tangible assets | 933 | 1 009 | -7.6 | 966 |
| Investments in joint ventures | 223 | 720 | -69.1 | 304 |
| Other receivables | 131 | 38 | 245.0 | 95 |
| Deferred tax assets | 913 | 342 | 167.1 | 193 |
| Non-current assets | 21 080 | 21 943 | -3.9 | 21 451 |
| Current assets | ||||
| Trade receivables and other receivables | 12 408 | 16 073 | -22.9 | 12 957 |
| Tax receivable. income tax | 187 | 19 | 882.9 | 73 |
| Cash and cash equivalents | 5 417 | 7 136 | -24.1 | 8 313 |
| Current assets | 18 012 | 23 228 | -22.5 | 21 343 |
| TOTAL ASSETS | 39 092 | 45 171 | -13.5 | 42 794 |
| EQUITY AND LIABILITIES | ||||
| Shareholders' equity | ||||
| Share capital | 9 603 | 9 603 | 0.0 | 9 603 |
| Reserve for invested non-restricted equity | 12 300 | 12 219 | 0.7 | 12 219 |
| Fair value reserve | 2 869 | 2 869 | 0.0 | 2 869 |
| Translation differences | -2 635 | -1 884 | 39.8 | -1 605 |
| Retained earnings | 1 267 | 3 623 | -65.0 | 2 729 |
| Shareholders' equity | 23 404 | 26 430 | -11.5 | 25 815 |
| Non-current liabilities | ||||
| Deferred tax liability | 1 485 | 953 | 55.9 | 903 |
| Non-current liabilities, interest-bearing | 1 350 | 1 950 | -15.4 | 1 650 |
| Other non-current liabilities | 23 | 38 | -39.9 | 23 |
| Non-current provisions | 71 | 226 | -68.4 | 152 |
| Non-current liabilities | 2 930 | 3 167 | 2.0 | 2 728 |
| Current liabilities | ||||
| Short-term liabilities, interest-bearing | 1 656 | 2 841 | -52.3 | 1 928 |
| Trade payables and other liabilities | 10 793 | 12 408 | -13.0 | 11 855 |
| Tax liability, income tax | 130 | 39 | 233.3 | 132 |
| Current provisions | 180 | 287 | -43.1 | 336 |
| Current liabilities | 12 758 | 15 574 | -20.1 | 14 251 |
| TOTAL EQUITY AND LIABILITIES | 39 092 | 45 171 | -13.5 | 42 794 |
| EUR thousand | a) | b) | c) | d) | e) | f) |
|---|---|---|---|---|---|---|
| SHAREHOLDERS' EQUITY Jan. 1, 2016 | 9 603 | 12 219 | 2 869 | -2 701 | 5 339 | 27 329 |
| Comprehensive income | ||||||
| Result for the period | -753 | -753 | ||||
| Other comprehensive income | ||||||
| Translation differences | 817 | 1 | 818 | |||
| Total comprehensive income | 0 | 0 | 0 | 817 | -752 | 65 |
| Transactions with shareholders | ||||||
| Share based compensation | 35 | 35 | ||||
| Dividend distribution | -999 | -999 | ||||
| Total transactions with shareholders | 0 | 0 | 0 | 0 | -964 | -964 |
| SHAREHOLDERS' EQUITY June 30, 2016 | 9 603 | 12 219 | 2 869 | -1 884 | 3 623 | 26 430 |
| EUR thousand | a) | b) | c) | d) | e) | f) |
| SHAREHOLDERS' EQUITY Jan. 1, 2017 | 9 603 | 12 219 | 2 869 | -2 701 | 5 339 | 27 329 |
| Comprehensive income | ||||||
| Result for the period | -468 | -468 | ||||
| Other comprehensive income | ||||||
| Translation differences | -1 030 | -1 030 | ||||
| Total comprehensive income | 0 | 0 | 0 | -1 030 | -468 | -1 498 |
| Transactions with shareholders | ||||||
| Stock options excercised | 81 | 81 | ||||
| Share based compensation | 7 | 7 | ||||
| Dividend distribution | -1 002 | -1 002 | ||||
| Total transactions with shareholders | 0 | 81 | 0 | 0 | -995 | -914 |
| SHAREHOLDERS' EQUITY June 30, 2017 | 9 603 | 12 300 | 2 869 | -2 635 | 1 267 | 23 404 |
| 1-6 | 1-6 | Change | 1-12 | |
|---|---|---|---|---|
| EUR thousand | 2017 | 2016 | % | 2016 |
| Cash flow from operating activities | ||||
| Operating result | -216 | 115 | -287.4 | 4 |
| Adjustments: | ||||
| Depreciation / Amortization | 244 | 297 | -17.8 | 578 |
| Personnel expenses | 7 | 31 | -77.4 | 104 |
| Adjustments, total | 251 | 328 | -23.5 | 682 |
| Changes in working capital | ||||
| Trade and other receivables, increase (-) / | -72 | 3 613 | -102.0 | 7 143 |
| decrease (+) | ||||
| Trade and other payables, increase (+) / | -676 | -5 217 | 87.0 | -6 314 |
| decrease (-) | ||||
| Changes in working capital, total | -748 -28 |
-1 604 -80 |
53.4 65.0 |
829 -120 |
| Interest paid | 7 | 21 | -66.7 | 34 |
| Interest received | -88 | -142 | 38.0 | -557 |
| Other financial expenses paid and received | ||||
| Income taxes paid | -218 | -288 | 24.3 | -305 |
| Net cash generated by operating activities | -1 040 | -1 650 | 37.0 | 567 |
| Cash flow from investing activities | ||||
| Investments in tangible and intangible assets | -64 | -61 | -4.9 | -109 |
| Purchase of shares in joint ventures | 0 | -124 | -100.0 | -124 |
| Loan receivables, increase (-) / decrease (+) | -47 | 0 | - | -89 |
| Net cash generated by investing activities | -111 | -185 | -40.0 | -322 |
| Cash flow from financing activities | ||||
| Stock options exercised | 81 | 0 | - | 0 |
| Repayments of non-current loans | -300 | -300 | 0.0 | -600 |
| Proceeds from short-term loans | 1 208 | 444 | 172.1 | 687 |
| Repayments of short-term loans | -1 403 | -1 070 | -31.1 | -2 294 |
| Dividends paid | -1 002 | -999 | 0.3 | -999 |
| Net cash generated by financing activities | -1 416 | -1 925 | -26.4 | -3 206 |
| Translation differences | -329 | -6 | 372 | |
| Change in cash and cash equivalents | -2 896 | -3 766 | -2 589 | |
| Cash and cash equivalents at beginning of the period | 8 313 | 10 902 | 10 902 | |
| Cash and cash equivalents at end of the period | 5 417 | 7 136 | 8 313 |
The half year financial report has been prepared in line with IAS 34 and, apart from the additions below, the same accounting principles have been applied as in the 2016 financial statements. Key indicator calculations remain unchanged and have been presented in the 2016 financial statements.
As of January 1, 2017, the Group has adopted the following revised, and amended IFRS standards with the effective date of January 1, 2017: IAS 7 Statement of Cash Flows (amended), IAS 12 Income Taxes (amended), and Annual Improvements to IFRSs 2012-2014 Cycle.
Dovre Group adopts IFRS 15 Revenue from Contracts with Customers as of January 1, 2018 (mandatory application). As the Group has estimated that the standard does not affect revenue recognition within the Group, the Group has not yet decided whether it will use full or modified retrospective application. The Group will still further assess the impact of the standard on note disclosures.
The Group's Project Personnel business area covers a significant share of the Group's external net sales (92% in 2016).
The Group has several frame agreements with a number of customers in the Project Personnel business area. However, revenue recognition is based not on the frame agreements but on more detailed purchase or work orders. Revenue is recognized based on hourly, daily, weekly, or monthly invoicing. From the point of view of IFRS 15, the service consists of a series of performance obligations that are substantially the same. The Group has estimated that it does not need to change its method of revenue recognition, which will also in future be based on work performed. Travel expenses are invoiced as incurred.
The business area's sales include also some revenue from customer contracts, where the performance obligation consists of finding an employee corresponding to the customer's requirements. In such cases, revenue is recognized at a certain point in time as the performance obligation has been satisfied.
In 2016, the net sales of the Group's Consulting business area were 8% of the Group's net sales. The business area consists of two separate units, which have distinctively different service offerings.
The Group's Consulting unit in Norway offers strategic and operational consulting services for project management and procurement, including, for example, project definition and evaluation as well as risk and contract management. The Group's Consulting unit in Finland offers a variety of project management software, maintenance, implementation, training, and customer support. In both units, majority of revenue is based on hourly rates invoiced from the customer in accordance with work performed. Typically revenue is recognized at the same time as services are invoiced. Typical project duration is less than a year.
The Consulting unit in Finland derives revenue also from program maintenance and license fees, which have been invoiced monthly. Those very few situations, when the Group sells the license to the customer, will be evaluated on a case-by-case basis.
The Group has two reporting segments that are also the Group's strategic business areas:
The Group's segment information is based on internal management reporting prepared in accordance with IFRS standards. The Group does not allocate the parent company's intra-Group charges to segments for the purposes of segment reporting.
| % of net | ||||
|---|---|---|---|---|
| EUR thousand | 1-6/2017 | sales | 1-6/2016 | sales |
| Project Personnel | 29 901 | 90.3 % | 44 143 | 92.3 % |
| Consulting | 3 200 | 9.7 % | 3 694 | 7.7 % |
| Total | 33 101 | 100.0 % | 47 837 | 100.0 % |
| % of net | ||||
|---|---|---|---|---|
| EUR thousand | 1-6/2017 | % of net sales |
1-6/2016 | sales |
| Services | 32 890 | 99.4 % | 47 640 | 99.6 % |
| One-time license revenue | 98 | 0.3 % | 107 | 0.2 % |
| Recurring license revenue | 113 | 0.3 % | 89 | 0.2 % |
| Total | 33 101 | 100.0 % | 47 837 | 100.0 % |
| EUR thousand | 1-6/2017 | 1-6/2016 | Change % |
|---|---|---|---|
| Project Personnel | 53 | 485 | -89.1 |
| Consulting | 478 | 506 | -5.5 |
| Other functions | -607 | -695 | -12.7 |
| Unallocated | -140 | -181 | -22.7 |
| Total | -216 | 115 | -287.4 |
Unallocated expenses include amortization of customer agreements and relations and share-based compensation recognized as expense in the income statement.
| Average number of personnel | June 30, 2017 |
June 30, 2016 |
Change % |
Dec. 31, 2016 |
|---|---|---|---|---|
| Project Personnel | 435 | 550 | -20.9 | 498 |
| Consulting | 37 | 41 | -9.8 | 40 |
| Other functions | 5 | 5 | 0.0 | 5 |
| Total | 477 | 596 | -20.0 | 543 |
In the Project Personnel business area, 21 (27) % of personnel were independent contractors.
| EUR thousand | June 30, 2017 | June 30, 2016 | Dec. 31, 2016 |
|---|---|---|---|
| Carrying value, opening balance | 304 | 1 029 | 1 029 |
| Additions | 0 | 124 | 124 |
| Disposals | -3 | 0 | 0 |
| Share of profit and loss in joint ventures | -57 | -405 | -846 |
| Translation differences | -21 | -28 | -3 |
| At end of period | 223 | 720 | 304 |
Dovre Group Plc's joint venture is Singaporean SaraRasa Bioindo Pte. Ltd. (Bioindo). Dovre Group's ownership of Bioindo was 29% in all presented periods.
Balances with joint ventures
| EUR thousand | June 30, 2017 | June 30, 2016 | Dec. 31, 2016 |
|---|---|---|---|
| Trade receivables | 0 | 4 | 0 |
| Loan receivables | 131 | 0 | 95 |
| EUR thousand | June 30, 2017 | June 30, 2016 | Dec. 31, 2016 |
|---|---|---|---|
| Trade receivables | 10 795 | 13 967 | 11 591 |
| Other receivables | 169 | 121 | 160 |
| Prepayments and accrued income on sales | 724 | 1 306 | 660 |
| Other prepayments and accrued income | 704 | 679 | 546 |
| Total | 12 392 | 16 073 | 12 957 |
The book values of the receivables are based on a reasonable estimate of their fair values. No significant concentrations of credit risk are associated with the receivables. Other prepayments and accrued income include accrued expenses.
| EUR thousand | June 30, 2017 | June 30, 2016 | Dec. 31, 2016 |
|---|---|---|---|
| Not due | 10 018 | 12 259 | 7 480 |
| Overdue | |||
| 1 - 30 days | 492 | 463 | 3 436 |
| 31 - 60 days | 184 | 1 183 | 459 |
| 61 - 90 days | 94 | 41 | 164 |
| Over 90 days | 8 | 22 | 52 |
| Total | 10 795 | 13 967 | 11 591 |
| Changes in provisions, | ||||||
|---|---|---|---|---|---|---|
| 2017 | Jan 1, | Reversal of | Provisions | Translation | June 30, | |
| EUR thousand | 2017 | Increase | provisions | used | differences | 2017 |
| Restructuring provision | 488 | 0 | 0 | -222 | -16 | 251 |
| Total | 488 | 0 | 0 | -222 | -16 | 251 |
| June 30, | June 30, | Dec. 31, | |
|---|---|---|---|
| EUR thousand | 2017 | 2016 | 2016 |
| Trade receivables pledged as collateral | 8 358 | 10 752 | 8 804 |
| Floating charges | 3 000 | 3 000 | 3 000 |
| Pledged shares, book value in Group | 835 | 852 | 843 |
| Future minimum lease payments for non-cancellable operating leases |
|||
| June 30, | June 30, | Dec. 31, | |
| EUR thousand | 2017 | 2016 | 2016 |
| Not later than one year | 409 | 582 | 588 |
| Later than one year and not later than five years *) | 299 | 592 | 360 |
| Total | 707 | 1 174 | 948 |
*) Comparative for Dec. 31, 2016 corrected
The Group's leases business premises and cars under various non-cancellable leases. The leases have varying lenghts, index clauses, and renewal and other terms.
| 2017 | 2016 | 2017 | 2016 | 2016 | 2016 | |
|---|---|---|---|---|---|---|
| EUR thousand | 1-3 | 1-3 | 4-6 | 4-6 | 7-9 | 10-12 |
| NET SALES | 17 259 | 24 962 | 15 843 | 22 875 | 17 897 | 18 075 |
| Other operating income | 23 | 39 | 20 | 92 | 12 | 34 |
| Material and services | -30 | -27 | -27 | -27 | -31 | -34 |
| Employee benefits expense | -15 737 | -22 716 | -14 242 | -20 535 | -16 265 | -16 101 |
| Depreciation and amortization | -124 | -151 | -121 | -146 | -145 | -135 |
| Other operating expenses | -1 645 | -2 137 | -1 436 | -2 114 | -1 597 | -1 822 |
| OPERATING RESULT | -254 | -30 | 38 | 145 | -128 | 17 |
| 1-6 | 1-6 | 1-12 | |
|---|---|---|---|
| EUR million | 2017 | 2016 | 2016 |
| Cash and cash equivalents | 5.4 | 7.1 | 8.3 |
| Interest-bearing liabilities | 3.0 | 4.8 | 3.6 |
| Net debt | -2.4 | -2.3 | -4.7 |
| Shareholders' equity | 23.4 | 26.4 | 25.8 |
| Balance sheet total | 39.1 | 45.2 | 42.8 |
| Return on equity, % *) | -1.9 % | -2.7 % | -6.3 % |
| Return on investment, % *) | -0.9 % | -2.0 % | -4.2 % |
| Debt-equity ratio (Gearing), % | -10.3 % | -8.9 % | -18.3 % |
| Equity-ratio, % | 59.9 % | 58.5 % | 60.3 % |
| Personnel (average for period) | 477 | 596 | 543 |
| Personnel (at end of period) | 515 | 521 | 462 |
| Earnings per share, EUR (basic, average for period) | -0.005 | -0.008 | -0.017 |
| Equity per share, EUR (basic, end of period) | 0.23 | 0.26 | 0.26 |
*) Comparatives for 1-6/2016 corrected
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