Earnings Release • Jul 22, 2019
Earnings Release
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Rotterdam, 19 July 2018
Half-year interim dividend set at €0.40 per share, equal to H1 2017
Today, Amsterdam Commodities N.V. (Acomo), the Euronext Amsterdam-listed trader in spices, nuts, edible seeds, tea and food ingredients reports its H1 2018 results with net profit at €15.5 million. Low trading price levels across a number of major product groups and a short-term focus of customers due to the uncertain outcome of foreign trade talks, have led the Company's net profit to be 10.8% below last year's first half year.
Acomo's H1 2018 performance, described by the Board of Directors as being 'solid under challenging market circumstances', shows the combined strength of the company's skilled trading teams, its diverse global product portfolio and established supply chain positions, continuously focused on adding value.
Following Acomo's consistent dividend pay-out policy, the interim dividend is maintained at €0.40 per share (2017: €0.40).
Over the first six months of 2018, the consolidated sales recorded by Amsterdam Commodities N.V. (Acomo) decreased by 5.2% to €335.9 million (H1 2017: €354.2 million). Reported gross margin as a percentage of sales decreased by 0.3 percentage point. Reported personnel and general costs decreased by 2.8%. Interest expenses increased due to higher average borrowings and higher Libor rates. The effective corporate income tax rate decreased by 2.9 percentage points due to a more favourable country mix of the Group's source of profits, and the lower corporate income tax rate in the US as a result of the US tax reforms. Reported net profit reached €15.5 million in H1 2018, a decrease of €1.9 million versus the first half of 2017 (€17.4 million, -10.8%).
Reported sales include the full half-year results of the last year acquired company Delinuts, adding €16.1 million to the top line versus H1 2017. The weakened US dollar had a negative impact on reported sales of €15.5 million versus H1 2017. The full half-year consolidation of Delinuts adds €1.4 million to reported gross margin, which further includes a positive unrealized hedge result of €1.8 million versus H1 2017. The weakened US dollar had a negative impact on the reported gross margin of €3.5 million versus H1 2017.
In the first four months of this half-year period the US dollar versus the euro was significantly weaker compared to H1 2017, but strengthened in May and June. The average euro/US dollar exchange rate of 1.210 in H1 2018 was 11.7% weaker than H1 2017 (1.083). The FX rates contributed negatively to the reported sales (-€15.5 million) and net profit (-€0.7 million).
The euro/US dollar balance sheet exchange rate on 30 June 2018 was 1.168 versus 1.200 on 31 December 2017. The impact of the FX rate on the consolidated assets was €3.6 million.
The interim dividend per share is set at €0.40 in cash, equal to H1 2017. The dividend is payable on 3 August 2018 (ex-dividend date is 24 July 2018).
| H1 2018 | H1 2017 | ∆ | |
|---|---|---|---|
| Consolidated figures (in €millions) | |||
| Sales | 335.9 | 354.2 | -5.2% |
| Gross margin | 56.7 | 60.9 | -7.0% |
| EBITDA | 25.1 | 28.4 | -11.8% |
| EBIT | 22.6 | 25.8 | -12.7% |
| Financial result | (1.8) | (1.6) | -10.7% |
| Corporate income tax | (5.3) | (6.8) | 23.1% |
| Net profit | 15.5 | 17.4 | -10.8% |
| Shareholders' equity (before interim dividend) | 186.3 | 184.9 | 0.8% |
| Total assets | 359.1 | 346.4 | 3.7% |
| Ratios | |||
| Solvency | 51.9% | 53.4% | -1.5 |
| Return on Equity (ROE), annualized | 16.5% | 18.8% | -2.3 |
| Return On Net Capital Employed (RONCE), annualized | 15.0% | 18.3% | -3.3 |
| RONCE operating companies (excluding goodwill), annualized | 19.4% | 23.9% | -4.5 |
| Dividend pay-out ratio | 63.6% | 56.6% | 7.0 |
| Key performance indicators (in €) | |||
| Earnings per share | 0.630 | 0.714 | -11.8% |
| Interim dividend per share | 0.40 | 0.40 | 0.0% |
| Equity per share per 30 June | 7.558 | 7.511 | 0.6% |
| Share price per 30 June | 23.45 | 28.49 | -17.7% |
| Market capitalization per 30 June (in millions) | 578.0 | 701.0 | -17.5% |
| Number of shares outstanding (in thousands) | |||
| Per 30 June | 24,649 | 24,605 | 0.2% |
'In major product groups we faced continued low market price levels and short-term focus of customers. Given these circumstances our teams achieved strong results by using their trading capabilities, customer focus and in-depth supply chain knowledge, and managed to partly offset price declines of in some cases 40%,' said Group Managing Director Allard Goldschmeding.
Catz International in Rotterdam, the Netherlands, realized a net result which was below the record year 2017, due to difficult market circumstances. Prices declined for various spices from different parts of the globe. Pepper showed a continuing downward price trend and currently trades at levels 40% below the same period in the previous year. The price decrease of nutmeg continued in the first half of 2018 and also turmeric and ginger saw lower price levels. Prices of desiccated coconut decreased on average by 7% after stable prices in 2017. Nuts saw significant price movements, with sharply decreasing prices for Brazil nuts after the high levels in 2017. Walnuts and cashew nuts faced declining price levels as well.
Tovano in Maasdijk, the Netherlands, showed a slightly lower profit versus prior year, but limited the impact of the challenging market circumstances by a focused market approach and benefiting from its new, improved positioning of the Tovano brand.
King Nuts & Raaphorst in Bodegraven, the Netherlands, continued to achieve strong margins despite the challenging market circumstances with a further expansion of their market position in specialty stores and open markets.
Delinuts in Ede, the Netherlands, consolidated their market position and achieved satisfactory results in the difficult market with a focus on foodservice.
Red River Commodities in Fargo, USA, realized net results below the level of H1 2017. Higher input costs and a slow start of the year resulted in lower margins in its wild life division. The processing division's sales and margins were slightly lower due to overall global market conditions and reduced export opportunities. At SunGold Foods Inc., results improved due to the incorporation of new North American roasting volumes which started halfway through the first half year. The SunButter® brand continues to experience strong growth along with operational efficiency gains, leading to higher results. Red River Global Ingredients in Winkler, Canada, doubled its trading volume and improved profits in the first half of the year.
Red River-van Eck in Zevenbergen, the Netherlands, showed overall better financial results versus prior year mainly due to recovered poppy seed market conditions. The net result of Red River-van Eck increased versus prior year.
SIGCO Warenhandel in Hamburg, Germany, continued to improve its performance. The focus on margins and core trading products paid off, resulting in a doubling of the net result versus prior year.
Van Rees Group in Rotterdam, the Netherlands, realized a lower net result in the first half year versus 2017. Volumes were slightly lower against prior year however at higher margins following the company's revised strategy two years ago. Overall Van Rees Group realized a higher gross margin contribution. The operating expenses in US dollar increased due to a stronger euro against the US dollar, resulting in a lower net result for the group. In the first six months the global tea production has been high resulting in an increased supply. The reported results have been impacted by delayed shipments at the end of H1 2018 due to port issues such as flooding in several countries of origin including Kenya and India.
Snick EuroIngredients in Ruddervoorde, Belgium, performed excellently in Food Ingredients. The gross margin for the first six months improved further versus prior year. Both dry and wet blends showed growth versus the first half of previous year through a continued focus on broadening the customer base.
The Group's total balance sheet increased by €13.2 million when compared with 31 December 2017, mainly due to higher trade receivables as a result of relatively high sales at the end of the period (increase of €11.8 million).
Shareholders' equity increased by €1.2 million to €186.3 million on 30 June 2018 (31 December 2017: €185.1 million). In May 2018, the 2017 final dividend of €17.2 million was paid (€ 0.70 per share).
Versus 30 June 2017, bank borrowings increased by €17.9 million primarily in relation to the increased working capital.
Given the nature of the Group's activities, it is impossible to forecast market developments or likely Group results. However, the Company is confident that its teams will continue to generate good results for shareholders.
The Company's executive director hereby declares that, to the best of his knowledge:
Rotterdam, 19 July 2018
Allard Goldschmeding Group Managing Director
| Page | 7 | Consolidated balance sheet as at 30 June 2018 |
|---|---|---|
| Page | 8 | Consolidated income statement H1 2018 |
| Page | 8 | Condensed consolidated cash flow statement H1 2018 |
| Page | 9 | Statement of changes in shareholders' equity H1 2018 |
| Page | 9 | Consolidated statement of comprehensive income H1 2018 |
| Page | 10 | Segment information H1 2018 |
| Page | 10 | Sales per geography H1 2018 |
| Page | 11 | Notes to the H1 2018 consolidated interim financial statements |
| Page | 13 | Financial calendar 2018/2019 |
This report in the English language has also been translated into the Dutch language. In case of any differences between the two versions, the English version will prevail.
For further information, please contact:
Amsterdam Commodities N.V. (Acomo) Creative Venue PR Mr A.W. Goldschmeding Mr F.J.M. Witte, spokesperson WTC, Beursplein 37, 10th floor Sophialaan 43 3011 AA Rotterdam 1075 BM Amsterdam The Netherlands The Netherlands [email protected] [email protected]
Tel. +31 10 4051195 Tel. +31 20 4525225
Fax +31 10 4055094 Fax +31 20 4528650 www.acomo.nl www.creativevenue.nl
Amsterdam Commodities N.V. (Acomo) is an international group with as its principal business the trade and distribution of natural food products and ingredients. Our main trading subsidiaries are Catz International B.V. in Rotterdam, the Netherlands (spices and food raw materials), Van Rees Group B.V. in Rotterdam, the Netherlands (tea), Red River Commodities Inc. in Fargo, USA (confectionary sunflower seeds), Red River Global Ingredients Ltd. in Winkler, Canada, Red River-van Eck B.V. in Zevenbergen, the Netherlands, and SIGCO Warenhandelsgesellschaft mbH in Hamburg, Germany (edible seeds), King Nuts B.V. in Bodegraven, Delinuts B.V. in Ede and Tovano B.V. in Maasdijk, the Netherlands (nuts), and Snick EuroIngredients N.V. in Ruddervoorde, Belgium (food ingredients). Acomo shares have been traded on Euronext Amsterdam since 1908.
before interim dividend
| (in € thousands) | 30 June 2018 | 31 December 2017 | 30 June 2017 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Intangible assets | 67,342 | 66,242 | 67,266 |
| Property, plant and equipment | 36,908 | 36,574 | 39,945 |
| Other non-current receivables | 1,259 | 1,257 | 1,321 |
| Deferred tax assets | 1,262 | 1,846 | 291 |
| Total non-current assets | 106,771 | 105,919 | 108,823 |
| Current assets | |||
| Inventories | 148,049 | 149,570 | 148,523 |
| Trade receivables | 95,286 | 83,493 | 83,207 |
| Other receivables | 5,162 | 4,131 | 3,886 |
| Derivative financial instruments | 2,137 | 261 | 444 |
| Cash and cash equivalents | 1,731 | 2,590 | 1,561 |
| Total current assets | 252,365 | 240,045 | 237,621 |
| Total assets | 359,136 | 345,964 | 346,444 |
| Equity and liabilities | |||
| Equity attributable to owners of the parent | |||
| Share capital | 11,092 | 11,081 | 11,072 |
| Share premium reserve | 61,994 | 61,658 | 61,428 |
| Other reserves | 6,429 | 3,801 | 9,080 |
| Retained earnings | 91,280 | 76,039 | 85,881 |
| Net profit for the period | 15,514 | 32,472 | 17,394 |
| Total shareholders' equity | 186,309 | 185,051 | 184,855 |
| Non-current liabilities and provisions | |||
| Bank borrowings | 10,541 | 11,571 | 14,111 |
| Deferred tax liabilities | 6,484 | 6,895 | 8,422 |
| Retirement benefit obligations | 2,230 | 2,453 | 2,025 |
| Other provisions | 236 | 100 | 290 |
| Total non-current liabilities | 19,491 | 21,019 | 24,848 |
| Current liabilities | |||
| Bank borrowings | 101,507 | 68,214 | 80,061 |
| Trade creditors | 35,054 | 45,593 | 34,779 |
| Tax liabilities | 1,780 | 6,135 | 5,668 |
| Derivative financial instruments | 234 | 1,271 | 1,980 |
| Other current liabilities and accrued expenses | 14,761 | 18,681 | 14,253 |
| Total current liabilities | 153,336 | 139,894 | 136,741 |
| Total equity and liabilities | 359,136 | 345,964 | 346,444 |
| (in € thousands) | H1 2018 | H1 2017 |
|---|---|---|
| Sales | 335,899 | 354,160 |
| Cost of goods sold | (279,234) | (293,234) |
| Gross margin | 56,665 | 60,926 |
| Personnel costs | (18,421) | (20,939) |
| General costs | (13,191) | (11,571) |
| Total costs | (31,612) | (32,510) |
| EBITDA | 25,053 | 28,416 |
| Depreciation and amortization | (2,496) | (2,592) |
| Operating income (EBIT) | 22,557 | 25,824 |
| Interest income | 2 1 |
4 2 |
| Interest expense | (1,865) | (1,486) |
| Other financial income and expenses | 8 | (214) |
| Profit before income tax | 20,721 | 24,166 |
| Corporate income tax | (5,207) | (6,772) |
| Net profit | 15,514 | 17,394 |
| Total basic EPS (in €) | 0.630 | 0.714 |
| Total diluted EPS (in €) | 0.630 | 0.706 |
| (in € thousands) | H1 2018 | H1 2017 |
|---|---|---|
| Cash flow from operating activities | 21,694 | 27,881 |
| Net changes in working capital | (24,959) | 7,557 |
| Paid interest and taxes | (10,459) | (8,256) |
| Net cash generated from operating activities | (13,724) | 27,182 |
| Cash flow from investing activities | (2,137) | (10,875) |
| Cash flow from financing activities | ||
| Dividend paid | (17,226) | (18,180) |
| Proceeds from new shares | 347 | 131 |
| Net changes in long term bank borrowings | (1,056) | 5,634 |
| Net changes in bank financing of working capital | 32,955 | (4,133) |
| Cash flow from financing activities | 15,020 | (16,548) |
| Net increase/(decrease) in cash and cash equivalents | (841) | (241) |
| Cash and cash equivalents at 1 January | 2,590 | 1,807 |
| Exchange gains/(losses) on cash and cash equivalents | (18) | (5) |
| Cash and cash equivalents at 30 June | 1,731 | 1,561 |
| Share | Net profit | |||||
|---|---|---|---|---|---|---|
| Share | premium | Other | Retained | for the | Total | |
| (in € thousands) | capital | reserve | reserves | earnings | period | equity |
| Balance at 1 January 2017 | 10,901 | 52,447 | 15,499 | 69,684 | 34,377 | 182,908 |
| Net profit for the period | - | - | - | - | 17,394 | 17,394 |
| Other comprehensive income | - | - | (6,448) | - | - | (6,448) |
| Appropriation of net profit | - | - | - | 34,377 | (34,377) | - |
| Issue of ordinary shares | 171 | 8,981 | - | - | - | 9,152 |
| Employee share option plan | - | - | 2 9 |
- - | - | 2 9 |
| Dividend relating to 2016, final | - | - | - | (18,180) | - | (18,180) |
| Balance at 30 June 2017 | 11,072 | 61,428 | 9,080 | 85,881 | 17,394 | 184,855 |
| Balance at 1 January 2018 | 11,081 | 61,658 | 3,801 | 76,039 | 32,472 | 185,051 |
| Net profit for the period | - | - | - - | - | 15,514 | 15,514 |
| Other comprehensive income | - | - | 2,613 | - | - | 2,613 |
| Appropriation of net profit | - | - | - | 32,472 | (32,472) | - |
| Issue of ordinary shares | 1 1 |
336 | - | - | - | 347 |
| Employee share option plan | - | - | 1 5 |
- | - | 1 5 |
| Dividend relating to 2017, final | - | - | - | (17,231) | - | (17,231) |
| Balance at 30 June 2018 | 11,092 | 61,994 | 6,429 | 91,280 | 15,514 | 186,309 |
| (in € thousands) | H1 2018 | H1 2017 |
|---|---|---|
| Net profit | 15,514 | 17,394 |
| Other comprehensive income | ||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods | ||
| Movement currency translation reserves on equity, net | 1,547 | (4,207) |
| Movement currency translation differences on goodwill | 852 | (2,021) |
| Movement on cash flow hedge | 214 | (220) |
| Total other comprehensive income | 2,613 | (6,448) |
| Total comprehensive income | 18,127 | 10,946 |
| Total comprehensive income attributable to shareholders of the parent | 18,127 | 10,946 |
| Spices and | Edible | Food | ||||
|---|---|---|---|---|---|---|
| (in € thousands) | Nuts | Seeds | Tea | Ingredients | Other | Total |
| H1 2018 | ||||||
| Sales | 165,178 | 89,887 | 71,009 | 10,396 | (571) | 335,899 |
| Costs | (153,932) | (81,427) | (68,536) | (8,476) | 251 | (312,120) |
| Effect discontinuation hedge accounting | 1,274 | - | - | - | - | 1,274 |
| EBITDA | 12,520 | 8,460 | 2,473 | 1,920 | (320) | 25,053 |
| Depreciation | (275) | (1,848) | (188) | (170) | (15) | (2,496) |
| EBIT | 12,245 | 6,612 | 2,285 | 1,750 | (335) | 22,557 |
| Financial results | (1,836) | |||||
| Corporate income tax | (5,207) | |||||
| Net result | 15,514 | |||||
| Total assets | 115,367 | 108,084 | 67,729 | 12,226 | 55,730 | 359,136 |
| Total liabilities | 90,774 | 70,361 | 49,931 | 9,002 | (47,240) | 172,828 |
| H1 2017 | ||||||
| Sales | 177,402 | 97,741 | 73,653 | 10,454 | (5,090) | 354,160 |
| Costs | (162,926) | (87,804) | (70,489) | (8,533) | 4,008 | (325,744) |
| EBITDA | 14,476 | 9,937 | 3,164 | 1,921 | (1,082) | 28,416 |
| Depreciation | (252) | (1,912) | (254) | (171) | (3) | (2,592) |
| EBIT | 14,224 | 8,025 | 2,910 | 1,750 | (1,085) | 25,824 |
| Financial results | (1,658) | |||||
| Corporate income tax | (6,772) | |||||
| Net result | 17,394 | |||||
| Total assets | 123,528 | 97,267 | 55,146 | 11,689 | 58,814 | 346,444 |
| Total liabilities | 92,896 | 65,741 | 41,570 | 8,541 | (47,159) | 161,589 |
| The column 'Other' mainly represents holding costs and intra-Group items. | |||||
|---|---|---|---|---|---|
| Sales per geography | |||||
| (in € thousands) | N L |
EU other | U S |
Other | Total |
| H1 2018 | 67,656 | 130,429 | 77,074 | 60,740 | 335,899 |
| H1 2017 | 63,356 | 161,383 | 91,562 | 37,859 | 354,160 |
| Other | H1 2018 | H1 2017 | |||
| Number of FTEs per 30 June | 576 | 606 | |||
| Effective tax rate | 25.1% | 28.0% | |||
The interim financial statements for the six months ended 30 June 2018 comprise the results of Acomo ('the Company') and its subsidiaries and have been prepared in accordance with International Financial Reporting Standards (IFRS), IAS 34 'Interim Financial Reporting', as adopted by the European Union. They do not contain all the information required for annual financial statements and should be read in conjunction with the Annual Report 2017, dated 8 March 2018 (published on the website of the Company).
The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period and are in accordance with IFRS, except for the adoption of new and amended standards as set out below.
(a) New and amended standards adopted by the Group
The following standards became applicable for the current reporting period:
The adoption of these standards had no material impact on the valuation and classification of the assets and liabilities of the Group, nor the income statement or cash flows.
The new standard IFRS 16 Leases will be applied as of 1 January 2019 by the Group. Preliminary calculations based upon current operational lease obligations indicate that the adoption of IFRS 16 will lead to the recognition of right of use assets and other assets of approximately €7 million and of financial liabilities of €7 million.
The H1 2018 interim financial statements are unaudited.
The movements in shareholders' equity are shown in the consolidated statement of changes in shareholders' equity on page 9. During H1 2018, the Company issued 25,000 new shares in relation to the existing share option plan.
On 30 June 2018, the number of shares outstanding was 24,649,060 (31 December 2017: 24,624,060).
Based on the existing share options granted, 12,000 share options are vested but not yet exercised. A total of 15,000 share options will vest on 1 September 2018 and 6,000 on 1 December 2018. In the years 2019 until 2024, a total of 94,500 share options will vest.
The risks related to the activities, and the risk control and management systems of the Group as described in the Annual Report 2017 are unchanged. The main risks and uncertainties remain applicable in the current financial year.
The half-year reported results of Acomo are not impacted by a seasonal pattern. The sales and margins are determined by market prices and conditions rather than seasonal fluctuations.
| 24 July 2018 | Ex-dividend date, interim dividend FY 2018 |
|---|---|
| 3 August 2018 | Dividend payment date, interim dividend FY 2018 |
| 14 February 2019 |
Publication of the 2018 financials (unaudited) – after close |
| 7 March 2019 |
Publication of the Annual Report FY 2018 – after close |
| 25 April 2019 |
Annual general meeting of shareholders |
| 29 April 2019 |
Ex-dividend date, final dividend FY 2018 |
| 9 May 2019 |
Dividend payment date, final dividend FY 2018 |
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