Interim / Quarterly Report • Aug 16, 2017
Interim / Quarterly Report
Open in ViewerOpens in native device viewer
In accordance with Annex 31 to the Regulation no 1/2006 with subsequent modifications regarding the issuers and operations with securities, issued by CNVM, currently ASF (Financial Supervisory Authority)
Date of the report: 30.06.2017
Name of the Company: S.C. AEROSTAR S.A. BACAU
Registered Headoffice: str. Condorilor nr 9
Telephone No: 0234-575.070
Sole Registration Number with Bacau Trade Register Office: 950531
Number in Bacau Trade Register: J04/1137/1991
Social capital, subscribed and paid: 48.728.784 lei
Regular market for trading issued securities: BUCHAREST STOCK EXCHANGE (symbol "ARS")
The interim financial report of the Board of Directors of AEROSTAR S.A. Bacau for half year 2017 presents the significant events and transactions in order to provide the understanding of the modifications in the position and performance of the company, which took place in the time period January 2017 - June 2017.
| MU | 30.06.2017 | 30.06.2016 | |
|---|---|---|---|
| Registered Capital | thousand lei | 48.729 | 48.729 |
| Turnover | thousand lei | 162.706 | 169.588 |
| Export Sales $\circ$ |
thousand lei | 136.726 | 142.029 |
| Expenses for Investments | thousand lei | 8.031 | 7.888 |
| Actual Number of Employees, of which: |
no | 2.128 | 2.005 |
| Own employees $\circ$ |
no. | 1.943 | 1.787 |
| Employees from temporary $\circ$ labour agent |
no. | 185 | 218 |
| Total Gross Profit | thousand lei | 31.307 | 41.286 |
| Net Profit | thousand lei | 25.213 | 34.636 |
| Stock Exchange Symbol "ARS" | MU | 30.06.2017 | 30.06.2016 |
|---|---|---|---|
| Number of shares | no. | 152.277.450 | 152.277.450 |
| Nominal Value per share | lei | 0,32 | 0.32 |
| Net Profit per share (EPS ratio) | lei | 0,166 | 0.227 |
| Market value per share | lei | ||
| at the end of the period *) | 3,43 | 2,87 | |
| Stock Exchange capitalization | lei | 522.311.654 | 437.036.282 |
*) source: Bucharest Stock Exchange Monthly Bulletin
The transaction price of an AEROSTAR share during the first half of the year 2017 was fluctuating between a minimum level of 3.25 lei and a maximum level of 3.70 lei.
| MU | 30.06.2017 | 30.06.2016 | |
|---|---|---|---|
| Average Exchange Rate EURO | lei/euro | 4,536 | 4.4953 |
| AN ARTHUR AN DEALAINN AN D'AIR AN A-SAOL ANN AN A-SAOL AN A-SAOL ANN A-SAOL ANN A-SAOL ANN A-SAOL ANN A-SAOL A TACHARTASANA A-SAOL A-SAOL ANN A-SAOL A-SAOL A-SAOL ANN A-SAOL ANN A-SAOL A-SAOL A-SAOL A-SAOL A-SAOL ANN A-SA |
|||
| Average Exchange Rate USD | lei/USD | 4,195 | 4,0307 |
| Average Exchange Rate GBP | lei/GBP | 5,274 | 5,7802 |
| (thousands lei) | 30.06.2017 | 31.12.2016 |
|---|---|---|
| TOTAL ASSETS, of which: | 413.550 | 419.092 |
| Immobilized Assets | 150.706 | 154.397 |
| Current Assets-total, of which: | 262.018 | 256.174 |
| o inventories | 62.893 | 50.272 |
| o commercial receivables and other receivables | 53.193 | 42.749 |
| o cash and cash equivalent | 145.932 | 163.153 |
| Other assets elements (expenses in advance) | 826 | 521 |
| TOTAL COMPANY CAPITALS, DEBTS AND PROVISIONS, of which: |
46.50 | Albert 1989-11-1092 |
| Total Debts | 71.928 | 72.939 |
| Total Provisions | 116.140 | 124.245 |
| Subsidies for Investments | 13.867 | 15.001 |
| Total Company Capitals, of which: | 225.482 | 213.908 |
| o registered capital | 48.729 | 48.729 |
| o result carried forward | 56.911 | 56.331 |
| o reserves | 104.516 | 67.833 |
| o other capital elements (receivables/debts related to tax on deferred profit) |
(6.876) | (6.362) |
| o profit distributed as legal reserve | (3.011) | (9.095) |
| o result (profit) | 25.213 | 56.472 |
$\sim$
| b) Revenues & Expenses Elements | ||
|---|---|---|
| (thousands lei) | 6 months 2017 | 6 months 2016 |
| Provincia a partidos. Por externa a partidos |
通神 部 | $\mathbb{E} \mathbb{E}^{(0)}_k$ |
| Revenues from Operations, of which: | 182.676 | 183.521 |
| $\sim$ Turnover | 162.706 | 169.588 |
| Financial Revenues | 2.296 | 3.589 |
| (Havier의 Gangeral) (Boo | (Inc. ast | $24\times 14$ kWH |
| Expenses for Operations, of which: ٠ |
(149.794) | (142.357) |
| $\sim$ Expenses with materials | (68.118) | (64.539) |
| ~ Expenses with employees benefits | (53.398) | (47.441) |
| Expenses regarding amortization of immobilizations |
(11.743) | (7.761) |
| ~Value adjustments regarding currents assets | (9.385) | 1.043 |
| ~Adjustments regarding provisions | 8.104 | (2.999) |
| ~Other expenses for Operations, of which: | (15.254) | (20.672) |
| ~expenses regarding external services | (14.056) | (19.543) |
| Financial Expenses | (3.871) | (3.467) |
| Result from Operations (profit) | 32362 | 41.164 |
| Financial:Result (loss/profit) | 16152-11 | |
| GROSS RESULTER (DIGIT) NET RESULT (Profit) |
an in $\mathbb{Z}[\mathbb{Z}_F] \neq \mathbb{K}$ |
|
| Cash-Flow Elements c) |
||
| (thousands lei) | 6 months 2017 | 6 months 2016 |
| A. Operations | ||
| · Amounts collected | 年生的 | $\mathbb{E}[S_1, S_2]$ |
| e Payments, of which | 15050 | [6023] |
| -payments for suppliers and employees | (128.333) | (118.415) |
| -payments for dues and taxes to state budget | (32.873) | (31.814) |
| Cosh from Ore rations we see | (6729) | es di d |
| B. Investments |
||
| d Amounts collected, of which | ler, | $\mathbb{R} \times \mathbb{R}$ |
| -installments collected from loans granted | ||
| -interest received from bank deposits and loans granted |
133 | 295 |
| -amounts collected from sales of immobilizations | 72 | 3 |
| -dividends received from subsidiaries | 97 | 50 |
| -amounts received from non-reimbursable funds | ||
| 0 | 4.671 | |
| C 2 iyin mencur combinada dan adalka dans | 501.923 | |
| CHINACIONAL CHINAICE Zandard Breaton |
||
| C.Financing Operations | ||
| Dividends paid but not collected, recovered Payments for dividends |
29 (EG) |
88 |
| Cash from Financing Operations | ${1, 1, 1}$ | |
| Maconumbia des Viens de la 19 | (3) | (180) $\mathcal{E}(\mathbf{r}) = \mathcal{E} \mathcal{N}$ . |
| Cash at the beginning of the period | 163.153 | 101.299 |
| Effect of currency exchange rates variations Cash at the end of the period |
(990) | (62) |
In the ordinary general meeting of 20 April 2017, AEROSTAR shareholders approved the distribution of the net profit of the year 2016, in amount of lei 56.471.594,73 lei, as follows:
The distribution of the dividends due to the shareholders of the company for the year 2016 will be made in accordance with the legal provisions applicable.
The costs with the distribution activity will be charged from the value of the net dividend of each shareholder.
In accordance with the classification of activities in the national economy, the main object of activity is manufacturing of aircraft and spaceships- CAEN code 3030.
The main field of activity is production.
AEROSTAR operates on the global market, highly competitive, where the dynamics of the dominant players- the large companies which integrate final products- pursue with consistency their major objective of business growth.
While the growth dynamics seems not to be affected by the geopolitics of the recent and present periods, the Original Equipment Manufacturers focus on those levers able to support growth: key cooperations within the supply chains, growing their share of the services and support business associated with their products.
The approaches related to innovative technologies, the progress in the digital transformation as well as cybersecurity are the aspects which are setting the growth coordinates in the aviation and defence industry.
During the first six months 2017, AEROSTAR business is aligned with the specific trends in the field of aviation and defence at global scale.
Further on, AEROSTAR's main lines of business are:
-Manufacturing of aviation products
-MRO commercial aircraft
-Aero & ground systems for defence, production and integrations
AEROSTAR maintained its positioning as number 1 in Romania for its object of activity.
Number 1 in aviation manufacturing
Number 1 in maintennace of commercial aircraft
Aerostar is a significant supplier for the solutions in the field of aero & ground defence systems.
AEROSTAR is a regional leader in these market domains.
AEROSTAR holds a significant footprint in the global programmes of aeronautical manufacturing.
Aerostar fulfills at a high level the performance and competitiveness criteria and was specifically distinguished by AIRBUS and SAFRAN Landing Systems on the occasion of their annual meetings with their suppliers in the manufacturing programmes.
The positioning on the market is characteristic for the tier 2 suppliers in the global supply chains in the aviation industry.
AEROSTAR's contribution in the supply chains of the two dominant global players, AIRBUS and BOEING, is based on the technological development and of the production systems.
The total revenues during the first semester 2017 were in amount of 184.973 thousand lei. The expenses made to achieve these revenues were in amount of 153.666 thousand lei. The net profit achieved was in amount of 25.213 thousand lei.
We present the comparative evolution for the sales of products and services (thousand lei):
We present the markets where AEROSTAR business was performed during the first six months 2017 (as contribution in total sales)
In the first six months 2017 the level of the investments made by AEROSTAR from own sources was in amount of 8.031 thousand lei.
From this amount, 7.397 thousand lei were spent for the acquisition of technological equipment, hardware, measurement and control units, installations, internal and freight transportation vehicles and equipment, etc while 634 thousand lei were spent for the acquisition of software licenses and for the development of the IT system applicable to the production management.
Aviation is certainly is among the most advanced from the digitalization viewpoint.
The subcontractors management, the integration of all components are performed using highly digitalized business process for the very reason to provide for the traceability, transparency and integration of the processes.
The digitalization process initiated in AEROSTAR is not an option, it is a MUST.
The purpose of the digitalization is obviously to have an increased effectiveness of the data flow, to reduce the time to convey the information and use it when needed and not later.
The digitalization does not start from zero in AEROSTAR, there is already a range of digitalized processes, a sensors network installed on the equipment which join into an Internet of Things, there are already ERP systems, MRP, PDM.
Aerostar has the hardware and software resources required to continue this process, as well as the human resource to create the applications which are at the basis of the digitalization process. The company is under full digitalization processes.
The main objective of the project team made of AEROSTAR specialists is the digitalization of all the production processes by the end of 2018.
During the first six months 2017 AEROSTAR maintained the certifications and approvals issued either by the certification bodies, or by the customers or other regulatory authorities.
As regards quality, surveillance audits were performed in AEROSTAR both by the Romanian Civil Aeronautical Authority in order to maintain the Part 21G and Part 145 approvals, by the certification body AEROQ in order to maintain the certification in accordance with the requirements of SR EN ISO 9001, by DQS in order to maintain the certification in accordance with the requirements in AS9100, as well as by OMCAS in order to maintain the certification in accordance with the requirements in AQAP 2110.
As regards environment, four inspections were made by Garda de Mediu (environment police), an on site inspection by the Environment Protection Agency Bacau as a first step in the process to renew the approval, as well as the audit for the validation of the GES (greenhouse effect gas) certificates for the year 2016.
Also, the GES certificates were submitted in order to provide compliance with the applicable legislation.
During this period the water monitoring inspection was made for the entire company site in accordance with the requirements in the Integrated Environment Approval.
In the first semester 2017 an actual number of 2128 employees were working in AEROSTAR, of which 185 were made available by AIRPRO CONSULT S.R.L., a company which operates on the market as a temporary labour agent.
AEROSTAR continued the professional development programmes for the employees by professional formation courses.
AEROSTAR provides training of its employees for specialties and skills which are not provided otherwise on the labour market.
During the first six months 2017 the total attendance in the professional formation programmes was 1879 as a number while the expenses for this activity were in amount of 523 thousand lei.
With reference to the background of the employees, the figures indicate as follows:
| - university degree | 566 |
|---|---|
| - high school education | 650 |
| - vocational schools | 646 |
| - other categories | 83 |
These figures do not include the numbers from the people employed through the temporary labour agent company and utilized in the production processes in AEROSTAR.
The average union membership was 76,15%.
The negotiations for a new collective labour contract were finalized on 22 March 2017 with validity in force from the date of 01 April 2017 until 31 March 2019.
$\ddot{\cdot}$
AEROSTAR is exposed to a variety of risks and uncertainties which may affect its financial performances. The business lines followed by Aerostar, the operational results or the financial situation of the company, could be affected by the materialization of the risks presented as below.
pursues to secure the mid and long term sustainability and also to reduce the Aerostar uncertainty associated to its strategic and financial objectives.
The risk management processes provide the identification, review, assessment and administration of the risks in order to minimize their effects down to an agreed level.
Still, there may be risks and uncertainties further to the ones presented as follows, which are not currently known, or which are considered insignificant but which may affect in the future the business lines followed by Aerostar.
It is the risk to register losses or not to achieve the estimated profits, caused by:
Assimilated to the operational risk is the Legal Risk, defined as the risk of loss due to penalties. fines and sanctions for which Aerostar is liable in case of failure to apply or inadequate application of the dispositions, of the legal or contractual regulations, or in case the contractual rights and obligations are not properly set for Aerostar and/or its business partner.
The monitoring and the elimination of the effects of the legal risk is implemented by means of a permanent updating system as to the legislative changes, as well as through a system for the review, advise and approval of the terms and conditions included in the commercial agreements.
Aerostar allocates and will continue to allocate investment expenses and other operational expenses in order to prevent and manage the operational risk.
In addition, Aerostar seeks to have available company funds, by setting provisions for risks and related expenses, in order to cover its risks of exposure.
Also, in order to minimize the operational risk, Aerostar annually renews the liability insurance contract with prime insurance-reinsurance companies in connection with its main business lines (aviation products manufacturing and maintenance of commercial aircraft).
The Credit Risk is the risk of AEROSTAR bearing a financial loss as a result of the failure to meet the contractual business obligations by a customer, mainly determined by cash, cash equivalents (bank deposits) and commercial receivables.
The cash and cash equivalents are placed solely in first rank banking institutions and are considered to have a high solvency degree.
The credit risk, including the risk of the country where the customer performs its operations, is administered for each business partner. When considered necessary, specific mitigation tools are requested (advance payments, letters of bank guarantee, confirmed letters of credit).
AEROSTAR has no significant exposure towards a single partner and does not register a significant concentration of the turnover on a single geographic area.
A presentation of the quantitative information regarding AEROSTAR exposure to the credit risk is detailed in Note 9 (Financial Instruments) of the Financial Statements.
The Liquidity Risk is the risk for AEROSTAR to encounter difficulties in fulfilling its debt-related obligations as they become due.
For the administration of the liquidity risk, the treasury cash flows are monitored and reviewed weekly, monthly, quarterly and annually in order to establish the estimated level of net modifications of the cash. Such reviews provide the basis for the financing decisions and for the capital undertakings.
In order to reduce the liquidity risk, AEROSTAR keeps an annual cash reserve in the form of a Credit Line (used as overdraft) granted by banks.
During the reporting period, AEROSTAR did not use the contracted credit line in amount of 2.500.000 USD, all the activities being financed from company's own sources.
The Market Risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of the changes in market prices.
The market risk includes the price risk, currency risk and interest rate risk.
AEROSTAR is mainly exposed to the price risk determined by the fluctuations of the price of raw materials and materials used in the production processes.
The management of this risk is made by:
AEROSTAR is exposed to currency risk as 84% of the turnover is related to USD and EUR, while a considerable amount of the operational expenses is related to the operational currency (LEI).
So, the company is exposed to the risk of the exchange rate fluctuations, affecting both the net revenues and the financial position, as they are both expressed in LEI.
An analysis of AEROSTAR's sensitivity to the currency fluctuations is detailed in Note 9 (Financial Instruments) of the Financial Statements.
As far as the interest rate risk is concerned, due to the fact that AEROSTAR S.A. did not use the contracted Credit Line during the reporting period, the cash revenues and flows are independent from the interest rate variation on the banking market.
During the first six months 2017 AEROSTAR fulfilled all its financial obligations. No changes ocurred regarding the rights of AEROSTAR shareholders in the first half year 2017.
In the first semester 2017, AEROSTAR did not conclude major transactions with the persons with whom is acting in correlation or transactions in which such persons were involved.
GENERAL DIRECTOR, GRIGORE FILIP
FINANCIAL DIRECTOR, DORU DAMASCHIN
The undersigned GRIGORE FILIP, as President of the Board of Directors and General Director of SC AEROSTAR S.A. and DORU DAMASCHIN, as Vice-president of the Board of Directors and Financial Director of S.C AEROSTAR S.A., hereby undertake responsibility for the preparation of the individual financial statements as on 30.06.2017 and we confirm hereby that:
President of the Board of Directors and General Director, GRIGORE FILIP
Vice-president of Board of Directors and Financial Director, DORU DAMASCHIN
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.