Interim / Quarterly Report • Aug 16, 2019
Interim / Quarterly Report
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AEROSTAR S.A.
Report of the Board of Directors on 30.06.2019 | 2
Date of report: 30.06.2019
Name of the company: AEROSTAR S.A. Bacău
Registered headquarter: 9, Condorilor Street, Bacău, România
Telephone number/fax: +40234575070/ +40234572023
Individual Identification Number: RO 950531
Trade number in Bacau Trade Register: J04/1137/1991
LEI Code of identification: 315700G9KRN3B7XDBB73
Subscribed and paid-in registered capital: 48.728.784 lei
Number of shares issued: 152.277.450
Nominal value: 0,32 lei / share
The regular market on which the shares issued are traded:
Bucharest Stock Exchange ("ARS" indicator) – Standard Category
The current half-year report of AEROSTAR S.A. is prepared in accordance with Regulation no. 5/2018 of the Financial Supervisory Authority (FSA) regarding the issuers of financial instruments and market operations, entered into force from 11 June 2018 and Law 24/2017 from 21.03.2017 regarding the issuers of financial instruments and market operations.
The scope of this half-year report is to inform the investors regarding the modifications of the position and performance of the company, which took place between January-June 2019, as well as regarding the predictable evolutions on the aviation and defence market industry and regarding the growth and development opportunities of the company.
The report is based on the frame established in Annex 14 Regulation no. 5/2018 of the Financial Supervisory Authority (FSA) – Model half-year report for the first semester, and presents the review of the current economic-financial situation of AEROSTAR, in comparison with the similar period of the previous year; an analysis of the activity, of the events, transactions and economic changes which significantly affect the income from the basic activity, as well as the possible changes which can affect the equity, the company's administration, as well as the significant transactions.
The financial statements established on 30 June 2019 are accompanied by the revision report of the independent/statutory financial auditor.
According to the classification of activities in the Romanian economy, the main object of activity of AEROSTAR is manufacture of aircraft and spaceships – CAEN code 3030.
The main field of activity is production.
AEROSTAR prepares the financial statements in accordance with the international financial reporting standards (IFRS).
| UM | 30.06.2019 | 30.06.2018 | |
|---|---|---|---|
| Share capital | thousand lei |
48.729 | 48.729 |
| Turnover | thousand lei | 176.779 | 160.081 |
| o Export sales |
thousand lei | 153.028 | 135.097 |
| Number of employees, from which: |
no. | 1.913 | 2.044 |
| -own employees | no. | 1.815 | 1.907 |
| - employees attracted through temporary labour agent |
no. | 98 | 137 |
| Net profit | thousand lei | 28.473 | 45.550 |
| Cash - flow |
thousand lei | 178.453 | 159.938 |
| General liquidity | - | 8,49 | 5,44 |
|---|---|---|---|
| Investments expenses | |||
|---|---|---|---|
| from own sources | thousand lei | 7.393 | 12.352 |
The exchange rates of the national currency for the first semester of 2019 were the following:
| UM | 30.06.2019 | 30.06.2018 | |
|---|---|---|---|
| Average exchange rate EURO/6 months | lei/euro | 4,7408 | 4,6537 |
| Average exchange rate USD/6 months | lei/USD | 4,1949 | 3,8434 |
| Average exchange rate GBP/6 months | lei/GBP | 5,4280 | 5,2899 |
| Inflation | % | 2,98 | 2,42 |
The main characteristics of the shares issued: 152.277.450 nominative shares, ordinary, of equal value, fully paid, issued in dematerialized form and recorded through registration in the Shareholders' Register. The register of AEROSTAR shares is under the administration by Depozitarul Central S.A. Bucharest.
AEROSTAR S.A. Bacau as an issuer is registered with the following data: Unique registration code 950531, code ISIN ROAEROACNOR5, ARS stock exchange symbol, the shares issued being in the standard category.
| 30.06.2019 | 30.06.2018 | 30.06.2017 | |
|---|---|---|---|
| Number of shares | 152.277.450 | 152.277.450 | 152.277.450 |
| Nominal value per share (lei) |
0,32 | 0,32 | 0,32 |
| Equity (lei) |
327.032.447 | 281.966.899 | 225.481.238 |
| Price at the end of the period 1 (lei) |
5,05 | 4,90 | 3,43 |
| Stock exchange capitalization 1 (lei) | 769.001.123 | 746.159.505 | 522.311.654 |
| Maximum price 1 (lei) |
5.10 | 5,36 | 3,70 |
| 1 Minimum price (lei) |
4,78 | 4,65 | 3,25 |
| Result per share (lei) |
0,187 | 0,299 | 0,166 |
| MBR Indicator (market to book ratio) (stock exchange capitalization / equity). |
2,4 | 2,6 | 2,3 |
1 ) Source: Monthly Bulletin issued by the Bucharest Stock Exchange
On 24 April 2019 the Ordinary General Meeting of the Shareholders was held in accordance with the applicable legal regulations.
The General Meeting of the Shareholders from 24 April 2019 has approved the Report of the Board of Directors related to the financial year 2018, the Report of the financial auditor regarding the auditing of the financial statements of 2018, the Financial Statements of 2018, the Discharge of Accountability of the Board of Directors and executive management for 2018, Distribution of the net profit and the establishment of the dividend.
As regards to the distribution of the net profit and the establishment of the dividend related to the financial year 2018, the documents of the Ordinary General Meeting of the Shareholders were published in accordance with the applicable legal regulations and comprised three variants for the distribution of the net profit and the value of the gross dividend, as follows: a variant proposed by the Board of Directors and two alternative variants proposed by Societatea de Investitii Financiare Moldova S.A. as shareholder owning 15,05% from the share capital of AEROSTAR.
The variant proposed by the Board of Directors for the distribution of the profit realised in 2018 in amount of 79.920.849,23 lei has provided:
distributions to the legal reserve of the reinvested profit: 26.034.996,79 lei
distributions to statutory reserves: 37.436.793,44 lei
distributions as dividends: 16.449.059,00 lei and establishing a gross dividend per share for 2018 of 0,108 lei.
The variant I proposed by SIF Moldova for the distribution of the profit realised in 2018 in the amount of 79.920.849,23 lei provided:
distributions to the legal reserve of the reinvested profit: 26.034.996,79 lei
distributions to the statutory reserves: 14.293.715,44 lei
distributions as dividends 39.592.137,00 lei and establishing a new gross dividend per share related to 2018 is 0,26 lei.
As an alternative, the variant II proposed by SIF Moldova for the distribution of the profit realised in 2018 in the amount of 79.920.849,23 lei has provided:
distributions to the legal reserve of the reinvested profit: 26.034.996,79 lei
distributions to the statutory reserves: 37.436.793,44 lei, from which the amount of 23.143.078 lei to be used to perform a program to buy-back company's shares with the purpose to reduce the share capital.
distributions as dividends according to the Board of Directors proposal (gross dividend per share: 0,108 lei): 16.449.059,00 lei and approval of a gross dividend/share is 0,108 lei.
This variant II proposed by SIF Moldova of distributing the net profit of 2018 provided the distribution of the net profit of 2018 and conducting a program to buyback company's shares in order to reduce the share capital, and also the convening of the Extraordinary General Meeting of the Shareholders to approve the conduct of a program of buy-back company's shares.
In the Ordinary General Meeting of the Shareholders from 24 April 2019, AEROSTAR shareholders approved the variant proposed by the Board of Directors for the distribution of the net profit related to the financial year 2018, respectively of the amount of 79.920.849,23 lei, as follows:
- distributions to the legal reserve of the reinvested profit in the amount of 26.034.996,79 lei;
- distributions to the statutory reserves in the amount of 37.436.793,44 lei;
- distributions for dividends of the amount of 16.449.059,00 lei and establishment of a gross dividend per share of 0,108 lei, corresponding to a share with the nominal value 0,32 lei.
The date of 26 June 2019 was approved as Payment Date of the dividends related to the financial year 2018.
The coordinates of the payment of the dividends due to the shareholders, distributed from the profit of year 2018 were made known to the shareholders of the company through a press release in 04.06.2019, as follows:
a) the gross dividend per share is 0,108 lei, the amount from which the tax on dividends is retained at the source, in the quotas provided in the legislation entered into force at the payment date;
b) the "ex date" was established for the date of 06.06.2019 according to the decision of the Ordinary Meeting of the Shareholders from 24.04.2019;
c) the shareholders entitled to receive the dividends distributed from the net profit realised in the financial year 2018 are the ones registered in the consolidated register of the shareholders at the date of 07.06.2019 – The registration date (approved by the Ordinary General Meeting of the Shareholders from 24.04.2019);
d) the dividends distributed from the profit realised from the financial year 2018 were paid to the shareholders starting with 26.06.2019 – Payment date (approved by the Ordinary General Meeting of the Shareholders from 24.04.2019).
The payment of the dividends is performed through Depozitarul Central by respecting the applicable legal provisions (art. 86 paragraph 5 from Law 24/2017 and art. 177 from ASF Regulation no. 5/2018), as it was detailed in the press release from 4 June 2019 and which can be found on the company website www.aerostar.ro, at the section Investors Relation/Current Reports.
We remind the shareholders that any data modifications from the register of the shareholders (modifications of name, place of residence, legacies etc.) are performed only by the Depozitarul Central SA – with the headquarter in Bucharest, Sector 2, Carol I Boulevard, no. 34036, 3, 8 and 9 floors, telephone 021.408.58.66, 021.408.58.19 – at the request of the shareholder/person entitled.
Additional information regarding the payment of the dividends can be requested at: - Depozitarul Central: e-mail: [email protected]
In the first six months of 2019, AEROSTAR operated in conditions of continuity on the domestic and foreign market in the field of the aviation and defence industry.
AEROSTAR S.A. Bacau is the successor of Uzina de Reparatii Avioane-URA (Aircraft Repair Plant) (UM 03767) established through HCM 1165 dated 17 April 1953, Bucharest.
The successive names held were URA-1953, IRAv - Intreprinderea de Reparatii Avioane (Aircraft Repair Enterprise) - 1970, Intreprinderea de Avioane-IAv (Aircraft Enterprise)-1978.
AEROSTAR S.A. operates since 1991, when the company was registered as a shareholding company according to Law 15/1990 and of the HGR no. 242/29 March 1991 regarding the establishment of shareholding companies in the aircraft industry.
The company was registered in 10 July 1991 as a shareholding company with fully state-owned capital at the Bacau Trade Register under the number J04/1137/1991.
AEROSTAR shares are traded at the Bucharest Stock Exchange since 1998, with the ARS indicator and since 2000 is a fully private company.
AEROSTAR is part of the national industry of defence in compliance with the law 232/2016 law and holds the Authorization no. 23/2016 and owns Authorization no. 23/2018 from the Direction of the Defence Industry from the Ministry of Economy.
Achieving AEROSTAR objectives implies to be aware and to assume the factors from the decisional process, of certain multiple aspects which manifest both in the internal environment, as well as in the external environment of the company, as problems, situations, events which may occur in the future and which can have impact on obtaining the wanted results.
The elements of the risk-based management thinking, founded on the Aerostar agreement as an organisation and of the context in which it operates, as well as by understanding the necessities and expectations of the parties interested to obtain the predicted results of the organisation, establish the general frame to treat risks, to the extent that the risks are understood as uncertainties to satisfy the requests/expectations of the interested parties, under the effect of certain factors which derive from the context in which the organization operates.
The aspects identified that are part of the external context of AEROSTAR are: political, economic, social, technical, legal and environmental.
The aspects identified that are part of the internal context of AEROSTAR are from the following categories: human resource, infrastructure, capabilities and authorizations, from the field of governance, but also of the company's performance.
The relevant interested parties which were identified are: the customers, employees, investors, technical authorities and of applicable regulation, bodies of certifications, suppliers, educational establishments, union organizations, local and state community.
The recent years of continuous growth are threatened by the changes on the aviation market. The analysts are warning about the slowing down of the global economy, the escalation of commercial tensions and of political uncertainties.
The development forecasted on the Asiatic markets, the Chinese ambitions in the aerospace field, the Brexit and the global geopolitical tensions have an impact on the aircraft industry, with economic effects potentially disruptive over the supply chains.
The excess of production capacities in Europe is estimated at approximately 25%, which determines an increased interest equally from the investors and the players from this industry.
While the forecasts are maintained solid for the next 20-30 years, the data available and the signals regarding the aircraft orders on short-term do not confirm the planned figures. The targets for the new aircraft orders are not achieved.
The long cycles of manufacturing of over 2 years for the commercial aircraft and the complexity of interconnections from this market are making these evolution less visible.
The "Airbus pact" signed 50 years ago between France and Germany was the act of birth of one of the two dominant players at a global scale. The aircraft with number 12.000 delivered by Airbus in May was an Airbus 220, the new brand of the exprogram Bombardier C series, assembled in Canada.
Bombardier has already taken a step back towards completly retreatment from the market industry of commercial aircraft. In 25 June it was announced the conclusion of the definitive agreement for the sale of the regional aircraft programme from CRJ serie towards the Japanese company Mitsubishi Heavy Industries, after Bombardier quitted in the last years also on other programmes, such as Q400 and the amphibious aircraft programme.
While consolidating the maintenance activities for the aircraft Falcon, Dassault Aviation is strengthening its footprint in Holland taking from RUAG the maintenance bases for business aircraft from Geneva and Lugano.
Embraer also celebrates 50 years in 2019; after half of century having the title of the
emblem of Brazilian industry, following in short time, to own more that 20% from the entity having the new name brand Boeing Brazil – Commercial, but will further be in control with 51%, through a separate association with Boeing for the KC-390 military aircraft programme.
The market changes of the regional aircraft are strong: while Bombardier and Embraer are preparing to exit the market of commercial aircraft, the players from Asia are strengthening their positioning: Mitsubishi, COMAC from China a.o.
Due to the termination of certain programmes such as Airbus 380 and Falcon F5X, as well as due to the low demand for business aircraft or of helicopters, the volume of production activities is in decrease.
The same result has the extended grounding of 737 Max fleet.
The preoccupations for a sustainable future dominates the outlook: "a greener" aviation, new technologies, new collaboration models, launching the programmes of big development.
The demonstrator based on a turboprop Daher TBM series 900 aircraft modified is the proposal Daher, Airbus and Safran for a model of electric hybrid propulsion, applicable also at large aircraft.
Dassault Aviation presented the demonstrator for the future European combat aircraft system (FCAS). The agreement between France and Germany for this development is followed by the interest of Spain to participate financially and industrially to the future programme.
SSAB is interested to acceede to the technological initiatives from the Britain's TEMPEST next generation combat aircraft.
Turkey launches the 5th generation twin-engine aircraft which shall replace from 2030 the F-16 aircraft locally assembled.
The key movements of the main global players from the aviation and defence field continue in the field of associations, acquisitions and fusions, which shall better analyse the capabilities of the market requirements.
After Sikorsky Aircraft became part of Lockheed Martin, United Technologies, which includes the manufacture of engines Pratt & Whitney, is merging with Raytheon based on the aero spatial and defence technologies complementarities in a "transaction of equals" announced in June, forming a huge contractor in the defence field whose size is exceeded only by Boeing.
The value realised by Aerostar in the chain of value is created in the basic business, in the field of aviation and defence.
In the first six months of 2019 there were no significant modifications of the business model adopted.
The management has adopted an integrated business model, based on the systemic – process approach and on RISK management thinking.
This year the most important investment is the MRO Centre for civil aircraft at Iasi Airport.
In terms of construction, important steps were completed and the construction of the investment objective is performed by respecting the obligations of Aerostar in accordance with the endorsements issued by various institutions to obtain the Plan of urbanistic area and with the ones which were required to obtain the Authorisation to Construct the hangar.
From the activities which are completed until this date, we mention the completion of the urbanistic area plan, issuing the construction authorisation, the elaboration of the Technical Project constructive documentation, works of organizing the construction site.
The embankments, the soil covering and the retaining wall on the north side were performed, the foundations of the support columns were casted and the grounding system of the hangar was executed.
The target of completing the construction is until the end of 2019.
As regards to the investment in the manpower for the future civil aircraft maintenance centre Boeing 737 and Airbus 320, the preparing of the technicians and engineers for the Iasi Centre is realised by coordinating the trainings from Bacau Centre.
The total value of the investment for the future MRO civil center from Iasi is 10 million Euro.
Designated in December 2018 by the Romanian Government as a Maintenance Centre for F-16 from the Romanian Army, AEROSTAR took initiative and initiated the investments for setting up the capabilities required. The maintenance centre for F-16 aircraft shall be developed progressively by allocating and training the personnel, the manufacturing and purchasing the devices and testing benches and creating its own infrastructure for these aircrafts.
The investment of approximately 10 million Euro, on a period of 3 years, we estimate that it will be conducted without records of any financial risk from our own sources of this capability ment to develop the operating capacity of the Romanian F-16 aircraft.
In the first semester of 2019, the value of expenses with the investments realised in Aerostar were 7.393 thousand lei. From this volume, 14% were investments of replacement, meant to change the worn fixed-capital and 86% were investments of development meant to ensure the growth of the work productivity and to create a strong training effect.
All these investment efforts, in comparison with the ones from the previous years, were executed in order to determine certain long-term businesses which shall fulfil the requirements of adaptability and flexibility of the company, having in their structure specific measures for environment protection, and the targets consists in the minimisation of water, paper and energy consumption; limiting the carbon footprint of related activities; the preservation of the natural resources and recycle our own waste.
After the company's relaunching which happened in the first years after 2000, it ha been operated consistently to reposition the company on the market, by focusing on the following fields:
This continuous process presumed the upgrading of the production capabilities with modern equipment, the digitalisation of the processes (management, design), assimilation and qualification of the special processes of production after the western standards.
An essential component consists in the schooling and qualification of the personnel to adapt to the new technologies.
In the first semester of 2019, AEROSTAR had sales in the amount of 176.779 thousand lei, from which 153.016 equivalent in thousand lei were export sales (87%), with a high diversity of customers, in a high number of different production programmes.
The contribution of the main business lines at the sales on 6 months 2019 are illustrated below:
Aerostar sales were realised on a large global market both in civil field as well as in defence.
| 6 months 2019 | 6 months 2018 | |
|---|---|---|
| Romania | 13,44% | 15,61% |
| Europe | 70,00% | 67,24% |
| Asia | 5,49% | 8,94% |
| Africa | 6,10% | 5,35% |
| Canada | 4,97% | 2,87% |
AEROSTAR followed a strategy of development and growth in the field of the basic businesses from the aviation and defence industry.
97% from the production of AEROSTAR in the first semester is in the aeronautical field.
The average added value made by AEROSTAR is arround 62%.
Aerostar S.A. is recognized in the European aviation industry and beyond, being one of the significant suppliers in Airbus programmes, but also in the maintenance field of industrial level for commercial aicraft.
In the field of aircraft manufacturing, the AEROSTAR positioning in the global supply chain is "Tier 2" in the field of aerostructure manufacturing and "Tier 1" in the filed of landing gears and components of hydropneumatic equipment for aircraft.
AEROSTAR is well anchored in the global supply chain from the aviation field, being a significant partner in programmes of aircraft manufacturing with a solid perspective.
It is targeted to identify sustainable solutions of diminishing the lowering effect of the production volume after the suspension of F5X and A380 programmes.
Aerostar realizes a significant volume of small parts and sub-assemblies from aluminium alloy, in a high diversity of types and dimensions, manufacturing technologies and delivery methods.
The MRO civil centre from Aerostar has extended its customer base in regards to the portfolio of capabilities from the category of upgrades and modifications type STC (supplemental type certificates).
The same as in civil aviation manufacturing, Aerostar's MRO business for commercial aircraft is anchored in the sector market defined as the growth core, the Airbus 320 and Boeing 737; this is also the most competitive and competitional.
Starting with the Part-145 approval, Aerostar's maintenance base developed its market position by obtaining a large range of approvals from civil aviation authorities of many countries in the European Union and beyond.
The experience accumulated in this domain is the base for the development of the future civil aviation MRO Centre Part 145 in Iasi.
In equal measure, the profile of Regional Centre of Excellence in the field of MRO commercial aircraft has been consolidated and it is a pole of sustainable development with a significant growth.
AEROSTAR is part of the national defence industry in accordance with Act 232/2016 and Authorization no. 23/2018 from the Direction of the Defence Industry of the Ministry of the Economy, having the status of authorized economic operator registered in the Unique Register of the economic operators and of production capabilities and/or defence services, having the responsibility to maintain the physical and functional integrity of the assets in the inventory.
In the field of the defence systems, AEROSTAR operates in upgrading programmes, integration and maintenance of military and defence aviation systems.
Designated by the Romanian Government as a maintenance centre for F-16 aircraft from the Romanian Army, AEROSTAR took initiative and initiated the investments to set up the capabilities for the maintenance centre which shall develop progressively by allocating and training the personnel, manufacturing and purchasing the devices and testing benches and creating its own maintenance infrastructure for these aircraft.
AEROSTAR has the capability to fully or partially upgrade the metric gamma radars (Eastern manufacturing).
Nominated and agreed as a sole supplier for the IFF systems installed on operational platforms within the army, AEROSTAR has successfully implemented the IFF Mode 4 equipment on different types of platforms (aircraft, helicopters, spaceships, ground systems of air-defence) being prepared to proceed to Mode 5 implementation, in accordance with the requirements of Ministry of Romanian Defence.
The status obtained by AEROSTAR in 2018 as an approved Raytheon supplier, the qualification of certain specific processes and procedures, resulted in the first part of 2019 in the order placed for manufacturing of components and mechanical assemblies for the installation and support of the electronics inside the radar shelter.
This way, AEROSTAR became part of the Raytheon's global supply chain for Patriot systems and operates to develop and consolidate this position.
In the first six months 2019, in order to achieve the strategic objectives defined through the policy referring to quality and environment, Aerostar actioned to maintain its certifications – both on quality and on environment and respectively to maintain the authorizations obtained from the part of regulatory authorities in field.
Satisfying the customer requirements is one of the main objectives of Aerostar. In this sense, within the company, the key performance indicators referring to on time delivery and the manufacturing of products and performing services in accordance with the requirements are permanently monitored, and actiones shall be established if the risk or their unfulfilment is identified.
From the social responsibility and sustainable development point of view, as to environment, Aerostar has set the objectives to improve its performance in the field of the pollution prevention, sustainable use of the resources and the climate changes mitigation, following the guidelines of SR ISO 26000.
Aerostar fulfilled all its obligations resulted from the Greenhouse Gas Emissions Authorization.
Also, the current monitorizations of the indicators for waste water and ground water have been performed (indicators specified in the Environment Integrated Authorization) and the actions required for the Environment Integrated Authorization and of the Water Management Authorization were commenced.
On 30.06.2019 AEROSTAR had a total number of 1.913 employees, from which an effective number of 1.815 employees, with 176 employees in position of management.
To these, a number of 98 employees are added, manpower employed through the temporary work agent AIRPRO CONSULT S.R.L.
With reference to the background and skills, the figures are the following:
| employees, university degree: | 572, | from which: |
|---|---|---|
| - doctorate graduates: |
11 | |
| - doctorate studies under way: |
6 | |
| - master studies graduates: |
210 | |
| employees, post high school studies: | 13 | |
| high school employees: | 605 | |
| employees, vocational studies: | 562 | |
| employees, on job training qualifi cations: | 40 | |
| employees, gymnasium background: | 23 |
The average union membership of the company on the first 6 months from 2019 is 68,34%.
The average work duration is of 17 years and the average age of AEROSTAR employees is 46 years.
In the first semester of 2019, in AEROSTAR was negociated a new collective agreement for the period 01.04.2019 – 31.03.2021.
The professional development of the employees is realised by including them in training programmes, including the professional training programmes dedicated for the new employees.
As regards to the costs registered in this period on the annual budget for professional training, the ones from the external services from the training field alone have increased with over 38% in comparison with the same period from the previous year.
The company ensures optimal conditions regarding security and health at work for all
the employees, regarding the mode of action in case of emergencies.
AEROSTAR is authorized as supplier for professional training by the Ministry of Education and Ministry of Work for aviation specific skills: fitters, aviation mechanic, aviation electromechanic and mechanic of aircraft engines.
The company operations take place at its main headquarter located in Bacau, 9, Condorilor Street, postal code 600302.
AEROSTAR has a second site without legal personality, a secondary place of business, in Iasi, 25B Aeroportului Street. Currently, AEROSTAR does not perform economic activities at this secondary place of business.
Aerostar's production facilities and capacities are found at the site in Bacau, where there is also the registered headquarter of the company.
The company owns in its property a surface of 45,29 ha, with access to the European road E85.
Aerostar has direct access to the "George Enescu" airport's runaway in Bacau.
At the registered headquarter are build all the facilities required to execute the activities of production, according to the object of activity.
The production space comprises hangars, industrial buildings, technological testing benches, spaces for administrative and social activities. Also, the company has dedicated areas for office work for technical and economical activities.
All these areas are maintained in good condition.
The total surface of buildings is approximately 13,47 ha.
AEROSTAR assets are compliant with provisions imposed by the health, safety and
environment management system, respecting the applicable legislation and occupational safety regulations, as well as the requirements for protection and security of the company.
At 30 June 2019 the tangible assets held in property by AEROSTAR to perform the activities are in gross value of 250.124 thousand lei, which comprise the land, buildings, special constructions, installations, technological equipment, transport vehicles:
| Category of tangible assets | Gross value (thousand lei) |
Degree of wear (%) |
Estimated useful life (years) |
|---|---|---|---|
| Land | 28.401 | N/A | N/A |
| Constructions | 55.954 | 34,4% | 30-50 years |
| Investment property | 10.629 | 25,0% | 25-50 years |
| Technical installations, of which: |
153.577 | 52,4% | |
| technological equipment |
148.519 | 52,0% | 4-25 years |
| transport vehicles |
5.058 | 61,3% | 4-18 years |
| Other tangible assets |
1.563 | 34,8% | 2-18 years |
| TOTAL | 250.124 | 41,1% | N/A |
There were no issues related to the ownership right over the tangible assets of the company.
The main shareholders are IAROM S.A. Bucharest and SIF MOLDOVA S.A. Bacau.
Further to these, a large number of shareholders is added, natural and legal persons, under the significance threshold as specified in the regulations of the Financial Supervisory Authority and the Bucharest Stock Exchange.
According to the data from the Bucharest Stock Exchange, the shareholding structure at 30 June 2019 is presented below:
| Shareholder | Number of shares | Participation owned |
|---|---|---|
| held | (%of the share capital) | |
| IAROM S.A. Bucureşti | 108.585.664 | 71,3078 |
| SIF MOLDOVA Bacău | 22.919.887 | 15,0514 |
| Other shareholders | 20.771.899 | 13,6408 |
| Total | 152.277.450 | 100,0 |
There are no litigations with the persons mentioned earlier.
In 2019, there were no subscriptions of new shares, nor participation certificates, convertible bonds, options or similar rights.
AEROSTAR monitors the activity related to the evolution of ARS shares at Bucharest Stock Exchange without interfering in its operations with such activity.
In the relation with the shareholders, AEROSTAR took into account in 2019 as well, to protect and secure the rights of the shareholders, that is:
to participate in the Ordinary General Meetings directly or by representation– by providing them special proxy forms, voting bulletins by correspondence, other useful information;
to have a fair treatment, no matter the stakeholdings;
to receive dividends proportional with the holdings of each shareholder.
In the relation with the capital market, AEROSTAR fulfilled in 2019 as well, all the reporting obligations arising from the legal provisions by publishing the mandatory current and periodical reports in the electronic system of the Financial Supervisory Authority and of the Stock Exchange, on the internet page of the company and by press releases.
According to the provisions of the Corporate Governance Code, the continuous and periodical reports were simultaneously released, both in Romanian and English.
The shareholders can obtain information about AEROSTAR and its main events on the internet page www.aerostar.ro.
Also, annual reports, as well as half-year and quarterly reports can be downloaded for the last five years, as well as the current reports and other useful information for the shareholders.
There were no modifications which affect the capital and administration of the company.
The company was not in the impossibility to respect its financial obligations during the period.
There are no modifications regarding the rights of the shareholders. There were no major transactions concluded by the company with the persons with which the company operates in collaboration or in which such persons were involved in the relevant period.
No data or information or any prospect for a public offer for sale, documents of public offer for purchasing, voluntary take-over or of any other nature is available. No notifications are available regarding reaching or exceeding the thresholds for holding the voting rights of AEROSTAR's shareholders are available.
with the parent company and with the related companies
During the first semester of 2019 there was no merger or significant reorganization, neither in AEROSTAR nor of the companies controlled by AEROSTAR.
The General Meeting of the Shareholders of "AEROSTAR TRANSPORTURI FEROVIARE" S.A. Bacau, held in statutory conditions at 08.11.2018, decided in unanimity the modification of art. no. 1 of the constitutive deed, that is to change the company name from "AEROSTAR TRANSPORTURI FEROVIARE S.A." to "ATF" S.A., while maintaining the organization of the company as a shareholding company.
On 30.06.2019, AEROSTAR participations in other companies are the following:
| Name of the subsidiary/related |
Basic activity |
No. of shares |
Voting rights |
Value of the holding Sales (thousand (thousand lei) lei) |
Financial information for the last financial year (for 2018) for which the financial statements of the related companies were approved |
||
|---|---|---|---|---|---|---|---|
| company | held | Company capitals (thousand lei) |
Net profit (thousand lei) |
||||
| Airpro Consult S.R.L. |
Basic activity according to CAEN code 7820 |
100 | 100% | 10 | 7.840 | 147 | 66 |
| Foar S.R.L. | Basic activity according to CAEN code 7739 |
408 | 51% | 4 | 434 | 1.919 | 171 |
| ATF S.A. | Basic activity according to CAEN code 2822 |
9150 | 45,75% | 92 | - | 274 | 1 |
| Total | 106 | 8.274 | 2.340 | 238 |
The transactions with the related parties between 01.01.2019 – 30.06.2019 consisted in:
Dividends collected/ to be collected by AEROSTAR S.A. from Airpro Consult S.R.L. Bacău and Foar S.R.L. Bacău.
Between 01.01.2019 – 30.06.2019 no transactions were made with the company ATF S.A.
The contributions of AEROSTAR in these companies are registered on cost.
During the first semester of 2019, AEROSTAR S.A. did not register modifications such as increase/decrease of the contribution percentage, AEROSTAR maintaining the same influence as in 2018.
All the companies where Aerostar holds participations are registered in Romania.
AEROSTAR's Board of Directors of was elected for a period of four years during the Ordinary General Meeting of the Shareholders from 5 July 2016 and has the following members:
| Numele si prenumele | Functia | Profesia |
|---|---|---|
| FILIP GRIGORE | President | Aviation |
| of the Board of Directors | Engineer | |
| DAMASCHIN DORU | Vicepresident | |
| of the Board of Directors | Economist | |
| TONCEA MIHAIL- NICOLAE |
Member | Aviation |
| of the Board of Directors |
Engineer | |
| DOROŞ LIVIU-CLAUDIU | Member | |
| of the Board of Directors | Economist | |
| VÎRNĂ DANIEL | Member | Legal |
| of the Board of Directors | advisor |
The atributions and responsibilities of the Board of Directors are provided in the Constitutive Act.
The direct participation of the administrators to the registered capital of the company is lower than 1%.
There is no agreement, understanding or family tie in connection with the nomination of the administrators of the company. There were no resignations or dismissals from among the members of the Board of Directors, or in connection with the auditor.
There is no litigation between the company and the administrators with reference to their activity.
None of the administrators was involved in a litigation or administrative procedure with AEROSTAR during the last 5 years.
AEROSTAR is under unitary administration.
AEROSTAR management is delegated to the General Director, Mr. Grigore FILIP, and to the Financial Director, Mr. Doru DAMASCHIN.
As for the organization and management system in Aerostar, the management structure at operational level provides the activities based on a divisional type organization, with accounts management centres in the areas of operations, auxiliary and functional activities.
AEROSTAR performs its object of activity using the common resources of the organization in an integrated mode.
The organizational structure implemented since the beginning of 2018 generated the results envisaged while maintaining the principles for the organization and utilization of the resources in a unitary, competitive and integrated mode.
This organization provides the development of the capacities in order to realise the new programmes for defence as well as the necessary investments in this purpose.
The organizational structure implemented is represented as follows:
At 30.06.2019 the management structure which provides the management of the company functions subject to the division type organisation is:
| Name and surname | Position |
|---|---|
| FILIP GRIGORE | General Director |
| DAMASCHIN DORU | Director Finance-Accounting |
| ROGOZ VASILE-LAURENȚIU | Quality Director |
| POPA DAN PAUL MĂLIN | Director |
| HR & Industrial Engineering | |
| Director | |
| FILIP ALEXANDRU | Logistics Division |
| Director | |
| BUHAI OVIDIU | Defence Systems Division |
| Director | |
| IOSIPESCU ŞERBAN | Aeronautical Products Division |
| Director | |
| VELEŞCU IOAN-DAN | MRO Civil Aviation |
| Director | |
| BRANCHE CĂTĂLIN BOGDAN | Utilities & Infrastructure Division |
The direct participation of the executive management to the registered capital of the company is lower that 1%.
There are no litigations with the persons mentioned above.
As a company listed on the Bucharest Stock Exchange, AEROSTAR S.A. follows the compliance with the principles and recommendations provided in the Code of Corporate Governance of the Bucharest Stock Exchange adopted on 11 September 2015.
At the same time, AEROSTAR's Corporate Governance System is in accordance with the provisions of the constitutive act of the company and respects the dispositions of the law no. 31/1990 and 24/2017, the Regulation no. 5/2018 of the Financial Supervisory Authority.
The implementation of the corporate governance rules provides a transparent decision-making process, founded on clear rules and objectives meant to lead to the growth of the shareholders' trust in the company. AEROSTAR focuses on corporate governance, reviewing the level of compliance with the provision of the Corporate Governance Code issued by the Bucharest Stock Exchange entered in force on 4 January 2016. The annex to the Report herein presents the current stage of implementation of the Bucharest Stock Exchange corporate governance code.
The administration of the company is in unitary system.
The president of the Board of Directors is also the General Director of the company.
The executive management is provided by the General Director and the Financial Director.
The corporate governance structures are:
The General Meeting of Shareholders is the main corporate body, with decisionmaking attributes for all the aspects specified in the Constitutive Deed.
The shareholders exercise their rights during the General Meeting of the Shareholders ("GMS" or "General Meeting").
The procedure for the organization and performance of the general meeting of the shareholders are published on the internet page www.aerostar.ro/ Investors Relation/Reference Documents.
The shares of the company are indivisible and provide equal rights to their owners, any one share entitles to one vote in the General Meeting of the Shareholders.
The General Meeting is convened by the Board of Directors with at least 30 days before the date established.
The General Meetings are ordinary and extraordinary. The Ordinary General Meeting is held at least once a year, no later than 4 months from the ending of the financial year, while the Extraordinary General Meeting is held whenever is necessary.
In order to provide equal treatment and full and fair exercise of the rights of the shareholders, the company makes available all the relevant information with reference to the GMS and the resolutions adopted both in the regular communication system (national newspaper, reports to the Financial Supervisory Authority and BSE), as well as in the special section "Investors Relation" on company's website, easily identifiable and accessible.
AEROSTAR does its best efforts, in compliance with the legal requirements in the field, to facilitate the participation of the shareholders in the General Meetings, as well as for the full exercise of their rights. The shareholders can participate and vote in the General Meeting, but also have the possibility to vote by proxy or by correspondence.
The General Meetings of the Shareholders are presided by the President of the Board of Directors, thus allowing an open and effective dialogue between the Directors and the shareholders.
Each share of the company held by a shareholder on the "record date" gives the right to receive dividends for the previous financial year, in the amount and terms set by the General Meeting of the Shareholders.
The approval competencies of the General Meetings of the Shareholders, the conditions for organizing and validations of the meetings are set out in the Constitutive Deed of the company, according to the applicable legal and regulatory framework.
The General Meetings of Shareholders took place with full compliance of the Law 31/1990 regarding the companies, the Law 297/2004 regarding the capital market and the applicable regulations issued by FSA, as well as any applicable provision.
During the last years, the company distributed dividends to the shareholders and consolidated a dividend policy which provides satisfaction to the shareholders as well as resources for the development of the company.
In accordance with the legal provisions applicable, the claim to collect the dividends approved by the General Meeting of the Shareholders cease to generate effects after the expiry of a period of three years calculated from the dividend's "payment date" for each financial year.
During the first semester of 2019 the company did not purchase its own shares and did not issue bonds or other securities as receivables.
No data or notices are available regarding the percentage of the voting rights held by the shareholders in relation to reaching or exceeding the shareholding thresholds provided by law.
AEROSTAR's Board of Directors was elected for a period of 4 years in the General Meeting of the Shareholders from 5 July 2016.
The attributes and responsibilities of the Board of Directors are provided in the Constitutive Deed and in the Internal Regulation of the Board of Directors on www.aerostar.ro/Investors Relation.
The direct participation of the administrators to the share capital of the company is under 1%.
There is no agreement, understanding or family tie in connection with the nomination of the administrators of the company. There were no resignations or dismissals from among the members of the Board of Directors, or in connection with the auditor.
There is no litigation between the company and the Directors (administrators) with reference to their activity.
None of the administrators was involved in a litigation or administrative procedure with AEROSTAR during the last 5 years.
Audit committee
Based on the provisions of Corporative Governance's Code in conjunction with the provisions of the Law no. 162/2017, an independent committee audit was established, formed from two members named by the General Meeting of the Shareholders on 19 April 2018.
The attributions of the independent audit committee are provided in the Internal Regulations of the audit committee, approved by the Board of Directors, completed with the provisions of the Law no. 162/2017 and the EU Regulation no. 537/2014, which is found also on www.aerostar.ro/Investors Relation/Reference documents.
Since 2018, an Audit Committee is acting in Aerostar in accordance with the provisions of the Law no. 162/2017 regarding the statutory audit of the annual financial statements and of the consolidated financial statements.
The Audit Committee has the role to assist the Board of Directors in realizing its attributes regarding the financial reporting process, the effectiveness of the internal quality control system and of the risk management system and of the internal audit regarding the financial reporting.
The Audit Committee has the purpose to:
The Audit Committee meets the legal attributions provided in art. 65 from the Law no. 162/2017 regarding the statutory audit of the consolidated annual financial statements, respectively:
a) monitors the financial reporting process and transmits recommendations or proposals to ensure its integrity;
b) monitors the effectiveness of the internal quality control system and of the risk management systems of the entity and, as applicable, of the internal audit regarding the financial reporting of the audited entity, without infringement of its independence;
c) monitors the statutory audit of the annual financial statements and of the consolidated annual financial statements, especially its execution, taking into consideration the findings and conclusions of the competent bodies, in accordance with art. 26 paragraph (6) from ( EU) Regulation no. 537/2014;
d) evaluates and monitors the independence of the financial auditors or of the audit companies in accordance with art. 21-25, 28 and 29 and Law no. 162/2017 and with art. 6 from the (EU) Regulation no. 537/2014 and, especially, the opportunity to perform certain non-audit services to the entity audited in accordance with art. 5 from such regulation.
The audit committee shall meet on a regular basis, at least 4 times a year, as well an exceptionally, as applicable.
In the execution of its attributions and the improvement of the activities which they review, endorse, monitor, the committee collaborates with:
AEROSTAR pursues the company principles and values in an honest and fair way, with integrity while consistently acting to comply with the highest ethic standards in business, by adopting voluntarily for many years already AEROSTAR's Code of business conduct and ethics. This code is posted on the internet page of the company www.aerostar.ro and is part of the provisions of the work contract.
To the extent in which this Code requires a higher standard than the one requested by the commercial practice or by the applicable laws, rules or regulations, we adhere to these higher standards. This code is mandatory for the administrators, employees and is adopted in all the aspects related to the employees, as well as for investors, customers, suppliers, representatives of the local community, other business partners.
The Board of Directors pays special attention to respecting the corporate governance principles in order to provide:
obtaining performance in long-term sustainable development conditions of the company;
accuracy and transparency of the decision- making process of the company;
respecting the laws and fair treatment of the shareholders by protecting and implementing their prerogatives in practice;
transparency and access to information by periodically publishing the relevant financial and operational information.
The details about the compliance with the principles and recommendations provided in the Corporate Governance Code of the Bucharest Stock Exchange are provided as integral part of the current report.
The members of the Board of Directors must notify the Board of Directors regarding any conflicts of interest which occurred or may arise and must refrain from participating in any discussions (including by non-attendance, except when the nonattendance would prevent the quorum set-up) or casting such votes for the adoption of any decision regarding the matter at the origin of the conflict of interest.
Respecting the requirement of the Internal Regulations of the Board of Directors, art. 3.5, all the members of the Board filled in and signed a Declaration regarding the Conflicts of Interest, for the year 2018.
Following the assessment, based on these declarations, the following were observed:
no member of the Board of Directors is independent;
no member is in conflict of interests regarding the position held in the Board of Directors;
no measures or changes are required in the Board of Directors.
AEROSTAR is managed in a unitary system, with the delegation of the executive management of the company to the General Director, Mr. Grigore FILIP and to the Financial Director, Mr. Doru DAMASCHIN.
The internal control system of AEROSTAR comprises the following components:
In AEROSTAR there is a dedicated department responsible with accounts control.
This department provides the inventory of all the elements related to assets, debts and company capitals in the company records.
Throughout 2018, the inventory activity was made in compliance with the legal provisions and company regulations.
The results of the inventory processes were registered in the company's accounting records.
No significant deviations were found compared to the scriptic records.
The budgetary control is performed by the persons in charge with the budget.
From the budgeting perspective, the company is organised in:
There are 19 budgets set in the company underlying activity programmes, corresponding to the functions of the company.
The budgetary control provides:
Quarterly, both the profit centres and the cost centres report to the executive management on the budgetary execution and on the necessary, due, effective and legal character of the expenses made by the company.
Controlling was implemented and constantly developed in AEROSTAR as a higher phase of the budgetary control.
Controlling also provides compliance with the mission statement and the strategic objectives of the company.
Also, it provides conformity with the planned treasury cash flows, while making the periodic review of the necessity, opportunity and legality of the amounts collected and paid by the company.
The company has organised the Internal Audit with members registered with the Chamber of Financial Auditors of Romania.
AEROSTAR's internal auditing activity is organized according to law, as a distinct compartment in the organisational structure, in accordance with the organizational chart.
The internal audit is directly subordinated to the Board of Directors and is an independent and objective activity for enforcement and consultancy, designated to evaluate and improve the company's operations.
The company management pursues to ensure that the established internal control function operates efficiently, effectively and sufficiently, in order to mitigate and eliminate the identified risks.
The internal audit activity is structured in:
The internal auditing activity is conducted based on the annual activity programme approved by the Board of Directors.
The internal audit tasks confirmed the positive impact of the internal audit activity on the activities performed in the company.
The internal audit reports are periodically submitted for the attention of the Board of Directors meetings.
AEROSTAR is exposed to multiple 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 follows.
AEROSTAR pursues to secure the mid and long-term sustainability and to reduce the uncertainty associated to its strategic and financial objectives.
The risk management processes provide the identification, analysis, evaluation and treatment of risks to minimize its effects to an agreed level.
The reconfiguration of the Management System and of the Quality Management System in AEROSTAR compliant with the latest editions of the standards ISO 9001 of 2015, AQAP 2110 of 2016, AS 9100 Rev D of 2016, ISO 14001 of 2016 places a particular emphasis on the risk management.
The recertification obtained after the external audit for each of these certifications and authorisations confirms the preoccupation and good practice implemented in AEROSTAR for the risk management.
By adopting an integrated approach for the risk management, AEROSTAR has in place a robust risk management system and the risks are structurated as follows:
The Operational risk is monitored through the intensive Management System actions applied at all levels, and this process is supported by the used applications and implemented through the digitisation programme.
Associated to the Operational risk is the Risk connected to reaching the turnover value, for which the management and the mitigation of the possible consequences are based on actions specific to the phases of the P-D-C-A (strategic planning on the business lines, diversification and scheduling on divisions, component subunits and on products, regular reviews at each management level, updating the scheduling if relevant aspects are identified given the organisational context).
These actions lead to the achievement of the production under contract and maintaining a low level of the risk related to immobilizations of inventories and of the business' discontinuity risk; a defining positive factor is the fact that the company has implemented a robust production management system assisted by adequate IT systems.
There are no risks regarding the production financing as the company operations are secured from its own funds.
The company has financial provisions for the risks which may arise.
Also associated to the Operational risk is the Legal risk.
The highly varied spectrum of AEROSTAR's suppliers and customers, at multicontinental level, makes the Legal risk extremely important, detailed and outlined by:
completion between Great Britain and the European Union with potential impact on the sales volume to UK companies, a.s.o.);
Risks regarding the commercial competitiveness, in the competition contractual landscape in aviation, including the concentration of the customers;
Risks regarding the changes of the laws/ regulations regarding the legislation in force (including anti-trust, anti-corruption, embargo/ sanctions legislation etc).
Also, within the Legal risk enters the Risk related to the strict compliance of the contractual standards within the business lines fields in accordance with the requirements related to Environment.
The effects of the legal risk are monitored and eliminated by means of a permanent information update system about the legislative changes, as well as through a system for the review, endorsement and approval of the terms and conditions included in the commercial agreements.
AEROSTAR allocates and will continue to allocate funds for investment expenses, development and other operational expenses in order to prevent and administrate the operational risk, including for the Lease risk possible to arise.
We appreciate that currently the operational risk level in Aerostar is low.
In addition, AEROSTAR seeks to have available adequate capital, by setting provisions for risks and related expenses, company funds to cover its risks of exposure, also taking into account the possible association/ partnerships risk.
In this context, the emphasis is on the possible syncopes in the development and execution of certain programmes possible to be abandoned by the partners due to extraordinary events or to certain collaborations where additional delayed, postponed, unmaintainable Programmes may arise (Risk of discontinuity of the Programmes' lifecycle).
Also, by allocating adequate resources, the monitoring is focused on the mitigation of the possible dangers specific to cyber-attacks, including to minimize the Risk of the computer system to operate in security and safety terms (system comprising an additional volume of data, information, knowledge, including experience/knowhow).
With a strong and proactive organisational culture in the human resources area, with adequately budgeted programmes, AEROSTAR mitigates the Risk related to the
increased mobility of the manpower, which leads to additional costs for the identification of skills and competences and for professional adaptation.
At the same time, the activity of the employees is monitored in order to react quickly and focused to the potential events related to Psycho- social risks (both stress, as well as harassment and/ or accusation of violence at work) and the Possible Health and Occupational Safety Risks, which are largely diminished because the company has an integrated management system (Quality – Environment- Occupational Health and Security), certified according to the standards in force.
By following the laws specific to work and social protection, AEROSTAR records no possible Risks related to pension funds.
Also, in order to minimize the Operational risk, AEROSTAR annually renews the liability insurance contract with first rank insurance-reinsurance companies in connection with its main business lines (aviation products manufacturing and maintenance of commercial aircraft), knowing and respecting the provisions specific to the Insurance risk while the possible signs of influence on the organisation's reputation, the Risk of affecting the image of the company, are attentively monitored and mitigated.
The Risk of affecting the company image is mitigated by a continuous set of founded and conjugated actions, communicated according to the legal regulations in force, taking into account the stakeholders' requirements and based on AEROSTAR's results.
The cash flows and the statement of the amounts collected and paid for each partner are permanently monitored and controlled, maintaining a close relation with them, so we appreciate that this risk is very low.
The cash and cash equivalents are placed only in first rank banking institutions, considered to have high solvency.
The Credit risk, including the Country risk in which the customer carries out the activity, is managed on each business partner.
When deemed necessary, the company requires specific credit risk mitigation tools (prepaid expenses, letters of credit with bank guarantee, confirmed export letters of credit).
AEROSTAR has no significant exposure to a single partner and does not record a significant concentration of the turnover on a single geographic area. However, there is a significant exposure to the global market of the Airbus programmes, a large share of the company's products being embedded in Airbus aircraft.
In this period, this risk is practically non-existent.
For the administration of the liquidity risk, the 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. For the administration of the liquidity, AEROSTAR keeps an annual cash-reserve in the form of a Credit Line usable as a bank overdraft in amount of 2.500.000 USD.
During the reporting period, AEROSTAR did not use the Credit Line, all the activities being financed from company's own sources.
The market risk is relevant subject to 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, due to some extraordinary events (the Brexit Agreement with an impact on the purchasing of materials from Great Britain, implementation of certain international sanctions with consequences on the limitation of the possibility to provide the necessary parts and materials, etc.), as well as the increase of the costs of specific duties for the import/ export of metallic products (steel and/ or aluminium) to and from USA.
The management of this risk is made by:
diversification of the range of suppliers, which provides increased negotiation levers in case of price increase for the materials from certain suppliers.
long term contracts, with fixed price clauses.
AEROSTAR is exposed to the currency risk as 87% of the turnover is related to the first semester of 2019 is related to USD and EUR, while a considerable amount of the operational expenses is related to the operational currency in LEI.
As such, AEROSTAR is exposed to the risk of the exchange rate fluctuations, affecting both its net revenues and its financial position, as they are both expressed in LEI.
As far as the interest rate risk is concerned, due to the fact that AEROSTAR 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.
For the following period, AEROSTAR does not foresee other significant risks, additional to the ones managed in the current period and presented as following:
The operational risk: the risk of registration of loss or failure to make the estimated profits is carefully monitored through the management system applied.
The legal risk: the risk of loss due to fines, penalties and sanctions chargeable to AEROSTAR in case of failure to apply or misapplication of the dispositions, legal or contractual regulations. The internal control systems provide an effective management of these risks.
The credit risk: the risk that AEROSTAR suffers a financial loss as a result of a partner's failure to meet the contractual obligations is monitored by the methods of the management by programmes.
Still, there may be additional risks and uncertainties, which currently are not known or are considered insignificant, but which can affect the business lines performed by AEROSTAR in the future.
| Presenting the financial results of the first semester of 2019 | 16.08.2019 |
|---|---|
| Meeting with the press and the investors interested to present | |
| the financial results of the first semester of 2019 | 16.08.2019 |
| Presenting the financial results on 30 September 2019 | 08.11.2019 |
| (thousand lei) | 30.06.2019 | 31.12.2018 |
|---|---|---|
| TOTAL ASSETS, from which: | 498.273 | 486.801 |
| Total non-current assets | 151.221 | 156.876 |
| Current assets – total, from which: |
334.367 | 318.289 |
| - inventories |
92.283 | 82.368 |
| - trade receivables and other receivables |
63.631 | 68.376 |
| - cash and cash equivalents |
178.453 | 167.545 |
| Other elements of assets | 12.685 | 11.636 |
| TOTAL EQUITY, SUBVENTIONS FOR INVESTMENTS, LIABILITIES AND PROVISIONS, from which: |
498.273 | 486.801 |
| Total liabilities | 55.603 | 48.872 |
| Total provisions | 106.572 | 112.551 |
| Subvensions for investments | 9.065 | 10.239 |
| Total equity, from which: | 327.033 | 315.139 |
| - share capital |
48.729 | 48.729 |
| - result carried-forward |
58.679 | 58.324 |
| - reserves |
206.632 | 166.395 |
| - other capital elements (tax on deferred profit recognized on equity) |
(12.681) | (12.195) |
| - distribution of the profit to legal reserves |
(2.799) | (26.035) |
| - result of the period (profit) |
28.473 | 79.921 |
| (thousand lei) | 30.06.2019 | 30.06.2018 |
|---|---|---|
| TOTAL INCOME | 193.092 | 191.661 |
| Operating income, from which: | 187.975 | 187.082 |
| Turnover |
176.779 | 160.081 |
| Income related to inventories of finite products and in progress of execution |
8.907 | 25.186 |
| Financial income | 5.117 | 4.579 |
| TOTAL INCOME | (159.023) | (142.216) |
| Operating expenses, from which: | (156.725) | (139.741) |
| Material expenses |
(64.579) | (66.675) |
| Expenses with employees' benefits |
(60.660) | (56.552) |
| Expenses with the assets' depreciation |
(13.066) | (12.440) |
| Influence of adjustments regarding current assets |
(10.551) | (5.860) |
| Influence of adjustments regarding provisions |
5.978 | 16.820 |
| Expenses regarding external benefits |
(12.280) | (13.600) |
| Other expenses |
(1.567) | (1.434) |
| Financial expenses | (2.298) | (2.475) |
| Operating Profit/Loss | 31.250 | 47.341 |
| Financial Profit / Loss | 2.819 | 2.104 |
| PROFIT BEFORE TAX | 34.069 | 49.445 |
| TAX ON CURRENT AND DEFERRED PROFIT |
(5.596) | (3.895) |
| NET PROFIT OF THE PERIOD | 28.473 | 45.550 |
| (thousand lei) |
30.06.2019 | 30.06.2018 |
|---|---|---|
| Operating activities: | ||
| collected |
197.249 | 160.118 |
| payments, from which: |
165.043 | 150.695 |
| ~ payments for suppliers and employees | (131.627) | (123.808) |
| ~ tax and duties payments to Budget state |
(33.416) | (26.887) |
| A. Cash from operational activities | 32.206 | 9.423 |
| Investments activities: | ||
| collected, from which: |
1.940 | 1.044 |
| ~ rates collected from loans granted | 0 | 2 |
| ~ interest collected from bank and loans granted | 1.877 | 941 |
| ~ collected from sales of intangible assets | 13 | 11 |
| ~ dividends collected from afilliated entities | 50 | 90 |
| payments for purchasing property, plant and equipment |
(8.248) | (14.329) |
| B. Net cash from investment activities | (6.308) | (13.285) |
| Financing activities: | ||
| ~ dividends paid but unclaimed | 99 | 0 |
| ~ dividends paid | (15.437) | (34) |
| C. Net cash used in financing activities | (15.338) | (34) |
| Net increase of the cash and of cash equivalents (A+B+C) |
10.560 | (3.896) |
| Cash and cash equivalents at the beginning of the period |
167.545 | 163.886 |
| Cash and cash equivalents at the end of the period |
178.453 | 159.938 |
| Name of the indicator | Calculation mode | Result |
|---|---|---|
| Indicator of the current liquidity | Current assets/ | 8,49 |
| Current liabilities | ||
| Indebtedness indicator | Loan capital /Equity x 100 | 0 |
| Rotation speed of debits-customers | Average balances of | 58 |
| customers/Turnover x 180 | ||
| Rotation speed of non-current assets | Turnover /Noncurrent | 1,17 |
| assets |
On behalf of the Board of Directors, Grigore FILIP President-General Director
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