Quarterly Report • May 11, 2018
Quarterly Report
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In accordance with Appendix 30A from Regulation no. 1/2006 regarding the issuers and operations with real estate, with later amendments
Date of report: 31.03.2018
Name of the company: AEROSTAR S.A. BACAU
Registered headquarter: Condorilor Street, no. 9, Bacãu, România
Telephone number: 0234 575070
Individual Identification Number: RO 950531
Trade number in Bacau Trade Register: J04/1137/1991
LEI Code: 315700G9KRN3B7XDBB73
Subscripted and paid-in registered capital: 48.728.784 lei
The regulated market on which the real estate issued are traded: Bucharest Stock Exchange ("ARS" indicator) – Standard Category
The purpose of this interim report of the Board of Directors of AEROSTAR S.A. Bacau is to inform the investors with reference to the modifications in the position and performance of the company which took place January - March 2018, as well as regarding the predictable evolutions on AEROSTAR market, the growth and development opportunities of the company.
According to the common practice, the financial statements established on March 31, 2018 are not accompanied by the report of the independent financial auditor.
The individual financial statements established on March 31, 2018 were audited by the internal audit of the company AEROSTAR S.A. Bacau.
According to the classification of the activities from the Romanian economy, the main field of activity of AEROSTAR is the manufacture of aircraft and spaceship – CAEN code 3030.
The main field of activity is production.
| UM | 31.03.2018 | 31.03.2017 | |
|---|---|---|---|
| Share capital |
thousand lei |
48.729 | 48.729 |
| Turnover | thousand lei |
81.774 | 74.803 |
| Export sales |
thousand lei |
69.155 | 67.934 |
| Expenses for investments |
thousand lei |
10.693 | 3.040 |
| Actual no. of employees, from which: | no. | 2.074 | 2.158 |
| own employees |
no. | 1.928 | 1.880 |
| employees attracted by temporary manpower agent |
no. | 146 | 279 |
| Gross profit | thousand lei |
23.846 | 14.051 |
| Net profit | thousand lei |
21.105 | 11.065 |
| General liquidity | - | 6,08 | 4,39 |
| Stock Exchange Symbol "ARS" |
31.03.2018 | 31.03.2017 |
|---|---|---|
| Number of shares | 152.277.450 | 152.277.450 |
| Market value per share at the end of the period (lei) *) |
5,25 | 3,440 |
| Stock Exchange Capitalization (lei) *) |
800.979.387 | 523.834.428 |
| Trading price during the period (minimum level /maximum level) (lei) |
4,92 / 5,26 | 3,25 / 3,56 |
*) Source: Monthly newsletter issued by the Bucharest Stock Exchange
Monthly evolution of the company's market value (in lei) in the first quarter in the last three years (2018, 2017, 2016):
Starting with January 2018, AEROSTAR has operated organisational modifications with the purpose of a better using and mobilization of resources, to exploit the market opportunities and to respond as much as possible to the clients' requests.
These modifications consisted in:
The new name of this division is The Defence Systems Division and shall comprise:
New programs, in development
The establishment of Civil Aviation MRO Division which contains the maintenance units related to the MRO Civil Aviation Centre Part 145, the current MRO Civil Aviation Centre Part 145 from Bacau and the future MRO Civil Aviation Centre Part 145 from Iasi.
In the time interval elapsed since the last reporting period, AEROSTAR has continued its development based on business lines according to the mission, strategy and development directions presented:
AEROSTAR has maintained its position on top of the Romanian and Central Europe market.
During the period of January – March 2018, AEROSTAR has realized sales in the amount of 81.774 thousand lei, from which 69.155 equivalent in thousand lei were export sales, with a large diversity of customers, in a high number of different production programs.
Aerostar sales have been realized on a global market of large geographical area both in civil and in defence field.
In the first quarter of 2018 the level of investments realized in AEROSTAR was of 10.693 thousand lei (the first quarter in 2017: 3.040 thousand lei), the financing source being its own internal source.
The level of investments in the reporting period was 3,5 times higher than the level realized in the first quarter of 2017.
The main purpose of the company's investment effort is, also in 2018, upgrading the production field by providing performant technological equipment, meant to assure the realization of the contracted production programs and the continuous development of the capabilities and services offered to the customers.
Performant CNC machine-tools, technological equipment, facilities, measuring and control equipment of last generation have been purchased – in a total amount of 10.525 thousand lei.
In the reporting period the company has spended 168 thousand lei in purchasing software licences and for the IT development of production management.
The digital transformation of the company is also in 2018 one of the main strategic development priorities. Managing the cyber security issues, establishing the strategies and management processes of the information, the digital transformation of IT and the creation of an organization with a high risk of use of data analysis generates, in Aerostar's vision, the degree of financial health of the company.
In the first 3 months of 2018 AEROSTAR had 2.074 employees from which 146 employees made available by AIRPRO CONSULT S.R.L., which actions on the market as temporary work agent.
S.C. AEROSTAR has continued the on-going programs of professional development of the employees by including them in programs of professional training.
The average burden of the employees affiliated to the trade union organizations was of 75%.
If in the first three months of the year 2018, AEROSTAR has maintained its certifications and authorizations obtained either from the certification organisms or from the customers or other regulation authorities.
On a quality line, in Aerostar there have been performed surveillance audits both from Romanian Civil Aeronautical Authority for maintaining Part 21F authorization, as well as for recertification audits of the Quality Management System according to the requirements of SR EN ISO 9001 from 2015 with the organism of AEROQ certification and according to the requirements of AQAP 2110 from 2016 with OMCAS.
On an environment line, a thematic control from the Environment Guard took place regarding the verification of environment legislation, EUTR Regulation and of H.G. 845/2015, as well as the audit of the validation of the number of GES certificates related to 2017.
Also, the GES certificates were handed in by assuring the conformance with the legislation in force.
The distribution of the dividends due to the shareholders of the company AEROSTAR relating to 2017 shall be performed in accordance with the applicable legal provisions.
The costs related to the distribution activity shall be supported from the value of the net dividend due to each shareholder.
The establishment of an audit Committee formed from the following members: Mihai Deju and Daniel Botez.
The time period of the contracts signed with the audit Committee is for a period between 19 April 2018 and 10 July 2020.
The net allowances of the members of the audit Committee have been approved by the shareholders on the level of 50% from the allowance of a member of AEROSTAR's Board of Directors.
Naming MAZARS ROMANIA SRL as a financial audit.
The contract of financial audit with MAZARS ROMANIA SRL is concluded on a period of at least 2 years, with the possibility of extension through an amendment approved by the Board of Directors of AEROSTAR.
A representative company for the Romanian and European aviation and defence industry, AEROSTAR has marked the celebration of 65 years from its establishment through a series of events.
Most of the activities dedicated to these celebrating events were organized and financed by Asociatia Cultural-Educationala Aerostar Bacau.
SIF Moldova is a significant shareholder of AEROSTAR. At the date of 31 December 2017, it held 15,0514% from the registered capital of AEROSTAR.
FINANCIAL CALENDAR 2018 – the following events which shall be performed:
| The presentation of the financial results of the first semester of 2018. | 16.08.2018 |
|---|---|
| Meeting with the press and the investors interested for the presentation of financial results of the first semester of 2018. |
16.08.2018 |
| The presentation of the financial results on September 30th 2018. | 09.11.2018 |
| Financial position | ||
|---|---|---|
| 31 March | 31 December | |
| 2018 | 2017 | |
| ASSETS | ||
| Noncurrent assets | ||
| Property, Plant and Equipment | 149.314 | 144.613 |
| Intangible assets | 1.580 | 1.858 |
| Investment property | 7.135 | 6.987 |
| Long-term financial assets | 225 | 228 |
| Total noncurrent assets | 158.254 | 153.686 |
| Current assets | ||
| Inventories | 86.048 | 67.925 |
| Trade receivables and other receivables | 56.143 | 46.640 |
| Cash and cash equivalents | 159.397 | 163.886 |
| Total current assets |
301.588 | 278.451 |
| Deferred tax assets | 9.771 | 10.564 |
| Prepaid expenses | 1.103 | 491 |
| Total assets | 470.716 | 443.192 |
| EQUITY AND LIABILITIES |
||
| Capital and reserves | ||
| Share capital | 48.729 | 48.729 |
| Current Result | 21.105 | 53.170 |
| Result carried forward | 101.562 | 57.524 |
| Other reserves | 117.899 | 110.843 |
| Deferred tax liabilities/assets recognized on equity | (9.107) | (7.961) |
| Distribution of profit for legal reserve | (7.056) | (9.338) |
| Total equity | 273.132 | 252.967 |
| Deferred income | ||
| Subsidies for investments | 12.066 | 12.677 |
| Income registered in advance |
26 | 28 |
| Total income in advance |
12.092 | 12.705 |
| Non-current liabilities | ||
| Deferred tax liabilities | 13.612 | 12.690 |
| Other non-current liabilities | 51 | 51 |
| Total non-current liabilities | 13.663 | 12.741 |
| Non-current provisions | 74.667 | 75.825 |
| Current liabilities | ||
| Trade liabilities | 41.073 | 29.515 |
| Current tax liabilities | 1.952 | 1.522 |
| Other current liabilities | 8.179 | 8.553 |
| Total current liabilities | 51.204 | 39.590 |
| 31 March | 31 December | |
|---|---|---|
| 2018 | 2017 | |
| Short term provisions | 45.958 | 49.364 |
| Total provisions | 120.625 | 125.189 |
| Total liabilities | 64.867 | 52.331 |
| Total equity, deferred income, liabilities and |
||
| provisions | 470.716 | 443.192 |
The achievement of the revenues, expenses and profit of the first quarter in 2018, on component parts, in comparison with the first quarter of 2017, shall be presented as follows:
| March 31 | March 31 | |
|---|---|---|
| 2018 | 2017 | |
| Income from sales |
81.774 | 74.803 |
| Other income | 628 | 917 |
| Income related to the cost of products inventories |
||
| and production in progress | 11.830 | 13.698 |
| Income from production assets |
161 | 66 |
| Total operating income | 94.393 | 89.484 |
| Expenses | ||
| Expenses with materials | (33.337) | (35.469) |
| Expenses with employee benefits | (28.844) | (27.217) |
| Expenses with amortization of assets | (6.062) | (5.965) |
| Influence of adjustments on current assets | 1.407 | (4.191) |
| Influence of adjustments on provisions | 4.565 | 4.305 |
| Expenses related to third party services | (7.233) | (6.195) |
| Other expenses | (806) | (533) |
| Total operating expenses | (70.310) | (75.265) |
| Profit from Operations | 24.083 | 14.219 |
| Financial Revenues | 1.323 | 922 |
| Financial Expenses | (1.560) | (1.090) |
| Financial loss | (237) | (168) |
| Profit before tax | 23.846 | 14.051 |
| Tax on current and deferred profit | (2.741) | (2.986) |
| Net profit of the period | 21.105 | 11.065 |
In name of the Board of Directors:
Grigore FILIP, President and General Director
Doru DAMASCHIN, Vicepresident and Financial Director
Appendix 30
| Indicator | Calculation method | Result |
|---|---|---|
| 1. Current Liquidity Indicator |
Current Assets/Current liabilities |
6,08 |
| 2. Endebtness Ratio |
Equity loaned/Equity x 100 |
0 |
| 3. Rotation of Client Debits |
Medium balance for customers/Turnover x 90 |
52 |
| 4. Rotation of Noncurent assets |
Turnover/ Immobilized Assets |
0,52 |
In name of the Board of Directors
Grigore FILIP President and General Director
Doru DAMASCHIN Vicepresident and Financial Director
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