Quarterly Report • Aug 31, 2018
Quarterly Report
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Condensed consolidated statement of income Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flow
Condensed consolidated statement of changes in equity
Notes to the interim condensed consolidated financial statements for the period ended June 30, 2017
Auditor's report
| Capital employed | Intangible assets + goodwill + property, plant and equipment + working capital requirement |
|---|---|
| Working capital requirement | Inventories + trade receivables and other operating receivables + other current assets + non-current assets held for sale - other current provisions - trade payables and other operating liabilities - tax payables - other current liabilities |
| Net financial debt (NFD) | Non-current and current bonds + Non-current and current financial liabilities - Cash and cash equivalents |
| Income from operating activities | Turnover + revenue from auxiliary activities + purchases + wages, salaries and social charges + other operational charges and depreciation and goodwill depreciation |
| Operating income (EBIT) | Income from operating activities + earnings from associates and joint venture |
| EBITDA | Income from operating activities + amortisation and depreciation + other non-cash items |
| For the period from January 1st to June,30th (In thousand Euro) |
Note | June 2018 | June 2017 | |
|---|---|---|---|---|
| Revenue Revenue from auxiliary activities Purchases Remuneration and social security payments Other operating expenses Depreciation and amortization Income from operating activities |
6 | 1,860,146 31,123 (1,117,770) (334,784) (233,825) (126,150) 78,740 |
1,455,872 57,988 (809,501) (281,781) (189,435) (116,844) 116,299 |
|
| Earnings from associates and joint venture | 11 | (1,211) | (15,284) | |
| Operating income | 77,529 | 101,015 | ||
| Cost of gross financial debt Other financial expenses & income |
7 7 |
(7,091) 29 |
(9,427) (3,867) |
|
| Net financial income/expense | (7,062) | (13,294) | ||
| Pre-tax income | 70,467 | 87,721 | ||
| Income tax expense | 9 | (20,199) | (20,926) | |
| Net income for the period | 50,268 | 66,795 | ||
| Attributable to owners of non-controlling interests | 8 | 1,581 | 1,030 | |
| Net income share of the group | 51,849 | 67,825 | ||
| Net income of the group per share (EUR) (diluted and basic) | 2.05 | 2.68 |
| For the period from January 1st to June,30th (In thousand Euro) |
Note | June 2018 | June 2017 | |
|---|---|---|---|---|
| Net income share of the group Net income for the period |
51,849 50,268 |
67,825 66,795 |
||
| Changes in fair value related to hedging instruments Currency translation differences Deferred taxes Other elements of the comprehensive income to be reclassified to profit or loss in subsequent periods |
(4,505) 1,904 630 (1,971) |
7,227 (19) (1,439) 5,769 |
||
| Re-measurement on defined benefit plans Deferred taxes Other elements of the comprehensive income not to be reclassified to profit or loss in subsequent periods |
0 0 0 |
0 0 0 |
||
| Other elements of the comprehensive income directly accounted in equity | (1,971) | 5,769 | ||
| Comprehensive income: - Attributable to owners of the parent - Attributable to owners of non-controlling interests Net income attributable to owners of the parent per share (EUR) (diluted and basic) |
48,297 50,016 (1,719) 1.98 |
72,564 73,656 (1,092) 2.91 |
| For the period ended June 30th (In thousand Euro) |
Notes | June 2018 | December 2017 (*) | December 2017 |
|---|---|---|---|---|
| Intangible assets | 90,890 | 91,343 | 91,343 | |
| Goodwill | 177,519 | 184,930 | 184,930 | |
| Property, plant and equipment | 10 | 2,208,024 | 2,138,208 | 2,138,208 |
| Investments in associates and joint ventures | 11 | 138,778 | 140,510 | 140,510 |
| Other non-current financial assets | 154,258 | 147,719 | 147,719 | |
| Derivative instruments – Non-current assets | 16 | 171 | 921 | 921 |
| Other non-current assets | 10,416 | 7,798 | 7,798 | |
| Deferred tax assets | 99,300 | 104,022 | 104,022 | |
| Total non-current assets | 2,879,356 | 2,815,451 | 2,815,451 | |
| Inventories | 12 | 107,647 | 138,965 | 138,965 |
| Trade and other operating receivables | 13 | 1,330,838 | 1,120,306 | 1,132,306 |
| Other current assets | 39,608 | 32,963 | 32,963 | |
| Derivative instruments – Current assets | 16 | 1,146 | 4,156 | 4,156 |
| Current financial assets | 19 | 34 | 34 | |
| Assets held for sale | 0 | 0 | 0 | |
| Cash and cash equivalents | 17 | 428,011 | 523,018 | 523,018 |
| Total current assets | 1,907,269 | 1,819,442 | 1,831,442 | |
| Total assets | 4,786,625 | 4,634,893 | 4,646,893 | |
| Share capital | 41,330 | 41,330 | 41,330 | |
| Share premium | 800,008 | 800,008 | 800,008 | |
| Retained earnings | 804,087 | 812,993 | 840,543 | |
| Defined benefits pension plans | (25,268) | (25,268) | (25,268) | |
| Hedging reserves | (6,332) | (2,457) | (2,457) | |
| Currency translation differences | (10,210) | (12,252) | (12,252) | |
| Equity attributable to owners of the parent | 1,603,615 | 1,614,354 | 1,641,904 | |
| Non-controlling interests | 12,067 | 14,421 | 14,421 | |
| Equity | 1,615,682 | 1,628,775 | 1,656,325 | |
| Retirement benefit obligations and employee benefits | 53,231 | 53,149 | 53,149 | |
| Provisions | 14 | 34,812 | 30,183 | 30,183 |
| Other non-current liabilities | 3,127 | 4,497 | 4,497 | |
| Bonds – non-current | 17 | 29,531 | 231,378 | 231,378 |
| Financial liabilities | 17 | 694,409 | 419,093 | 419,093 |
| Derivative instruments – Non-current liabilities | 16 | 7,858 | 7,209 | 7,209 |
| Deferred tax liabilities | 116,985 | 126,946 | 130,023 | |
| Total non-current liabilities | 939,953 | 872,455 | 875,532 | |
| Current provisions | 14 | 75,454 | 82,530 | 82,530 |
| Trade & other operating payables | 1,345,716 | 1,295,073 | 1,276,446 | |
| Income tax payable | 43,666 | 43,275 | 43,275 | |
| Bonds - current | 17 | 201,097 | 99,959 | 99,959 |
| Current financial liabilities | 17 | 152,837 | 124,497 | 124,497 |
| Derivative instruments – Current liabilities | 16 | 7,472 | 7,445 | 7,445 |
| Liabilities held for sale | 0 | 0 | 0 | |
| Other current liabilities | 404,748 | 480,884 | 480,884 | |
| Total current liabilities | 2,230,990 | 2,133,663 | 2,115,036 | |
| Total equity and liabilities | 4,786,625 | 4,634,893 | 4,646,893 |
(*) Amounts adjusted in accordance with the changes in accounting principle related to IFRS 15 "Revenue from contracts with customers" and IFRS 9 "Financial instruments and subsequent amendments" as explained in note 3.2.
| For the period from January 1st to June 30th (In thousand Euro) |
Note | June 2018 | June 2017 |
|---|---|---|---|
| Operating activities | |||
| Income from operating activities Depreciation and amortization of intangible assets, property, plant & equipment |
78,740 126,150 |
116,299 116,844 |
|
| and investment property Net provision expense |
(1,844) | 3,135 | |
| Impairment on current and non-current assets and other non-cash items Sales of non-current assets Dividends from associates and joint-ventures |
(945) (1,708) 3,340 |
(10,301) (2,397) 6,315 |
|
| Cash flow from operating activities before changes in working capital | 203,733 | 229,895 | |
| Decrease/(increase) in trade receivables and other current and non-current receivables |
(228,409) | 20,201 | |
| Decrease/(increase) in inventories Increase/(decrease) in trade payables and other current and non-current payables Income tax paid/received Cash flow from operating activities |
34,502 23,084 (23,777) 9,133 |
4,124 43,105 (16,120) 281,205 |
|
| Investing activities | |||
| Sales of non-current assets Purchases of non-current assets Acquisition of subsidiaries, net of cash acquired Capital increase in investments in associates Sale of subsidiaries Loans granted |
2,534 (226,739) 336 (1,395) 0 (10,568) |
4,654 (267,774) 0 (2,015) 0 (4,216) |
|
| Cash flow from investing activities | (235,832) | (269,351) | |
| Financing activities | |||
| Interests paid Interests received Other financial expenses and income Borrowings Reimbursements of borrowings Dividends paid |
(16,657) 5,112 (569) 390,239 (185,069) (60,715) |
(17,877) 6,970 (9,065) 78,672 (34,224) (54,426) |
|
| Cash flow from financing activities | 132,341 | (29,950) | |
| Net Increase/(decrease) in cash position Cash and cash equivalents at start of the year Exchange rate effects Cash and cash equivalents at end of period |
(94,358) 523,018 (649) 428,011 |
(18,096) 612,155 (1,106) 592,953 |
Purchases and sales of subsidiaries net of cash acquired do not include entities that are not a business combination (segment real estate). They are not considered as investment operations and are directly reflected in cash flows from operating activities.
For the year ended June 30, 2018
| (thousand Euro) | Share Capital | Share premium | Retained earnings | Defined benefits pension plans |
Hedging reserves | Currency Translation differences |
Equity attributable to owners of the parent |
Non-controlling interests |
Total |
|---|---|---|---|---|---|---|---|---|---|
| December 2017 | 41,330 | 800,008 | 840,543 | (25,268) | (2,457) | (12,252) | 1,641,904 | 14,421 | 1,656,325 |
| IFRS 15 & 9 restated | (27,550) | (27,550) | (27,550) | ||||||
| December 2017(*) | 41,330 | 800,008 | 812,993 | (25,268) | (2,457) | (12,252) | 1,614,354 | 14,421 | 1,628,775 |
| Comprehensive income for the period |
51,849 | (3,875) | 2,042 | 50,016 | (1,719) | 48,297 | |||
| Dividends paid to shareholders |
(60,755) | (60,755) | (60,755) | ||||||
| Dividends from non | (518) | (518) | |||||||
| controlling interests | |||||||||
| Other movements | (117) | (117) | |||||||
| June 2018 | 41,330 | 800,008 | 804,087 | (25,268) | (6,332) | (10,210) | 1,603,615 | 12,067 | 1,615,682 |
(*) Amounts adjusted in accordance with the changes in accounting principle related to IFRS 15 "Revenue from contracts with customers" and IFRS 9 "Financial instruments and subsequent amendments" as explained in note 3.2.
| (thousand Euro) | Share Capital | Share premium | Retained earnings | Defined benefits pension plans |
Hedging reserves | Currency Translation differences |
Equity attributable to owners of the parent |
Non-controlling interests |
Total |
|---|---|---|---|---|---|---|---|---|---|
| ----------------- | --------------- | --------------- | ------------------- | ----------------------------------- | ------------------ | ------------------------------------- | ------------------------------------------------ | ------------------------------ | ------- |
| December 2016 | 41,330 | 800,008 | 714,527 | (19,464) | (7,337) | (7,505) | 1,521,559 | 14,918 | 1,536,477 |
|---|---|---|---|---|---|---|---|---|---|
| Comprehensive income for the period |
67,825 | 5,788 | 43 | 73,656 | (1,092) | 72,564 | |||
| Dividends paid to shareholders Dividends from non controlling interests Other movements |
(54,426) | (54,426) | (592) 100 |
(54,426) (592) 100 |
|||||
| June 2017 | 41,330 | 800,008 | 727,926 | (19,464) | (1,549) | (7,462) | 1,540,789 | 13,334 | 1,554,123 |
The share capital on June 30, 2018 is represented by 25,314,482 ordinary shares. These shares are without any nominal value. The shareholders of ordinary shares have the right to receive dividends and the right of one vote per share at the General Shareholders' Meeting.
On February 22, 2018 the Board of Directors proposed a dividend of 60,755 thousand Euro, corresponding to 2.40 Euro gross per share. The proposal has been approved by the General Shareholders Meeting on May 3, 2018. The dividend has been paid.
The basic income per share is the same as the diluted income per share due to the absence of potential dilutive ordinary shares in circulation.
It is calculated as follows :
| 2017 |
|---|
| 67,825 |
| 73,656 |
| 25,314,482 |
| 2.68 |
| 2.91 |
| 2018 51,849 50,016 25,314,482 2.05 1.98 |
The Board of Directors authorized the issue of the interim condensed consolidated financial statements on August 27, 2018.
MAIN TRANSACTIONS FOR THE FIRST SIX MONTHS OF 2018 AND THE FIRST SIX MONTHS OF 2017 WITH EFFECT ON THE SCOPE OF THE GROUP CFE
During the first half year 2018, DEME acquired :
The acquired companies listed here above are fully consolidated.
The group DEME has also acquired during the first semester 2018:
The companies listed here above are integrated under equity method.
Finally, the companies Europ Agregats SARL owned at 100% and Ecoterres Holding owned at 74,90% were respectively absorbed by DEME Building Materials NV and DEME Environmental Contractors NV which are 100% owned by DEME.
Nihil.
On January 1st, 2018 CFE Group, through its subsidiary BPI Real Estated Belgium SA, increased its stake in D.H.B. SA from 75,33% to 100%. This entity was already fully integrated.
On May 14th, 2018, the company Foncière Sterpenich SA, subsidiary of BPI Real Estate Belgium SA, was rebranded as BPI Park West SA.
On May 30th, 2018 CFE Group, through its subsidiary BPI Real Estate Poland sp.z.o.o., acquired a 100% stake in company BPI Sadowa sp.z.o.o. which is fully consolidated.
On June 8th, 2018 CFE Group, through its subsidiaries BPI Real Estated Belgium SA and BPI Samaya SA, acquired a 100% stake in the newly created company Wolimmo SA which is fully consolidated.
On June 8th, 2018 CFE Group, through its subsidiaries BPI Real Estated Belgium SA and BPI Samaya SA, acquired a 100% stake in the newly created company Zen Factory SA which is fully consolidated.
Nihil.
In the first half year 2017, DEME acquired a 50% stake in the company K3 DEME which is consolidated under the equity method.
On April 26th, 2017 CFE Group, through its subsidiary CFE Contracting SA, acquired a 100% stake in the newly created company CFE Senegal SASU which is fully consolidated.
On June 29th, 2017 CFE Group, through its subsidiary BPI SA, acquired a 50% stake in the newly created company Ernest 11 SA which is integrated based on the equity method.
In the first half year 2017, BPI Luxembourg SA sold its stake in the company Pef Kons Investment SA (33,33%) which was integrated based on the equity method.
In the first half year 2017, BPI SA sold its stake in the companies Rederij Marleen BVBA, Rederij Ishtar BVBA and Oosteroever NV (50%) which were integrated based on the equity method.
Nihil.
The retained accounting principles are the same that the principles used for the yearly consolidated financial statement at December 31, 2017, except for the standards IFRS 15 and IFRS 9, applicable for annual periods beginning on or after 1 January 2018. We refer to the note 3.2. of the present report.
STANDARDS AND INTERPRETATIONS APPLICABLE FOR THE ANNUAL PERIOD BEGINNING ON JANUARY 1ST, 2018
The Company decided not to anticipate the application standards and interpretations here below that are not mandatory on June 30, 2018:
The potential impacts of these standards and interpretations on the group's consolidated financial statements are being determined. The group does not expect any material changes resulting from the application of the standards and interpretations except for IFRS 16.
The new IFRS 16 standard abolishes for the lessee the current distinction between operating leases recognized as expenses, and finance leases recognized as tangible assets against a financial debt, and requires for all leases the recognition of a right of use against a financial debt. IFRS 16 will replace the standard and interpretations IAS 17, IFRIC 4, SIC 15 and SIC 27. Where according to IAS 17 the accounting treatment of leases is determined by the assessment of the transfer of the risks and rewards incidental to ownership of the asset, IFRS 16 imposes a single recognition method for leases by lessees that has a similar impact on the balance sheet as finance leases. This standard will come into effect on 1 January 2019.
The implementation of IFRS 16 will thus have the following effects on the consolidated statement of financial position and on the consolidated income statement:
Because of the specific features of certain leases (such as terms and conditions of extension), the time periods used for the measurement of leases under IFRS 16 may in some cases differ from those used for the measurement of off-balance-sheet commitments where only the firm period of commitment was taken into account. The commitments mentioned in Note 27 Operating leases of the consolidated financial statements as of December 31, 2017 therefore cannot be entirely representative of the liabilities that are to be recognized in pursuance of IFRS 16.
The assessment of the potential impact on the group's financial statements is still in progress, since this is a complex task given the number of contracts to be reviewed and the decentralized management of the lease agreements.
Companies in which the Group holds, whether directly or indirectly, the majority of voting rights enabling control to be exercised, are fully consolidated. Companies over which the Group exercises a joint control with others shareholders are integrated under equity method. This mainly concerns Rent-A-Port and some companies in the segments Dredging and environment and real estate.
| Number of entities | June 2018 | December 2017 |
|---|---|---|
| Full consolidation Equity method |
196 124 |
191 124 |
| Total | 320 | 315 |
Reciprocal operations and transactions relating to assets and liabilities and income and expenses between companies that are consolidated are eliminated in the consolidated financial statements. This is done:
In main cases, the functional currency of companies and establishments correspond to the currency of the related country.
Financial statements of foreign companies whereas the functional currency is different from the consolidated accounts reporting currency of the group are translated at the closing rate for the balance sheet elements, and at the average rate of the period for the results elements. Exchange differences are recorded in "translation differences" in the consolidated reserves.
Goodwill related to foreign companies is considered to be included in the acquired assets and liabilities and is therefore translated at the closing rate.
Foreign currencies transactions are converted into Euro using the conversion rate at the date of the operation. At closing period, the financial assets and monetary liabilities denominated in foreign currencies are converted into Euro at the exchange closing rate of the period. The exchange losses and gains coming from these operations are recognized in the section "exchange result" and are presented in other financial revenues and other financial expenses in the income statement.
The exchange gains and losses on loans denominated in foreign currencies or on exchange derivative instruments used for hedging investments in foreign subsidiaries are recorded under translation differences in equity.
The preparation of financial statements under IFRS requires estimates to be used and assumptions to be made that affect the amounts shown in those financial statements, particularly with regards the following items:
These estimates assume the operation is a going concern and are based on the information available at the time. Estimates may be revised if the circumstances on which they were based alter or if new information becomes available. Actual results may be different from these estimates.
3.2. CHANGES IN ACCOUNTING METHOD: APPLICATION OF IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS AND IFRS 9 FINANCIAL INSTRUMENTS AND SUBSEQUENT AMENDMENTS
At 1st January 2018, the Group reduced its equity with €15,550 thousand, net of deferred tax in order to present the cumulative effect of the first time adoption of IFRS 15 "Revenue from contracts with customers".
IFRS 15 is the new standard governing the principles of revenue recognition. This standards is applicable for the annual period beginning on January 1st, 2018 and replaces the standards IAS 11 "Construction Contracts" and IAS 18 "Revenue", as well as the various existing interpretations, notably IFRIC 15 "Agreements for the Construction of Real Estate". The recognition of revenue from contracts with customers is consequently be governed by one single standard that will apply with effect from 1 January 2018.
The implementation of this standards as of 1st January 2018 has a limited impact on the accounting of the turnover that we resume as follows:
At 1st January 2018, the Group reduced its equity by €12,000 thousand, net of deferred tax in order to present the cumulative effect of the first time adoption of IFRS 9 Financial Instruments and subsequent amendments.
The new IFRS 9 standard, which is due to replace the present standard IAS 39 Financial Instruments, contains new provisions regarding the classification and measurement of financial assets based on the corporate governance model and contractual features of the financial assets.
The matching between the categories as defined by the standards IAS 39 and IFRS 9 are summarized as follows:
| Categories of financial assets and liabilities - (Note 18.3) |
IAS 39 | IFRS 9 |
|---|---|---|
| Financial assets Investments |
Financial instruments available for sales | Financial assets or financial liabilities measured at amortised cost |
| Financial loans and receivables | Loans and trade receivables at amortized costs |
Financial assets or financial liabilities measured at amortised cost |
| Derivatives | Financial instruments not designated as hedging instruments OR Derivatives designated as hedging instruments |
Financial assets mandatorily measured at fair value - derivatives, non-hedging instruments OR hedging instruments |
| Trade and other receivables | Loans and trade receivables at amortized costs |
Financial assets or financial liabilities measured at amortised cost |
| Cash equivalents | Loans and trade receivables at amortized costs |
Financial assets or financial liabilities measured at amortised cost |
| Cash at bank and in hand | Loans and trade receivables at amortized costs |
Financial assets or financial liabilities measured at amortised cost |
| Financial liabilities Bonds |
Loans and trade receivables at amortized costs |
Financial assets or financial liabilities measured at amortised cost |
| Financial debts | Loans and trade receivables at amortized costs |
Financial assets or financial liabilities measured at amortised cost |
| Trade payables and other operating | Loans and trade receivables at amortized costs |
Financial assets or financial liabilities measured at amortised cost |
| Derivatives | Financial instruments not designated as hedging instruments OR Derivatives designated as hedging instruments |
Financial liabilities at fair value through profit or loss - derivatives, non-hedging instruments OR hedging instruments |
IFRS 9 has also changed the Group's principles regarding the impairment of financial assets, as it now requires a model based on expected losses. The evaluation of the Group financial assets considers the present value of expected losses if the borrower defaults on its obligations. Expected credit losses are calculated based on a weighted average of expected credit losses arising from multiple scenario's. Implementation of this model on the receivables owned by the Group on the Chadian Government leads to a decrease of the opening equity at 1st January 2018 with an estimated amount of €12,000 thousand.
The "simplified retrospective" transition method has been applied by Group for the implementation of standards IFRS 15 and IFRS 9. Consequently, the consolidated statement of financial position for comparative period 2017 has been restated, without presentation of a restated 2017 condensed consolidated statement of comprehensive income. The condensed consolidated statement of comprehensive income is presented according the accounting rules applicable in 2017.
The consolidated statement of financial position for the fiscal year ended on 31 December 2017 has been impacted as follows :
| December 2017, published |
Impact IFRS 15 |
Impact IFRS 9 |
December 2017, after restatement |
|
|---|---|---|---|---|
| Current assets, including : | ||||
| Trade and other operating receivables | 1,132,306 | (12,000) | 1,120,306 | |
| Equity attributable to owners of the parent, including : | ||||
| Retained earnings | 840,543 | (15,550) | (12,000) | 812,993 |
| Non current liabilities, including : | ||||
| Deferred tax liabilities | 130,023 | (3,077) | 126,946 | |
| Trade & other operating payables | 1,276,446 | 18,627 | 1,295,073 |
If the standard IFRS 15 had not been implemented at 1st January 2018 the net result of the Group of the first semester 2018 would have been lower by €5,767 thousand in the dredging and environmental segment.
Segment reporting is presented in respect of the group's operating segments. Segment profits, losses, assets and liabilities include items that can be attributed directly to a segment or allocated on a reasonable basis.
CFE Group is made of four operating segments, which are :
The Dredging & Environment division – through DEME – operates in dredging (investment dredging and maintenance dredging), the treatment of polluted earth, installation of offshore wind turbines and sludge, and marine civil engineering.
The construction activities reported in the Contracting Segment include :
The Real Estate segment develops real estate projects in Belgium, Luxemburg and Poland.
Besides the usual holding activities, this segment includes:
| At June 30 | Revenue | Income from operating activities | Operating income (EBIT) | Financial income | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2017 | 2018 | %Turnover | 2017 | %Turnover | 2018 | %Turnover | 2017 | %Turnover | 2018 | 2017 | |
| Dredging and environment |
1,329,416 | 1,097,715 | 68,895 | 5.18% | 85,135 | 7.76% | 66,997 | 5.04% | 72,339 | 6.59% | (4,587) | (12,822) |
| Correction DEME | (2,294) | (2,734) | (2,636) | (3,223) | 1,450 | 2,109 | ||||||
| Contracting | 468,116 | 351,202 | 7,247 | 1.55% | 14,819 | 4.22% | 7,244 | 1.55% | 14,819 | 4.22% | (79) | (45) |
| Real Estate | 75,474 | 7,140 | 9,652 | 12.79% | 20,106 | 281.60% | 11,651 | 15.44% | 19,252 | 269.64% | (2,130) | (363) |
| Holding & non transferred activities |
13,706 | 19,312 | (4,169) | (1,295) | (5,136) | (2,440) | (1,716) | (2,173) | ||||
| Eliminations between segments |
(26,566) | (19,497) | (591) | 268 | (591) | 268 | ||||||
| Total consolidated | 1,860,146 | 1,455,872 | 78,740 | 4.23% | 116,299 | 7.99% | 77,529 | 4.17% | 101,015 | 6.94% | (7,062) | (13,294) |
| At June 30 | Taxes | Net income of the group | Non-cash items | EBITDA | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 | 2017 | 2018 | %Turnover | 2017 | %Turnover | 2018 | 2017 | 2018 | %Turnover | 2017 | %Turnover | ||
| Dredging and environment | (1,531) | (14,417) | 48,425 | 3.64% | 46,130 | 4.20% | 118,205 | 110,265 | 187,100 | 14.07% | 195,400 | 17.80% | |
| Correction DEME | 192 | 110 | (994) | (1,004) | 2,294 | 2,734 | |||||||
| Contracting | (3,091) | (5,929) | 4,075 | 0.87% | 8,845 | 2.52% | 7,619 | (3,904) | 14,866 | 3.18% | 10,915 | 3.11% | |
| Real Estate | (1,741) | (91) | 7,815 | 10.35% | 18,798 | 263.28% | (1,028) | 4,188 | 8,624 | 11.43% | 24,294 | 340.26% | |
| Holding & non-transferred activities |
(70) | (528) | (6,923) | (5,141) | (3,729) | (3,605) | (7,898) | (4,900) | |||||
| Eliminations between segments | 42 | (71) | (549) | 197 | (591) | 268 | |||||||
| Total consolidated | (20,199) | (20,926) | 51,849 | 2.79% | 67,825 | 4.66% | 123,361 | 109,678 | 202,101 | 10.86% | 225,977 | 15.52% |
| At June 30th, 2018 | Dredging and environment |
Contracting Real Estate | Holding & non transferred |
Eliminations between |
Total consolidated |
|
|---|---|---|---|---|---|---|
| (thousand euro) | activities | segments | ||||
| ASSETS | ||||||
| Goodwill | 155,959 | 21,560 | 0 | 0 | 0 | 177,519 |
| Property, plant and equipment | 2,144,100 | 62,351 | 523 | 1,050 | 0 | 2,208,024 |
| Non-current loans to consolidated group companies |
0 | 0 | 0 | 20,000 | (20,000) | 0 |
| Other non-current financial assets | 103,355 | 1 | 30,112 | 20,790 | 0 | 154,258 |
| Other non-current assets | 272,563 | 13,376 | 32,241 | 1,267,243 | (1,245,868) | 339,555 |
| Inventories | 14,649 | 23,283 | 69,710 | 1,630 | (1,625) | 107,647 |
| Cash and cash equivalents | 343,204 | 51,995 | 8,763 | 24,049 | 0 | 428,011 |
| Internal cash position - cash pooling – assets |
0 | 41,256 | 0 | 871 | (42,127) | 0 |
| Other current assets | 837,522 | 338,509 | 87,176 | 117,540 | (9,136) | 1,371,611 |
| Total assets | 3,871,352 | 552,331 | 228,525 | 1,453,173 | (1,318,756) | 4,786,625 |
| EQUITY AND LIABILITIES | ||||||
| Equity | 1,543,439 | 71,941 | 66,586 | 1,181,209 | (1,247,493) | 1,615,682 |
| Non-current borrowings from consolidated group companies |
0 | 0 | 20,000 | 0 | (20,000) | 0 |
| Bonds – non-current | 0 | 0 | 29,531 | 0 | 0 | 29,531 |
| Non-current financial liabilities | 544,599 | 10,665 | 19,145 | 120,000 | 0 | 694,409 |
| Other non-current liabilities | 167,660 | 16,525 | 8,770 | 23,058 | 0 | 216,013 |
| Bonds – current | 201,097 | 0 | 0 | 0 | 0 | 201,097 |
| Current financial liabilities | 151,493 | 1,344 | 0 | 0 | 0 | 152,837 |
| Internal cash position - cash pooling - liabilities |
0 | 0 | 10,475 | 31,652 | (42,127) | 0 |
| Other current liabilities | 1,263,064 | 451,856 | 74,018 | 97,254 | (9,136) | 1,877,056 |
| Total equity and liabilities | 3,871,352 | 552,331 | 228,525 | 1,453,173 | (1,318,756) | 4,786,625 |
| At December 31st, 2017(*) (thousand euro) |
Dredging and environment |
Contracting Real Estate | Holding & non transferred activities |
Eliminations between segments |
Total consolidated |
|
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Goodwill | 163,370 | 21,560 | 0 | 0 | 0 | 184,930 |
| Property, plant and equipment | 2,073,436 | 63,736 | 526 | 510 | 0 | 2,138,208 |
| Non-current loans to consolidated | ||||||
| group companies | 0 | 0 | 0 | 20,000 | (20,000) | 0 |
| Other non-current financial assets | 94,138 | 754 | 34,981 | 17,846 | 0 | 147,719 |
| Other non-current assets | 278,749 | 10,894 | 32,889 | 1,267,880 | (1,245,818) | 344,594 |
| Inventories | 15,714 | 24,020 | 99,216 | 1,640 | (1,625) | 138,965 |
| Cash and cash equivalents | 434,687 | 59,234 | 3,324 | 25,773 | 0 | 523,018 |
| Internal cash position - cash pooling - assets |
0 | 47,985 | 0 | 1,928 | (49,913) | 0 |
| Other current assets | 727,178 | 290,454 | 26,723 | 124,074 | (10,970) | 1,157,459 |
| Total assets | 3,787,272 | 518,637 | 197,659 | 1,459,651 | (1,328,326) | 4,634,893 |
| EQUITY AND LIABILITIES | ||||||
| Equity | 1,554,953 | 74,226 | 64,433 | 1,182,605 | (1,247,442) | 1,628,775 |
| Non-current borrowings from consolidated group companies |
0 | 0 | 20,000 | 0 | (20,000) | 0 |
| Bonds | 201,900 | 0 | 29,478 | 0 | 0 | 231,378 |
| Non-current financial liabilities | 401,559 | 11,134 | 6,400 | 0 | 0 | 419,093 |
| Other non-current liabilities | 174,527 | 18,241 | 8,846 | 20,370 | 0 | 221,984 |
| Bonds – current | 0 | 0 | 0 | 99,959 | 0 | 99,959 |
| Current financial liabilities | 118,889 | 5,608 | 0 | 0 | 0 | 124,497 |
| Internal cash position - cash pooling - liabilities |
0 | 0 | 16,293 | 33,620 | (49,913) | 0 |
| Other current liabilities | 1,335,444 | 409,428 | 52,209 | 123,097 | (10,971) | 1,909,207 |
| Total equity and liabilities | 3,787,272 | 518,637 | 197,659 | 1,459,651 | (1,328,326) | 4,634,893 |
(*) Amounts adjusted in accordance with the changes in accounting principle related to IFRS 15 "Revenue from contracts with customers" and IFRS 9 "Financial instruments and subsequent amendments" as explained in note 3.2.
| At June 30th, 2018 | Dredging & Contracting Real Estate environment |
Holding, non transferred activities |
|||
|---|---|---|---|---|---|
| (In thousand Euro) | and eliminations | ||||
| Cash flow from operating activities before changes in working capital |
187,649 | 15,379 | 10,153 | (9,448) | 203,733 |
| Cash flow from operating activities | 25,336 | 16,981 | (2,083) | (31,101) | 9,133 |
| Cash flow from investing activities | (228,604) | (3,907) | 325 | (3,646) | (235,832) |
| Cash flow from financing activities | 111,676 | (19,781) | 7,410 | 33,036 | 132,341 |
| Net increase/(decrease) of cash | (91,592) | (6,707) | 5,652 | (1,711) | (94,358) |
| At June 30th, 2017 (In thousand Euro) |
Dredging & environment |
Contracting | Real Estate | Holding, non transferred activities and eliminations |
Total consolidated |
|---|---|---|---|---|---|
| Cash flow from operating activities before changes in working capital |
196,519 | 8,672 | 29,674 | (4,970) | 229,895 |
| Cash flow from operating activities | 259,796 | 17,288 | 4,262 | (141) | 281,205 |
| Cash flow from investing activities | (264,362) | (2,038) | (2,362) | (589) | (269,351) |
| Cash flow from financing activities | (1,534) | (11,438) | (3,456) | (13,522) | (29,950) |
| Net increase/(decrease) of cash | (6,100) | 3,812 | (1,556) | (14,252) | (18,096) |
Cash flows from financing activities include cash pooling loans and borrowing with other segments. A positive amount means a use of liquidities in the cash pooling. This section is also influenced by external financing, especially and primarily in the segments Dredging and environment, Real Estate, Holding and non-transferred activities. The dredging and environment segment is not part of the cash pooling of the group CFE.
| At June 30th, 2018 (In thousand Euro) |
Dredging & environment |
Contracting | Real Estate |
Holding & non transferred activities |
Total consolidated |
|---|---|---|---|---|---|
| Amortizations Investments |
(120,548) 186,229 |
(5,383) 4,575 |
(137) 185 |
(82) 673 |
(126,150) 191,662 |
| At June 30th, 2017 | Dredging & environment |
Contracting | Real Estate |
Holding & non transferred |
Total consolidated |
| (In thousand Euro) | activities | ||||
| Amortizations Investments |
(112,988) 261,214 |
(3,651) 5,485 |
(91) 350 |
(114) 583 |
(116,844) 267,632 |
The investments include the acquisitions done for the purpose of the group investments and the acquisitions done by the segments Real Estate and PPP-concessions for their operational activities. Acquisitions through business combinations are not disclosed in those amounts.
| (In thousand Euro) | June 2018 | June 2017 |
|---|---|---|
| Capital dredging | 274,474 | 259,115 |
| Environmental contracting | 84,064 | 81,740 |
| Fallpipe and landfalls | 225,744 | 65,858 |
| Maintenance dredging | 146,957 | 136,001 |
| Marine works | 538,682 | 523,416 |
| Civil works | 59,495 | 31,585 |
| Total | 1,329,416 | 1,097,715 |
| REVENUE BREAKDOWN GENERATED BY THE CONTRACTING DIVISION (In thousand Euro) |
June 2018 | June 2017 |
|---|---|---|
| Construction Multitechnics Rail Infra & Utilities Networks |
343,370 86,156 38,590 |
242,864 74,897 33,441 |
| Total | 468,116 | 351,202 |
| REVENUE OF CFE GROUP AT JUNE 30 | ||
|---|---|---|
| (In thousand Euro) | June 2018 | June 2017 |
| Belgium | 566,710 | 509,289 |
| Other Europe | 930,721 | 611,772 |
| Middle East | 8,669 | 7,109 |
| Asia | 195,729 | 135,180 |
| Oceania | 18,067 | 17,914 |
| Africa | 110,558 | 136,044 |
| Americas | 29,692 | 38,564 |
| Total consolidated | 1,860,146 | 1,455,872 |
Acquisitions of first semester 2018 classified as business combination according standard IFRS 3 have no materiel impacts during the period ended 30 June.
During the first semester 2018, GeoSea, subsidiary of DEME has finalized the assessment of fair value of assets and liabilities of the subsidiaries G-Tec and A2Sea A/S, acquired in 2017. The definitive acquisition price and the definitive fair value assigned to the assets and liabilities are summarized as follows:
| Acquisitions GeoSea 2017 (In thousand Euro) |
Provisional fair value December 2017 |
Definitive fair value June 2018 |
|---|---|---|
| Property, plant and equipment | 186,675 | 190,964 |
| Cash and cash equivalents | 38,945 | 38,945 |
| Dettes non courantes | (14,279) | (14,279) |
| Other current and non-current assets and liabilities | (9,192) | (7,281) |
| Total net assets acquired | 202,149 | 208,349 |
| Non-controlling interests | 699 | 869 |
| Total net assets acquired – share of the group | 202,848 | 209,218 |
| Goodwill | 7,410 | 704 |
| Acquisition price | 210,258 | 209,922 |
Acquisitions and disposals of subsidiaries in the Real Estate division are not business combinations. Therefore, the consideration paid is allocated to the land and buildings in stock. The main acquisitions and sales which occur in the real estate division are described here above in the preamble.
Revenues from auxiliary activities amount to 31,123 thousand Euro (June 2017 : 57,988 thousand Euro) and include gains on disposals of property, plant and equipment for 1,828 thousand Euro (June 2017: 2,838 thousand Euro), as well as rent income, recharges of costs and other compensation for 29,295 thousand Euro (June 2017 : 21,823 thousand Euro). In 2017, the income from the sale of subsidiaries within the real estate segment for an amount of 33,327 thousands euro were included in the revenue from auxiliary activities.
| As of June 30 | ||
|---|---|---|
| (in thousand Euro) | 2018 | 2017 |
| Cost of financial debt | (7,091) | (9,427) |
| Derivative instruments - fair value adjustments through profit and loss | 0 | 0 |
| Derivative instruments used as hedging instruments | 0 | 0 |
| Assets measured at fair value | 0 | 0 |
| Available-for-sale financial instruments | 0 | 0 |
| Assets and liabilities at amortized cost – interests income | 5,376 | 3,642 |
| Assets and liabilities at amortized cost - interest expenses | (12,467) | (13,069) |
| Other financial income and expense | 29 | (3,867) |
| Realized / unrealized translation gains/(losses) | 2,459 | (5,491) |
| Dividends received from non-consolidated companies | 43 | 3,330 |
| Defined benefit plan financial cost | 0 | 0 |
| Impairment of financial assets | 0 | 0 |
| Other | (2,473) | (1,706) |
| Financial result | (7,062) | (13,294) |
The evolution of the exchange gain/(loss) realized/not realized in the first half year of 2018 compared to the same period in 2017 is mostly explained by the valuation of the Euro against other foreign currencies in DEME.
As of June 30, 2018 the part of non-controlling interests in the result amounts to 1,581 thousand Euro (June 2017 : 1,030 thousand Euro).
The tax expense amounts to 20,199 thousand Euro for the first half year 2018 (June 2017 : 20,926 thousand Euro). The effective tax rate amounts to 28.18% (June 2017 : 20.32%). The effective tax rate is defined as the income tax expense over the pre-tax income from which the earnings from associates and joint ventures are deducted.
| As of June 30, 2018 (In thousand Euro) |
Land & buildings |
Installations & equipments |
Furniture & fittings |
Under construction |
Total |
|---|---|---|---|---|---|
| Acquisition cost | |||||
| Balance at the end of the previous period | 144,888 | 3,435,161 | 76,181 | 428,074 | 4,084,304 |
| Effect of foreign currency fluctuations | 131 | 667 | 32 | 58 | 888 |
| Acquisitions | 2,309 | 71,225 | 3,803 | 113,319 | 190,656 |
| Transfers from one asset to another | (1,328) | 3,500 | 1,909 | (5,136) | (1,055) |
| Disposals | (967) | (22,263) | (2,751) | 0 | (25,981) |
| Acquisitions through business | 187 | 788 | 527 | 0 | 1,502 |
| combinations | |||||
| Balance at the end of the year | 145,220 | 3,489,078 | 79,701 | 536,315 | 4,250,314 |
| Depreciations & impairment | |||||
| Balance at the end of the previous period | (58,599) | (1,823,759) | (63,738) | 0 | (1,946,096) |
| Effect of foreign currency fluctuations | (112) | (344) | 7 | 0 | (449) |
| Depreciations | (2,700) | (118,667) | (2,987) | 0 | (124,354) |
| Transfers from one asset to another | 4,124 | 213 | (3,667) | 0 | 670 |
| Disposals | 967 | 21,591 | 2,594 | 0 | 25,152 |
| Acquisitions through business - | (187) | 3,501 | (527) | 0 | 2,787 |
| combinations | |||||
| Balance at the end of the period | (56,507) | (1,917,465) | (68,318) | 0 | (2,042,290) |
| Net carrying amount | |||||
| At January 1st, 2018 At June 30, 2018 |
86,289 88,713 |
1,611,402 1,571,613 |
12,443 11,383 |
428,074 536,315 |
2,138,208 2,208,024 |
The net carrying amount of tangible assets amounts to 2,208,024 thousand Euro on June 30, 2018 (December 31, 2017: 2,138,208 thousand Euro).
On June 30, 2018, the acquisitions of tangible assets amount to 190,656 thousand Euro, and are mainly related to DEME (185,497 thousand Euro).
The caption "acquisitions through business combinations" concerns the evaluation of assets of A2Sea for which the valorisation was finalized during the first semester 2018.
Of the eight vessels commissioned in 2015 and 2016, worth a total of one billion euros, the trailing suction hopper dredgers Minerva and Scheldt River, with a capacity of 3,500 m³ and 8,400 m³ respectively had previously been delivered. In 2018, the vessels Living Stone, Apollo, and Gulliver are fully operational.
DEME's board of directors approved the construction of four new vessels for a total amount of € 133 million. They include two trailing suction hopper dredgers with a capacity of 2,300 m³ and 8,000 m³ respectively, and two self-propelled barges with a capacity of 3,500 m³ each.
The net value of the fixed assets held in leasing amounts to 60,958 thousand Euro on June, 30 2018 (December 31, 2017: 65,599 thousand Euro). Those contracts relate mainly to the vessels held by DEME, the buildings of the subsidiaries Louis Stevens & Co NV, Engema and Vandendorpe NV; the trucks of the subsidiary Benelmat and the equipment of Compagnie Tunisienne d'Entreprises and José-Coghe-Werbrouck NV.
The amount of property, plant, and equipment constituting a guarantee for some borrowing amounts to 112,024 thousand Euro (December 31, 2017 : 113,231 thousand Euro).
| As of June 30, 2017 | Land & | Installations | Furniture & | Under | |
|---|---|---|---|---|---|
| (In thousand Euro) | buildings | & | fittings | construction | Total |
| equipments | |||||
| Acquisition cost | |||||
| Balance at the end of the previous period | 130,770 | 3,022,471 | 60,273 | 129,115 | 3,342,629 |
| Effect of foreign currency fluctuations | (175) | (3,623) | (264) | 2 | (4,060) |
| Acquisitions | 1,829 | 55,769 | 2,641 | 203,191 | 263,430 |
| Transfers from one asset to another | 153 | 1,612 | 11 | (1,849) | (73) |
| Disposals | (1,957) | (16,277) | (1,828) | (686) | (20,748) |
| Acquisitions through business | 0 | 0 | 0 | 0 | 0 |
| combinations | |||||
| Balance at the end of the year | 130,620 | 3,059,952 | 60,833 | 329,773 | 3,581,178 |
| Depreciations & impairment | |||||
| Balance at the end of the previous period | (58,215) | (1,551,879) | (49,231) | 0 | (1,659,325) |
| Effect of foreign currency fluctuations | 128 | 1,677 | 152 | 0 | 1,957 |
| Depreciations | (2,327) | (105,460) | (2,244) | 0 | (110,031) |
| Transfers from one asset to another | (478) | 490 | 61 | 0 | 73 |
| Disposals | 1,720 | 14,975 | 1,808 | 0 | 18,503 |
| Acquisitions through business - | 0 | 0 | 0 | 0 | 0 |
| combinations | |||||
| Balance at the end of the period | (59,172) | (1,640,197) | (49,454) | 0 | (1,748,823) |
| Net carrying amount | |||||
| At January 1st, 2017 | 72,555 | 1,470,592 | 11,042 | 129,115 | 1,683,304 |
| At June 30, 2017 | 71,448 | 1,419,755 | 11,379 | 329,773 | 1,832,355 |
On June 30, 2018 investments in associates amount to 138,778 thousand Euro (December 2017: 140,510 thousand Euro) in the statement of financial position. The decrease is mainly explained by the earnings from associates and joint ventures which amounts to (1,211) thousand Euro (June 2017: (15,284) thousand Euro).
On June 30, 2018 the inventories amount to 107,647 thousand Euro (December 2017: 138,965 thousand Euro) and are detailed as follows:
| (In thousand Euro) | June 30, 2018 | December 31, 2017 |
|---|---|---|
| Raw materials and consumables Raw material and consumables (impairment losses) Finished products and goods purchased for resale Finished products (impairment losses) |
42,349 (231) 67,253 (1,724) |
40,727 (324) 101,182 (2,620) |
| Inventories | 107,647 | 138,965 |
The drastic decrease of inventories is mainly explained by the sales of several real estate projects in Poland.
On June 30, 2018, the trade and other receivables amount to 1,330,838 thousand Euro (December 2017(*): 1,120,306 thousand Euro). The increase during the 1st half year 2018 is mainly due to DEME's activities.
In order to reduce the current risk, the group CFE monitors regularly its outstanding clients and adapts its position towards them. Regarding this matter, it should be noted that CFE is involved in two projects in Chad. It consists of the construction of the "Grand Hôtel" and of the building for the Ministry of Finance. The "Grand Hôtel" operational maintenance and management were transferred in June 2017 to the operator appointed by the Chadian government while the official opening took place on July 1st, 2017.
Negotiations continued in the first half of 2018 with the Chadian authorities and the Afrexim Bank to refinance the receivables relating to the Grand Hotel. In July 2018, the Chadian government settled old receivables relating to the Ministry of Finance project and the Grand Hotel for an amount of € 7.5 million .
Accordingly, CFE's exposure to Chad has diminished by € 12 million following the recognition of the partial impairment loss, and by € 7.5 million to the extent that the sums received locally can be converted into euros and transferred to Belgium.
(*) Amounts adjusted in accordance with the changes in accounting principle related to IFRS 15 "Revenue from contracts with customers" and IFRS 9 "Financial instruments and subsequent amendments" as explained in note 3.2.
On June 30, 2018 these provisions amount 110,266 thousand Euro, which represents a decrease of 2,447 thousand Euro compared to the end of December 2017 (112,713 thousand Euro).
| (In thousand Euro) | After - sale service |
Other current risks |
Negative equity method |
Other non current risks |
Total |
|---|---|---|---|---|---|
| Balance at the end of the previous period | 14,898 | 67,632 | 19,179 | 11,004 | 112,713 |
| Effect of foreign currency fluctuations Actualization effect |
(79) 0 |
(179) 0 |
0 0 |
0 0 |
(258) 0 |
| Transfer from one category to another Provisions recognized |
(4) 1,332 |
(5,757) 8,335 |
2,924 0 |
2,573 33 |
(264) 9,700 |
| Provisions used | (1,526) | (6,284) | 0 | (901) | (8,711) |
| Provisions reversed | 0 | (2,914) | 0 | 0 | (2,914) |
| Closing balance | 14,621 | 60,833 | 22,103 | 12,709 | 110,266 |
of which current: 75,454 thousand Euro non-current: 34,812 thousand Euro
The provision for after-sale service decreased by 277 thousand Euro to reach 14,621 thousand Euro on June 30, 2018.
The provision for other current risks decreased by 6,799 thousand Euro and amounts to 60,833 thousand Euro at June 30, 2018. This category includes :
If the share of CFE group in the economic losses of associates and joint ventures exceeds the carrying amount of investment, the carrying amount is limited to zero. Losses higher than the carrying amount are not recognised, except for the amount of commitments of CFE as regards to some of those associates and joint ventures. The amounts of those commitments are accounted as non-current provisions to the extent that the group considers it has an obligation to support those subsidiaries and their projects.
Provisions for other non-current liabilities include provisions for liabilities not directly related to site operations in progress.
Based on available information at the date on which the financial statements were approved by the Board of Directors, we are not aware of any contingent assets or liabilities, with the exception of contingent assets or liabilities related to construction contracts (for example, the group's claims against customers or claims by subcontractors) that can be described as normal in the construction and the dredging sector and which are treated by applying the percentage-of-completion method during the recognition of revenue.
CFE group uses derivatives financial instruments mainly in order to reduce the risks linked to unfavourable movements of interests rates, exchange rate, price of commodities and other market risks. The company does not hold or does not sell any financial instruments for trading purposes. However, derivatives which are not eligible to be considered as hedging instruments are disclosed as financial instruments held for trading.
On June 30, 2018 the derivative financial instruments have been estimated at their fair values.
| 30/06/2018 | 31/12/2017 | |||||
|---|---|---|---|---|---|---|
| (In thousand Euro) | Non-current | Current | Total | Non-current | Current | Total |
| Bank loans and other financial debt | 519,602 | 141,911 | 661,513 | 373,667 | 110,236 | 483,903 |
| Bonds | 29,531 | 201,097 | 230,628 | 231,378 | 99,959 | 331,337 |
| Drawings on credit facilities | 133,000 | 0 | 133,000 | 0 | 0 | 0 |
| Borrowings under finance leases | 41,807 | 7,863 | 49,670 | 45,426 | 7,920 | 53,346 |
| Total long-term financial debt | 723,940 | 350,871 | 1,074,811 | 650,471 | 218,115 | 868,586 |
| Short-term financial debt | 0 | 3,063 | 3,063 | 0 | 6,341 | 6,341 |
| Cash equivalents | 0 | (9,624) | (9,624) | 0 | (9,650) | (9,650) |
| Cash | 0 | (418,387) | (418,387) | 0 | (513,368) | (513,368) |
| Net short-term financial debt/(cash) | 0 | (424,948) | (424,948) | 0 | (516,677) | (516,677) |
| Total net financial debt | 723,940 | (74,077) | 649,863 | 650,471 | (298,562) | 351,909 |
| Derivative instruments used as interest-rate hedges |
5,735 | 3,130 | 8,865 | 5,250 | 3,453 | 8,703 |
The bank loans and other financial debts (€661,513 thousand) mainly relate to the corporate credit line and project financing granted to DEME which are allocated to the financing of vessels.
The bonds (€230,628 thousand) are the bonds subscribed by DEME NV and BPI Real Estate Belgium SA. On 14 February 2013, DEME issued €200 million of bonds maturing on 14 February 2019 and paying a coupon of 4.145%. On 19 December 2017, BPI Real Estate Belgium issued €30 million of bonds maturing on 19 December 2022 and paying a coupon of 3.75%.
The finance leases (€49,670 thousand) mainly relate to DEME, and the buildings of the subsidiaries Louis Stevens & Co NV and Engema NV and the equipment's of the subsidiary José Coghe-Werbrouck NV.
| Less than 1 year |
Between 1 and 2 years |
Between 2 and 3 years |
Between 3 and 5 years |
Between 5 and 10 years |
More than 10 |
Total | |
|---|---|---|---|---|---|---|---|
| (In thousand Euro) | years | ||||||
| Bank loans and other financial debt | 141,911 | 118,325 | 115,786 | 186,133 | 99,358 | 0 | 661,513 |
| Bonds | 201,097 | 0 | 0 | 29,531 | 0 | 0 | 230,628 |
| Drawings on credit facilities | 0 | 0 | 13,000 | 120,000 | 0 | 0 | 133,000 |
| Borrowings under finance leases | 7,863 | 8,013 | 6,592 | 13,760 | 10,560 | 2,882 | 49,670 |
| Total long-term financial debt | 350,871 | 126,338 | 135,378 | 349,424 | 109,918 | 2,882 | 1,074,811 |
| Short-term financial debt | 3,063 | 0 | 0 | 0 | 0 | 0 | 3,063 |
| Cash equivalents | (9,624) | 0 | 0 | 0 | 0 | 0 | (9,624) |
| Cash | (418,387) | 0 | 0 | 0 | 0 | 0 | (418,387) |
| Net short-term financial debt | (424,948) | 0 | 0 | 0 | 0 | 0 | (424,948) |
| Total net financial debt | (74,077) | 126,338 | 135,378 | 349,424 | 109,918 | 2,882 | 649,863 |
The present value of finance lease obligations amounted to €7,863 thousand (2017: €7,920 thousand).
At 30 June 2018, CFE's financial liabilities amounted to €1,077,874 thousand, or an increase by €202,947 thousand relative to 31 December 2017.
This increased debt is primarily explained by a net positive cash flow (+€205,170 thousand) from bank loans granted (+ €390,239 thousand) and repaid (€-185,069 thousand). The item 'Other changes' mainly concerns the reclassification in current financial liabilities of the retail bond of DEME NV which matures in February 2019 as well as the effect of foreign exchange rates.
| (in € thousands) | December 2017 |
Cash flow | Other changes |
June 2018 |
|---|---|---|---|---|
| Non-current financial liabilities | ||||
| Bonds | 231.378 | (750) | (201.097) | 29.531 |
| Other non-current financial liabilities |
419.093 | 309.699 | (34.383) | 694.409 |
| Current financial liabilities | ||||
| Bonds Other current financial liabilities |
99.959 124.497 |
(99.959) (3.820) |
201.097 32.160 |
201.097 152.837 |
| Total | 874.927 | 205.170 | (2.223) | 1.077.874 |
At June, 30 2018 CFE SA has confirmed long-term bank credit facilities of €150 million on which €120 million were drawn at half-end 2018.
At June, 30 2018 BPI Real Estate Belgium SA has confirmed long-term bank credit facilities of €20 million on which €13 million were drawn at halfend 2018.
DEME has confirmed bank credit facilities "revolving credit facilities" of €120 million, and bank credit facilities "term loans" of €240 million and has also the opportunity to issue commercial paper for a total amount of €125 million. At 30 June 2018, none of those financing facilities is used.
Bilateral loans are subject to specific covenants that take into account factors such as financial debt and the ratio of debt to equity or non-current assets, as well as cash flow. The group complied with all these covenants at June, 30 2018.
The policy and the risk management procedures defined by the group are the same as the one's declared in the 2017 annual report.
| Fixed rate | Floating rate | Total | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Type of debts | Amounts | Quota | Rate | Amounts | Quota | Rate | Amounts | Quota | Rate | |
| Bank loans and other financial debts |
326 | 0.12% | 5.37% | 661,187 | 83.00% | 0.69% | 661,513 | 61.55% | 0.70% | |
| Bonds | 230,628 | 82.89% | 4.09% | 0 | 0.00% | 0.00% | 230,628 | 21.46% | 4.09% | |
| Drawing on credit facilities |
0 | 0.00% | 0.00% | 133,000 | 16.70% | 0.77% | 133,000 | 12.37% | 0.77% | |
| Borrowings under finance leases |
47,270 | 16.99% | 1.12% | 2,400 | 0.30% | 2.50% | 49,670 | 4.62% | 1.19% | |
| Total | 278,224 | 100% | 3.59% | 796,587 | 100% | 0.71% | 1,074,811 | 100% | 1.46% |
| Fixed rate | Floating rate | Floating rate capped + inflation | Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Type of debts | Amounts | Quota | Rate | Amounts | Quota | Rate | Amounts | Quota | Rate | Amounts | Quota | Rate |
| Bank loans and other financial debts |
655,343 | 64.68% 0.080% | 6,170 | 10.02% | 0.68% | 0 | 0.00% | 0.00% | 661,513 | 61.55% | 0.80% | |
| Bonds | 230,628 | 22.76% | 4.09% | 0 | 0.00% | 0.00% | 0 | 0.00% | 0.00% | 230,628 | 21.46% | 4.09% |
| Drawing on credit facilities |
80,000 | 7.90% | 0.57% | 53,000 | 86.08% | 0.82% | 0 | 0.00% | 0.00% | 133,000 | 12.37% | 0.67% |
| Borrowings under finance leases |
47,270 | 4.66% | 1.12% | 2,400 | 3.90% | 2.50% | 0 | 0.00% | 0.00% | 49,670 | 4.62% | 1.19% |
| Total | 1,013,241 | 100% | 1.55% | 61,570 | 100% | 0.87% | 0 | 0.00% | 0.00% 1,074,811 | 100% | 1.51% |
The outstanding debts, excluding finance leases, can be split by currency as follows:
| (In thousand Euro) | June 2018 | December 2017 |
|---|---|---|
| Euro | 1,025,141 | 815,240 |
| US Dollar | 0 | 0 |
| Other currencies | 0 | 0 |
| Total long term debts | 1,025,141 | 815,240 |
| June 30, 2018 | FAMMFV/ | FAMMFV/ | Loans and | Total of | Fair value | Fair value |
|---|---|---|---|---|---|---|
| (In € thousands) | FLFVPL (3): | FLFVPL (3): | trade | carrying | measurements | of the class |
| Derivatives | Derivatives | receivables at | amount | of financial | ||
| not designated | designated as | amortised | assets by level | |||
| as hedging | hedging | costs | ||||
| instruments | instruments | |||||
| Non-current financial assets | 171 | 145.941 | 146.112 | 146.112 | ||
| Investments (1) | 7.163 | 7.163 | Level 2 | 7.163 | ||
| Financial loans and receivables (1) | 138.778 | 138.778 | Level 2 | 138.778 | ||
| Derivatives | 171 | 171 | Level 2 | 171 | ||
| Current financial assets | 1.032 | 114 | 1.758.849 | 1.759.995 | 1.759.995 | |
| Trade and other receivables | 1.330.838 | 1.330.838 | Level 2 | 1.330.838 | ||
| Derivatives | 1.032 | 114 | 1.146 | Level 2 | 1.146 | |
| Cash equivalents (2) | 9.624 | 9.624 | Level 2 | 9.624 | ||
| Cash at bank and in hand (2) | 418.387 | 418.387 | Level 2 | 418.387 | ||
| Total assets | 1.032 | 285 | 1.904.790 | 1.906.107 | 1.906.107 | |
| Non-current financial debts | 2.122 | 4.638 | 723.940 | 730.700 | 737.303 | |
| Bonds | 29.531 | 29.531 | Level 1 | 29.531 | ||
| Financial debts | 694.409 | 694.409 | Level 2 | 701.012 | ||
| Derivatives | 2.122 | 4.638 | 6.760 | Level 2 | 6.760 | |
| Current financial liabilities | 4.200 | 3.272 | 1.699.650 | 1.707.122 | 1.714.903 | |
| Trade payables and other operating debts | 1.345.716 | 1.345.716 | Level 2 | 1.345.716 | ||
| Bonds | 201.097 | 201.097 | Level 1 | 204.640 | ||
| Financial debts | 152.837 | 152.837 | Level 2 | 157.075 | ||
| Derivatives | 4.200 | 3.272 | 7.472 | Level 2 | 7.472 | |
| Total liabilities | 6.322 | 7.910 | 2.423.590 | 2.437.822 | 2.452.206 |
| December, 31 2017 (*) (In € thousands) |
FAMMFV/ FLFVPL (3): Derivatives designated as hedging instruments |
FAMMFV/ FLFVPL (3): Derivatives designated as hedging instruments |
Loans and trade receivables at amortized costs |
Total of carrying amount |
Fair value measurements of financial assets by level |
Fair value of the class |
|---|---|---|---|---|---|---|
| Non-current financial assets | 921 | 147,719 | 148,640 | 148,640 | ||
| Investments (1) | 7,101 | 7,101 | Level 2 | 7,101 | ||
| Financial loans and receivables (1) | 140,618 | 140,618 | Level 2 | 140,618 | ||
| Derivatives | 921 | 921 | Level 2 | 921 | ||
| Current financial assets | 2,320 | 1,836 | 1,643,324 | 1,647,480 | 1,647,480 | |
| Trade and other receivables | 1,120,306 | 1,120,306 | Level 2 | 1,120,306 | ||
| Derivatives | 2,320 | 1,836 | 4,156 | Level 2 | 4,156 | |
| Cash equivalents (2) | 9,650 | 9,650 | Level 2 | 9,650 | ||
| Cash at bank and in hand (2) | 513,368 | 513,368 | Level 2 | 513,368 | ||
| Total assets | 2,320 | 2,757 | 1,791,043 | 1,796,120 | 1,796,120 | |
| Non-current financial debts | 1,960 | 5,249 | 650,471 | 657,680 | 671,253 | |
| Bonds | 231,378 | 231,378 | Level 1 | 235,599 | ||
| Financial debts | 419,093 | 419,093 | Level 2 | 428,445 | ||
| Derivatives | 1,960 | 5,249 | 7,209 | Level 2 | 7,209 | |
| Current financial liabilities | 401 | 7,044 | 1,519,529 | 1,526,974 | 1,530,825 | |
| Trade payables and other operating debts | 1,295,073 | 1,295,073 | Level 2 | 1,295,073 | ||
| Bonds | 99,959 | 99,959 | Level 1 | 101,168 | ||
| Financial debts | 124,497 | 124,497 | Level 2 | 127,139 | ||
| Derivatives | 401 | 7,044 | 7,445 | Level 2 | 7,445 | |
| Total liabilities | 2,361 | 12,293 | 2,170,000 | 2,184,654 | 2,202,078 |
(*) Amounts adjusted in accordance with the changes in accounting principle related to IFRS 15 "Revenue from contracts with customers" and IFRS 9 "Financial instruments and subsequent amendments" as explained in note 3.2.
(1) Included in items "Other non-current financial assets" and "Other non-current assets".
(2) Included in item "Cash and cash equivalents".
(3) FAMMFV: Financial assets mandatorily measured at fair value
FLFVPL: Financial liabilities at fair value through profit or loss
The fair value of financial instruments can be classified into three levels based on the degree to which the inputs to the fair value measurements are observable:
The fair value of financial instruments has been determined using the following methods :
The total amount of commitments granted other than guarantees for the period ended June 30th, 2018 amount to 1,143,033 thousand Euro (December 2017: 1,168,439 thousand Euro) and is detailed by nature as follows:
| (In thousand Euro) | ||
|---|---|---|
| June 2018 | December 2017 | |
| Performance guarantees and performance bonds (a) | 979,778 | 997,687 |
| Bid bonds (b) | 12,966 | 16,902 |
| Repayment of advance payments (c) | 2,452 | 2,683 |
| Retentions (d) | 15,006 | 12,300 |
| Deferred payments to subcontractors and suppliers (e) | 51,523 | 51,317 |
| Other commitments given - including 60,858 thousand Euro of corporate guarantees at | 81,308 | 87,550 |
| DEME | ||
| Total | 1,143,033 | 1,168,439 |
a) Guarantees given in relation to the performance of works contracts. If the construction entity fails to perform, the bank (or insurance company) undertakes to compensate the customer to the extent of the guarantee.
b) Guarantees provided as part of tenders relating to work contracts.
c) Guarantees provided by a bank to a customer guaranteeing the repayment of advance payments in relation to contracts (mainly at DEME).
d) Security provided by a bank to a client to replace the use of retention money.
e) Guarantee covering the settlement of a liability to a supplier or subcontractor.
| (In thousand Euro) | June 2018 | December 2017 |
|---|---|---|
| Performance guarantees and performance bonds Other commitments received |
436,007 2,226 |
393,592 2,515 |
| Total | 438,233 | 396,107 |
The commitments received are essentially related to the commitments received in the context of the extension of the dredging fleet.
The CFE group has a number of claims that we qualify as normal for the construction and the dredging industry. In most of the cases, the group CFE expects to conclude a transactional convention with the counterparty, which substantially reduces the number of procedures. Currently, negotiations are on-going regarding some receivables. At the moment, it is not possible to assess the potential asset.
| (In thousand Euro) | June 30, 2018 | December 31, 2017 |
|---|---|---|
| Assets with related parties | 478,409 | 445,634 |
| Non-current financial assets | 151,513 | 143,203 |
| Trade receivables and other operating trades | 305,051 | 281,761 |
| Other current assets | 21,845 | 20,670 |
| Liabilities with related parties | 104,459 | 106,555 |
| Other non-current liabilities | 1,578 | 3,542 |
| Trade payables and other operating trades | 102,881 | 103,013 |
| (In thousand Euro) | June 30, 2018 | June 30, 2017 |
| Expenses and incomes with related parties | 266,002 | 318,386 |
| Turnover and incomes from auxiliary activities | 281,934 | 322,004 |
| Purchases and other operating expenses | (20,453) | (9,069) |
Expenses and financial incomes 4,521 5,451
Nihil.
The international activities of the group CFE for the contracting and real estate segments are mainly within the Euro zone. Consequently, the exposure to exchange risk and the impact on financial statements are limited. However, the dredging and environment segment realize a large part of its business internationally. These activities are mainly in US Dollars or in currencies strictly related to the US Dollar. DEME uses financial instruments to hedge exchange rate risk.
For DEME, the research and development relate to the improvement of the efficiency of the maritime-equipment. This company also lead a program in partnership with universities and the Flemish Region in order to develop the production of eco-friendly energy in the maritime-environment.
The activity of construction is seasonal and depends on the climatic conditions of the winter.
Turnover and results achieved in the first half year cannot be extrapolated over the full year. The seasonal effect on the business is reflected in a higher use of cash in the first half year.
No adjustments were made to take account of the impact of seasonal factors on the group's financial statements for the first half year.
Income and expenses of the group from normal business operations which are subject to a seasonal, cyclical or occasional nature were recognized following the same valuation as at year end. They were therefore neither anticipated nor deferred in the interim financial statements.
In the context of our appointment as the company's statutory auditor, we report to you on the consolidated interim financial information. This consolidated interim financial information comprises the consolidated condensed statement of financial position as at 30 June 2018, the consolidated condensed income statement, the consolidated condensed statement of comprehensive income, the consolidated condensed statement of changes in equity and the consolidated condensed statement of cash flows for the period of six months then ended, as well as selective notes 1 to 26.
We have reviewed the consolidated interim financial information of Compagnie d'Entreprises CFE SA ("the company") and its subsidiaries (jointly "the group"), prepared in accordance with International Accounting Standard (IAS) 34, "Interim Financial Reporting" as adopted by the European Union.
The consolidated condensed statement of financial position shows total assets of 4 786 625 (000) EUR and the consolidated condensed income statement shows a consolidated profit (group share) for the period then ended of 51 849 (000) EUR.
The board of directors of the company is responsible for the preparation and fair presentation of the consolidated interim financial information in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union. Our responsibility is to express a conclusion on this consolidated interim financial information based on our review.
We conducted our review of the consolidated interim financial information in accordance with International Standard on Review Engagements (ISRE) 2410, "Review of interim financial information performed by the independent auditor of the entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit performed in accordance with the International Standards on Auditing (ISA) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the consolidated interim financial information.
Based on our review, nothing has come to our attention that causes us to believe that the consolidated interim financial information of Compagnie d'Entreprises CFE SA has not been prepared, in all material respects, in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union.
Without modifying the conclusion expressed above, we draw your attention to the Note 13 of the consolidated interim financial information which describes the uncertainties regarding the amount due by the State of Chad and the undertaken actions in order to facilitate its payment.
Zaventem, 27 August 2018
DELOITTE Bedrijfsrevisoren / Reviseurs d'Entreprises DELOITTE Bedrijfsrevisoren / Reviseurs d'Entreprises BV o.v.v.e. CVBA / SC s.f.d. SCRL BV o.v.v.e. CVBA / SC s.f.d. SCRL Represented by Michel Denayer Represented by Rik Neckebroeck
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