Quarterly Report • Aug 31, 2017
Quarterly Report
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MANAGEMENT REPORT OF THE BOARD OF DIRECTORS
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
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
The management report should be read together with the interim condensed consolidated financial statements of the group CFE.
The Board of Directors of CFE examined and approved the H1 2017 financial statements at its meeting on August 25, 2017.
| In million € | 1st semester 2017 | 1st semester 2016 | Variation |
|---|---|---|---|
| Revenue | 1,455.9 | 1,224.5 | 18.9% |
| Self-financing capacity (EBITDA) (*) | 226.0 | 182.2 | 24.0% |
| % of revenue | 15.5% | 14.9% | |
| Operating income on activities (*) | 116.3 | 70.5 | 65.0% |
| % of revenue | 8.0% | 5.8% | |
| Operating income (EBIT) (*) | 101.0 | 75.5 | 33.8% |
| % of revenue | 6.9% | 6.2% | |
| Net income share of the group | 67.8 | 53.0 | 27.9% |
| % of revenue | 4.7% | 4.3% | |
| Net income share of the group per share (in EUR) | 2.68 | 2.10 | 27.6% |
(*) The definitions are included in the 'Consolidated financial statements' section of the intermediary report.
| In million € | 30 June 2017 | 31 December 2016 | Variation |
|---|---|---|---|
| Equity share of the Group | 1,540.8 | 1,521.6 | 1.3% |
| Net financial debt | 275.8 | 213.1 | 29.4% |
| Order book | 4,923.1 | 4,756.7 | 3.5% |
| In million € | 1st semester 2017 | 1st semester 2016 | Variation |
|---|---|---|---|
| Revenue | 1,097.7 | 802.1 | 36.8% |
| EBITDA (**) | 195,4 | 185.3 | 5.4% |
| Operating income (**) | 69,1 | 78.3 | -11.7% |
| Net income share of the group | 45,1 | 54.1 | -16.6% |
(*) Amounts restated to take account of the recognition at fair value of the identifiable assets and liabilities of DEME following the acquisition of an additional 50% of the DEME shares on 24 December 2013.
(**) The definitions are included in the 'Consolidated financial statements' section of the intermediary report.
| In million € | 30 June 2017 | 31 December 2016 | Variation |
|---|---|---|---|
| Order book | 3,845.0 | 3,800.0 | 1.2% |
| Net financial debt | 232.9 | 155.0 | 50.3% |
The key figures shown below are presented according to the economic approach whereby the jointly controlled companies are proportionally consolidated (accounting rules applicable before 1 January 2014).
| In million € (Excluding restatements for DEME) |
1st semester 2017 | 1st semester 2016 | Variation |
|---|---|---|---|
| Revenue | 1,102.9 | 803.1 | 37.3% |
| EBITDA | 194.4 | 195.2 | -0.4% |
| Income from operating activities | 79.8 | 84.7 | -5.8% |
| Net income share of the group | 46.1 | 54.0 | -14.6% |
| Investments | 264.1 | 112.6 | 134.6% |
DEME's revenue amounted to €1,102.9 million (€803.1 million in the first half of 2016).
GeoSea (DEME's subsidiary specializing in complex offshore projects) reported a high level of activity, generated mainly by four major projects: Rentel, Merkur, Hohe See and Galloper.
Off the German North Sea coast, GeoSea completed the installation of the 66 monopiles for the Merkur wind farm at the beginning of July, while construction of the foundations for the Hohe See project (and its extension Albatross) has begun.
Off the Belgian coast, the 'Innovation', flagship of GeoSea's fleet, started work in July on the installation of the 42 monopiles for the Rentel wind farm. Activity during the first six months of 2017 focused on the design and manufacture of the monopiles and transition pieces.
In the UK, the Galloper project, situated 27 km off the Suffolk coast, is virtually finished: the 56 foundations have been installed, and ancillary works are nearing completion.
Business for the dredging division was not so brisk during the first half of 2017 compared with the first half of 2016, due to delays in the start-up and award of several projects in the Middle East and Asia. This situation is reflected in a lower occupancy of the fleet, which weighed on DEME's results.
During the first six months, DEME continued works on its two major projects in Singapore: the extension of Jurong Island (JIWE), and the Tuas Terminal - Phase 1 (TTP1) project. DEME also finished a port extension project at Port Louis (Mauritius) within the appointed deadline. Maintenance dredging activity was buoyant, particularly in Belgium, Germany and Africa.
| In % | 1st semester 2017 | 1st semester 2016 |
|---|---|---|
| Capital dredging | 23% | 44% |
| Maintenance dredging | 12% | 14% |
| Fallpipe and landfalls | 6% | 4% |
| Environment | 8% | 13% |
| Civil works | 3% | 3% |
| Marine works | 48% | 22% |
| Total | 100% | 100% |
Evolution of activity by geographical area (economic approach)
| In % | 1st semester 2017 | 1st semester 2016 |
|---|---|---|
| Europe (EU) | 68% | 50% |
| Europe (non-EU) | 3% | 2% |
| Africa | 11% | 15% |
| Americas | 3% | 7% |
| Asia-Pacific | 12% | 16% |
| Middle East | 1% | 4% |
| India and Pakistan | 2% | 6% |
| Total | 100% | 100% |
As projected, the EBITDA margin, expressed as a percentage of revenue, came to 17.6%, which is close to the historical average.
DEME's order book grew by 1.2% to €3,845 million at 30 June 2017.
Several substantial orders were won during the first half of 2017:
Investments in the first six months of 2017 amounted to €264.1 million according to the economic approach, a sharp rise compared with the first six months of 2016 (€112.6 million) as the investment programme was stepped up.
In February 2017, DEME confirmed an order for two additional vessels with an overall budget of around €500 million:
The dredger 'Minerva', with a capacity of 3,500 m³, was ceremonially launched in Zeebrugge on 23 June 2017.
In July 2017, GeoSea announced it had concluded an agreement with DONG Energy and Siemens on the acquisition of the company A2SEA during the second half of 2017. The transaction is expected to be finalized very shortly, and will have an estimated impact of €170 million on DEME's net financial debt.
The company A2SEA, based in Fredericia, Denmark, and owned by DONG Energy and Siemens, has branches in Germany and the United Kingdom. In recent months, A2SEA restructured its operations, making major cutbacks in its workforce and selling off part of its fleet and its division specializing in laying subsea cables. It means that GeoSea will be acquiring a financially sound structure.
A2SEA specializes in the installation of wind towers and turbines in Western Europe. It has a workforce of around 160 highly qualified and specialized employees. At 30 June 2017, its order book was worth €141 million. A2SEA owns two vessels equipped with the latest technologies, built in 2012 and 2014 (Sea Installer and Sea Challenger).
With this acquisition, GeoSea completes its range of services by acquiring the market leader in the installation of wind towers and turbines in Europe.
DEME's net financial debt amounted to €232.9 million at 30 June 2017 (€235.2 million according to the economic approach).
Despite the substantial increase in capital expenditure, the net financial debt rose by just €77.9 million during the first six months of 2017 thanks to the cash flow from operating activities and the improvement in working capital requirement.
| In million € | 1st semester 2017 | 1st semester 2016 | Variation |
|---|---|---|---|
| Revenue | 351.2 | 400.5 | -12.3% |
| Operating income (*) | 14.8 | 7.6 | 94.7% |
| Net Income share of the group | 8.8 | 4.1 | 114.6% |
(*) The definitions are included in the 'Consolidated financial statements' section of the intermediary report.
| In million € | 30 June 2017 | 31 December 2016 | Variation |
|---|---|---|---|
| Order book | 960.6 | 850.5 | 12.9% |
| Net Financial debt | -84.4 | -92.0 | -8.3% |
| In million € | 1st semester 2017 | 1st semester 2016 (*) | Variation |
|---|---|---|---|
| Construction | 242.9 | 293.5 | -17.2% |
| Buildings, Belgium | 177.9 | 226.6 | -21.4% |
| Buildings, International | 65.0 | 66.9 | -2.8% |
| Multitechnics | 74.9 | 76.2 | -1.7% |
| Rail infra & Utility Networks | 33.4 | 30.8 | 8.4% |
| Total Contracting | 351.2 | 400.5 | -12.3% |
Revenue in the Contracting division amounted to €351.2 million, down 12.3% on the first half of 2016.
The drop in activity primarily affected the Belgian entities of the Construction segment: several of their large projects were completed in the second half of 2016 (more particularly the Docks shopping centre), while the new large-scale projects do not yet generate significant activity. In Flanders, the final projects that are part of the Public Private Partnership 'Schools of Tomorrow' are in the course of completion.
Activity in Luxembourg remains busy. Delivery of the real estate project 'Kons' was accepted in March 2017, while construction of the Lycée Français progressed according to schedule.
CFE Contracting reported an operating income of €14.8 million, up 94.7% on the first six months of 2016.
All segments made a positive contribution to the division's operating income.
This positive trend is essentially attributable to the Construction segment.
In Multitechnics, VMA reported an increase in both revenue and profit, while the entities of the Rail infra & Utility Networks segment generally increased their contribution to the division's operating income.
| In million € | 30 June 2017 | 31 December 2016 | Variation |
|---|---|---|---|
| Construction | 737.5 | 648.7 | 13.7% |
| Buildings, Belgium | 520.3 | 505.0 | 3.0% |
| Buildings, International | 217.2 | 143.7 | 51.1% |
| Multitechnics | 155.9 | 143.4 | 8.7% |
| Rail infra & Utility Networks | 67.2 | 58.4 | 15.1% |
| Total Contracting | 960.6 | 850.5 | 12.9% |
The order book grew by 12.9% during the first six months of 2017.
Order intake was high for most entities of the division, particularly in Brussels and in Poland, where CFE Polska landed two major contracts, one in Gdansk (residential project) and the other in Zabrze, Southern Poland (extension of a shopping centre). In Luxembourg, CLE won the contract for the Naos project (mixed office/retail building).
The Contracting division's net cash position stood at €84.4 million (€92.0 million at 31 December 2016).
The boards of directors of Ackermans & van Haaren and CFE examine the combination of the activities of Van Laere group and CFE Contracting under CFE.
Van Laere group, a leading general contractor in Belgium, realised a turnover of €195 million in 2016. It is fully owned by Ackermans & van Haaren. The main entities of the Van Laere group are Algemene Aannemingen Van Laere NV, Groupe Thiran SA and Arthur Vandendorpe NV.
Even though the transaction does not fall within the scope of article 524 of the Companies Code, the board of directors of CFE decided on June 23, 2017 to appoint a committee of independent directors. The committee is composed of Ciska Servais SPRL, represented by Mrs Ciska Servais, by Pas de Mots SPRL, represented by Mrs Leen Geirnaerdt, and by Mr Philippe Delusinne. This committee will describe the nature and terms of this transaction, evaluate the pro's and con's for CFE and its shareholders and evaluate the financial consequences, to allow the board of directors of CFE to take a final decision.
The transaction could take place in the course of the fourth quarter of 2017, after the realization of a due diligence, which has started.
The interest of this transaction for CFE Contracting is twofold:
| In million € | 1st semester 2017 | 1st semester 2016 | Variation |
|---|---|---|---|
| Revenue | 7.1 | 7.6 | -6.6% |
| Operating income (*) | 19.3 | 0.5 | n.s. |
| Net income share of the group | 18.8 | -0.8 | n.s. |
(*) The definitions are included in the 'Consolidated financial statements' section of the intermediary report.
| In million € | 30 June 2017 | 31 December 2016 |
|---|---|---|
| Unsold units post completion | 12 | 17 |
| Properties under construction | 32 | 35 |
| Properties in development | 71 | 78 |
| Total capital employed | 115 | 130 |
| Net financial debt | 53 | 88 |
(*) Real estate projects is the sum of the equity and net financial debt of the real estate division.
In the Brussels area, BPI and its partners continued the marketing and construction of residential units in the projects 'Erasmus Gardens' in Anderlecht, 'Les Hauts-Prés' in Uccle, and 'Ernest The Park' in Ixelles.
In Liège, BPI and its partner will start the construction of a 12,500 m² office building near Guillemins railway station (Val Benoît site). A long-term lease has been concluded with Forem for 5,500 m² office space.
BPI Luxembourg won the tender launched by the City of Differdange for the development of a mixed-use real estate complex with a total gross floor area of 25,500 m² ('Entrée de ville' project).
Work on the residential project 'Kiem' (Kirchberg-Plateau) has begun, and virtually all apartments have already been sold.
BPI Polska continued developing the projects 'Wola Libre' (Warsaw) and 'Bulwary Ksiazece' (Wroclaw). In Gdansk, the last tower block of the 'Ocean Four' project was completed in July 2017, and 98% has been sold.
Two new acquisitions were recently finalized: a building plot in Poznan on which a residential property of approximately 13,000 m² will be built, and a building plot adjoining the 'Wola Libre' project in Warsaw. The second acquisition (also a residential project) is conditional upon the decontamination of the site by the seller.
BPI reported an all-time high after tax profit, which is explained by two major transactions that were finalized during the first half of 2017:
| In million € | 1st semester 2017 | 1st semester 2016 | Variation |
|---|---|---|---|
| Revenue | -0.2 | 14.4 | -101.4% |
| Operating income (*) | -2.1 | -10.9 | -80.7% |
| Net income share of the group | -4.9 | -4.3 | 13.9% |
(*) The definitions are included in the 'Consolidated financial statements' section of the intermediary report.
Revenue includes €-19.5 million inter-division eliminations. Adjusted for this item, the revenue of the non-transferred activities amounted to €19.3 million (as against €29.5 million in the first half of 2016). This figure mostly represents the activity generated by the last civil engineering projects in Belgium that were not transferred to DEME in 2015. The main one is the Brussels-South wastewater treatment plant project, which is progressing according to plan.
The division's operating income was adversely affected by an under-recovery of overhead costs, agency fees and maintenance costs of the Grand Hotel in Chad, and the negative contribution of Rent-A-Port (in Vietnam, there were no significant sales of industrial land during the first six months of 2017).
The division's net income, share of the group, amounted to €-4.9 million (€-4.3 million in the first half of 2016).
In the first half of 2016, the net result, share of the group, of the Holding division was favourably influenced by the capital gain realized on the disposal of CFE's stake in Locorail, the company operating the Liefkenshoek rail tunnel in Antwerp.
The operational management and maintenance of the Grand Hotel were transferred in June 2017 to the hotel operator appointed by the Chadian government. The Grand Hotel was officially opened on 1 July 2017.
The receivables on Chad remain unchanged. Negotiations to refinance our receivables are progressing more slowly than expected.
| Year ended at June 30 | ||
|---|---|---|
| (in thousands €) | 2017 | 2016 |
| Revenue | 1,455,872 | 1,224,532 |
| Revenue from auxiliary activities | 57,988 | 31,227 |
| Purchases | -809,501 | -591,732 |
| Wages, salaries & social charges | -281,781 | -291,942 |
| Other operating charges | -189,435 | -189,388 |
| Depreciations and amortization | -116,844 | -112,178 |
| Goodwill Impairment | 0 | 0 |
| Operating income on activities | 116,299 | 70,519 |
| Earnings from associates and joint ventures | -15,284 | 4,938 |
| Operating income | 101,015 | 75,457 |
| Cost gross financial debt | -9,427 | -13,265 |
| Other financial expenses and income | -3,867 | 1,428 |
| Financial result | -13,294 | -11,837 |
| Result before taxes | 87,721 | 63,620 |
| Income tax expense | -20,926 | -11,373 |
| Net income for the period | 66,795 | 52,247 |
| Attributable to owner of non-controlling interest | 1,030 | 799 |
| Net income share of the group | 67,825 | 53,046 |
| Year ended 30 June (in thousands €) |
2017 | 2016 |
|---|---|---|
| Net income for the period – Share of the group | 67,825 | 53,046 |
| Net income for the period | 66,795 | 52,247 |
| Change in fair values related to the hedging instruments | 7,227 | -5,253 |
| Currency translation differences | -19 | 4,581 |
| Deferred taxes | -1,439 | 1,859 |
| Other elements of the comprehensive income to be reclassified to profit or loss in subsequent period |
5,769 | 1,187 |
| Remeasurement on defined benefit plans | 0 | 0 |
| Deferred taxes | 0 | 0 |
| Other elements of the comprehensive income not to be reclassified to profit or loss in subsequent period |
0 | 0 |
| Total elements of the comprehensive income directly accounted in equity |
5,769 | 1,187 |
| Comprehensive income | 72,564 | 53,434 |
| - attributable to the group | 73,656 | 54,294 |
| - attributable to non-controlling interests | -1,092 | -860 |
| Net result share of the group per share (€) (basic and diluted) | 2.68 | 2.10 |
| Comprehensive income per share (€) (basic and diluted) | 2.91 | 2.14 |
| Year ended (in thousands €) |
30 June 2017 | 31 December 2016 |
|---|---|---|
| Intangible assets | 92,449 | 95,441 |
| Goodwill | 175,169 | 175,169 |
| Tangible assets | 1,832,355 | 1,683,304 |
| Associates and joint ventures | 121,544 | 141,355 |
| Other non-current financial assets | 151,928 | 153,976 |
| Non-current derivative instruments | 1,333 | 510 |
| Other non-current assets | 21,138 | 23,518 |
| Deferred tax assets | 111,636 | 126,944 |
| Total non-current assets | 2,507,552 | 2,400,217 |
| Inventories | 92,093 | 94,836 |
| Trade receivables and other operating receivable | 1,150,131 | 1,160,306 |
| Other current assets | 39,796 | 38,430 |
| Current derivative instruments | 8,961 | 2,311 |
| Current financial assets | 33 | 48 |
| Assets held for sale | 19,916 | 19,916 |
| Cash and cash equivalents | 592,953 | 612,155 |
| Total current assets | 1,903,883 | 1,928,002 |
| Total assets | 4,411,435 | 4,328,219 |
| Issued capital | 41,330 | 41,330 |
| Share premium | 800,008 | 800,008 |
| Retained earnings | 727,926 | 714,527 |
| Defined benefits plans | -19,464 | -19,464 |
| Hedging reserves | -1,549 | -7,337 |
| Translation differences | -7,462 | -7,505 |
| Equity – part of the group CFE | 1,540,789 | 1,521,559 |
| Non-controlling interests | 13,334 | 14,918 |
| Equity | 1,554,123 | 1,536,477 |
| Retirement benefit obligations and employee benefits | 51,362 | 51,215 |
| Provisions | 35,588 | 43,085 |
| Other non-current liabilities | 944 | 5,645 |
| Bonds | 202,739 | 303,537 |
| Financial debts | 443,690 | 367,147 |
| Non-current derivative instruments | 12,838 | 18,475 |
| Deferred tax liabilities | 136,256 | 151,970 |
| Total non-current liabilities | 883,417 | 941,074 |
| Current provisions | 70,507 | 65,113 |
| Trade & other operating payables | 1,214,193 | 1,138,288 |
| Income tax payable | 33,930 | 69,398 |
| Bonds | 99,959 | 0 |
| Current financial debts | 122,390 | 154,522 |
| Current derivative instruments | 15,354 | 23,515 |
| Liabilities held for sale | 6,032 | 6,004 |
| Other current liabilities | 411,560 | 393,828 |
| Total current liabilities | 1,973,895 | 1,850,668 |
| Total equity and liabilities | 4,411,435 | 4,328,219 |
| Year ended 30 June (in thousands €) |
2017 | 2016 (*) |
|---|---|---|
| Cash flows relating to operating activities | 281,205 | 161,458 |
| Cash flows relating to investing activities | -269,351 | -114,983 |
| Cash flows relating to financing activities | -29,950 | -82,533 |
| Net increase/decrease in cash position | -18,096 | -36,058 |
(*) Amounts restated in accordance with changes in the accounting presentation related to the consolidated cash flow statement which is applied by the group since January 1st, 2017 and detailed in the note 3.2. of the intermediary report.
| 30 June 2017 | 30 June 2016 | |
|---|---|---|
| Total number of shares | 25,314,482 | 25,314,482 |
| Operating result after deduction of the net financial charges per share (in €) |
3.46 | 2.51 |
| Net result share of the group per share (in €) | 2.68 | 2.10 |
CFE's consolidated revenue will increase significantly in 2017, albeit to a lesser degree than initially expected due to delays in the start-up and award of new projects at DEME.
Excluding potential non-recurring items, the Group's net result, share of the group, for 2017 is expected to be in line with last year.
At 30 June 2017, CFE's share capital was divided into 25,314,482 shares.
Each share confers one vote. There has been no issue of convertible bonds or warrants. Financial institutions with which holders of financial instruments may exercise their financial rights are: BNP Paribas Fortis, Banque Degroof and ING Belgium. Banque Degroof has been appointed as the 'Main Paying Agent'.
The general meeting of 4 May 2017 renewed the director's mandates of Luc Bertrand, John-Eric Bertrand, Piet Dejonghe, Jan Suykens, Alain Bernard and Koen Janssen for a period of four years. Luc Bertrand was reappointed as chairman of the board of directors.
The general meeting also renewed the director's mandate of Renaud Bentégeat for a period of three years. He and Piet Dejonghe were both reappointed as managing directors.
Finally, the general meeting approved the appointment of Pas de Mots SPRL, having as its permanent representative Leen Geirnaerdt, for a period of three years. Pas de Mots SPRL and its permanent representative, Leen Geirnaerdt, meet the independence criteria defined in Article 526c of the Companies Code and in the 2009 Belgian Corporate Governance Code.
| 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) | Cash and cash equivalents - non-current and current bonds– non-current and current financial liabilities |
| 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 2017 | June 2016 | |
|---|---|---|---|---|
| Revenue Revenue from auxiliary activities Purchases Remuneration and social security payments Other operating expenses Depreciation and amortization Income from operating activities |
6 | 1,455,872 57,988 (809,501) (281,781) (189,435) (116,844) 116,299 |
1,224,532 31,227 (591,732) (291,942) (189,388) (112,178) 70,519 |
|
| Earnings from associates and joint venture | 11 | (15,284) | 4,938 | |
| Operating income | 101,015 | 75,457 | ||
| Cost of gross financial debt Other financial expenses & income |
7 7 |
(9,427) (3,867) |
(13,265) 1,428 |
|
| Net financial income/expense | (13,294) | (11,837) | ||
| Pre-tax income | 87,721 | 63,620 | ||
| Income tax expense | 9 | (20,926) | (11,373) | |
| Net income for the period | 66,795 | 52,247 | ||
| Attributable to owners of non-controlling interests | 8 | 1,030 | 799 | |
| Net income share of the group | 67,825 | 53,046 | ||
| Net income of the group per share (EUR) (diluted and basic) | 2.68 | 2.10 |
| For the period from January 1st to June,30th (In thousand Euro) |
Note | June 2017 | June 2016 | |
|---|---|---|---|---|
| Net income share of the group Net income for the period |
67,825 66,795 |
53,046 52,247 |
||
| 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 |
7,227 (19) (1,439) 5,769 |
(5,253) 4,581 1,859 1,187 |
||
| 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 | 5,769 | 1,187 | ||
| Comprehensive income: - Attributable to owners of the parent - Attributable to owners of non-controlling interests |
72,564 73,656 (1,092) |
53,434 54,294 (860) |
||
| Net income attributable to owners of the parent per share (EUR) (diluted and basic) |
2.91 | 2.14 |
| For the period ended June 30th (In thousand Euro) |
Notes | June 2017 | December 2016 |
|---|---|---|---|
| Intangible assets | 92,449 | 95,441 | |
| Goodwill | 175,169 | 175,169 | |
| Property, plant and equipment | 10 | 1,832,355 | 1,683,304 |
| Investments in associates and joint ventures | 11 | 121,544 | 141,355 |
| Other non-current financial assets | 151,928 | 153,976 | |
| Derivative instruments – Non-current assets | 16 | 1,333 | 510 |
| Other non-current assets | 21,138 | 23,518 | |
| Deferred tax assets | 111,636 | 126,944 | |
| Total non-current assets | 2,507,552 | 2,400,217 | |
| Inventories | 12 | 92,093 | 94,836 |
| Trade and other operating receivables | 13 | 1,150,131 | 1,160,306 |
| Other current assets | 39,796 | 38,430 | |
| Derivative instruments – Current assets | 16 | 8,961 | 2,311 |
| Current financial assets | 33 | 48 | |
| Assets held for sale | 19,916 | 19,916 | |
| Cash and cash equivalents | 17 | 592,953 | 612,155 |
| Total current assets | 1,903,883 | 1,928,002 | |
| Total assets | 4,411,435 | 4,328,219 | |
| Share capital | 41,330 | 41,330 | |
| Share premium | 800,008 | 800,008 | |
| Retained earnings | 727,926 | 714,527 | |
| Defined benefits pension plans | (19,464) | (19,464) | |
| Hedging reserves | (1,549) | (7,337) | |
| Currency translation differences | (7,462) | (7,505) | |
| Equity attributable to owners of the parent | 1,540,789 | 1,521,559 | |
| Non-controlling interests | 13,334 | 14,918 | |
| Equity | 1,554,123 | 1,536,477 | |
| Retirement benefit obligations and employee benefits | 51,362 | 51,215 | |
| Provisions | 14 | 35,588 | 43,085 |
| Other non-current liabilities | 944 | 5,645 | |
| Bonds – non-current | 17 | 202,739 | 303,537 |
| Financial liabilities | 17 | 443,690 | 367,147 |
| Derivative instruments – Non-current liabilities | 16 | 12,838 | 18,475 |
| Deferred tax liabilities | 136,256 | 151,970 | |
| Total non-current liabilities | 883,417 | 941,074 | |
| Current provisions | 14 | 70,507 | 65,113 |
| Trade & other operating payables | 1,214,193 | 1,138,288 | |
| Income tax payable | 33,930 | 69,398 | |
| Bonds - current | 17 | 99,959 | |
| Current financial liabilities | 17 | 122,390 | 154,522 |
| Derivative instruments – Current liabilities | 16 | 15,354 | 23,515 |
| Liabilities held for sale | 6,032 | 6,004 | |
| Other current liabilities | 411,530 | 393,828 | |
| Total current liabilities | 1,973,895 | 1,850,668 | |
| Total equity and liabilities | 4,411,435 | 4,328,219 |
| For the period from January 1st to June 30th (In thousand Euro) |
Note | June 2017 | June 2016 (*) |
|---|---|---|---|
| Operating activities | |||
| Income from operating activities Depreciation and amortization of intangible assets, property, plant & equipment |
116,299 116,844 |
70,519 112,178 |
|
| and investment property Net provision expense Impairment on current and non-current assets and other non-cash items |
3,135 (10,301) |
(83) (380) |
|
| Sales of non-current assets Dividends from associates and joint-ventures |
(2,397) 6,315 |
(738) 7,716 |
|
| Cash flow from operating activities before changes in working capital | 229,895 | 189,212 | |
| Decrease/(increase) in trade receivables and other current and non-current receivables |
20,201 | 136,479 | |
| 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 |
4,124 43,105 (16,120) 281,205 |
(6,751) (134,949) (22,533) 161,458 |
|
| Investing activities | |||
| Sales of non-current assets Purchases of non-current assets Change in percentage held in associates Capital increase in investments in associates Sale of subsidiaries Loans granted |
5 5 |
4,654 (267,774) 0 (2,015) 0 (4,216) |
1,876 (109,296) 0 (6,300) 0 (1,263) |
| Cash flow from investing activities | (269,351) | (114,983) | |
| Financing activities | |||
| Interests paid Interests received Other financial expenses and income Borrowings Reimbursements of borrowings Dividends paid |
(17,877) 6,970 (9,065) 78,672 (34,224) (54,426) |
(22,833) 5,086 (9,994) 64,886 (58,924) (60,754) |
|
| Cash flow from financing activities | (29,950) | (82,533) | |
| 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 |
(18,096) 612,155 (1,106) 592,953 |
(36,058) 491,952 (1,338) 454,556 |
(*) Amounts restated in accordance with changes in the accounting presentation of the consolidated cashflow statement which is applied within the Group since January 1st, 2017 (note 3.2.).
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, 2017
| (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 |
For the year ended June 30, 2016
| (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 2015 | 41,330 | 800,008 | 607,012 | (7,448) | (10,710) | (6,915) | 1,423,277 | 11,123 | 1,434,400 |
|---|---|---|---|---|---|---|---|---|---|
| Comprehensive income for the period |
53,046 | (3,394) | 4,642 | 54,294 | (860) | 53,434 | |||
| Dividends paid to shareholders Dividends from non-controlling interests Other movements |
(60,755) (141) |
(60,755) (141) |
(819) 483 |
(60,755) (819) 342 |
|||||
| June 2016 | 41,330 | 800,008 | 599,162 | (7,448) | (14,104) | (2,273) | 1,416,675 | 9,927 | 1,426,602 |
The share capital on June 30, 2017 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 23, 2017 the Board of Directors proposed a dividend of 54,426 thousand Euro, corresponding to 2.15 Euro gross per share. The proposal has been approved by the General Shareholders Meeting on May 4, 2017. 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 :
| NET RESULT PER SHARE | ||
|---|---|---|
| (In thousand Euro) | 2017 | 2016 |
| Net income attributable to shareholders | 67,825 | 53,046 |
| Comprehensive income attributable to owners of the parent | 73,656 | 54,294 |
| Number of ordinary shares at closing date | 25,314,482 | 25,314,482 |
| Basic (diluted) income by share in Euro | 2.68 | 2.10 |
| Comprehensive income attributable to owners of parent by share in Euro | 2.91 | 2.14 |
11. INVESTMENTS IN ASSOCIATES AND JOINT VENTURE
12. INVENTORIES
13. TRADE AND OTHER RECEIVABLES
16. FINANCIAL INSTRUMENTS
21. LITIGATION
The Board of Directors authorized the issue of the interim condensed consolidated financial statements on August 25, 2017.
MAIN TRANSACTIONS FOR THE FIRST SIX MONTHS OF 2017 AND THE FIRST SIX MONTHS OF 2016 WITH EFFECT ON THE SCOPE OF THE GROUP CFE
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.
During the first half year 2016, DEME acquired :
Moreover, the companies Geka Bouw BV and CFE Nederland BV, which are 100% held by DEME Group have been merged and renamed "Dimco BV".
On June 29, 2016 CFE Group, through its subsidiary CFE Contracting, increased its stake in Groep Terryn NV from 77.5% to 100%. Groep Terryn remains fully integrated.
On April 7, 2016 CFE Group, through its subsidiary BPI, acquired a 100% stake in BPI Barska sp z.o.o. which is fully integrated.
On May 20, 2016 CFE Group, through its subsidiary BPI, increased its stake in Foncière Sterpenich from 50% to 100%. This entity is now fully integrated.
On June 30, 2016 the company Sogesmaint Luxembourg, 100% held by Sogesmaint SA was sold.
The companies C.I.W. and P.R.N.E., 100% held by BPI Luxembourg were dissolved.
The company Immomax, a 47% subsidiary of BPI, bought 100% of the shares in Immomax II where 47% were bought from CFE Polska and 53% from a third party. Immomax II remains integrated under the equity method.
On June 29, 2016 CFE SA sold its 25% stake in Locorail NV.
The retained accounting principles are the same that the principles used for the yearly consolidated financial statement at December 31, 2016.
The Company decided not to anticipate the application standards and interpretations here below that are not mandatory on June 30, 2017:
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 15 and IFRS 16.
The IASB published a new standard IFRS 15 Revenue from contracts with customers. This standard will replace IAS 18 Revenue and IAS 11 Construction contracts. This new standard defines how and when a company applying IFRS standards should recognise revenues from its activities. An additional explanatory disclosure will have to be provided. Consequently, the recognition of revenue from contracts with customers will be ruled by one standard based on a five-step model. The rule will be applicable from January 1st, 2018.
To determine the impact of the implementation of the standard, the ongoing contracts will be analysed to identify the performance obligations as defined by IFRS 15. The accounting of revenues from these contracts will be assessed for each performance obligations.
Although the financial impact from the implementation of IFRS 15 will only be valued after the financial closing of the year 2017, the Group expects that revenue recognition can still be based on the principle of the percentage of completion. Timing of revenue recognition could however differ for some contracts for which the unbundling in several performance obligations is required by IFRS 15. In addition, the Group also analyses the impact of the application of IFRS 15 on the accounting treatment for costs supported during the precontractual stages.
IFRS 16 Leases was published in January 2016. This standard, not yet endorsed in EU, defines how a company applying IFRS will account, measure and disclose leases in financial statements. The standard requires from the lessee to account in the statement of financial position all assets and liabilities related to leases with a duration higher than 12 months, except for leased assets having a very low value.
The application of IFRS 16 will lead to:
Furthermore, the Group doesn't expect any major accounting changes as consequences from the application of IFRS 9 Financial Instruments on January 1st, 2018.
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. Companies over which the Group exercises a significant influence are integrated under equity method. This mainly concerns PPP Schulen Eupen SA, Van Maerlant Property I SA & II SPRL, Van Maerlant Residential SA, Erasmus Gardens SA, Immoange SA, Immo PA 33 SA, Ernest 11 SA, Victor Estates and C-Power NV, Rentel NV and Otary NV in DEME Group.
| Number of entities | June 2017 | December 2016 |
|---|---|---|
| Full consolidation Equity method |
174 120 |
171 122 |
| Total | 294 | 293 |
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.
The Group decided to modify the presentation of the consolidated cashflow statement in accordance with IFRS 7 Cashflow Statement. In addition to the general presentation of the cashflow statement, the changes lead to a different classification of cashflows related to financial income and expenses. These are mainly related to the corporate financing of CFE SA and DEME NV and to the financing of the vessels for the dredging activities. As of January 1st, 2017 CFE classifies them in cashflow from financing activities and no longer in cashflows from operating activities.
The consolidated cashflow statement on June 30th, 2016 was adapted has follows;
| June 2016, published |
Interests paid/received and other financial income and expenses |
June 2016, After restatement |
|
|---|---|---|---|
| Cash flows from operating activities | 133.719 | 27.739 | 161.458 |
| Cash flows from investing activities | (114.983) | 0 | (114.983) |
| Cash flows from financing activities | (54.794) | (27.739) | (82.533) |
| Net Increase/(Decrease) in cash position | (36.058) | 0 | (36.058) |
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:
‐ the participations in Rent-A-Port NV, Green Offshore NV and in two Design Build Finance and Maintenance contracts in Belgium. ‐ the contracting activities non-transferred to CFE Contracting SA and DEME including a number of civil engineering projects in Belgium and building projects in Africa (except Tunisia) and in central Europe (except Poland).
| At June 30 | Revenue | Income from operating activities | Operating income (EBIT) | Financial income | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2016 | 2017 | %Turnover | 2016 | %Turnover | 2017 | %Turnover | 2016 | %Turnover | 2017 | 2016 | |
| Dredging and environment |
1,097,715 | 802,069 | 85,135 | 7.76% | 79,361 | 9.89% | 72,339 | 6.59% | 81,402 | 10.15% | (12,822) | (20,790) |
| Correction DEME | (2,734) | (2,638) | (3,223) | (3,127) | 2,109 | 3,515 | ||||||
| Contracting | 351,202 | 400,490 | 14,819 | 4.22% | 7,609 | 1.90% | 14,819 | 4.22% | 7,609 | 1.90% | (45) | (331) |
| Real Estate | 7,140 | 7,592 | 20,106 | 281.60% | (390) | (5.14%) | 19,252 | 269.64% | 518 | 6.82% | (363) | (1,290) |
| Holding & non transferred activities |
19,312 | 29,514 | (1,295) | (13,548) | (2,440) | (11,070) | (2,173) | 7,059 | ||||
| Eliminations between segments |
(19,497) | (15,133) | 268 | 125 | 268 | 125 | ||||||
| Total consolidated | 1,455,872 | 1,224,532 | 116,299 | 7.99% | 70,519 | 5.76% | 101,015 | 6.94% | 75,457 | 6.16% | (13,294) | (11,837) |
| At June 30 | Taxes | Net income of the group | Non-cash items | EBITDA | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2016 | 2017 | %Turnover | 2016 | %Turnover | 2017 | 2016 | 2017 | %Turnover | 2016 | %Turnover | |
| Dredging and environment | (14,417) | (7,051) | 46,130 | 4.20% | 54,009 | 6.73% | 110,265 | 105,944 | 195,400 | 17.80% | 185,305 | 23.10% |
| Correction DEME | 110 | (335) | (1,004) | 53 | 2,734 | 2,638 | ||||||
| Contracting | (5,929) | (3,597) | 8,845 | 2.52% | 4,068 | 1.02% | (3,904) | 5,028 | 10,915 | 3.11% | 12,637 | 3.16% |
| Real Estate | (91) | (33) | 18,798 | 263.28% | (805) | (10.60%) | 4,188 | 1,429 | 24,294 | 340.26% | 1,039 | 13.69% |
| Holding & non-transferred activities |
(528) | (324) | (5,141) | (4,371) | (3,605) | (3,324) | (4,900) | (16,872) | ||||
| Eliminations between segments | (71) | (33) | 197 | 92 | 268 | 125 | ||||||
| Total consolidated | (20,926) | (11,373) | 67,825 | 4.66% | 53,046 | 4.33% | 109,678 | 111,715 | 225,977 | 15.52% | 182,234 | 14.88% |
| At June 30th, 2017 | Dredging and environment |
Contracting Real Estate Holding & non transferred |
Eliminations between |
Total consolidated |
||
|---|---|---|---|---|---|---|
| (thousand euro) | activities | segments | ||||
| ASSETS | ||||||
| Goodwill | 155,960 | 19,209 | 0 | 0 | 0 | 175,169 |
| Property, plant and equipment | 1,796,866 | 34,393 | 465 | 631 | 0 | 1,832,355 |
| Non-current loans to consolidated group companies |
0 | 0 | 0 | 20,000 | (20,000) | 0 |
| Other non-current financial assets | 93,503 | 104 | 35,853 | 22,468 | 0 | 151,928 |
| Other non-current assets | 294,155 | 4,429 | 31,558 | 1,264,038 | (1,246,080) | 348,100 |
| Inventories | 14,969 | 18,211 | 59,049 | 1,465 | (1,601) | 92,093 |
| Cash and cash equivalents | 519,533 | 48,043 | 4,222 | 21,155 | 0 | 592,953 |
| Internal cash position - cash pooling - assets |
0 | 47,718 | 0 | 24,214 | (71,932) | 0 |
| Other current assets | 808,900 | 244,840 | 47,573 | 135,200 | (17,676) | 1,218,837 |
| Total assets | 3,683,886 | 416,947 | 178,720 | 1,489,171 | (1,357,289) | 4,411,435 |
| EQUITY AND LIABILITIES | ||||||
| Equity | 1,463,798 | 70,172 | 61,545 | 1,206,040 | (1,247,432) | 1,554,123 |
| Non-current borrowings from consolidated group companies |
0 | 0 | 20,000 | 0 | (20,000) | 0 |
| Bonds – non-current | 202,739 | 0 | 0 | 0 | 0 | 202,739 |
| Non-current financial liabilities | 428,876 | 9,814 | 0 | 5,000 | 0 | 443,690 |
| Other non-current liabilities | 193,451 | 12,023 | 5,108 | 26,655 | (250) | 236,987 |
| Bonds – current | 0 | 0 | 0 | 99,959 | 0 | 99,959 |
| Current financial liabilities | 120,824 | 1,566 | 0 | 0 | 0 | 122,390 |
| Internal cash position - cash pooling - liabilities |
0 | 0 | 37,230 | 34,702 | (71,932) | 0 |
| Other current liabilities | 1,274,198 | 323,372 | 54,837 | 116,815 | (17,675) | 1,751,547 |
| Total equity and liabilities | 3,683,886 | 416,947 | 178,720 | 1,489,171 | (1,357,289) | 4,411,435 |
| At December 31st, 2016 (thousand euro) |
Dredging and environment |
Contracting Real Estate Holding & non transferred activities |
Eliminations between segments |
Total consolidated |
||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Goodwill | 155,960 | 19,209 | 0 | 0 | 0 | 175,169 |
| Property, plant and equipment | 1,648,984 | 33,409 | 224 | 687 | 0 | 1,683,304 |
| Non-current loans to consolidated group companies |
0 | 0 | 0 | 20,000 | (20,000) | 0 |
| Other non-current financial assets | 98,860 | 160 | 32,913 | 22,043 | 0 | 153,976 |
| Other non-current assets | 318,519 | 4,586 | 44,424 | 1,266,368 | (1,246,129) | 387,768 |
| Inventories | 25,261 | 15,855 | 53,645 | 1,676 | (1,601) | 94,836 |
| Cash and cash equivalents | 527,733 | 43,481 | 5,574 | 35,367 | 0 | 612,155 |
| Internal cash position - cash pooling - assets |
0 | 61,005 | 0 | 60,714 | (121,719) | 0 |
| Other current assets | 790,584 | 253,355 | 54,552 | 154,630 | (32,110) | 1,221,011 |
| Total assets | 3,565,901 | 431,060 | 191,332 | 1,561,485 | (1,421,559) | 4,328,219 |
| EQUITY AND LIABILITIES | ||||||
| Equity | 1,470,050 | 66,869 | 42,745 | 1,204,291 | (1,247,478) | 1,536,477 |
| Non-current borrowings from consolidated group companies |
0 | 0 | 20,000 | 0 | (20,000) | 0 |
| Bonds | 203,578 | 0 | 0 | 99,959 | 0 | 303,537 |
| Non-current financial liabilities | 327,193 | 9,916 | 38 | 30,000 | 0 | 367,147 |
| Other non-current liabilities | 214,909 | 12,472 | 14,792 | 28,467 | (250) | 270,390 |
| Current financial liabilities | 151,947 | 2,575 | 0 | 0 | 0 | 154,522 |
| Internal cash position - cash pooling - liabilities |
0 | 0 | 73,185 | 48,582 | (121,767) | 0 |
| Other current liabilities | 1,198,224 | 339,228 | 40,572 | 150,186 | (32,064) | 1,696,146 |
| Total equity and liabilities | 3,565,901 | 431,060 | 191,332 | 1,561,485 | (1,421,559) | 4,328,219 |
| 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) |
| At June 30th, 2016 (*) (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 |
185,814 | 14,873 | 6,893 | (18,368) | 189,212 |
| Cash flow from operating activities | 142,849 | 11,566 | 2,448 | 4,595 | 161,458 |
| Cash flow from investing activities | (112,493) | (3,422) | 1,497 | (565) | (114,983) |
| Cash flow from financing activities | (38,270) | 3,610 | (4,928) | (42,945) | (82,533) |
(*) Amounts restated in accordance with changes in the accounting presentation related to the consolidated cashflow statement which is applied within the Group since January 1st, 2017 (note 3.2.).
Net increase/(decrease) of cash (7,914) 11,754 (983) (38,915) (36,058)
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, 2017 (In thousand Euro) |
Dredging & environment |
Contracting | Real Estate |
Holding & non transferred activities |
Total consolidated |
|---|---|---|---|---|---|
| Amortizations Investments |
(112,988) 261,214 |
(3,651) 5,485 |
(91) 350 |
(114) 583 |
(116,844) 267,632 |
| At June 30th, 2016 | Dredging & environment |
Contracting | Real Estate |
Holding & non transferred |
Total consolidated |
| (In thousand Euro) | activities | ||||
| Amortizations Investments |
(108,582) 108,904 |
(3,824) 4,006 |
(57) 161 |
285 16 |
(112,178) 113,087 |
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 2017 | June 2016 |
|---|---|---|
| Capital dredging | 259,115 | 356,584 |
| Environmental contracting | 81,740 | 103,791 |
| Fall pipe and landfalls | 65,858 | 32,804 |
| Maintenance dredging | 136,001 | 112,260 |
| Marine works | 523,416 | 173,272 |
| Civil works | 31,585 | 23,358 |
| Total | 1,097,715 | 802,069 |
| (In thousand Euro) | June 2017 | June 2016 |
|---|---|---|
| Construction Multitechnics Railway |
242,864 74,897 33,441 |
293,468 76,246 30,776 |
| Total | 351,202 | 400,490 |
| REVENUE OF CFE GROUP AT JUNE 30 | ||
|---|---|---|
| (In thousand Euro) | June 2017 | June 2016 |
| Belgium | 509,289 | 464,304 |
| Other Europe | 611,772 | 344,382 |
| Middle East | 7,109 | 34,215 |
| Asia | 135,180 | 170,216 |
| Oceania | 17,914 | 10,471 |
| Africa | 136,044 | 141,399 |
| Americas | 38,564 | 59,545 |
| Total consolidated | 1,455,872 | 1,224,532 |
ACQUISITIONS AS OF JUNE 30, 2017
Nihil.
Nihil.
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 57,988 thousand Euro (June 2016 : 31,227 thousand Euro) and include gains on disposals of property, plant and equipment for 2,838 thousand Euro (June 2016: 783 thousand Euro), as well as rent income, recharges of costs and other compensation for 21,823 thousand Euro (June 2016 : 30,444 thousand Euro), and the income from the sale of subsidiaries within the real estate segment for an amount of 33.327 thousands euro which are classified as operational activities.
| As of June 30 | ||
|---|---|---|
| (in thousand Euro) | 2017 | 2016 |
| Cost of financial debt | (9,427) | (13,265) |
| Derivative instruments - fair value adjustments through profit and loss | 0 | 183 |
| 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 - income from availabilities | 3,642 | 5,249 |
| Assets and liabilities at amortized cost - interest charges | (13,069) | (18,697) |
| Other financial income and expense | (3,867) | 1,428 |
| Realized / unrealized translation gains/(losses) | (5,491) | (8,834) |
| Dividends received from non-consolidated companies | 3,330 | 64 |
| Impairment of financial assets | 0 | 0 |
| Other | (1,706) | 10,198 |
| Financial result | (13,294) | (11,837) |
The evolution of the exchange gain/(loss) realized/not realized in the first half year of 2017 compared to the same period in 2016 is mostly explained by the valuation of the Euro against other foreign currencies in DEME.
The evolution of the caption "Other" is mainly due to the capital gain related to the sale of CFE's participation in the company Locorail NV in 2016 (8,723 thousand Euro).
As of June 30, 2017 the part of non-controlling interests in the result amounts to 1,030 thousand Euro (June 2016 : 799 thousand Euro).
The tax expense amounts to 20,926 thousand Euro for the first half year 2017 (June 2016 : 11,373 thousand Euro). The effective tax rate amounts to 20.32% (June 2016 : 19.38%). 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, 2017 (In thousand Euro) |
Land & buildings |
Installations & equipments |
Furniture & fittings |
Under construction |
Total |
|---|---|---|---|---|---|
| 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 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 - combinations |
0 | 0 | 0 | 0 | 0 |
| 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 At June 30, 2017 |
72,555 71,448 |
1,470,592 1,419,755 |
11,042 11,379 |
129,115 329,773 |
1,683,304 1,832,355 |
The net carrying amount of tangible assets amounts to 1,832,355 thousand Euro on June 30, 2017 (December 31, 2016: 1,683,304 thousand Euro).
On June 30, 2017, the acquisitions of tangible assets amount to 263,430 thousand Euro, and are mainly related to DEME (257,710 thousand Euro).
The net value of the fixed assets held in leasing amounts to 67,659 thousand Euro (December 31 2016: 121,664 thousand Euro). Those contracts relate mainly to the vessels held by DEME, the building of the subsidiaries Louis Stevens & Co NV and Engema, the trucks of the subsidiary Benelmat and the equipment of Compagnie Tunisienne d'Entreprises. The huge decrease in the net value of fixed assets held in leasings is mainly explained by the vessel jack-up Thor for which the finance lease was reimbursed during the first half year 2017.
The amount of property, plant, and equipment constituting a guarantee for some borrowing amounts to 202,338 thousand Euro (December 31, 2016 : 290,395 thousand Euro).
In 2015, DEME had started building six new vessels for a total amount of € 500 million. Furthermore, DEME confirmed in 2017 an order for two additional vessels, Spartacus and Orion, with an overall additional budget of about € 500 million.
| As of June 30, 2016 (In thousand Euro) |
Land & buildings |
Installations & equipments |
Furniture & fittings |
Under construction |
Total |
|---|---|---|---|---|---|
| Acquisition cost | |||||
| Balance at the end of the previous period | 113,239 | 3,070,912 | 58,355 | 90,422 | 3,332,928 |
| Effect of foreign currency fluctuations | (382) | (799) | (526) | 55 | (1,652) |
| Acquisitions | 4,169 | 74,644 | 1,530 | 31,025 | 111,368 |
| Transfers from one asset to another | 12,994 | 17,984 | (180) | (28,096) | 2,702 |
| Disposals | (1,690) | (10,359) | (1,437) | (9) | (13,495) |
| Acquisitions through business combinations |
0 | (5) | (1) | 0 | (6) |
| Balance at the end of the year | 128,330 | 3,152,377 | 57,741 | 93,397 | 3,431,845 |
| Depreciations & impairment | |||||
| Balance at the end of the previous period | (54,244) | (1,503,845) | (47,160) | 0 | (1,605,249) |
| Effect of foreign currency fluctuations | 308 | 1,042 | 391 | 0 | 1,741 |
| Depreciations | (1,478) | (106,011) | (2,462) | 0 | (109,951) |
| Transfers from one asset to another | (2,924) | 51 | 173 | 0 | (2,700) |
| Disposals | 1,261 | 9,694 | 1,394 | 0 | 12,349 |
| Acquisitions through business - combinations |
0 | 4 | 1 | 0 | 5 |
| Balance at the end of the period | (57,077) | (1,599,065) | (47,663) | 0 | (1,703,805) |
| Net carrying amount | |||||
| At January 1st, 2016 At June 30, 2016 |
58,995 71,253 |
1,567,067 1,553,312 |
11,195 10,078 |
90,422 93,397 |
1,727,679 1,728,040 |
On June 30, 2017 investments in associates amount to 121,544 thousand Euro (December 2016: 141,355 thousand Euro) in the statement of financial position. The decrease is mainly explained by the earnings from associates and joint ventures which amounts to (15,284) thousand Euro (June 2016: 4,938 thousand Euro).
On June 30, 2017 the inventories amount to 92,093 thousand Euro (December 2016: 94,836 thousand Euro) and are detailed as follows:
| (In thousand Euro) | June 30, 2017 | December 31, 2016 |
|---|---|---|
| Raw materials and consumables Raw material and consumables (impairment losses) Finished products and goods purchased for resale Finished products (impairment losses) |
56,791 (131) 37,866 (2,433) |
57,038 (141) 40,655 (2,716) |
| Inventories | 92,093 | 94,836 |
On June 30, 2017, the trade and other receivables amount to 1,150,131 thousand Euro (December 2016: 1,160,306 thousand Euro). The decrease during the 1st half year 2017 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 regarding the financing of the receivables are progressing at a slower pace than expected. The exposure to this country remains unchanged at €60 million.
On June 30, 2017 these provisions amount 106,095 thousand Euro, which represents a decrease of 2,103 thousand Euro compared to the end of December 2016 (108,198 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 | 15,464 | 49,649 | 24,444 | 18,641 | 108,198 | |
| Effect of foreign currency fluctuations | (13) | 202 | 0 | 0 | 189 | |
| Actualization effect | 0 | 0 | 0 | 0 | 0 | |
| Transfer from one category to another | 0 | 1,354 | (6,636) | 0 | (5,282) | |
| Provisions recognized | 1,202 | 12,228 | 0 | 358 | 13,788 | |
| Provisions used | (987) | (8,592) | 0 | (1,219) | (10,798) | |
| Provisions reversed | 0 | 0 | 0 | 0 | 0 | |
| Closing balance | 15,666 | 54,841 | 17,808 | 17,780 | 106,095 | |
| of which current: non-current: |
70,507 thousand Euro 35,588 thousand Euro |
The provision for after-sale service increased by 202 thousand Euro to reach 15,666 thousand Euro on June 30, 2017.
The provision for other current risks increased by 5,192 thousand Euro and amounts to 54,841 thousand Euro at June 30, 2017. This category includes :
Provisions for other non-current liabilities include provisions for liabilities not directly related to site operations in progress.
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.
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, 2017 the derivative financial instruments have been estimated at their fair values.
| 30/06/2017 | 31/12/2016 | |||||
|---|---|---|---|---|---|---|
| (In thousand Euro) | Non-current | Current | Total | Non-current | Current | Total |
| Bank loans and other financial debt | (390,942) | (111,914) | (502,856) | (286,181) | (102,529) | (388,710) |
| Bonds | (202,739) | (99,959) | (302,698) | (303,537) | 0 | (303,537) |
| Drawings on credit facilities | (5,000) | 0 | (5,000) | (30,000) | 0 | (30,000) |
| Borrowings under finance leases | (47,748) | (7,642) | (55,390) | (50,966) | (48,108) | (99,074) |
| Total long-term financial debt | (646,429) | (219,515) | (865,944) | (670,684) | (150,637) | (821,321) |
| Short-term financial debt | (2,834) | (2,834) | (3,885) | (3,885) | ||
| Cash equivalents | 8,636 | 8,636 | 10,409 | 10,409 | ||
| Cash | 584,317 | 584,317 | 601,746 | 601,746 | ||
| Net short-term financial debt/(cash) | 590,119 | 590,119 | 608,270 | 608,270 | ||
| Total net financial debt | (646,429) | 370,604 | (275,825) | (670,684) | 457,633 | (213,051) |
| Derivative instruments used as interest-rate hedges |
(6,087) | (3,740) | (9,827) | (8,539) | (4,917) | (13,456) |
| 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 | (111,914) | (96,781) | (73,175) | (138,260) | (82,726) | 0 | (502,856) |
| Bonds | (101,711) | (200,987) | 0 | 0 | 0 | 0 | (302,698) |
| Drawings on credit facilities | 0 | (5,000) | 0 | 0 | 0 | 0 | (5,000) |
| Borrowings under finance leases | (7,793) | (5,683) | (5,750) | (12,800) | (20,650) | (2,714) | (55,390) |
| Total long-term financial debt | (221,418) | (308,451) | (78,925) | (151,060) | (103,376) | (2,714) | (865,944) |
| Short-term financial debt | (2,834) | 0 | 0 | 0 | 0 | 0 | (2,834) |
| Cash equivalents | 8,636 | 0 | 0 | 0 | 0 | 0 | 8,636 |
| Cash | 584,317 | 0 | 0 | 0 | 0 | 0 | 584,317 |
| Net short-term financial debt | 590,119 | 0 | 0 | 0 | 0 | 0 | 590,119 |
| Change in net financial debt | 368,701 | (308,451) | (78,925) | (151,060) | (103,376) | (2,714) | (275,825) |
At June 30th, 2017 the CFE group had confirmed long-term bank credit facilities of € 115 million, which are not drawn at the end of June 2017 (31 December 2016: € 115 million). In addition, CFE Group draw € 5 million on not confirmed long-term bank credit facilities.
DEME has confirmed short-term bank credit facilities of € 95 million which are not drawn at June 30th 2017 (31 December 2016: € 95 million). Moreover, DEME also has confirmed long-term credit facilities of € 240 million (31 December 2016: € 425 million), which are not drawn at June 30th 2017, intended to finance the development of its fleet.
On June 2012, 21st CFE issued 100 million Euro of bond maturing on June 21st, 2018 and paying a coupon of 4.75%. On February 14th, 2013 DEME issued 200 million Euro of bond maturing on February 14th, 2019 and paying a coupon of 4.145%.
Bank loans and other financial debts mainly concern DEME and loans relating to real-estate projects and are without recourse against CFE.
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.
The policy and the risk management procedures defined by the group are the same as the one's declared in the 2016 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 |
1,316 | 0.37% | 1.34% | 501,540 | 98.70% | 0.71% | 502,856 | 58.07% | 0.72% |
| Bonds | 302,698 | 84.60% | 4.34% | 0 | 0.00% | 0.00% | 302,698 | 34.96% | 4.34% |
| Credit line used | 0 | 0.00% | 0.00% | 5,000 | 0.98% | 1.30% | 5,000 | 0.58% | 1.30% |
| Loans related to finance lease |
53,794 | 15.03% | 1.09% | 1,596 | 0.32% | 4.06% | 55,390 | 6.40% | 1.17% |
| Total | 357,808 | 100.00% | 3.84% | 508,136 | 100.00% | 0.73% | 865,944 | 100.00% | 2.02% |
| 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 |
502,854 | 58.52% 1.00% | 2 | 0.03% | 1.00% | 0 | 0.00% | 0.00% | 502,856 | 58.06% | 1.00% | |
| Bonds | 302,698 | 35.22% 4.34% | 0 | 0.00% | 0.00% | 0 | 0.00% | 0.00% | 302,698 | 34.96% | 4.34% | |
| Credit line used | 0 | 0.00% 0.00% | 5,000 | 75.78% | 1.30% | 0 | 0.00% | 0.00% | 5,000 | 0.58% | 1.30% | |
| Loans related to finance lease |
53,794 | 6.26% 1.02% | 1,596 | 24.19% | 3.96% | 0 | 0.00% | 0.00% | 55,390 | 6.40% | 1.11% | |
| Total | 859,346 | 100.00% 2.18% | 6,598 | 100.00% | 1.94% | 0 | 0.00% | 0.00% | 865,944 | 100.00% | 2.18% |
The outstanding debts by currency are:
| (In thousand Euro) | June 2017 | December 2016 | |
|---|---|---|---|
| Euro | 865,944 | 821,321 | |
| US Dollar | 0 | 0 | |
| Other currencies | 0 | 0 | |
| Total long term debts | 865,944 | 821,321 |
| June 30, 2017 | Financial | Derivatives | Financial | Loans and | Total of | Fair value | Fair value |
|---|---|---|---|---|---|---|---|
| (In € thousands) | instruments | designated as | instruments | trade | carrying | measurements | of the class |
| not designated | hedging | available for | receivables at | amount | of financial | ||
| as hedging | instruments | sales | amortised | assets by level | |||
| instruments | costs | ||||||
| Non-current financial assets | 1,333 | 6,349 | 145,576 | 153,258 | 153,258 | ||
| Investments (1) | 6,349 | 6,349 | Level 2 | 6,349 | |||
| Financial loans and receivables (1) | 145,576 | 145,576 | Level 2 | 145,576 | |||
| Interest rate derivatives – cash flow | 1,333 | 1,333 | Level 2 | 1,333 | |||
| hedges | |||||||
| Current financial assets | 8,961 | 1,743,083 | 1,752,044 | 1,752,044 | |||
| Interest rate derivatives – non-hedge | |||||||
| Trade and other receivables | 1,150,131 | 1,150,131 | Level 2 | 1,150,131 | |||
| Cash management financial assets | 8,961 | 8,961 | Level 2 | 8,961 | |||
| Cash equivalents (2) | 8,636 | 8,636 | Level 2 | 8,636 | |||
| Cash at bank and in hand (2) | 584,316 | 584,316 | Level 2 | 584,316 | |||
| Total assets | 10,294 | 6,349 | 1,888,659 | 1,905,302 | 1,905,302 | ||
| Non-current financial debts | 12,837 | 646,429 | 659,266 | 676,398 | |||
| Bonds | 202,739 | 202,739 | Level 1 | 210,486 | |||
| Financial debts | 443,690 | 443,690 | Level 2 | 453,075 | |||
| Interest rate derivatives – cash flow | 12,837 | 12,837 | Level 2 | 12,837 | |||
| hedges | |||||||
| Current financial liabilities | 11,628 | 3,726 | 1,436,542 | 1,451,896 | 1,461,890 | ||
| Interest rate derivatives – highly probable | (28) | (28) | Level 2 | (28) | |||
| projected cash flow hedges | |||||||
| Interest rate derivatives – cash flow | 3,754 | 3,754 | Level 2 | 3,754 | |||
| hedges | |||||||
| Exchange rate derivatives – non-cash flow | 345 | 345 | Level 2 | 345 | |||
| hedges | |||||||
| Other derivatives instruments – non | 11,283 | 11,283 | Level 2 | 11,283 | |||
| hedge | |||||||
| Trade payables and other operating debts | 1,214,193 | 1,214,193 | Level 2 | 1,214,193 | |||
| Bonds | 99,959 | 99,959 | Level 1 | 103,457 | |||
| Financial debts | 122,390 | 122,390 | Level 2 | 128,886 | |||
| Total liabilities | 11,628 | 16,563 | 2,082,971 | 2,111,162 | 2,138,288 |
| Non-current financial assets 510 6,046 147,930 154,486 154,486 Investments (1) 6,046 6,046 Level 2 6,046 Financial loans and receivables (1) 147,930 147,930 Level 2 147,930 Interest rate derivatives – cash flow 510 510 Level 2 510 hedges Current financial assets 2,311 1,722,461 1,774,772 1,774,772 Interest rate derivatives – non-hedge Trade and other receivables 1,160,306 1,160,306 Level 2 1,160,306 Cash management financial assets 2,311 Level 2 2,311 2,311 Cash equivalents (2) 10,409 10,409 Level 2 10,409 Cash at bank and in hand (2) 601,746 601,746 Level 2 601,746 Total assets 2,821 6,046 1,920,391 1,929,258 1,929,258 Non-current financial debts 18,475 670,684 689,159 712,121 Bonds 303,537 303,537 Level 1 314,777 Financial debts 367,147 367,147 Level 2 378,869 Interest rate derivatives – cash flow 18,475 18,475 Level 2 18,475 hedges Current financial liabilities 18,585 4,930 1,292,810 1,316,325 1,317,431 Interest rate derivatives – highly 14 14 Level 2 14 probable projected cash flow hedges Interest rate derivatives – cash flow 4,916 4,916 Level 2 4,916 hedges Exchange rate derivatives – non-cash 10,313 Level 2 10,313 10,313 flow hedges Other derivatives instruments – non 8,272 8,272 Level 2 8,272 hedge Trade payables and other operating 1,138,288 1,138,288 Level 2 1,138,288 debts Bonds Financial debts 154,522 154,522 Level 2 155,628 Total liabilities 18,585 23,405 1,963,494 2,005,484 2,029,552 |
December, 31 2016 (In € thousands) |
Financial instruments not designated as hedging instruments |
Derivatives designated as hedging instruments |
Financial instruments available for sales |
Loans and trade receivables at amortized costs |
Total of carrying amount |
Fair value measurements of financial assets by level |
Fair value of the class |
|---|---|---|---|---|---|---|---|---|
(1) Included in items "Other non-current financial assets" and "Other noncurrent assets".
(2) Included in item "Cash and cash equivalents".
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, 2017 is 1,037,814 thousand Euro (December 2016: 1,119,534 thousand Euro) and is detailed by nature as follows:
| (In thousand Euro) | ||
|---|---|---|
| June 2017 | December 2016 | |
| Performance guarantees and performance bonds (a) | 867,213 | 856,445 |
| Bid bonds (b) | 14,051 | 36,175 |
| Repayment of advance payments (c) | 15,000 | 16,812 |
| Retentions (d) | 15,627 | 16,782 |
| Deferred payments to subcontractors and suppliers (e) | 53,327 | 82,451 |
| Other commitments given - including 38,927 thousand Euro of corporate guarantees at | 72,596 | 110,869 |
| DEME | ||
| Total | 1,037,814 | 1,119,534 |
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 2017 | December 2016 |
|---|---|---|
| Performance guarantees and performance bonds Other commitments received |
316,584 2,100 |
145,112 2,825 |
| Total | 318,684 | 147,937 |
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, 2017 | December 31, 2016 |
|---|---|---|
| Assets with related parties | 488,368 | 429,373 |
| Non-current financial assets | 150,331 | 152,629 |
| Trade receivables and other operating trades | 319,237 | 249,703 |
| Other current assets | 18,800 | 27,041 |
| Liabilities with related parties | 89,047 | 83,187 |
| Other non-current liabilities | 695 | 4,905 |
| Trade payables and other operating trades | 88,352 | 78,282 |
| (In thousand Euro) | June 30, 2017 | June 30, 2016 |
| Expenses and incomes with related parties | 318,386 | 85,602 |
| Turnover and incomes from auxiliary activities | 322,004 | 90,715 |
| Purchases and other operating expenses | (9,069) | (4,881) |
| Expenses and financial incomes | 5,451 | (232) |
In July 2017, GeoSea, 100% subsidiary of DEME NV, signed an agreement with DONG Energy and Siemens which involves the sale of all shares in A2SEA to GeoSea. A2SEA is active in Europa in the installation of offshore windmills. The transaction should be finalized during the second half year 2017. The estimated impact on DEME's net financial debt amounts to € 170 million.
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 Belgian universities and the Flemish Region in order to develop the production of eco-friendly energy in the maritimeenvironment.
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 2017, 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 4,411,435 (000) EUR and the consolidated condensed income statement shows a consolidated profit (group share) for the period then ended of 67,825 (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, 25 August 2017
__ 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
DELOITTE Bedrijfsrevisoren / Reviseurs d'Entreprises DELOITTE Bedrijfsrevisoren / Reviseurs d'Entreprises
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