Earnings Release • Aug 30, 2016
Earnings Release
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| | Revenue : | €1,224.5 million |
|
|---|---|---|---|
| | Operating income : |
€ | 75.5 million |
| | Net income share of the Group : |
€ | 53.0 million |
| | Net financial debt : |
€ | 365.2 million |
| | Order book : | € | 4,472.4 million |
The Board of Directors of CFE examined and approved the H1 2016 financial statements at its meeting on August 25, 2016
| In million € | st semester 1 2016 |
st semester 2015 1 |
Variation |
|---|---|---|---|
| Revenue | 1,224.5 | 1,643.5 | -25.5% |
| Self-financing capacity (EBITDA) | 182.2 | 276.0 | -34.0% |
| % of revenue | 14.9% | 16.8% | |
| Operating income on activities | 70.5 | 143.0 | -50.7% |
| % of revenue | 5.8% | 8.7% | |
| Operating income (*) (EBIT) | 75.5 | 152.7 | -50.6% |
| % of revenue | 6.2% | 9.3% | |
| Net income share of the group | 53.0 | 110.9 | -52.2% |
| % of revenue | 4.3% | 6.7% | |
| Net income share of the group per share (in EUR) |
2.10 | 4.38 | -52.1% |
(*) including earnings from associates and joint ventures.
| In million € | 30 June 2016 |
31 December 2015 |
Variation |
|---|---|---|---|
| Equity share of the Group | 1,416.7 | 1,423.3 | -0.5% |
| Net financial debt | 365.2 | 322.7 | +13.2% |
| Order book | 4,472.4 | 4,160.3 | +7.5% |
| In million € | st semester 2016 1 |
st semester 2015 1 |
Variation |
|---|---|---|---|
| Revenue | 802.1 | 1,171.0 | -31.5% |
| EBITDA | 185.3 | 276.3 | -32.9% |
| Operating income (**) | 78.3 | 176.5 | -55.6% |
| Net income share of the group |
54.1 | 120.8 | -55.2% |
(*) 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.
(**) Including results of associated companies and joint ventures.
| In million € | 30 June 2016 | 31 December 2015 | Variation |
|---|---|---|---|
| Order book | 3,625.0 | 3,185.0 | 13.8% |
| Net financial debt | 329.6 | 275.0 | 19.9% |
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) |
st semester 1 2016 |
st semester 1 2015 |
Variation |
|---|---|---|---|
| Revenue | 803.1 | 1,218.7 | -34.1% |
| EBITDA | 195.2 | 302.6 | -35.5% |
| Income from operating activities | 84.7 | 183.8 | -53.9% |
| Net income share of the group | 54.0 | 119.8 | -54.9% |
| Investments | 112.6 | 291.9 | -61.4% |
DEME realized a turnover of €803.1 million, or less than in the first half of 2015, which was marked by an exceptionally high level of activity, particularly in Egypt (widening of the Suez Canal).
The delayed start of certain major projects weighed on the fleet occupancy level.
In Singapore, the Jurong Island Westward Extension (JIWE) and Tuas Terminal Phase 1 projects are progressing according to schedule. DEME was also actively engaged in Panama (widening of the access to the Canal on the Pacific side), Africa, India and Europe.
In the North Sea, GeoSea finished the transport and installation of the monopile foundations for 54 wind turbines of the German Nordsee One wind farm ahead of schedule.
In the United Kingdom, the Galloper and Race Bank projects were started up. Those two projects will represent a substantial volume of activity in the second half of 2016.
| In % | st semester 2016 1 |
st semester 2015 1 |
|---|---|---|
| Capital dredging | 44% | 55% |
| Maintenance dredging | 14% | 10% |
| Fallpipe and landfalls | 4% | 5% |
| Environment | 13% | 9% |
| Civil works | 3% | 0% |
| Marine works | 22% | 21% |
| Total | 100% | 100% |
| En % | st semester 2016 1 |
st semester 2015 1 |
|---|---|---|
| Europe (EU) | 50% | 33% |
| Europe (non-EU) | 2% | 0% |
| Africa | 15% | 40% |
| Americas | 7% | 6% |
| Asia-Pacific | 16% | 11% |
| Middle East | 4% | 6% |
| India and Pakistan | 6% | 4% |
| Total | 100% | 100% |
DEME's EBITDA amounted to €195.2 million in the first six months of 2016, or 24.3% of the revenue. Despite the temporary decrease in activity, DEME was able to maintain a high level of profitability partly thanks to the successful completion of several projects.
The order book increased by 13.8% to a record level of €3,625 million during the first six months of 2016.
GeoSea won a contract worth €650 million for the construction of the Merkur wind farm with its 66 wind turbines of 6 MW; the financial close of this contract has been confirmed. Completion is due in March 2019. GeoSea will also be responsible for maintaining the foundations of the wind turbines for a 10-year period. Through its subsidiary DEME Concessions Wind, DEME holds a minority stake (12.5%) in the capital of the company operating the wind farm.
GeoSea also concluded an EPCI contract for the design, construction and installation of 71 monopiles for the Hohe See offshore wind farm situated approximately 90 km north of Borkum Island (Germany) in the North Sea. This contract is not yet included in the order book as at June 30, 2016.
DEME's subsidiary Tideway also won a major Design & Build contract from DONG Energy for the dredging and laying of high-voltage power cables using the new multipurpose vessel 'Living Stone' as part of the HornSea One project (1200 MW), the world's largest offshore wind farm, in the United Kingdom. This contract is not yet included in the order book as at June 30, 2016.
On May 30, the consortium Femern Link Contractors, which includes namely CFE and DEME as partners, signed conditional contracts with the Danish government for the design and construction of the world's longest road tunnel (18 km), the Fehmarnbelt link between Denmark and Germany. This project, worth an estimated €700 million for DEME/CFE, will only begin once the German authorities have delivered the necessary building permits. This contract is not yet included in the order book as at June 30, 2016.
The investments during the period amounted to €112.6 million. This figure primarily consists of the capitalized maintenance costs in pursuance of IAS 16 and down payments (€32 million) on the six vessels under construction : the self-propelled jack-up vessel 'Apollo', the multipurpose vessel 'Living Stone', the crane ship 'DP2 Gulliver' (in joint venture), and three trailing suction hopper dredgers ('Bonny River', 'Scheldt River' and 'Minerva'). Those vessels, worth a total of €500 million, will join DEME's fleet in 2017 and 2018.
The net financial debt amounted to €334.2 million (economic approach), an increase of €67.5 million.
| In million € | st semester 2016 1 |
st semester 2015 (*) 1 |
Variation |
|---|---|---|---|
| Revenue | 400.5 | 332.7 | +20.4 % |
| Operating income (**) | 7.6 | -4.6 | - |
| Net Income share of the group | 4.1 | 0.7 | +485.7% |
(*) Pro forma figures according to the new definition of the segment applicable at 1st of January, 2016.
(**) Including results of associated companies and joint ventures.
Revenue amounted to €400.5 million, or 20.4% up on the first six months of 2015.
Most entities of the Contracting division reported an increase in revenue, particularly in the international operations, with CFE Polska and CLE in Luxembourg recording a high level of activity.
Construction activity in Belgium, which represents just over half the division's revenue, is growing primarily in Flanders, buoyed by the 'Schools of Tomorrow' programme and several major projects such as AZ Sint-Maarten hospital in Mechelen and the Exxon industrial site in Antwerp. In Brussels, work on the 'Docks' shopping centre has entered the final stages, while the 'Grands Prés' project in Mons was completed in June 2016.
| In million € | st semester 2016 1 |
st semester 2015 (*) 1 |
Variation |
|---|---|---|---|
| Construction | 293.5 | 236.1 | +24.3% |
| Buildings, Belgium | 226.6 | 194.7 | +16.4% |
| Buildings, International (**) | 66.9 | 41.4 | +61.6% |
| Multitechnics | 76.2 | 66.5 | +14.6% |
| Rail infra | 30.8 | 30.1 | +2.3% |
| Total Contracting | 400.5 | 332.7 | +20.4% |
(*) Pro forma figures according to the new definition of the segment applicable at 1 st of January, 2016.
(**) Exclusively Luxemburg, Poland and Tunisia.
CFE Contracting reported an operating income of €7.6 million, compared to €-4.6 million at June 30, 2015.
The three segments (Construction, Multitechnics and Rail Infra) made a positive contribution to the division's operating income.
The contribution of CFE Bouw Vlaanderen and CFE Polska to the division's operating income increased considerably compared to the first six months of 2015.
The operating margin as a percentage of revenue improved significantly to nearly 2%.
| In million € | 30 June 2016 | 31 December 2015 (*) | Variation |
|---|---|---|---|
| Construction | 571.6 | 671.2 | -14.8% |
| Buildings, Belgium | 415.0 | 494.6 | -16.1% |
| Buildings, International (**) | 156.6 | 176.6 | -11.3% |
| Multitechnics | 120.5 | 115.8 | +4.1% |
| Rail infra | 46.7 | 49.3 | -5.3% |
| Total Contracting | 738.8 | 836.3 | -11.7% |
(*) Pro forma figures according to the new definition of the segment applicable at 1st of January, 2016.
(**) Exclusively Luxemburg, Poland and Tunisia.
The order book of Contracting amounted to €738.8 million, which is €97.5 million down on January 1, 2016.
Market conditions in Belgium and a greater selectivity in the intake of new contracts weighed on the order intake of CFE Bâtiment Brabant Wallonie and CFE Bouw Vlaanderen. Nevertheless, both CFE Bouw Vlaanderen and CFE Polska were able to win some major new contracts in July 2016.
Due to a favourable evolution of the working capital requirement, the division's net cash position stood at €98.2 million, which is €23.4 million up on year-end 2015.
| In million € | st semester 2016 1 |
st semester 1 2015 |
Variation |
|---|---|---|---|
| Revenue | 7.6 | 13.4 | -43.3% |
| Operating income (*) | 0.5 | 2.7 | -81.5% |
| Net income share of the group | -0.8 | 1.4 | - |
(*) Including results of associated companies and joint ventures.
| In million € | 30 June 2016 | 31 December 2015 |
|---|---|---|
| Unsold units post completion | 16 | 14 |
| Properties under construction | 32 | 34 |
| Properties in development | 75 | 71 |
| Total | 123 | 119 |
The book value of real estate projects stood at €122.8 million at June 30, 2016, which is a 3.4% increase.
In Belgium, BPI successfully continued the marketing of residential units in the projects 'Erasmus Gardens' (Anderlecht), 'Ernest' (Ixelles) and 'Oosteroever' (Ostend). In the European district of Brussels, BPI finalized the acquisition of a land plot at the beginning of July for the development of 5,400 m² residential units.
In Luxemburg, satisfactory progress was made with the construction of the real estate complex 'Kons'; completion and transfer of the project to an institutional investor is scheduled for the end of the year.
In Poland, BPI Polska acquired a new plot of land in Warsaw (residential project of 3,500 m²). The construction and marketing of phases 3 and 4 of the residential project 'Ocean Four' in Gdansk continued at a steady pace.
In the absence of major transactions during the six-month period under review, the net income of the division amounted to €-0.8 million (compared to €+1.4 million in the first six months of 2015). This figure does not reflect the division's expected performance over the whole year.
| In million € | 1st semester 2016 | 1st semester 2015 (*) | Variation |
|---|---|---|---|
| Revenue | 14.4 | 126.4 | -88.6% |
| Operating income (**) | -10.9 | -21.9 | +50.2% |
| Net operating income share of the group | -4.3 | -12.2 | +64.8% |
(*) Pro forma figures according to the new definition of the segment applicable at 1st of January 2016
(**) Including results of associated companies and joint ventures.
Revenue amounted to €29.5 million for the non-transferred operations of CFE SA (€131.6 million in the first half of 2015) and €-15.1 million for interdivisional eliminations.
The substantial decrease in revenue is explained by the transfer of the marine civil engineering operations to DEME at year-end 2015 and by a sharply reduced level of activity in Africa following the completion in 2015 of several large-scale projects, more specifically in Algeria and Chad.
The operating income (€-10.9 million) was adversely affected by the recognition of additional losses on the Brussels-South wastewater treatment plant project, of which the first of three phases was completed in July 2016.
The division's net result amounted to €-4.3 million (€-12.2 million in the first half of 2015).
The operating loss was partly offset by the capital gain realized on the disposal of CFE's stake in Locorail NV, the company responsible for maintaining and financing the Liefkenshoek rail tunnel in Antwerp.
In the first half of 2015, the net result had been favourably influenced by the sale of the road-building activity.
Order book
| In million € | 30 June 2016 | 31 December 2015 | Variation |
|---|---|---|---|
| Order book | 101.6 | 132.3 | -23.2% |
The main projects in progress are the Brussels-South wastewater treatment plant and the supply contract for three residential tower blocks in Lagos, Nigeria.
The Chadian government received a proposal during the second quarter for a conditional refinancing of the outstanding receivables relating to the Grand Hotel in N'Djamena. This proposal is currently being examined by the Chadian authorities.
The exposure to this country remains unchanged at €60 million.
| Year ended at June 30 (in thousands €) |
2016 | 2015 |
|---|---|---|
| Revenue | 1,224,532 | 1,643,545 |
| Revenue from auxiliary activities | 31,227 | 63,755 |
| Purchases | -591,732 | -871,528 |
| Wages, salaries & social charges | -291,942 | -299,650 |
| Other operating charges | -189,388 | -262,744 |
| Depreciations and amortization | -112,178 | -130,353 |
| Goodwill Impairment | 0 | 0 |
| Operating income on activities | 70,519 | 143,025 |
| Earnings from associates and joint ventures | 4,938 | 9,674 |
| Operating income | 75,457 | 152,699 |
| Cost gross financial debt | -13,265 | -13,692 |
| Other financial expenses and income | 1,428 | 5,078 |
| Financial result | -11,837 | -8,614 |
| Result before taxes | 63,620 | 144,085 |
| Income tax expense | -11,373 | -35,804 |
| Net income for the period | 52,247 | 108,281 |
| Attributable to owner of non-controlling interest | 799 | 2,569 |
| Net income share of the group | 53,046 | 110,850 |
| Year ended 30 June (in thousands €) |
2016 | 2015 |
|---|---|---|
| Net income for the period – Share of the group | 53,046 | 110,850 |
| Net income for the period | 52,247 | 108,281 |
| Change in fair values related to the hedging instruments | -5,253 | -178 |
| Currency translation differences | 4,581 | 1,145 |
| Deferred taxes | 1,859 | 60 |
| Other elements of the comprehensive income to | ||
| be reclassified to profit or loss in subsequent | 1,187 | 1,027 |
| period | ||
| 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 | 0 | 0 |
| period | ||
| Total elements of the comprehensive income | ||
| directly accounted in equity | 1,187 | 1,027 |
| Comprehensive income | 53,434 | 109,308 |
| - attributable to the group | 54,294 | 111,794 |
| - attributable to non-controlling interests | -860 | -2,486 |
| Net result share of the group per share (€) (basic and diluted) | 2.10 | 4.38 |
| Comprehensive income per share (€) (basic and diluted) | 2.14 | 4.42 |
| Year ended (in thousands €) | 30 June 2016 | 31 December 2015 |
|---|---|---|
| Intangible assets | 97,556 | 97,886 |
| Goodwill | 175,169 | 175,222 |
| Tangible assets | 1,728,040 | 1,727,679 |
| Associates and joint ventures | 152,908 | 151,377 |
| Other non-current financial assets | 106,244 | 129,501 |
| Non-current derivative instruments | 2,190 | 1,381 |
| Other non-current assets | 18,566 | 19,280 |
| Deferred tax assets | 109,225 | 103,345 |
| Total non-current assets | 2,389,898 | 2,405,671 |
| Inventories | 98,524 | 77,946 |
| Trade receivables and other operating receivable | 1,135,129 | 1,192,977 |
| Other current assets | 74,871 | 125,029 |
| Current derivative instruments | 1,330 | 8,514 |
| Current financial assets | 56 | 70 |
| Cash and cash equivalents | 454,556 | 491,952 |
| Total current assets | 1,764,466 | 1,896,488 |
| Total assets | 4,154,364 | 4,302,159 |
| Issued capital | 41,330 | 41,330 |
| Share premium | 800,008 | 800,008 |
| Retained earnings | 599,162 | 607,012 |
| Defined benefits plans | -7,448 | -7,448 |
| Hedging reserves | -14,104 | -10,710 |
| Translation differences | -2,273 | -6,915 |
| Equity – part of the group CFE | 1,416,675 | 1,423,277 |
| Non-controlling interests | 9,927 | 11,123 |
| Equity | 1,426,602 | 1,434,400 |
| Retirement benefit obligations and employee benefits | 41,187 | 41,054 |
| Provisions | 38,694 | 44,854 |
| Other non-current liabilities | 6,296 | 17,145 |
| Bonds | 304,376 | 305,216 |
| Financial debts | 343,869 | 398,897 |
| Non-current derivative instruments | 28,941 | 33,359 |
| Deferred tax liabilities | 142,706 | 150,053 |
| Total non-current liabilities | 906,069 | 990,578 |
| Current provisions | 66,243 | 64,820 |
| Trade & other operating payables | 1,093,451 | 1,184,886 |
| Income tax payable | 53,809 | 88,215 |
| Current financial debts | 171,511 | 110,558 |
| Current derivative instruments | 34,077 | 35,146 |
| Other current liabilities | 402,602 | 393,556 |
| Total current liabilities | 1,821,693 | 1,877,181 |
| Total equity and liabilities | 4,154,364 | 4,302,159 |
| Year ended 30 June (in thousands €) |
2016 | 2015 |
|---|---|---|
| Cash flows relating to operating activities | 133,719 | 149,085 |
| Cash flows relating to investing activities | -114,983 | -134,380 |
| Cash flows relating to financing activities | -54,794 | -327,377 |
| Net increase/decrease in cash position | -36,058 | -312,672 |
| 30 June 2016 | 30 June 2015 | |
|---|---|---|
| Total number of shares | 25,314,482 | 25,314,482 |
| Operating result after deduction of the net financial charges per share (in €) |
2.51 | 5.69 |
| Net result share of the group per share (in €) | 2.10 | 4.38 |
Delayed phasing of several major projects will weigh on DEME's revenue in 2016, which will be down on 2015 despite the prospect of a high level of activity in the second half of the year, particularly in offshore wind. Nevertheless, the EBITDA margin as a percentage of revenue is expected to remain above the historical average.
The Contracting division is expected to report an increase in revenue and operating income in 2016.
At 30 June 2016, 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 annual general meeting renewed the director's mandate of Philippe Delusinne for a period of four years, ending after the annual general meeting of May 2020. Philippe Delusinne meets the independence criteria defined in Article 526c of the Companies Code and in the 2009 Belgian Corporate Governance Code.
The annual general meeting renewed the director's mandate of Christian Labeyrie for a period of four years, ending after the annual general meeting of May 2020. Christian Labeyrie does not meet the independence criteria defined in Article 526c of the Companies Code and in the 2009 Belgian Corporate Governance Code.
The general meeting appointed Leen Geirnaerdt as director for a period of four years, ending after the general meeting of May 2020. Leen Geirnaerdt meets the independence criteria defined in Article 526c of the Companies Code and in the 2009 Belgian Corporate Governance Code.
The general meeting renewed the auditor's mandate of Deloitte, Reviseurs d'Entreprises, SC s.f.d. SCRL, represented by Michel Denayer and Rik Neckebroeck, for a period of three years, ending after the annual general meeting of 2019.
Luc Bertrand was appointed chairman of the board of directors of CFE with effect from 5 May 2016.
| | Publication of interim statements | 22/11/2016 (before opening of the stock market) |
|---|---|---|
| | Publication of year results | 28/02/2017 (before opening of the stock market) |
| | General meeting | 04/05/2017 |
The auditor, Deloitte Reviseurs d'Entreprises, represented by Michel Denayer and Rik Neckebroeck, has confirmed that its limited review revealed no material corrections to be made to the accounting information disclosed in this press release. Without modifying the unqualified opinion expressed above, the auditor draws the attention to the uncertainties regarding the amount due by the State of Chad and the undertaken actions in order to facilitate its payment.
* * *
CFE is a Belgian industrial group active in 3 different areas: Dredging, Marine Engineering and Environment, Contracting and Real Estate Development.
The group is active worldwide, primarily through its dredging and marine activities executed by DEME, a 100% owned subsidiary, one of the world's leading dredging contractors. CFE is listed on Euronext Brussels and is 60.40% owned by Ackermans & van Haaren.
This press release is available on our website at www.cfe.be
For further information, please contact, at CFE:
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