Interim / Quarterly Report • Sep 7, 2017
Interim / Quarterly Report
Open in ViewerOpens in native device viewer
Registered Office: Lugar do Espido, Via Norte, Maia, Portugal Registered at the Commercial Registry of Maia Registry and Tax Identification No. 506 035 034 Share Capital: € 253 319 797.26 Publicly Traded Company
CONTENTS
MANAGEMENT REPORT
APPENDICES IN ACCORD WITH ART 9 OF CMVM REGULATION 5/2008
STATEMENT IN ACCORD WITH ART 246 CMVM CODE
CONSOLIDATED FINANCIAL STATEMENTS
Sonae Indústria's operational performance in the first half of 2017 was once again positive with a Recurrent EBITDA margin of 17.0%, 1.4 p.p. above last year and generating a Net Profit of 14.1 million euros in the period, the latter including the contribution from Sonae Arauco.
First half 2017 performance of our three main businesses (North America, Laminates and Components and Sonae Arauco) was impacted by higher input costs of chemical raw materials compared to last year although the trend of increasing chemical costs initiated at the end of 2016 has started to subside in recent months. These increased input costs were largely compensated by our efforts to increase productivity, allowing us to broadly sustain 1H17 proportional recurrent EBITDA at the levels of 1H16.
Sonae Indústria Balance Sheet continued to strengthen due to a combination of lower Net Debt and increased Shareholders' Funds. Proportional leverage ratio also improved to 3.4x.
In North America, and following last year's investment in a fifth melamine surfacing line, that includes embossed and in-register capabilities, the new VIVA collection has had good market acceptance and is showing encouraging progress in sales volumes, improving our innovation contribution to our customers.
The strategic partnership with Arauco has now completed its first anniversary. While delivering positive net results, we have been able, together with our partners, to improve the competitiveness of our plants and our focus on customer needs and service level. In June, the shareholders of Sonae Arauco approved the distribution of a dividend equal to 50% of 2016 Net Profit that was paid in July.
In order to create the conditions for a more competitive and sustainable business we will continue to invest in our production facilities. An example is our recent decision at Sonae Arauco to invest in the replacement of a multi daylight MDF press by a new continuous press and ancillary equipment at its Mangualde plant in Portugal.
Paulo Azevedo Chairman Sonae Indústria
Due to the fact that one of Sonae Indústria's main assets (its 50% shareholding in Sonae Arauco) is accounted by the Equity method since 1 June 2016, we are presenting in section 1.1. unaudited pro forma Proportional Indicators, to help improve the understanding of size of the business, valuation and financial leverage of Sonae Indústria today.
These Proportional Indicators consider the full results of the wholly owned businesses and the proportional consolidation of the 50% contribution from Sonae Arauco.
| FINANCIAL INDICATORS (unaudited and pro forma ) | 1H16 | 1H17 |
|---|---|---|
| Proportional Turnover | 332 | 331 |
| Proportional Rec. EBITDA | 49 | 48 |
| Proportional Rec. EBITDA margin | 14.7% | 14.4% |
| Proportional LTM Turnover | 647 | 644 |
| Proportional LTM Rec. EBITDA | 83 | 90 |
| Proportional LTM Rec. EBITDA margin | 12.8% | 14.0% |
| LEVERAGE | ||
| Proportional Net Debt | 339 | 308 |
| Proportional Leverage (Net Debt / LTM Rec. EBITDA) | 4.1 x | 3.4 x |
| LOAN TO VALUE | ||
| Net Debt of Sonae Indústria | 222 | 213 |
| Asset Value | 472 | 523 |
| LTV (Net Debt of Sonae Indústria / Asset Value) | 47% | 41% |
For the first half of the year, Net Debt to Recurrent EBITDA (proportional) stood at 3.4x, which represents an improvement of 0.7x vs. June 2016, driven by both the increased Recurrent EBITDA and by the lower Net Debt y.o.y.. Loan to Value also improved when compared to 1H16, decreasing to 41%, at the end of June 2017.
Consolidated Turnover for the first half of the year reached 121.8 million euros, an improvement of 1.0% vs. 1H16 (+1.2 million euros) benefiting from the appreciation of the Canadian dollar vs. the EUR. On a quarterly basis, consolidated turnover stood at 62.3 million euros, representing a decrease of 0.9 million euros vs. same period of last year driven by lower sales of our Laminates & Components business that offset the higher Turnover in our North American business. However, Turnover improved by 2.8 million euros, when compared to the previous quarter, due to the better performance of the North American business with higher sales volumes and average selling prices.
Variable costs per cubic meter increased in 1H17 when compared to the same period of last year driven by the higher input costs of chemicals. However when compared with 1Q17, variable costs per cubic meter have decreased with the trend for increased cost of chemicals being interrupted in 2Q17.
Recurrent EBITDA for the first half of the year reached 20.8 million euros, an improvement of 1.9 million euros (+10.2%) vs. 1H16 with an underlying Recurrent EBITDA margin of 17.0%, up by 1.4 p.p. vs. 1H16. On a quarterly basis, Recurrent EBITDA for the 2Q17 stood at 11.0 million euros, a decrease of 0.5 million euros vs. 2Q16 driven by higher chemical costs per cubic meter and lower production volumes in North America, but an improvement of 1.3 million euros against last quarter, with a Recurrent EBITDA margin of 17.7%, down by 0.5 p.p. vs. last year and above 1Q17 by 1.4 p.p.
Sonae Indústria consolidated EBITDA for the first semester of the year reached 20.6 million euros, circa 1.5 million euros higher than the 1H16, on a comparable basis, mostly explained by lower fixed costs that this year reflect one-off adjustments to personnel cost accruals. Consolidated EBITDA for 2Q17 stood at 10.9 million
euros, a deterioration of circa 1.2 million euros vs. 2Q16, mainly driven by a reduction in the contribution of our North American business which however performed better than in the previous quarter and was the main driver for the 1.2 million euros improvement in the consolidated EBITDA vs. 1Q17.
| CONSOLIDATED INCOME STATEMENT | ||||||||
|---|---|---|---|---|---|---|---|---|
| Million euros | ||||||||
| 1H16 | 1H17 | 1H17 / | 2Q16 | 1Q17 | 2Q17 | 2Q17 / | 2Q17 / | |
| Unaudited | Unaudited | 1H16 | Unaudited | Unaudited | Unaudited | 2Q16 | 1Q17 | |
| Turnover | 120.6 | 121.8 | 1.0% | 63.1 | 59.5 | 62.3 | (1.4%) | 4.6% |
| Other operational income | 3.5 | 2.8 | (20.9%) | 2.2 | 1.1 | 1.7 | (22.5%) | 63.0% |
| EBITDA | 19.2 | 20.6 | 7.7% | 12.1 | 9.7 | 10.9 | (9.5%) | 12.6% |
| Non recurrent items | 0.3 | (0.1) | - | 0.5 | (0.0) | (0.1) | - | - |
| Recurrent EBITDA | 18.8 | 20.8 | 10.2% | 11.5 | 9.7 | 11.0 | (4.3%) | 13.7% |
| Recurrent EBITDA Margin % | 15.6% | 17.0% | 1.4 pp | 18.3% | 16.3% | 17.7% | -0.5 pp | 1.4 pp |
| Depreciation and amortisation | (5.8) | (6.2) | (6.5%) | (3.0) | (3.2) | (3.1) | (0.8%) | 3.7% |
| Provisions and impairment Losses | 0.3 | (0.1) | - | 0.1 | (0.1) | 0.0 | 98.7% | 101.0% |
| Operational profit (EBIT) | 13.6 | 14.4 | 6.1% | 9.1 | 6.5 | 7.9 | (13.7%) | 20.6% |
| Net financial charges | (9.8) | (6.1) | 37.5% | (7.0) | (2.8) | (3.4) | 51.8% | (21.7%) |
| o.w. Net interest charges | (8.2) | (4.2) | 49.1% | (5.9) | (2.1) | (2.0) | 65.5% | 4.0% |
| o.w. Net exchange differences | 0.1 | (0.7) | - | 0.0 | (0.1) | (0.6) | - | - |
| o.w. Net financial discounts | (0.8) | (0.9) | (5.3%) | (0.5) | (0.4) | (0.5) | (1.8%) | (11.9%) |
| Gains and losses in Joint-Ventures | 3.2 | 9.3 | - | 3.2 | 4.2 | 5.1 | 58.4% | 20.3% |
| Profit before taxes (EBT) | 7.0 | 17.6 | - | 5.4 | 8.0 | 9.6 | 78.7% | 20.0% |
| Taxes | (3.7) | (3.5) | 5.5% | (3.2) | (1.6) | (1.9) | 39.4% | (24.7%) |
| o.w. Current tax | (4.3) | (3.9) | 9.2% | (3.5) | (1.6) | (2.3) | 34.4% | (39.4%) |
| o.w. Deferred tax | 0.6 | 0.4 | -31.3% | 0.3 | 0.1 | 0.3 | 21.5% | - |
| Profit/(loss) from continued operations | 3.3 | 14.1 | - | 2.1 | 6.4 | 7.6 | - | - |
| Profit/(loss) from discontinued operations | (30.7) | 0.0 | 100.0% | (32.8) | 0.0 | 0.0 | 100.0% | - |
| Consolidated net profit/(loss) for the period | (27.5) | 14.1 | - | (30.7) | 6.4 | 7.6 | 124.9% | 18.9% |
| Losses (income) attrib. to non-contro. interests | 0.0 | 0.0 | - | (0.0) | 0.0 | 0.0 | - | - |
| Net profit/(loss) attrib. to Equity Holders | (27.5) | 14.1 | - | (30.7) | 6.4 | 7.6 | 124.9% | 18.9% |
Total fixed costs for the first semester of the year represented 15.6% of turnover, an improvement of 0.4 p.p. when compared to 1H16.
Total headcount for Sonae Indústria, at the end of June 2017, was 484 FTE's excluding Sonae Arauco, which compares with 488 FTE's at the end of March and 486 FTE's in June 2016.
Depreciation and amortization charges during 1H17 were 6.2 million euros, which represents an increase of 6.5% when compared to 1H16, explained by the higher depreciation charges in our North American operation which now take into account the investment in the new melamine surfacing line completed in 2Q16. For the quarter, the depreciations charges reached 3.1 million euros, in line with the values booked for 2Q16 and 1Q17.
Provisions and impairment losses for the 1H17 represent a charge of 0.1 million euros, circa 0.4 million euros higher vs. 1H16 when a gain of 0.3 million was registered due to the release of provisions for the legacy restructuring process in France.
Net financial charges during 1H17 were 6.1 million Euros, which represents a reduction of circa 3.7 million euros vs. 1H16. This is explained by a reduction of 4.0 million euros in Net Interest Charges justified by the reduction of net debt and cost of debt but also by the fact that 1H16 figures included the recognition of previously deferred upfront financing costs of 1.9 million Euros as a result of the early repayment of loans
carried out within the setting up of the Sonae Arauco partnership. Compared with the previous quarter net financial charges increased mostly a result of a one off effect for foreign exchange differences and derivatives in 2Q17.
Gains and losses in Joint-Ventures, amounted to 9.3 million euros, corresponding to 50% of the consolidated net profit of Sonae Arauco for the first half of the year. On a quarterly basis, Gains and Losses in Joint-Ventures reached 5.1 million euros, up by 1.9 million euros and by 0.9 million euros when compared to 2Q16 and to 1Q17, respectively.
Current tax charges were 3.9 million euros for the first half of the year, a decrease of 0.4 million euros when compared to 1H16, driven by lower tax charges in Canada. On a quarterly basis, current tax charges improved 1.2 million euros vs. 2Q16, mostly due to lower tax charges in Portugal but increased by 0.6 million euros when compared to the previous quarter, driven by higher tax charges in Canada.
As a result of the combination of the above factors, Sonae Indústria booked a consolidated positive Net Result of circa 14.1 million euros during 1H17, an improvement of 41.5 million euros when compared to same period of last year. It should be noted that, as then reported, the results of Discontinued Operations in 2Q16 included a one off accounting charge of 36.6 million euros related with accounting effects from the loss of control of Sonae Arauco. For the quarter, the net result reached 7.6 million euros, an improvement of 38.3 million euros and of 1.2 million euros, when compared to 2Q16 and 1Q17, respectively.
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION Million euros |
|||
|---|---|---|---|
| 2016 | 1Q17 Unaudited |
1H17 Unaudited |
|
| Non current assets | 352.8 | 355.7 | 347.7 |
| Tangible assets | 148.1 | 146.5 | 140.3 |
| Goodwill | 0.3 | 0.3 | 0.3 |
| Deferred tax asset | 1.4 | 1.4 | 1.4 |
| Other non current assets | 203.0 | 207.5 | 205.7 |
| Current assets | 44.7 | 46.6 | 51.2 |
| Inventories | 18.1 | 18.4 | 16.1 |
| Trade debtors | 15.2 | 19.1 | 18.9 |
| Cash and cash equivalents | 4.8 | 2.7 | 3.1 |
| Other current assets | 6.6 | 6.5 | 13.1 |
| Non-current assets classified as available for sale | 1.5 | 1.5 | 1.5 |
| Total assets | 399.0 | 403.8 | 400.5 |
| Shareholders' Funds | 110.3 | 116.7 | 120.3 |
| Equity Holders | 110.3 | 116.7 | 120.3 |
| Non-controlling interests | 0.0 | 0.0 | 0.0 |
| Liabilities | 288.7 | 287.1 | 280.2 |
| Interest bearing debt | 218.3 | 222.7 | 215.9 |
| Non current | 216.0 | 217.3 | 204.6 |
| Current | 2.3 | 5.4 | 11.3 |
| Trade creditors | 23.1 | 24.2 | 25.0 |
| Other liabilities | 47.3 | 40.2 | 39.3 |
| Liabilities directly associated with non-current assets classified as | |||
| available for sale | 0.0 | 0.0 | 0.0 |
| Total Shareholders'Funds and liabilities | 399.0 | 403.8 | 400.5 |
| Net debt | 213.5 | 220.0 | 212.8 |
| Working Capital | 10.3 | 13.3 | 10.0 |
Included in Other Non-current assets, is the investment in Joint-Ventures (50% of Sonae Arauco) in an amount of 198.6 million euros, which is circa 1.9 million euros lower than the book value of this investment at the end of 1Q17, despite the positive results of Sonae Arauco, mostly due to the amount of dividends to be paid by Sonae Arauco to Sonae Indústria (booked in 1H17 and settled in July) in an amount of circa 5.7 million euros, which justify the increase in Current assets.
Consolidated Working Capital reached 10.0 million euros, a decrease of 3.3 million euros when compared to March 2017, due to a decrease in inventories in our North American operation, combined with an increase in trade creditors balances, also in our North American operation. When compared to the end of 2016, consolidated Working Capital was kept relatively stable.
Net Debt stood at 212.8 million euros, at the end of June 2017, which represents a decrease of 7.2 million euros when compared to the end of 1Q17, benefiting from the positive EBITDA and, in this quarter, also from the reduction in Working Capital. When compared to the end of 2016, Net Debt also decreased, in this case by 0.7 million euros.
Total Shareholders' Funds continued to strengthen and at the end of June 2017 amounted to 120.3 million euros, which represents an increase of 3.6 million euros when compared to March 2017, mostly due to the positive net results of the quarter. It should also be highlighted that, when compared to the end of 2016, total Shareholder's Funds increased by 10.0 million euros.
Additions to Gross Tangible Fixed Assets reached 3.6 million euros during the first half of the year, marginally below the 3.9 million euros registered in 1H16, on a like for like basis. The figure for 1H17 includes not only the investments executed in our North American plant but also part of the ongoing investment in the new edging line for our Components plant in Portugal.
7 September 2017
The Board of Directors
Paulo Azevedo
Albrecht Ehlers
Carlos Moreira da Silva
José Romão de Sousa
Javier Vega
Christopher Lawrie
Louis Brassard
The completion of the 50/50 partnership with Arauco in the end of May 2016 has led to a number of material accounting changes in Sonae Indústria's financial statements and on the financial information reported by Sonae Indústria as summarized below.
The P&L shows all the companies included in the consolidation perimeter of Sonae Arauco classified as Discontinued Operations from January until May 2016 and accounted by the Equity Method as of the 1 June 2016.
As from June 2016, the balance sheet represents the position of Sonae Indústria under the new perimeter with the 50% shareholding in Sonae Arauco equity accounted.
In order to provide a more comprehensive view of Sonae Indústria underlying business, pro forma Proportional Indicators are also presented.
Proportional Indicators consider the full contribution of the wholly owned businesses and the proportional consolidation of the 50% contribution from Sonae Arauco.
Proportional Indicators are pro forma because they consider the changes in the consolidation perimeter that occurred in 2016 reported to the 1st of January 2015 and the proportional consolidation of Sonae Arauco companies since then not since 31 of May 2016 when the partnership was setup.
| Asset Value | Asset Value is calculated as follows: [6.8 x LTM Recurrent EBITDA of fully consolidated business (100%)] + [market value of inactive sites real estate properties owned 100% by Sonae Indústria, according to external valuations] + [50% x (6.8 x LTM Recurrent EBITDA of Sonae Arauco – Sonae Arauco Net Debt)] |
|---|---|
| CAPEX | Investment in Tangible Fixed Assets |
| EBITDA | Earnings Before Interests and Taxes + Depreciations and Amortizations + (Provisions and impairment losses - Impairment losses in trade receivables + Reversion of impairment losses in trade receivables) |
| FTEs | Full Time Equivalent; the equivalent of one person working full time, according to the working schedule of each country where Sonae Indústria has operations |
| Fixed Costs | Overheads + Personnel costs (internal and external); management accounts concept |
| Gross Debt | Bank loans + Debentures + Obligations under finance leases + other loans + Loans from related parties |
| Headcount | Total number of internal FTEs, excluding trainees |
| Loan to Value | Net Debt of Sonae Indústria / Asset value |
| LTM | Last Twelve Months |
| Net Debt | Gross Debt - Cash and cash equivalents |
| Proportional: Turnover, Recurrent EBITDA (unaudited, pro forma) |
Proportional Turnover and Proportional Recurrent EBITDA consider, in what regards to Turnover and Recurrent EBITDA, the full contribution of the wholly owned businesses and the proportional consolidation of the 50% contribution from Sonae Arauco. |
| Proportional Leverage (unaudited, pro forma) |
Proportional Net Debt / Proportional LTM Recurrent EBITDA |
| Proportional Net Debt (unaudited, pro forma) |
Proportional Net Debt considers the full contribution of the Net Debt of the wholly owned businesses and the proportional consolidation of the 50% contribution from Sonae Arauco. |
| Recurrent EBITDA | EBITDA excluding non-recurrent operational income / costs |
| Recurrent EBITDA margin | Recurrent EBITDA / Turnover |
| Working Capital | Inventories + Trade Debtors – Trade Creditors |
| Acquisitions | Sales | Position at 30.06.2017 |
Balance at 30.06.2017 |
||||
|---|---|---|---|---|---|---|---|
| Date | amount | € average value | amount | € average value | amount | ||
| Duarte Paulo Teixeira de Azevedo Efanor Investimentos, SGPS, SA (1) Migracom, SA (2) |
Minoritary Dominant |
||||||
| Acquisitions | Sales | Balance at 30.06.2017 |
|||||
| Date | amount | € average value | amount | € average value | 30.06.2017 | amount | |
| (1) Efanor Investimentos, SGPS, SA Sonae Indústria, SGPS, SA Pareuro, BV (3) |
Dominant | 4,842,637,142 | |||||
| (2) Migracom, SA Sonae Indústria, SGPS, SA Imparfim, Investimentos e Participações Financeiras, SA (4) |
Minoritary | 9,732,857 | |||||
| (3) Pareuro, BV Sonae Indústria, SGPS, SA |
2,932,687,752 | ||||||
| (4) Imparfin, Invest. e Participações Financeiras, SA Sonae Indústria, SGPS, SA |
30,098,752 |
Complying with Article 9 No.1 c) of the the CMVM Regulation no. 05/2008
| Shareholder | No. of shares | % Share Capital | % Voting rights | |
|---|---|---|---|---|
| Efanor Investimentos, SGPS, SA (**) | ||||
| Directly | 4,842,637,142 | 42.6636% | 42.6636% | |
| By Pareuro, BV (Company controlled by Efanor Investimentos, SGPS, SA) | 2,932,687,752 | 25.8369% | 25.8369% | |
| By Maria Margarida CarvalhaisTeixeira de Azevedo (Director of Efanor Investimentos, SGPS, SA) | 1,010 | 0.000009% | 0.000009% | |
| By Migracom, SA (Company controlled by Efanor Investimentos, SGPS, SA´s Director, Duarte Paulo Teixeira de Azevedo) | 9,732,857 | 0.0857% | 0.0857% | |
| By Linhacom, SA (Company controlled by Efanor Investimentos, SGPS, SA´s Director, Maria Cláudia Teixeira de Azevedo) | 2,507,400 | 0.0221% | 0.0221% | |
| Total allocation | 7,787,566,161 | 68.6083% | 68.6083% |
(*) On 28 July 2017 occurred the reverse stock split of the shares representative of Sonae Indústria' share capital, being this represented by 45 403 029 shares
(**) Under the terms of paragraph b) of no. 1 of Article 20 and of no. 1 of Article 21 of the Portuguese Securities Code, Belmiro Mendes de Azevedo is the ultimate beneficial, owner, since he is the controlling shareholder of Efanor Investimentos SGPS, SA, which, in her turn, is the dominant company of Pareuro BV.
On 22 February 2016, TEAK Capital, SA informed Sonae Indústria having signed a services agreement with the company Pareuro, BV, through which it was granted, by way of consideration, a call option over 1,702,620,000 shares representative of 15% of the share capital and voting rights of Sonae Indústria, SGPS, S.A., exercisable on 30 April 2018.
Thereafter, the referred to company informed Sonae Indústria that the call option will be performed by physical settlement and that 98.725% of its share capital is held by TEAK Capital, B.V., in which Carlos Moreira da Silva holds shares that grant him 40% of the voting rights and Fernanda Arrepia (married with him with separation of people and property) holds shares that grant her 45% of the voting rights.
In terms of the order in sub-paragraph c), no. 1, Article 246 of the Portuguese Securities Code, the Board members of Sonae Indústria, SGPS, SA hereby declare, to the best of our knowledge, that the:
Duarte Paulo Teixeira de Azevedo
Carlos António Rocha Moreira da Silva
Albrecht Olof Lothar Ehlers
Javier Vega de Seoane Azpilicueta
José Joaquim Romão de Sousa
George Christopher Lawrie
Louis Brassard
(Amounts expressed in Euros)
| NON-CURRENT ASSETS: Tangible fixed assets 6 140 339 174 148 065 694 Goodwill 347 082 347 082 Intangible assets 336 788 270 689 Investment properties 6 126 495 6 251 947 Investment in joint ventures 4, 5 198 622 333 195 908 535 Investment available for sale 5 131 220 130 821 Deferred tax asset 1 402 206 1 364 497 Other non-current assets 442 298 442 298 Total non-current assets 347 747 596 352 781 563 CURRENT ASSETS: Inventories 16 149 513 18 138 293 Trade debtors 18 892 375 15 193 129 Other current debtors 7 5 855 231 303 310 Current tax asset 1 649 847 1 090 204 Other taxes and contributions 2 434 081 3 246 215 Other current assets 3 202 501 1 951 835 Cash and cash equivalents 8 3 057 994 4 795 077 51 241 542 44 718 063 Total current assets 1 535 588 1 535 588 Non-current assets held for sale TOTAL ASSETS 400 524 726 399 035 214 SHAREHOLDERS FUNDS AND LIABILITIES<br>SHAREHOLDERSFUNDS:Share capital 9 253 319 797 812 107 574 Legal reserve 9 3 131 757 Other reserves and accumulated earnings - 183 864 366 - 759 319 894 Accumulated other comprehensive income 10 50 884 019 54 418 718 Total shareholders' funds attributabble to equity holders of Sonae Indústria 120 339 450 110 338 155 TOTAL SHAREHOLDERS`FUNDS 120 339 450 110 338 155 LIABILITIES: NON-CURRENT LIABILITIES: Bank loans - net of current portion 11 203 657 572 214 868 703 Finance lease creditors - net of current portion 11 915 220 1 132 741 Post-retirement liabilities 1 110 071 1 110 071 Other non-current liabilities 3 950 551 3 554 341 Deferred tax liability 19 562 241 20 754 938 Provisions 1 933 644 1 933 644 Total non-current liabilities 231 129 299 243 354 438 CURRENT LIABILITIES: Current portion of non-current bank loans 11 4 351 443 390 967 Current bank loans 11 6 500 001 1 500 000 Current portion of non-current finance lease creditors 11 426 187 417 272 Trade creditors 25 021 156 23 050 212 Current tax liability 146 385 2 422 190 Other taxes and contributions 792 716 699 465 Other current liabilities 12 11 818 089 16 862 515 Total current liabilities 49 055 977 45 342 621 TOTAL SHAREHOLDERS' FUNDS AND LIABILITIES 400 524 726 399 035 214 |
ASSETS | Notes | 30.06.2017 Unaudited |
31.12.2016 |
|---|---|---|---|---|
The notes are an integral part of the consolidated financial statements
The Board of Directors
(Amounts expressed in Euros)
| Notes | 30.06.2017 | 2nd. Quarter 2017 | 30.06.2016 | 2nd. Quarter 2016 | |
|---|---|---|---|---|---|
| Unaudited | Unaudited | Unaudited | Unaudited | ||
| Sales | 17 | 121 186 517 | 61 983 892 | 119 848 509 | 62 802 908 |
| Services rendered | 17 | 610 932 | 297 981 | 719 038 | 337 961 |
| Other income and gains | 15, 17 | 2 801 194 | 1 736 233 | 3 541 096 | 2 241 275 |
| Cost of sales | 17 | 63 342 959 | 31 616 244 | 63 057 183 | 33 445 411 |
| (Increase) / decrease in production | 17 | 1 713 827 | 1 248 751 | 1 379 109 | - 1 157 321 |
| External supplies and services | 17 | 24 860 563 | 12 386 638 | 24 586 119 | 12 661 795 |
| Staff expenses | 17 | 12 018 500 | 6 744 844 | 13 004 125 | 6 781 056 |
| Depreciation and amortisation | 6 227 662 | 3 054 605 | 5 848 432 | 3 031 644 | |
| Provisions and impairment losses (increase / reduction) | 17 | 86 882 | - 840 | - 268 925 | - 66 926 |
| Other expenses and losses | 16, 17 | 1 932 898 | 1 087 816 | 2 919 252 | 1 551 485 |
| Operating profit / (loss) | 14 415 352 | 7 880 048 | 13 583 348 | 9 135 000 | |
| Financial expenses | 18 | 6 761 873 | 3 670 188 | 13 816 220 | 7 606 319 |
| Financial income | 18 | 653 456 | 316 919 | 4 050 101 | 643 509 |
| Gains and losses in joint ventures | 4, 5 | 9 256 226 | 5 054 254 | 3 190 280 | 3 190 280 |
| Net profit/(loss) from continuing operations, before taxation | 17 563 161 | 9 581 033 | 7 007 509 | 5 362 470 | |
| Taxation | 19 | 3 509 188 | 1 947 128 | 3 712 950 | 3 213 845 |
| Consolidated net profit / (loss) from continuing operations, afer taxation | 14 053 973 | 7 633 905 | 3 294 559 | 2 148 625 | |
| Profit / (loss) from discontinued operations, after taxation | 14 | - 30 746 562 | - 32 816 446 | ||
| Consolidated net profit / (loss) for the period | 14 053 973 | 7 633 905 | - 27 452 003 | - 30 667 821 | |
| Attributable to: | |||||
| Equity Holders of Sonae Industria | |||||
| Continuing operations | 14 053 973 | 7 633 905 | 3 294 559 | 2 148 638 | |
| Discontinuing operations | - 30 746 562 | - 32 816 446 | |||
| Equity Holders of Sonae Industria | 14 053 973 | 7 633 905 | - 27 452 003 | - 30 667 808 | |
| Non-controlling interests | |||||
| Continuing operations Discontinuing operations |
- 13 | ||||
| Non-controlling interests | - 13 | ||||
| Profit/(Loss) per share | |||||
| Fom continuing operations: | |||||
| Basic | 0.0012 | 0.0007 | 0.0003 | 0.0002 | |
| Diluted | 0.0012 | 0.0007 | 0.0003 | 0.0153 | |
| From discontinued operations: | |||||
| Basic | - 0.0027 | - 0.0029 | |||
| Diluted | - 0.0027 | - 0.0029 | |||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIODS ENDED 30 JUNE 2017 AND 30 JUNE 2016
(Amounts expressed in Euros)
| Notes | 30.06.2017 Unaudited |
2nd Quarter 2017 Unaudited |
30.06.2016 Unaudited |
2nd Quarter 2016 Unaudited |
||
|---|---|---|---|---|---|---|
| Net consolidated profit / (loss) for the period (a) | 14 053 973 | 7 633 905 | - 27 452 003 | - 30 667 821 | ||
| Other consolidated comprehensive income | ||||||
| Items that may be subsequently transferred to profit or loss Change in currency translation reserve Change in fair value of available-for-sale financial assets |
- 2 669 405 | - 2 190 805 | 3 020 523 8 508 |
677 988 3 143 |
||
| Group share of other comprehensive income of joint ventures | - 865 294 | - 1 347 797 | 1 288 940 | 1 288 940 | ||
| Other consolidated comprehensive income for the period, net of tax (b) | 10 | - 3 534 699 | - 3 538 602 | 4 317 971 | 1 970 071 | |
| Total consolidated comprehensive income for the period (a) + (b) | 10 519 274 | 4 095 303 | - 23 134 032 | - 28 697 750 | ||
| Total consolidated comprehensive income attributable to: Equity holders of Sonae Industria Non-controlling interests |
10 519 274 | 4 095 303 | - 23 134 032 | - 28 697 730 - 20 |
||
| 10 519 274 | 4 095 303 | - 23 134 032 | - 28 697 750 | |||
| Other comprehensive income reclassified to profit or loss in the period | - 36 592 671 | - 36 592 671 |
The notes are an integral part of the consolidated financial statements
The board of directors
| Share capital | Legal reserve |
Other Reserves and accumulated earnings |
Accumulated other comprehensive income |
Total shareholders` funds attributable to the equity holders of Sonae Indústria |
Non controlling interests |
Total shareholders' funds |
|
|---|---|---|---|---|---|---|---|
| Notes | 9 | 9 | 10 | ||||
| Balance as at 1 January 2017 | 812 107 574 | 3 131 757 | - 759 319 894 | 54 418 718 | 110 338 155 | 110 338 155 | |
| Total consolidated comprehensive income for the period Net consolidated profit/(loss) for the period Other consolidated comprehensive income for the period |
14 053 973 | -3 534 699 | 14 053 973 - 3 534 699 |
14 053 973 - 3 534 699 |
|||
| Total | 14 053 973 | -3 534 699 | 10 519 274 | 10 519 274 | |||
| Share capital reduction Others |
-558 787 777 | - 3 131 757 | 561 919 534 - 517 979 |
- 517 979 | - 517 979 | ||
| Balance as at 30 June 2017 (unaudited) | 253 319 797 | -183 864 366 | 50 884 019 | 120 339 450 | 120 339 450 |
| Notes 9 9 10 Balance as at 1 January 2016 812 107 574 3 131 757 -801 248 687 43 785 859 57 776 503 - 106 611 Total consolidated comprehensive income for the period Net consolidated profit/(loss) for the period -27 452 003 - 27 452 003 Other consolidated comprehensive income for the period 4 317 971 4 317 971 Total -27 452 003 4 317 971 -23 134 032 Medium term incentive plan 30 499 30 499 Change in method 35 060 569 -35 060 569 Transferred to Net consolidated profit/(loss) for the period 36 592 671 36 592 671 Others -4 392 059 1 863 032 - 2 529 027 106 611 - 2 422 416 |
Share capital | Legal reserve |
Other Reserves and accumulated earnings |
Accumulated other comprehensive income |
Total shareholders` funds attributable to the equity holders of Sonae Indústria |
Non controlling interests |
Total shareholders' funds |
|
|---|---|---|---|---|---|---|---|---|
| 57 669 892 | ||||||||
| - 27 452 003 4 317 971 |
||||||||
| -23 134 032 | ||||||||
| 30 499 36 592 671 |
||||||||
| Balance as at 30 June 2016 (unaudited) | 812 107 574 | 3 131 757 | -798 001 681 | 51 498 964 | 68 736 614 | 68 736 614 |
The notes are an integral part of the consolidated financial statements
The board of directors
(Amounts expressed in Euros)
| Unaudited Unaudited OPERATING ACTIVITIES Receipts from trade debtors 114 462 665 421 862 751 Payments to trade creditors 86 039 974 343 643 764 Payments to staff 13 611 007 65 859 212 Net cash flow from operations 14 811 684 12 359 775 Payment / (receipt) of corporate income tax 7 476 686 2 732 887 Other receipts / (payments) relating to operating activities 1 052 493 749 576 Net cash flow from operating activities (1) 8 387 491 10 376 464 INVESTMENT ACTIVITIES Cash receipts arising from: Investments 214 Tangible fixed assets and intangible assets 85 228 2 125 916 85 228 2 126 130 Cash Payments arising from: Investments 1 896 215 112 Tangible fixed assets and intangible assets 5 161 421 12 014 764 Investment properties 131 191 5 163 317 12 361 067 Net cash used in investment activities (2) - 5 078 089 - 10 234 937 FINANCING ACTIVITIES Cash receipts arising from: Interest and similar income 306 127 357 697 Loans obtained 378 937 399 787 740 197 137 500 000 Increase in share capital (SONAE ARAUCO, SA) 379 243 526 925 597 894 Cash Payments arising from: Interest and similar charges 3 988 452 20 242 830 Loans obtained 379 807 666 907 130 527 Finance leases - repayment of principal 205 618 3 122 559 384 001 736 930 495 916 Net cash used in financing activities (3) - 4 758 210 - 4 898 022 Net increase in cash and cash equivalents (4) = (1) + (2) + (3) - 1 448 808 - 4 756 495 Effect of foreign exchange rate 288 275 77 753 Cash and cash equivalents at the beginning of the period 8 4 795 077 15 808 205 Cash and cash equivalents of excluded companies, at 31.05.2016 4 939 961 Cash and cash equivalents at the end of the period 8 3 057 994 6 033 996 |
Notes | 30.06.2017 | 30.06.2016 |
|---|---|---|---|
The notes are an integral part of the consolidated financial statements
The board of directors
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2017 (Amounts expressed in euros)
SONAE INDÚSTRIA, SGPS, SA has its head-office at Lugar do Espido, Via Norte, 4470- 909 Maia, Portugal.
The shares of the company are listed on Euronext Lisbon.
Consolidated financial statements for the period ended 30 June 2017 and 30 June 2016 were not subject to a limited revision carried out by the company's statutory external auditor.
This set of consolidated financial statement has been prepared on the basis of the accounting policies that were disclosed on the notes to the consolidated financial statements for fiscal year 2016.
These consolidated financial statements were prepared in accordance with the International Accounting Standard 34 – Interim Financial Reporting. As such, they do not include all the information which should be included in annual consolidated financial statements and should therefore be read in connection with the financial statements for fiscal year 2016.
These consolidated financial statements were prepared on the basis of International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and with Interpretations issued by the IFRS Interpretations Committee (IFRS IC), effective from 1 January 2017 and endorsed by the European Union.
2.2.1. At 30 June 2017, the following standards and interpretations had been issued by IASB and had been endorsed by the European Union, but had not been applied as they only become effective on later periods:
IFRS 9 (new), Financial instruments (effective for annual periods beginning on or after 1 January 2018). IFRS 9 replaces the guidance in IAS 39, regarding: (i) the classification and measurement of financial assets and liabilities; (ii) the recognition of credit impairment (through the expected credit losses model); and (iii) the hedge accounting requirements and recognition;
IFRS 15 (new), Revenue from contracts with customers (effective for annual periods beginning on or after 1 January 2018). This new standard applies only to contracts with customers to provide goods or services and requires an entity to recognise revenue when the contractual obligation to deliver the goods or services is satisfied and by the amount that reflects the consideration the entity is expected to be entitled to, following a five step approach.
The Company does not estimate any significant effect to arise from the application of these standards.
2.2.2. At 30 June 2017, the following standards, effective 1 January 2017 or later, had been issued by IASB but still had not been endorsed by the European Union:
IAS 7 (amendment), Statement of Cash Flows – Disclosure initiative (effective for annual periods beginning on or after 1 January 2017). This amendment is still subject to endorsement by the European Union. This amendment introduces an additional disclosure about the changes in liabilities arising from financing activities,
disaggregated between cash changes and non-cash changes and how it reconciles with the reported cash flows from financing activities, in the Cash Flow Statement;
IAS 12 (amendment), Income taxes – Recognition of deferred tax assets for unrealised losses (effective for annual periods beginning on or after 1 January 2017). This amendment is still subject to endorsement by the European Union. This amendment clarifies how to account for deferred tax assets related to assets measured at fair value, how to estimate future taxable profits when temporary deductible differences exist and how to assess recoverability of deferred tax assets when restrictions exist in the tax law;
IAS 40 (amendment), Transfers of Investment property (effective for annual periods beginning on or after 1 January 2018). This amendment is still subject to endorsement by the European Union. This amendment clarifies when assets are transferred to, or from investment properties, the evidence of the change in use is required. A change of management intention in isolation is not enough to support a transfer;
IFRS 2 (amendment), Classification and measurement of share-based payment transactions (effective for annual periods beginning on or after 1 January 2018). This amendment is still subject to endorsement by the European Union. This amendment clarifies the measurement basis for cash-settled, share-based payments and the accounting for modifications to a share-based payment plan that change the classification an award from cash-settled to equity-settled. It also introduces an exception to the principles in IFRS 2 that will require an award to be treated as if it was wholly equity-settled, where an employer is obliged to withhold an amount for the employee's tax obligation associated with a share-based payment and pay that amount to the tax authority;
IFRS 4 (amendment), Insurance contracts (Applying IFRS 4 with IFRS 9) transactions (effective for annual periods beginning on or after 1 January 2018). This amendment is still subject to endorsement by the European Union. This amendment allows companies that issue insurance contracts the option to recognise in Other Comprehensive Income, rather than Profit or Loss the volatility that could rise when IFRS 9 is applied before the new insurance contract standard is issued. Additionally, it is given an optional temporary exemption from applying IFRS 9 until 2021, to the companies whose activities are predominantly connected with insurance, not being applicable at consolidated level;
IFRS 15 (amendment) Revenue from contracts with customers (effective for annual periods beginning on or after 1 January 2018). This amendment is still subject to endorsement by European Union. This amendment refers to additional guidance for determining the performance obligations in a contract, the timing of revenue recognition from a license of intellectual property, the review of the indicators for principal versus agent classification, and to new practical expedients to simplify transition;
IFRS 16 (new), Leases (effective for annual periods beginning on or after 1 January 2019). This standard is still subject to endorsement by European Union. This new standard replaces the IAS 17 with a significant impact on the accounting by lessees that are now required to recognise a lease liability reflecting future lease payments and a "right-of-use asset" for all lease contracts, except for certain short-term leases and for low-value assets. The definition of a lease contract also changed, being based on the "right to control the use of an identified asset";
IFRS 17 (new), Insurance contracts (effective for annual periods beginning 1 January 2021). This standard will revoke IFRS 4 – Insurance contracts and applies to all entities issuing insurance contracts, reinsurance contracts and investment contracts with discretionary participation characteristics. IFRS 17 is based on the current measurement of technical liabilities at each reporting date. The current measurement can be based on a complete "building block approach" or "premium allocation approach". The recognition of the technical margin is different depending on whether it is positive or negative. IFRS 17 is of retrospective application;
Annual Improvement 2014 - 2016, (generally effective for annual periods beginning on or after 1 January 2017). These improvements are still subject to endorsement by European Union. The 2014-2016 annual improvements impacts: IFRS 1, IFRS 12 and IAS 28;
IFRIC 22 (new), Foreign currency transactions and advance consideration (effective for annual periods beginning on or after 1 January 2018). This interpretation is still subject to endorsement by the European Union. An Interpretation to IAS 21 'The effects of changes in foreign exchange rates' it refers to the determination of the "date of transaction" when an entity either pays or receives consideration in advance for foreign currency denominated contracts". The date of transaction determines the exchange rate used to translate the foreign currency transactions;
IFRIC 23 (new), Uncertainty over Income Tax Treatments (effective for annual periods beginning 1 January 2019). ). This interpretation is still subject to endorsement by the European Union. This is an interpretation of IAS 12 - Income tax referring to the measurement and recognition requirements to be applied when there is uncertainty as to the acceptance of an income tax treatment by the tax authorities. In the event of uncertainty as to the position of the tax authority on a specific transaction, the entity shall make its best estimate and record the income tax assets or liabilities under IAS 12 rather than IAS 37 - Provisions, contingent liabilities and contingent assets, based on the expected value or the most probable value. The application of IFRIC 23 may be retrospective or retrospective modified.
The Company does not estimate any significant effect to arise from the application of these standards.
Exchange rates used for translating into euros the financial statements of subsidiaries whose functional currency is not the euro are listed below:
| 30.06.2017 | 31.12.2016 | 30.06.2016 | ||||||
|---|---|---|---|---|---|---|---|---|
| Closing rate |
Average rate |
Closing rate |
Average rate |
Closing rate |
Average rate |
|||
| Great Britain Pound | 0.8793 | 0.8602 | 0.8562 | 0.7763 | 0.8265 | 0.7763 | ||
| South African Rand | 14.9209 | 14.2959 | 14.4571 | 17.2325 | 16.4474 | 17.2325 | ||
| Canadian Dollar | 1.4785 | 1.4427 | 1.4188 | 1.4647 | 1.4384 | 1.4835 | ||
| American Dollar | 1.1412 1.0818 |
1.0541 | 1.1061 | 1.1102 | 1.1156 |
Source: Bloomberg
Group companies included in the consolidated financial statements, their head offices and percentage of capital held by the Group as at 30 June 2017, 31 December 2016 and 30 June 2016 are as follows:
| PERCENTAGE OF CAPITAL HELD | ||||||||
|---|---|---|---|---|---|---|---|---|
| COM PANY | HEAD OFFICE | 30.06.2017 | 31.12.2016 | 30.06.2016 | TERM S FOR INCLUSION |
|||
| Direct | Total | Direct | Total | Direct | Total | |||
| 1) Agloma Imobiliária y Servicios, SL | M adrid (Spain) | - | - | - | - | 100.00% 100.00% | a) | |
| Frases e Frações - Imobiliária e Serviços, SA | M aia (Portugal) | 100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| Glunz UK Holdings, Ltd. | Liverpool (United Kingdom) |
100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| Glunz UkA GmbH | M eppen (Germany) | 100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| Isoroy, SAS | La Garenne Colombes (France) |
100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| M aiequipa - Gestão Florestal, SA | M aia (Portugal) | 100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| M egantic B.V. | Amsterdam (The Netherlands) |
100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| M ovelpartes - Comp. para a Indústria do M obiliário, SA |
Paredes (Portugal) | 100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| Novodecor (Pty) Ltd | Woodmead (South Africa) |
100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| Parcelas e Narrativas - Imobiliária, SA | M aia (Portugal) | 100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| Poliface North America | Lac M égantic (Canada) |
100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| 2) Sonae Indústria - M anagement Services, S. A. | M aia (Portugal) | 100.00% 100.00% | 100.00% 100.00% | - | - | a) | ||
| Sonae Indústria - Soc. Gestora de Participações Sociais, SA |
M aia (Portugal) | Parent | Parent | Parent | Parent | Parent | Parent | Parent |
| Sonae Indústria de Revestimentos, SA | M aia (Portugal) | 100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| Spanboard Products Ltd | Belfast (United Kingdom) |
100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| Tafisa Canadá Inc | Lac M égantic (Canada) |
100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) | |||
| Tafisa France S.A.S. | La Garenne Colombes (France) |
100.00% 100.00% | 100.00% 100.00% | 100.00% 100.00% | a) |
Joint ventures, their head offices, percentage of share capital held on 30 June 2017, 31 December 2016 and 30 June 2016 are as follows:
| PERCENTAGE OF CAPITAL HELD 30.06.2017 31.12.2016 |
||||||||
|---|---|---|---|---|---|---|---|---|
| COM PANY | HEAD OFFICE | 30.06.2016 | ||||||
| Direct | Total | Direct | Total | Direct | Total | |||
| Sonae Arauco, SA | Madrid (Spain) | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | |
| Agepan Eiweiler M anagement, GmbH | Eiweiler (Germany) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Agloma Imobiliaria y Servicios, S. L. | Madrid (Spain) | 100.00% | 50.00% | 100.00% | 50.00% | - | - a) | |
| Agloma Investimentos, SGPS, S. A. | Maia (Portugal) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Aserraderos de Cuellar, S.A. | Madrid (Spain) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| 1) Sonae Arauco Beeskow GmbH | Meppen (Germany) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Ecociclo, Energia e Ambiente, S. A. | Maia (Portugal) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Euroresinas - Indústrias Quimicas, S.A. | Maia (Portugal) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| GHP Glunz Holzwerkstoffproduktions GmbH | Meppen (Germany) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| 2) Sonae Arauco Deutschland AG | Meppen (Germany) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Glunz Service GmbH | Meppen (Germany) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Impaper Europe GmbH | Meppen (Germany) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Imoplamac – Gestão de Imóveis, S. A. | Maia (Portugal) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Laminate Park GmbH & Co. KG | Eiweiler (Germany) | 50.00% | 25.00% | 50.00% | 25.00% | 50.00% | 25.00% b) | |
| OSB Deustchland | Meppen (Germany) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Racionalización y M anufacturas Florestales, S.A. | Madrid (Spain) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Sociedade de Iniciativa e Aproveit. Florestais – Energias, S.A. |
Mangualde (Portugal) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Somit – Imobiliária, S.A. | Mangualde (Portugal) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Sonae Arauco France | La Garenne-Colombes (France) |
100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| 3) Sonae Arauco Portugal, SA | Mangualde (Portugal) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| 4) Sonae Arauco South Africa (Pty) Ltd | Woodmead (South Africa) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| 5) Sonae Arauco Netherlands B. V. | Woerden (The Netherlands) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| 6) Sonae Arauco (UK), Ltd. | Liverpool (United Kingdom) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| 7) Sonae Arauco Espana - Soluciones de M adera, S. L. | Madrid (Spain) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Tafiber. Tableros de Fibras Ibéricas, S.L. | Madrid (Spain) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| 8) Tafisa U.K, Ltd. | Liverpool (United Kingdom) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Taiber, Tableros Aglomerados Ibéricos, S.L. | Madrid (Spain) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| 9) Sonae Arauco Suisse SA | Tavannes (Switzerland) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Tecnologias del M edio Ambiente, S.A. | Barcelona (Spain) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) | |
| Tecmasa. Reciclados de Andalucia, S. L. | Madrid (Spain) | 50.00% | 25.00% | 50.00% | 25.00% | 50.00% | 25.00% b) | |
| Tool, GmbH | Meppen (Germany) | 100.00% | 50.00% | 100.00% | 50.00% | 100.00% | 50.00% a) |
a) Company included in the consolidation perimeter of Sonae Arauco, S. A.;
b) Company whose investment is measured using equity method in the consolidated financial statement of Sonae Arauco, S. A..
1) Formerly denominated as BHW Beeskow Holzwerkstoffe GmbH
2) Formerly denominated as Glunz AG
On 31 May 2016, the then subsidiary Tafleros de Fibras, S. A. (currently Sonae Arauco, S. A.) carried out a share capital increase, which was fully subscribed and paid by Arauco Group. As a consequence, Sonae Arauco S. A. and its subsidiaries identified as a) were excluded from consolidation as they were classified as joint ventures on that date. From that date, these companies have been recognized on the consolidated financial statements of Sonae Indústria, SGPS, S. A. using the equity method. Net profit/(loss) of these companies for the five-month period ended 31 May 2016 were stated under Profit / (loss) of discontinued operations, after taxation, on the Consolidated Income Statement.
In the consolidated financial statements for the period ended 31 December 2016, Sonae Indústria, SGPS, S. A. recognized the fair value of its investment in Sonae Arauco, S. A., which was estimated to amount to EUR 185 981 068, with reference to 31 May 2016. The recognition of this fair value implies adjusting the identifiable assets and liabilities of Sonae Arauco, S. A. and its subsidiaries at fair value, with reference to 31 May 2016, for equity method purposes. Based on external appraisals, the fair value adjustment to land and buildings amounts to EUR 10 000 000, which would adjust final goodwill by the same amount. This adjustment would increase annual depreciation charge by EUR 100 000, of which 50% would be attributable to Sonae Indústria, SGPS, S. A.. Taking into consideration the irrelevance of this amount, Sonae Indústria decided to not adjust the consolidated net profit or loss of Sonae Arauco, S. A. for equity method purposes from 31 May 2016.
Net assets and net profit/loss for these jointly-controlled companies, whose share was recognized on these consolidated financial statements using equity method, are detailed as follows:
| Sonae Arauco - Consolidated | |
|---|---|
| 30.06.2017 | 31.12.2016 |
| 503 817 406 | 516 229 548 |
| 199 988 260 | 181 815 850 |
| 24 941 527 | 29 903 996 |
| 206 550 330 | 204 590 512 |
| 89 154 412 | 95 963 697 |
| 7 852 586 | 21 836 327 |
| 190 531 931 | 176 328 520 |
Sonae Arauco - Consolidated
| 30.06.2017 | 30.06.2016 | |
|---|---|---|
| Operating revenues | 436 840 594 | 74 300 515 |
| Operating expenses (without depreciation and amortization) | 383 793 732 | 65 855 543 |
| Depreciation and amortization | 21 316 025 | 3 869 402 |
| Interest income | 405 603 | 57 634 |
| Interest expense | 4 416 938 | 747 405 |
| Taxation | 4 199 998 | - 48 534 |
| Net profit/(loss) from continuing operations | 18 512 453 | 7 042 876 |
| Adjustments to the Group's accounting policies | - 662 316 | |
| Group's share on net profit/(loss) | 9 256 226 | 3 190 280 |
| Group's share on other comprehensive Income | - 865 294 | 1 288 940 |
The results and the other comprehensive income presented above for the comparative period refer to the period beginning 1 June 2016 as this was the date the equity method was applied for measuring the investment in Sonae Arauco, S. A..
At 30 June 2017 and 31 December 2016, details of Investments, on the Consolidated Statement of Financial position, are as follows:
| 30.06.2017 | 31.12.2016 | |
|---|---|---|
| Non current | Non current | |
| Investment in joint ventures | ||
| Opening balance | 195 908 535 | 5 695 259 |
| Effect of change in perimeter | -5 695 259 | |
| Effect of equity method | 8 375 755 | 195 908 535 |
| Dividends | 5 661 957 | |
| Closing balance | 198 622 333 | 195 908 535 |
| 30.06.2017 | 31.12.2016 | |
| Non current | Non current | |
| Available-for-sale investment | ||
| Opening balance | 134 810 | 1 171 674 |
| Acquisition | 1 895 | 5 042 |
| Disposal | 1 496 | |
| Effect of change in perimeter | -1 050 414 | |
| Change in fair value | 8 508 | |
| Closing balance | 135 209 | 134 810 |
| Accumulated impairment losses | 3 989 | 3 989 |
| Net available-for-sale investment | 131 220 | 130 821 |
At 30 June 2017 and 31 December 2016, movements in tangible assets, accumulated depreciation and impairment losses were as follows:
| 30.06.2017 | 31.12.2016 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Land and Buildings |
Plant and Machinery |
Vehicles | Tools | Fixtures and Fittings |
Other Tangible Fixed Assets |
Tangible Fixed Assets under construction |
Total tangible fixed assets |
Total tangible fixed assets |
|
| Gross cost: | |||||||||
| Opening balance | 91 307 802 272 235 761 | 2 612 591 | 143 635 | 3 621 704 | 218 223 | 3 971 483 | 374 111 199 | 2 099 701 349 | |
| Changes in consolidation perimeter | -1 696 876 697 | ||||||||
| Capital expenditure | 3 467 210 | 3 467 210 | 13 468 828 | ||||||
| Disposals | 1 296 766 | 102 193 | 29 284 | 66 456 | 1 494 699 | 62 978 274 | |||
| Transfers and reclassifications | 36 756 | 1 118 257 | 30 688 | 44 451 | - 1 230 152 | - 1 613 391 | |||
| Exchange rate effect | - 2 682 516 - 10 126 731 | - 90 026 | - 80 351 | - 57 | - 195 826 | - 13 175 507 | 22 409 384 | ||
| Closing balance | 88 662 042 261 930 521 | 2 451 060 | 114 351 | 3 519 348 | 218 166 | 6 012 715 | 362 908 203 | 374 111 199 | |
| Accumulated depreciation and impairment losses | |||||||||
| Opening balance | 33 296 782 186 752 575 | 2 251 161 | 141 110 | 3 397 687 | 206 190 | 226 045 505 | 1 470 921 621 | ||
| Changes in consolidation perimeter | -1 231 154 300 | ||||||||
| Depreciations for the period | 1 125 365 | 4 770 418 | 51 022 | 467 | 44 493 | 1 715 | 5 993 480 | 31 252 522 | |
| Impairment losses for the period - through profit or loss | 4 028 485 | ||||||||
| Disposals | 1 271 910 | 101 208 | 29 282 | 62 181 | 1 464 581 | 61 981 258 | |||
| Transfers and reclassifications | - 7 874 | ||||||||
| Exchange rate effect | - 999 886 | - 6 857 350 | - 76 363 | - 71 754 | - 22 | - 8 005 375 | 12 986 309 | ||
| Closing balance | 33 422 261 183 393 733 | 2 124 612 | 112 295 | 3 308 245 | 207 883 | 222 569 029 | 226 045 505 | ||
| Carrying amount | 55 239 781 | 78 536 788 | 326 448 | 2 056 | 211 103 | 10 283 | 6 012 715 | 140 339 174 | 148 065 694 |
At the closing date of these consolidated financial statements, mortgaged net tangible fixed assets amounted to EUR 125 089 816 (EUR 133 392 714 at 31 December 2016), as collateral for loans amounting to EUR 44 041 451 (EUR 39 578 123 at 31 December 2016).
At 30 June 2017 and 31 December 2016, Other current debtors, on the Consolidated Statement of Financial Position, can be detailed as follows:
| 30.06.2017 | 31.12.2016 | |||
|---|---|---|---|---|
| Gross Value | Net Value | Gross Value | Net Value | |
| Other debtors | 44 978 | 44 978 | 209 171 | 209 171 |
| Related parties | 5 678 906 | 5 678 906 | ||
| Financial Instruments | 5 723 884 | 5 723 884 | 209 171 | 209 171 |
| Other debtors | 131 347 | 131 347 | 94 139 | 94 139 |
| Assets out of scope of IFRS 7 | 131 347 | 131 347 | 94 139 | 94 139 |
| Total | 5 855 231 | 5 855 231 | 303 310 | 303 310 |
At 30 June 2017, Related parties included EUR 5 661 957 of unpaid dividends distributed by the joint venture Sonae Arauco, S. A..
At 30 June 2017 and 31 December 2016, detail of Cash and Cash Equivalents, on the Consolidated Statement of Financial Position, was as follows:
| 30.06.2017 | 31.12.2016 | |
|---|---|---|
| Cash at Hand | 6 479 | 6 536 |
| Bank Deposits and Other Treasury Applications | 3 051 515 | 4 788 541 |
| Cash and Cash Equivalents on the Consolidated Statement of Financial Position |
3 057 994 | 4 795 077 |
| Cash and Cash Equivalents on the Statement of Cash Flows |
3 057 994 | 4 795 077 |
In the period ended 30 June 2017, the Company reduced share capital from EUR 812 107 574.17 to EUR 253 319 797.26 to cover accumulated losses, without change of the existing number of shares.
As a consequence, at 30 June 2017, the share capital of Sonae Indústria, SGPS, S. A. was EUR 253 319 797.26, represented by 11 350 757 417 ordinary and nominative shares, without nominal value.
In the period ended 30 June 2017, the Company fully used its legal reserve, which amounted to EUR 3 131 757, to cover accumulated losses.
Accumulated other comprehensive income on the Consolidated Statement of Financial Position, is detailed as follows:
| Accumulated other comprehensive income Atributable to the parent's shareholders |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Available | Remeasurements | Share of Other Comprehensive Income of Joint Ventures |
Income tax related to |
||||||
| Currency translation |
for-sale financial assets |
Revaluation Reserve |
on defined benefit plans |
Which may be subsequently transferred to profit or loss |
Which may not be subsequently transferred to profit or loss |
components of other comprehensive income |
Total | ||
| Balance as at 1 January 2017 | 11 114 057 | 6 367 184 | - 192 092 | 4 468 623 | 33 694 328 | 1 033 382 | 54 418 718 | ||
| Other consolidated comprehensive income for the period | -2 669 405 | - 865 294 | -3 534 699 | ||||||
| Balance as at 30 June 2017 (unaudited) | 8 444 652 | 6 367 184 | - 192 092 | 3 603 329 | 33 694 328 | 1 033 382 | 50 884 019 |
| Accumulated other comprehensive income Atributable to the parent's shareholders |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Available | Remeasurements | Share of Other Comprehensive Income of Joint Ventures |
Income tax related to components of |
||||||
| Currency translation |
for-sale financial assets |
Revaluation Reserve |
on defined benefit plans |
Which may be subsequently transferred to profit or loss |
Which may not be subsequently transferred to profit or loss |
other comprehensive income |
Total | ||
| Balance as at 1 January 2016 | - 31 461 322 | 96 733 | 106 260 850 | - 6 260 935 | 1 388 833 | 26 238 300 | 43 785 859 | ||
| Other consolidated comprehensive income for the period Change in method Tranferred to Net consolidated profit/(loss) for the period Others |
3 020 523 36 592 671 1 706 713 |
8 508 - 105 241 |
- 99 895 009 1 343 |
6 218 070 - 87 |
1 288 940 52 621 |
33 619 135 | - 25 049 855 - 155 063 |
4 317 971 -35 060 569 36 592 671 1 863 032 |
|
| Balance as at 30 June 2016 (unaudited) | 9 858 585 | 6 367 184 | - 42 952 | 1 341 561 | 35 007 968 | 1 033 382 | 51 498 964 |
As at 30 June 2017 and 31 December 2016, Sonae Indústria had the following outstanding loans:
| 30.06.2017 | 31.12.2016 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Amortised cost | Nominal value | Amortised cost | Nominal value | |||||||
| Current | Non current | Current | Non current | Current | Non current | Current | Non current | |||
| Bank loans Obligations under finance leases |
10 851 444 426 187 |
203 657 572 915 220 |
10 851 444 426 187 |
205 223 540 915 220 |
1 890 967 417 272 |
214 868 703 1 132 741 |
1 890 967 417 272 |
216 670 580 1 132 741 |
||
| Gross debt | 11 277 631 | 204 572 792 | 11 277 631 | 206 138 760 | 2 308 239 | 216 001 444 | 2 308 239 | 217 803 321 |
At 30 June 2017, loans can be detailed as follows:
| Company(ies) | Loan | Contract date | Maturity (with reference to 30.06.2017) |
Currency | Outstanding principal at 30.06.2017 (EUR) |
Outstanding principal at 31.12.2016 (EUR) |
|---|---|---|---|---|---|---|
| Tafisa Canada Inc. | Bank loan (Revolving ) |
July 2011 | to be repaid from March 2017 to May 2021 |
CAD | 40 041 451 | 34 678 123 |
| Sonae Indústria, SGPS, S.A. | Commercial paper programme |
June 2013 | June 2018 Note: programme without subscription guarantee |
EUR | 6 500 000 | 1 500 000 |
| Sonae Indústria, SGPS, S.A. | Commercial paper programme |
July 2014 | to be repaid from July 2018 to January 2020 |
EUR | 7 500 000 | |
| Sonae Indústria, SGPS, S.A. | Commercial paper programme |
May 2016 | to be repaid from May 2019 to May 2021 |
EUR | 140 000 000 | 175 000 000 |
| Sonae Indústria, SGPS, S.A. | Commercial paper programme |
July 2016 | to be repaid from January 2018 to July 2019 |
EUR | 4 000 000 | 4 900 000 |
| Sonae Indústria, SGPS, S.A. | Commercial paper programme |
July 2016 | to be repaid from July 2017 to July 2018 |
EUR | 1 250 000 | 1 250 000 |
| Sonae Indústria, SGPS, S.A. | Commercial paper programme |
December 2016 | to be repaid from June 2018 to December 2019 |
EUR | 15 000 000 | |
| Others | EUR | 1 783 533 | 1 233 424 | |||
| Total | EUR | 216 074 984 | 218 561 547 |
All these loans are subject to variable interest rates.
Figures detailed on the previous table correspond to the nominal value of bank loans disclosed on note 11.
At 30 June 2017, in addition to mortgaged tangible fixed assets referred to on note 6, there were other assets amounting to EUR 28 947 848 (EUR 27 014 465 at 31 December 2016) which were pledged as collateral for the Group's liabilities. These assets consisted mostly of inventories and accounts receivable.
At 30 June 2017 and 31 December 2016, Other current liabilities on the Consolidated Statement of Financial Position were composed of:
| 30.06.2017 | 31.12.2016 |
|---|---|
| 431 254 | |
| 2 511 973 | |
| 1 161 966 | |
| 1 393 173 | 4 105 193 |
| 384 489 | 292 949 |
| 335 167 | |
| 4 276 429 | 6 687 970 |
| 1 841 551 | 635 463 |
| 2 164 479 | 3 506 541 |
| 420 471 | 553 128 |
| 692 757 | 763 925 |
| 154 637 | 168 412 |
| 154 936 | 148 934 |
| 10 424 916 | 12 757 322 |
| 11 818 089 | 16 862 515 |
| 912 131 481 042 |
Balances and flows with related parties are summarized as follows:
| Balances | Accounts receivable Accounts payable |
|||
|---|---|---|---|---|
| 30.06.2017 | 31.12.2016 | 30.06.2017 | 31.12.2016 | |
| Other subsidiaries of the parent company | 149 835 | 137 543 | 290 633 | 2 320 894 |
| Joint ventures | 6 401 282 | 598 675 | 2 345 217 | 2 145 323 |
| Transactions | Income | Expenditure | |||
|---|---|---|---|---|---|
| 30.06.2017 | 30.06.2016 | 30.06.2017 | 30.06.2016 | ||
| Other subsidiaries of the parent company | 32 957 | 25 000 | 520 618 | 595 526 | |
| Joint ventures | 1 838 881 | 13 316 672 | 8 650 706 | 15 745 407 |
Profit / (loss) from discontinued operations, after taxation, on the Consolidated Income Statement for the period ended 30 June 2016 includes the results for the five-month period
ended 31 May 2016 (note 4) of the companies that were classified as joint ventures thereon and can be detailed as follows:
| 30.06.2016 | |
|---|---|
| Sales | 339 858 763 |
| Services rendered | 830 586 |
| Other income and gains | 6 660 223 |
| Cost of sales | 167 993 678 |
| (Increase) / decrease in production | - 2 711 434 |
| External supplies and services | 84 495 943 |
| Staff expenses | 51 864 328 |
| Depreciation and amortisation | 20 069 407 |
| Provisions and impairment losses (increase / reduction) | - 748 574 |
| Other expenses and losses | 39 799 364 |
| Operating profit / (loss) | - 13 413 140 |
| Net finance profit / (loss) | - 13 888 033 |
| Gains and losses in associated companies | 222 216 |
| Gains and losses in joint ventures | 74 869 |
| Gains and losses in investments | - 13 670 |
| Net profit/(loss) from discontined operations, before taxation | - 27 017 758 |
| Taxation | 3 728 804 |
| Consolidated net profit / (loss) from discontinued operations, | |
| after taxation | - 30 746 562 |
Cash flows of discontinued operations, which were included line by line on the Consolidated Statement of Cash Flows for the period ended 30 June 2016, are as follows:
| 30.06.2016 | |
|---|---|
| Operating activities | - 10 966 545 |
| Investment activities Financing activities |
4 809 572 178 279 233 |
Details of Other income and gains on the Consolidated Income Statement for the periods ended 30 June 2017 and 30 June 2016 are as follows:
| 30.06.2017 | 30.06.2016 | |
|---|---|---|
| Gains on disp. and write off of invest. prop., tang. and intang. assets | 83 765 | 856 923 |
| Supplementary revenue | 1 091 809 | 1 015 697 |
| Investment subventions | 78 704 | 80 651 |
| Tax received | 24 844 | |
| Positive exchange gains | 1 322 834 | 1 308 689 |
| Adjustment to fair value of financial instruments at fair value through profit or loss | 171 809 | 191 166 |
| Others | 52 273 | 63 126 |
| 2 801 194 | 3 541 096 |
Details of Other expenses and losses on the Consolidated Income Statement for the periods ended 30 June 2017 and 30 June 2016 are as follows:
| 30.06.2017 | 30.06.2016 | |
|---|---|---|
| Taxes | 661 803 | 606 647 |
| Losses on disp. and write off of invest. prop., tang. and intang. assets | 28 653 | 244 583 |
| Negative exchange gains | 889 669 | 1 277 207 |
| Adjustment to fair value of financial instruments at fair value through profit or loss | 227 345 | 604 327 |
| Others | 125 428 | 186 488 |
| 1 932 898 | 2 919 252 |
Recurring operating items on the Consolidated Income Statement are detailed as follows:
| 30.06.2017 | 30.06.2016 |
|---|---|
| Recurring | Recurring |
| 119 848 509 | |
| 719 038 | |
| 2 683 141 | |
| 63 057 183 | |
| 1 379 109 | |
| 24 479 465 | |
| 12 017 836 | 12 776 471 |
| 86 882 | - 1 270 |
| 1 902 508 | 2 725 611 |
| 20 758 194 | 18 834 119 |
| - 115 180 | 330 006 |
| 20 643 014 | 19 164 125 |
| 121 185 047 610 932 2 651 840 63 342 959 1 713 827 24 625 613 |
Financial results for the periods ended 30 June 2017 and 30 June 2016 were as follows:
| 30.06.2017 | 30.06.2016 | |
|---|---|---|
| Financial expenses: | ||
| Interest expenses | ||
| related to bank loans and overdrafts | 4 108 810 | 5 512 489 |
| related to non convertible bonds | 5 315 242 | |
| related to finance leases | 39 943 | 42 544 |
| related to loans from related parties | 160 | 106 683 |
| others | 12 616 | 150 908 |
| 4 161 529 | 11 127 866 | |
| Losses in currency translation | ||
| related to loans | 634 118 | 869 651 |
| related to cash and cash equivalents | 372 890 | |
| 1 007 008 | 869 651 | |
| Cash discounts granted | 923 858 | 884 474 |
| Other finance losses | 669 478 | 934 229 |
| 6 761 873 | 13 816 220 | |
| 30.06.2017 | 30.06.2016 | |
| Financial income: | ||
| Interest income | ||
| related to bank loans | 7 996 | 12 215 |
| related to loans to related parties | 2 128 | 2 964 350 |
| 10 124 | 2 976 565 | |
| Gains in currency translation | ||
| related to loans | 71 566 | 988 031 |
| related to cash and cash equivalents | 211 354 | |
| 282 920 | 988 031 | |
| Cash discounts obtained | 32 737 | 38 592 |
| Other finance gains | 327 675 | 46 913 |
| 653 456 | 4 050 101 | |
| Finance profit / (loss) | - 6 108 417 | - 9 766 119 |
Corporate income tax accounted for in the periods ended 30 June 2017 and 30 June 2016 is detailed as follows:
| 30.06.2017 | 30.06.2016 | |
|---|---|---|
| Current tax Deferred tax |
3 941 515 - 432 327 |
4 342 638 - 629 688 |
| 3 509 188 | 3 712 950 |
The main activity of the Group is the production and commercialization of wood based panels and derivative products through industrial plants and commercial facilities located in Portugal, Canada and South Africa.
The system of internal report focus on type of business, which is the main segmentation criterion. Secondary activities are materially irrelevant as far as segmental report is concerned and the Group decided to present one only segment.
On the Shareholders' Annual General Meeting held 9 May 2017, Sonae Indústria, SGPS, S. A. decided to implement a reverse stock split of 11 350 757 250 shares that represent its share capital after the cancellation of 167 shares which were donated by third parties.
This reverse stock split operation was effective 28 July 2017 and used a ratio of 1:250 shares, in accordance which every 250 shares with ISIN code PTS3P0AM0017 were replaced by one new share with ISIN code PTS3P0AM0025.
These consolidated financial statements were approved by the Board of Directors and authorized for issuance 7 September 2017.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.