Interim / Quarterly Report • Aug 31, 2017
Interim / Quarterly Report
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Report and Accounts 30 June 2017 (unaudited)
| INTRODUCTION | 3 |
|---|---|
| STOCK EXCHANGE EVOLUTION 4 |
|
| GROUP´S ACTIVITY | 6 |
| FINANCIAL REVIEW | 9 |
| SUBSEQUENT EVENTS 13 |
|
| SECOND SEMESTER OUTLOOK | 14 |
| CORPORATE GOVERNANCE | 15 |
| LEGAL MATTERS | 16 |
| CLOSING REMARKS | 18 |
| STATEMENT UNDER ARTICLE 246, PARAGRAPH 1, C) OF THE SECURITIES CODE | 20 |
| DECLARATION OF RESPONSIBILITY 20 |
To the Shareholders
Pursuant to the legal requirements, the Board of Directors of F. Ramada Investimentos, S.G.P.S., S.A. ("Ramada Group" or "Group") hereby presents its Director's Report for the first semester of 2017.
F. Ramada Investimentos S.G.P.S., S.A. is the parent company of a group of companies ("Ramada Group") that operate in two business areas:
(Note: in order to enable a better comparison of t'he stock fluctuations, the PSI 20 index has been considered as being equal in value to the opening price of the shares.)
In the first half of 2017, the Portuguese stock market index (PSI-20) appreciated 10.12% in relation to the end of 2016. The Ramada Group's shares appreciated 42.84% over the same period, presenting a better performance than the reference index during all the semester.
At the end of the first semester 2017, Ramada Group shares closed at 7.30 Euro per share, which represents a market capitalization of 187.2 million Euro.
In the 1st half of 2017, Ramada Group shares were traded at a maximum price of 8.51 Euro per share and a minimum price of 5.11 Euro per share.
The main events that marked the evolution of Ramada Group share price during the first semester of 2017 can be described as follows:
F. Ramada Investimentos S.G.P.S., S.A. is the parent company of a group of companies ("Ramada Group") which, together, operate in two business areas:
The Steel activity, which develops mainly on the sub segment of steel destined to molds, with a prominent position in the domestic market, is carried out by three companies: Ramada Aços, Universal Afir and Planfuro Global. In 2016 the Group acquired the remaining participation on the joint venture Planfuro Global, taking full control of its activity from the end of 2016 onwards. In the first semester of 2017, Planfuro Global was included in the consolidation perimeter of F. Ramada Group by the full consolidation method, although the impact of its activity in the Group's results is reduced.
The activity of Storage Systems (Storax - Engineered Storage Solutions) is carried out by five companies: Ramada Storax (the largest manufacturer of storage systems in Portugal and where all manufacturing of the Group is concentrated), and by its subsidiaries in France, UK, Belgium and Spain, which support the entire international distribution network.
Storax is specialized in the design, manufacturing, installation and after-sales service storage solutions, and a global leader in high-density storage solutions.
The financial investment activity includes several minority participations of which we highlight the investments in Base Holding S.G.P.S. and CEV – Consumo em Verde SA / Converde S.A..
Base Holding S.G.P.S. is the parent company of a group of companies, which operates in the area of complementary diagnostics, mainly, clinical analysis, imaging and cardiology.
The activity of CEV – Consumo em Verde SA / Converde SA consists in the development and patent register focused on BLAD protein. The BLAD is a fungicide obtained from the extraction of the protein from Lupinus Albus (sweet lupines).
The structure of Ramada Group, as of 30 June 2017, can be presented as follows:
In the first half of 2017, Steel activity was influenced by the lack of definition that the molds sector is experiencing, mainly due to its dependence on the automotive sector which finds itself in a period of transition and adaptation to a new reality, where the abandonment of diesel and the emergence of electric vehicles are generating new challenges.
The sector of general mechanics, construction of equipment and maintenance goods has shown some recovery compared to the same period.
In the first months of the year, some price rises were recorded on the most basic materials, not expected to occur in the second half of the year.
The complementary services of machining, oxyfuel and heat treatment showed a significant increase compared to the homologous period. Our integrated offer of added value products and services, with high quality, competitive prices and simplified logistics, has been recognized by the market.
Steel activity operates, essentially, in the domestic market, which represented 95% of its sales in the first half of 2017. However, it is important to mention that the external market grew by 9% over the same period last year, with the United Kingdom as the country with the highest growth.
In the first half of 2017, storage systems activity (Storax - Engineered Storage Solutions) had a significant increase in turnover compared to the same period of 2016.
The external market represents the highest turnover of this activity. In the first half of 2017, exports accounted for 89% of turnover. Europe is the main export destination, with sales growth in Spain, France and the Netherlands highlighting.
The Group continues to make investments to modernize and increase its production capacity in order to improve the productivity and services provided to its customers.
The financial information presented below in relation to Ramada Group was prepared in accordance with the recognition and measurement criteria of the International Financial Reporting Standards (IFRS), as adopted by the European Union.
| 1H 2017 | 1H 2016 | Var. % | |
|---|---|---|---|
| Sales and services rendered | 69,309 | 62,225 | 11.4% |
| Other income | 358 | 586 | -38.9% |
| Total income | 69,667 | 62,811 | 10.9% |
| Cost of sales | (34,555) | (31,791) | 8.7% |
| External supplies and services | (13,862) | (11,880) | 16.7% |
| Payroll | (9,522) | (7,872) | 21.0% |
| Other costs | (121) | (731) | -83.5% |
| Total costs (a) | (58,060) | (52,274) | 11.1% |
| EBITDA (b) | 11,606 | 10,537 | 10.1% |
| EBITDA margin | 16.7% | 16.8% | |
| Amortization and depreciation | (2,786) | (2,390) | 16.6% |
| EBIT (c) | 8,820 | 8,146 | 8.3% |
| EBIT margin | 12.7% | 13.0% | |
| Gains / losses in associated companies | 991 | 885 | |
| Financial costs | (765) | (1,120) | |
| Financial income | 91 | 99 | |
| Net profit before income tax | 9,137 | 8,010 | 14.1% |
| Income tax | (2,066) | (2,244) | |
| Consolidated net profit | 7,071 | 5,766 | 22.6% |
| Consolidated net profit attributable to shareholders of parent company |
7,061 | 5,749 | 22.8% |
| Consolidated net profit attributable to non-controlling interests |
10 | 16 |
(amounts in thousands of Euros)
(a) Operating costs excluding amortization and depreciation, financial expenses and income tax
(b) EBITDA = Earnings before interest, income tax, depreciation and amortization
(c) EBIT = Operating results
Total income of Ramada Group, during the first half of 2017, amounted to 69,667 thousand Euro, representing an increase of 10.9% compared to the total income of the homologous period of 2016.
Total costs, excluding amortization, financial expenses and taxes, amounted to 58,060 thousand Euro, representing an increase of 11.1% in relation to the same period of 2016.
EBITDA, in the first half of 2017, reached 11,606 thousand Euro, representing an increase of 10.1% when compared to the homologous period of 2016. The EBITDA margin, in the first semester of 2017, reached 16.7%, which compares to 16.8% obtained in the same period of 2016.
Group's operating results (EBIT) amounted to 8,820 thousand Euro, representing a growth of 8.3% comparing with 8,146 thousand Euro in the same period of 2016.
In the first half of 2017, the Group recorded gains related to the application of the equity method in associated companies in the amount of 991 thousand Euro, compared to the 885 thousand Euro recorded in 2016.
The negative financial costs amounted to 674 thousand Euro, representing an improvement of 33.9%, when compared with the same period of 2016.
Net profit in the first half of 2017, amounted to 7,071 thousand Euro, 22.6% higher than the net profit recorded in the same period of 2016.
| 1H 2017 | 1H 2016 | Var. % | |
|---|---|---|---|
| Total income | 66,561 | 59,681 | 11.5% |
| Total costs (a) | (57,494) | (51,697) | 11.2% |
| EBITDA (b) | 9,067 | 7,984 | 13.6% |
| EBITDA margin | 13.6% | 13.4% | |
| EBIT (c) | 6,480 | 5,729 | 13.1% |
| EBIT margin | 9.7% | 9.6% | |
| Financial results | (132) | (266) | -50.2% |
| Gains / losses in associated companies | 991 | 885 | 12.0% |
| Net profit before income tax | 7,339 | 6,348 | 15.6% |
(amounts in thousands of Euros)
(a) Operating costs excluding amortization and depreciation, financial expenses and income tax
(b) EBITDA = Earnings before interest, income tax, depreciation and amortization
(c) EBIT = Operating results
During the first half of 2017, the total income for the Industry segment amounted to 66,561 thousand Euro, representing an increase of 11.5% compared to total income for the first half of 2016.
Industry segment's EBITDA in the first half of 2017 amounted to 9,067 thousand Euro, which represents an increase of 13.6% when compared with 7,984 thousand Euro achieved in the same period of 2016.
Industry segment's EBITDA margin went from 13.4% in the first half of 2016 to 13.6% in the same period of 2017.
Operating results (EBIT) in the first semester of 2017 reached 6,480 thousand Euro, presenting an increase of 13,1% compared to 5,729 thousand Euro of 2016.
Industry segment's EBIT margin increased from 9.6% in the first semester of 2016 to 9.7% in the first semester of 2017.
Negative financial results in 132 thousand Euro, presented an improvement of 50.2% compared with the negative 266 thousand Euro in last year.
Industry segment's net profit before income tax reached to 7,339 thousand Euro, higher in 15.6% when compared to the amount recorded in the same period of 2016.
| 1H 2017 | 1H 2016 | Var. % | |
|---|---|---|---|
| Total income | 3,106 | 3,130 | -0.8% |
| Total costs (a) | (566) | (577) | -1.9% |
| EBITDA (b) | 2,540 | 2,553 | -0.5% |
| EBIT (c) | 2,340 | 2,417 | -3.2% |
| Financial results | (542) | (755) | -28.2% |
| Net profit before income tax | 1,798 | 1,662 | 8.2% |
(amounts in thousand of Euros)
(a) Operating costs excluding amortization and depreciation, financial expenses and income tax
(b) EBITDA = Earnings before interest, income tax, depreciation and amortization
(c) EBIT = Operating results
Total income for the Real Estate segment in the first half of 2017 was 3,106 thousand Euro, representing a slight decrease when compared to the same period of 2016.
The rents obtained from the long-term lease of forestland represent more than 95% of total income of the Real Estate segment.
Real Estate segment EBITDA in the first half of 2017 amounted to 2,540 thousand Euro, practically at the same level as in the same period last year.
In the first half of 2017, operational results (EBIT) amounted to 2,340 thousand Euro, representing a decrease of 3.2% compared with the same period of 2016.
Financial results of the Real Estate segment in the first half of 2017 were negative in 542 thousand Euro, which represents an improvement of 28.2% when comparing to 755 thousand Euro negative in homologous period.
Real Estate segment's net profit before income tax reached to 1,798 thousand Euro, higher in 8.2% when compared to the amount recorded in the same period of 2016.
Ramada Group investments in the first half of 2017 amounted to 2,345 thousand Euro.
The nominal net debt of the Ramada Group as of 30 June, 2017 reached 68,152 thousand Euro. As of 31 December, 2016 it was 72,973 thousand Euro.
On July 19, 2017, F. Ramada – Investimentos, SGPS, S.A., together with the other shareholders, entered into an agreement with Medicina Laboratorial – Doutor Carlos da Silva Torres, S.A. for the sale of its shares owned of BASE HOLDING, SGPS, S.A. ("BASE Holding").
The execution of the transaction is subject to prior notification to the Competition Authority, under the terms established in the competition legal regime, and, therefore, subject to the decision of non-opposition by the Competition Authority, and it is estimated that it will be concluded during the second half 2017.
It is further informed that the transaction, the total amount of which is subject to adjustments under the terms of the agreement, will result in an estimated capital gain of more than 40 million Euro for Ramada Investimentos.
On July 25, 2017, Ramada Investimentos sold all the own shares that it held until then (2,564,145 own shares representing 9.99% of its share capital). This sale was performed on the regulated market Euronext Lisbon to a group of qualified investors, having the transaction amounted to 18,025,939.35 Euro corresponding to the unit price of Euro 7.03 per share. As a result of this operation, Ramada Investimentos ceased to hold own shares.
Taking into account the current situation in the molds sector, which has an impact on the special steel business, and the orders backlog as of 30 June, the Group is expected to have a good level of activity in the second half of the year.
In accordance with the current legislation, the Group is not required to provide information regarding corporate governance, since this information is only compulsory together with the annual management report. The detailed annual report of corporate governance is included in the Financial Reporting of 2016 and it is available in our site (www.ramadainvestimentos.pt).
In this point, however, it should be noted that the Shareholders' General Meeting held on April 26, 2017 elected the corporate bodies for the 2017-2019 triennium.
Therefore, the following were elected to the Board of Directors for the 2017/2019 term:
To the Statutory Audit Board were elected the following:
The Statutory Auditor elected for the 2017-2019 triennium was Ernst & Young Audit & Associados - SROC, S.A., represented by Rui Manuel da Cunha Vieira or Rui Abel Serra Martins.
Pursuant to the requirements of article 66 and of nr 2 of article 324 of the Commercial Companies' Code (Código das Sociedades Comerciais), the Directors inform that as of 30 June 2017 it held 2,564,145 own shares representing 9.999996% of the share capital.
It should be referred that, on 25 July 2017, Ramada Investmentos sold all its own shares.
Pursuant to the requirements of article 447 of the Commercial Companies' Code, F. Ramada Investimentos Directors inform that, as of 30 June 2017, they held the following shares:
| 5,300,000 |
|---|
| 4,009,402 |
| 2,606,124 |
| 4,945,383 |
(a) – 5,300,000 shares correspond to the total shares of F. Ramada - Investimentos, S.G.P.S., S.A. held by CADERNO AZUL S.G.P.S., S.A., of which the Director João Manuel Matos Borges de Oliveira is shareholder and director.
(b) – 4,009,402 shares correspond to the total shares of F. Ramada - Investimentos, SGPS, S.A. held by ACTIUM CAPITAL – SGPS, S.A., of which the Director Paulo Jorge dos Santos Fernandes is dominant shareholder and director.
(c) – 2,606,124 shares correspond to the total shares of F. Ramada - Investimentos, SGPS, S.A. held by LIVREFLUXO – SGPS, S.A., of which the Director Domingos José Vieira de Matos is dominant shareholder and director.
(d) – 4,945,383 shares correspond to the total shares of F. Ramada - Investimentos, SGPS, S.A. held by PROMENDO –
SGPS, S.A, of which the Director Ana Rebelo de Carvalho Menéres de Mendonça is director and dominant shareholder.
As of 30 June 2017, the Statutory Auditor, the members of the Statutory Audit Board and the members of the Board of the General Shareholders' Meeting held no shares of F. Ramada Investimentos.
Pursuant to the requirements of articles 16 and 20 of the Securities Code (Código de Valores Mobiliários) and article 448 of the Commercial Companies Code, the Directors inform that, in accordance with the notifications received, the companies and/or individuals that hold qualified participations exceeding 2%, 5%, 10%, 20%, 33% and 50% of the voting rights, and accordingly with the notifications received in head office of Group as of 30 June 2017 are as follows:
| No of shares held | % share capital with | |
|---|---|---|
| Pedro Miguel Matos Borges de Oliveira | as of 30-Jun-2017 | voting rights |
| Through 1 Thing, Investments, SGPS,S.A. (of which is dominant shareholder and director) | 2,072,862 | 8.08% |
| Total attributable | 2,072,862 | 8.08% |
| No of shares held | % share capital with | |
| Domingos José Vieira de Matos | as of 30-Jun-2017 | voting rights |
| Through Livrefluxo - SGPS, S.A. (of which is dominant shareholder and director) | 2,606,124 | 10.16% |
| Total attributable | 2,606,124 | 10.16% |
| No of shares held | % share capital with | |
| Paulo Jorge dos Santos Fernandes | as of 30-Jun-2017 | voting rights |
| Through Actium Capital - SGPS, S.A. (of which is dominant shareholder and director) | 4,009,402 | 15.64% |
| Total attributable | 4,009,402 | 15.64% |
| No of shares held | % share capital with | |
| Ana Rebelo Carvalho Menéres de Mendonça | as of 30-Jun-2017 | voting rights |
| Through PROMENDO - SGPS, S.A. (of which is dominant shareholder and director) | 4,945,383 | 19.29% |
| Total attributable | 4,945,383 | 19.29% |
| No of shares held | % share capital with | |
| João Manuel Matos Borges de Oliveira | as of 30-Jun-2017 | voting rights |
| Through CADERNO AZUL - SGPS, S.A. (of which is dominant shareholder and director) | 5,300,000 | 20.67% |
| Total attributable | 5,300,000 | 20.67% |
Ramada Group was not informed of any participation exceeding 33% of the voting rights.
We don't want to conclude without thanking our customers and suppliers, financial institutions and other partners of the Group for their trust in our organization. We would also like to thank the Statutory Audit Board for the continued monitoring of our operations.
Porto, 27 July 2017
Board of Directors
João Manuel Matos Borges de Oliveira
____________________________________
____________________________________
____________________________________
Paulo Jorge dos Santos Fernandes
Domingos José Vieira de Matos
____________________________________ Pedro Miguel Matos Borges de Oliveira
____________________________________ Ana Rebelo de Carvalho Menéres de Mendonça
Appendices to the Management Report
The signatories individually declare that, to their knowledge, the Condensed Financial Statements were prepared in accordance with the International Financial Reporting Standards ("IFRS") as adopted by the European Union, for the purpose of interim reporting, and the other accounting documents required by law or regulation, give a truthful and appropriate image, in all material respects, of the assets and liabilities, financial position and the consolidated results of F. Ramada Investimentos, S.G.P.S., S.A. and of the companies included in the consolidation perimeter, and that the Interim Director's Report accurately explains the activity evolution, performance and financial position of F. Ramada Investimentos, SGPS, SA and the companies included in the consolidation perimeter, and contains a description of the major risks and uncertainties that they face.
The members of the Board of Directors of F. Ramada Investimentos, S.G.P.S., S.A. declare that they assume responsibility for this information and assure that the items included herein are true and that, to the best of their knowledge, there are no omissions.
Under paragraph 3 of article 8 of the Securities Code, the members of the Board of Directors of F. Ramada Investimentos, S.G.P.S., S.A. declare that the accounts that are part of this interim report have not been subject to a Limited Review.
Pursuant to article 210 of the Social Security Code (approved by Law no. 110/2009, of 16 September) the Board of Directors informs that there are no overdue debts to the State, namely with respect to Social Security.
Disclosure of shares and other securities held by members of the Board of Directors and by those discharging managerial responsibilities, as well as by people closely connected with them (article 248 B of the Securities Code), and disclosure of the respective transactions during the semester.
| Nr of shares held at | Nr of shares held at | |||
|---|---|---|---|---|
| Members of the Board of Directors | 31-Dec-2016 | Aquisitions | Disposals | 30-Jun-2017 |
| João Manuel Matos Borges de Oliveira (imputation through CADERNO AZUL - SGPS, S.A.) | 5,300,000 | - | - | 5,300,000 |
| Paulo Jorge dos Santos Fernandes (imputation through ACTIUM CAPITAL - SGPS, S.A.) | 4,009,402 | - | - | 4,009,402 |
| Domingos José Vieira de Matos (imputation through LIVREFLUXO - SGPS, S.A.) | 2,590,631 | 15,493 | - | 2,606,124 |
| Ana Rebelo de Carvalho Menéres de Mendonça (imputation through PROMENDO - SGPS, S.A.) | 4,945,383 | - | - | 4,945,383 |
| Date | Type | Volume | Price (€) | Local | Nr of shares |
|---|---|---|---|---|---|
| 31-Dec-16 | - | - | - | - | 2,590,631 |
| 3-Jan-17 | Acquisition | 1,000 | 5.160000 | Euronext Lisbon | 2,591,631 |
| 3-Jan-17 | Acquisition | 4,250 | 5.150000 | Euronext Lisbon | 2,595,881 |
| 6-Jan-17 | Acquisition | 500 | 5.200000 | Euronext Lisbon | 2,596,381 |
| 9-Jan-17 | Acquisition | 1,000 | 5.250000 | Euronext Lisbon | 2,597,381 |
| 9-Jan-17 | Acquisition | 1,000 | 5.250000 | Euronext Lisbon | 2,598,381 |
| 11-Jan-17 | Acquisition | 300 | 5.440000 | Euronext Lisbon | 2,598,681 |
| 11-Jan-17 | Acquisition | 1,500 | 5.500000 | Euronext Lisbon | 2,600,181 |
| 17-Jan-17 | Acquisition | 1,000 | 5.720000 | Euronext Lisbon | 2,601,181 |
| 19-Jan-17 | Acquisition | 300 | 5.830000 | Euronext Lisbon | 2,601,481 |
| 19-Jan-17 | Acquisition | 42 | 5.830000 | Euronext Lisbon | 2,601,523 |
| 19-Jan-17 | Acquisition | 145 | 5.950000 | Euronext Lisbon | 2,601,668 |
| 19-Jan-17 | Acquisition | 1,900 | 5.990000 | Euronext Lisbon | 2,603,568 |
| 27-Jan-17 | Acquisition | 9 | 5.900000 | Euronext Lisbon | 2,603,577 |
| 27-Jan-17 | Acquisition | 191 | 5.900000 | Euronext Lisbon | 2,603,768 |
| 27-Jan-17 | Acquisition | 500 | 5.900000 | Euronext Lisbon | 2,604,268 |
| 2-Feb-17 | Acquisition | 31 | 5.889000 | Euronext Lisbon | 2,604,299 |
| 2-Feb-17 | Acquisition | 360 | 5.889000 | Euronext Lisbon | 2,604,659 |
| 2-Feb-17 | Acquisition | 465 | 5.890000 | Euronext Lisbon | 2,605,124 |
| 2-Feb-17 | Acquisition | 640 | 5.900000 | Euronext Lisbon | 2,605,764 |
| 2-Feb-17 | Acquisition | 360 | 5.900000 | Euronext Lisbon | 2,606,124 |
| 30-Jun-17 | - | - | - | - | 2,606,124 |
| ASSETS | Notes | 30.06.2017 | 31.12.2016 | |
|---|---|---|---|---|
| NON CURRENT ASSETS | ||||
| Investment properties | 6 | 84,853,689 | 84,853,689 | |
| Tangible assets | 10,935,240 | 11,825,073 | ||
| Intangible assets | 31,245 | 21,949 | ||
| Goodwill Investments in associates |
4.2 | 1,245,520 17,813,696 |
1,245,520 16,812,392 |
|
| Other investments | 4.3 | 4,246,313 | 3,493,138 | |
| Deferred tax assets | 7 | 3,677,215 | 3,673,642 | |
| Total non current assets | 122,802,918 | 121,925,403 | ||
| CURRENT ASSETS | ||||
| Inventories | 37,155,447 | 21,498,481 | ||
| Clients | 53,896,643 | 49,931,173 | ||
| State and other public entities | 1,501,253 | 548,145 | ||
| Other debtors | 1,735,719 | 2,284,712 | ||
| Other current assets Cash and cash equivalents |
8 | 264,092 18,545,692 |
2365,845 17,220,214 |
|
| Total current assets | 113,098,846 | 93,848,570 | ||
| Total assets | 235,901,764 | 215,773,973 | ||
| EQUITY AND LIABILITIES | Notes | 30.06.2017 | 31.12.2016 | |
| EQUITY | ||||
| Share capital | 9 | 25,641,459 | 25,641,459 | |
| Own shares | (1,641,053) | (1,641,053) | ||
| Legal reserve | 6,460,878 | 6,231,961 | ||
| Currency translation reserves | (1,024,744) | (891,241) | ||
| Other reserves | 41,907,493 | 34,737,106 | ||
| Consolidated net profit for the period Total equity attributable to equity holders of the parent company |
7,061,005 78,405,038 |
13,860,952 77,939,184 |
||
| Non-controlling interests | 151,891 | 142,364 | ||
| Total equity | 78,556,929 | 78,081,548 | ||
| LIABILITIES | ||||
| NON CURRENT LIABILITIES | ||||
| Bank loans | 10 | 39,487,401 | 43,473,155 | |
| Other loans State and other public entities |
10 | 4,000,000 311,787 |
5,000,000 311,787 |
|
| Provisions | 12 | 2,806,005 | 2,883,080 | |
| Deferred tax liabilities | 7 | 29,225 | 31,125 | |
| Total non current liabilities | 46,634,418 | 51,699,147 | ||
| CURRENT LIABILITIES | ||||
| Bank loans | 10 | 3,986,753 | 3,985,753 | |
| Other loans | 10 | 39,223,797 | 37,734,033 | |
| Suppliers | 24,229,549 | 18,133,024 | ||
| State and other public entities | 8,315,051 | 4,543,447 | ||
| Other creditors | 3,275,822 | 5,948,256 | ||
| Other current liabilities | 11 | 31,679,445 | 15,648,765 | |
| Total current liabilities | 110,710,417 | 85,993,278 | ||
| Total liabilities | 157,344,835 | 137,692,425 | ||
| Total equity and liabilities | 235,901,764 | 215,773,973 |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements
| Six months period ended as: | Three months period ended as: | ||||
|---|---|---|---|---|---|
| Notes | 30.06.2017 | 30.06.2016 | 30.06.2017 | 30.06.2016 | |
| Sales and services rendered | 69,308,537 | 62,224,788 | 34,803,396 | 34,248,743 | |
| Other income | 358,080 | 586,022 | 234,193 | 332,571 | |
| Cost of sales | (34,555,176) | (31,791,391) | (17,201,535) | (18,763,659) | |
| External supplies and services | (13,861,766) | (11,879,895) | (7,188,082) | (5,372,736) | |
| Payroll expenses | (9,522,378) | (7,871,768) | (4,801,732) | (3,955,872) | |
| Amortisation and depreciation | (2,786,223) | (2,390,481) | (1,360,654) | (1,867,825) | |
| Provisions and impairment losses | 12 | 558,464 | (354,714) | 552,790 | (110,132) |
| Other expenses | (679,370) | (376,093) | (348,132) | (178,309) | |
| Gains/losses related with associated companies | 4.2 | 991,304 | 885,000 | 495,652 | 390,000 |
| Financial expenses | (765,273) | (1,120,264) | (400,283) | (604,708) | |
| Financial income | 90,715 | 99,094 | 45,866 | 48,870 | |
| Profit before income tax | 9,136,914 | 8,010,298 | 4,831,479 | 4,166,943 | |
| Income tax | (2,066,382) | (2,244,469) | (951,905) | (1,189,632) | |
| Consolidated net profit | 7,070,532 | 5,765,829 | 3,879,574 | 2,977,311 | |
| Attributable to: | |||||
| Parent company's shareholders | 7,061,005 | 5,749,481 | 3,857,048 | 2,951,139 | |
| Non-controlling interests | 9,527 | 16,348 | 22,526 | 26,172 | |
| Earnings per share | |||||
| Basic | 13 | 0.31 | 0.25 | 0.17 | 0.13 |
| Diluted | 13 | 0.31 | 0.25 | 0.17 | 0.13 |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements
(Amounts expressed in Euro)
| Six months period ended as: | Three months period ended as: | ||||
|---|---|---|---|---|---|
| Notes | 30.06.2017 | 30.06.2016 | 30.06.2017 | 30.06.2016 | |
| Net consolidated profit for the period Other comprehensive income |
7,070,532 | 5,765,829 | 3,879,574 | 2,977,311 | |
| Items that may be reclassified subsequently to profit or loss: | |||||
| Fair value of derivatives | - | (36,461) | - | (19,838) | |
| Exchange differences arising on translation of foreign operations | (133,503) | (579,532) | (100,808) | (202,926) | |
| Other comprehensive income for the period | (133,503) | (615,993) | (100,808) | (222,764) | |
| Total comprehensive income for the period | 6,937,029 | 5,149,836 | 3,778,766 | 2,754,547 | |
| Attributable to: | |||||
| Parent company's shareholders | 6,927,502 | 5,133,488 | 3,756,240 | 2,728,375 | |
| Non-controlling interests | 9,527 | 16,348 | 22,526 | 26,172 |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements
FOR THE SIX MONTHS PERIOD ENDED AS 30 JUNE 2017 AND 2016 (Translation of financial statements originally issued in Portuguese - Note 16)
(Amounts expressed in Euro)
| Attributable to the parent company's shareholders | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Notes | Share capital | Own shares | Legal reserve | Currency translation reserves |
Other reserves and retained earnings |
Net profit | Total | Non-controlling interests |
Total Equity | |
| Balance as of 1 January 2016 | 9 | 25,641,459 | (1,641,053) | 5,935,519 | (126,619) | 28,811,105 | 11,032,683 | 69,653,094 | 75,740 | 69,728,834 |
| Total consolidated comprehensive income for the period | - | - | - | (579,532) | (36,461) | 5,749,481 | 5,133,488 | 16,348 | 5,149,836 | |
| Appropriation of the consolidated net profit for 2015: Transfer to legal reserve and other reserves Dividends |
- - |
- - |
439,989 - |
- - |
10,592,694 (4,846,236) |
(11,032,683) - |
- (4,846,236) |
- - |
- (4,846,236) |
|
| Balance as of 30 June 2016 | 25,641,459 | (1,641,053) | 6,375,508 | (706,151) | 34,521,102 | 5,749,481 | 69,940,346 | 92,088 | 70,032,434 | |
| Balance as of 1 January 2017 | 9 | 25,641,459 | (1,641,053) | 6,231,961 | (891,241) | 34,737,106 | 13,860,952 | 77,939,184 | 142,364 | 78,081,548 |
| Total consolidated comprehensive income for the period | - | - | - | (133,503) | - | 7,061,005 | 6,927,502 | 9,527 | 6,937,029 | |
| Appropriation of the consolidated net profit for 2016: Transfer to legal reserve and other reserves Dividends |
- - |
- - |
228,917 - |
- - |
13,632,035 (6,461,648) |
(13,860,952) - |
- (6,461,648) |
- - |
- (6,461,648) |
|
| Balance as of 30 June 2017 | 25,641,459 | (1,641,053) | 6,460,878 | (1,024,744) | 41,907,493 | 7,061,005 | 78,405,038 | 151,891 | 78,556,929 |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements
(Amounts expressed in Euro)
| Six months period ended as: | Three months period ended as: | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Notes | 30.06.2017 | 30.06.2016 | 30.06.2017 | 30.06.2016 | |||||
| Operating activities: Collections from customers Payments to suppliers Payments to personnel Income tax payed/received Other collections/payments relating to operating activities |
104,214,361 (72,813,225) (6,468,936) (668,464) (6,019,146) |
24,932,200 (6,687,610) |
73,712,942 (52,953,610) (5,245,117) (874,310) (4,653,860) |
15,514,215 (5,528,170) |
47,990,810 (36,177,331) (3,186,606) (521,939) (2,727,010) |
8,626,874 (3,248,949) |
32,666,312 (26,614,179) (2,564,184) (752,574) (2,310,291) |
3,487,949 (3,062,865) |
|
| Cash flow from operating activities (1) Investment activities: Collections arising from: Dividends Tangible assets Other assets Investment properties Financial investments |
- 262,396 - 991,276 282 |
18,244,590 | 53 49,619 1,877 - - |
9,986,045 | - 147,896 - - 0 |
5,377,925 | 53 49,619 (7,348) - - |
425,084 | |
| Interests and similar income Payments arising from: Financial investments Intangible assets Tangible assets Loans granted Cash flow from investment activities (2) |
79,225 (478,012) (16,217) (6,452,562) - |
1 333 179 (6,946,791) (5,613,612) |
92,954 (1,146,369) (20,036) (5,806,587) - |
144,503 (6,972,992) (6,828,489) |
48,199 (417,805) (4,163) (1,449,441) - |
196,096 (1,871,409) (1,675,313) |
(23,499) (1,143,786) (20,036) (3,372,426) - |
18,825 (4,536,248) (4,517,423) |
|
| Financing activities: Collections arising from: Loans obtained Payments arising from: Interests and similar costs Other financing operations Dividends Loans obtained |
4,759,531 (1,252,407) - (6,461,422) (6,234,171) |
4,759,531 (13,948,000) |
2,044,150 (1,147,636) (56,671) (4,846,066) (7,485,753) |
2,044,150 (13,536,126) |
3,149,391 (440,721) - (6,461,422) (1,007,695) |
3,149,391 (7,909,838) |
2,044,150 (429,059) (28,508) (4,846,066) (3,395,955) |
2,044,150 (8,699,588) |
|
| Cash flow from financing activities (3) Cash and cash equivalents at the beginning of the year Effect of exchange rate changes Variation of cash and cash equivalents: (1)+(2)+(3) Cash and cash equivalents at the end of the period |
8 8 |
(9,188,469) 10,037,127 (96,684) 3,442,509 13,382,952 |
(11,491,976) 15,863,614 (340,548) (8,334,420) 7,188,646 |
(4,760,447) 14,513,515 (72,728) (1,057,835) 13,382,952 |
(6,655,438) 18,055,667 (119,245) (10,747,777) 7,188,645 |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements
F. Ramada Investimentos, SGPS, S.A. ("F. Ramada" or "Company" or "Group") is a Company incorporated in 1 June 2008, with its head-office located at Rua do General Norton de Matos, 68, r/c - Porto, Portugal and its shares listed in the Euronext Lisbon. Its main activity is the management of investments.
F. Ramada was created as a result of the reorganization process of Altri, SGPS, S.A. through the demerger of the business areas of steel and storage systems, namely the participation held in F. Ramada – Aços e Indústrias, S.A., which represented the voting rights of the mentioned company. The restructuring involved a simple demerger operation, as predicted in item 1.a), article 118, of the Portuguese Companies Act ("Código das Sociedades Comerciais").
Following this process, the assets corresponding to the shareholdings of the business units of steel and storage systems, including all the resources (such as human resources, assets and liabilities) related to that business unit were transferred from Altri, SGPS, S.A. to F. Ramada.
Currently, F. Ramada is the parent company of a group of companies listed in Note 4 (designated as F. Ramada Group), and through these financial holdings structure, focuses its operations in (i) steel trade, (ii) storage systems sales, sector in which the Group already presents a significant international presence, and (iii) real estate.
As of June 30, 2017 and December 31, 2016, the Group developed its activity in Portugal, France, United Kingdom, Belgium and Spain.
The consolidated financial statements of F. Ramada Group are presented in Euro (rounded to units), which is the currency used by the Group in its operations and, therefore, is considered to be its functional currency. The operations of the foreign companies whose functional currency is different from Euro are included in the consolidated financial statements in accordance with the policy set out in Note 2.
The consolidated financial statements as of 30 June 2017 were prepared in accordance with the accounting policies defined by the International Financial Reporting Standards and in accordance with IAS 34 – Interim Financial Reporting, and include the statement of financial position, the income statement, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows, as well as selected notes to the financial statements.
The accounting policies adopted in the preparation of the consolidated financial statements of F. Ramada are consistent with the accounting policies used in the preparation of the financial statements presented for the year ended as of 31 December 2016.
During the reporting period, there were no changes in the accounting policies and no material mistakes related with previous periods were identified.
1
The companies included in the consolidated financial statements by the full consolidation method, its headquarters, percentage of participation held and main activity as of June 30, 2017, and December 31, 2016, are as follows:
| Percentage of participation | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| held | |||||||||
| Designation | Headquarters | 30.06.2017 | 31.12.2016 | Activity | |||||
| Parent company: | |||||||||
| F. Ramada Investimentos, SGPS, S.A. | Porto | - | - | Holding | |||||
| F. Ramada Group: | |||||||||
| Ramada Aços, S.A. | Ovar | 100% | 100% | Steel comercialization | |||||
| Planfuro Global, S.A. | Leiria | 100% | 100% | Manufacture of metal molds | |||||
| Universal Afir, S.A. | Ovar | 100% | 100% | Steel comercialization | |||||
| Ramada Storax, S.A. | Ovar | 100% | 100% | Production and commercialization of storage systems |
|||||
| F. Ramada II, Imobiliária, S.A. | Ovar | 100% | 100% | Real estate | |||||
| Storax, S.A. | France | 100% | 100% | Comercialization of storage systems | |||||
| Storax, Ltd. | United Kingdom | 100% | 100% | Comercialization of storage systems | |||||
| Storax Benelux, S.A. | Belgium | 100% | 100% | Comercialization of storage systems | |||||
| Storax España S.L. | Spain | 60% | 60% | Comercialization of storage systems |
All the above companies were included in the consolidated financial statements of F. Ramada Group in accordance with the full consolidation method and there were no changes during the six-month period ended June 30, 2017 in the Group's consolidation perimeter.
As of June 30, 2017, the caption "Investments in associates" includes the ownership of Expeliarmus - Consultoria, S.A. (created in 2015 and owned by 49%) by an amount equal to 59,998 Euro (49,998 Euro in December 31, 2016).
The assessment of whether there is impairment in investments in associates considers, among other things, the financial indicators of the Companies, their operating results and their profitability for the shareholder, especially taking into account the capacity to distribute dividends.
As of December 31, 2016, the caption "Investments in associates" also included the shares of Base Holding, SGPS; S.A. owned by F. Ramada Investimentos, SGPS, S.A.. This entity has its head office in Oporto and heads a group of companies which operate in the healthcare sector, namely, complementary means of diagnosis and treatment.
The use of the equity method in six-months' period ended in June 30, 2017 was made based on preliminary and unaudited consolidated financial statements of the above company. The effect on the net profit of the year was recorded on the caption "Gains/losses related with associated companies" by the amount of 991,304 Euro (2,028,057 Euro in December 31, 2016). As of June 30, 2017 the investment in the mentioned associate amounted to 17,753,698 Euro (16,762,394 Euro in December 31, 2016). The Board of Directors believes that there will not be relevant and material differences between the financial statements used to apply the equity method and the final and consolidated financial statements.
On July 19, 2017, an agreement was entered between F. Ramada - Investimentos, SGPS, S.A., jointly with the other shareholders of Base Holding, SGPS, S.A., and Medicina Laboratorial – Doutor Carlos da Silva Torres, S.A. for the sale of all its shares owned of Base Holding, SGPS, S.A..of that associated company.
The execution of the transaction is subject to prior notification to the Competition Authority ("Autoridade da Concorrência"), under the terms established in the legal regime of competition, and, for this reason, conditioned to the decision of non-opposition of the Competition Authority. It's the Board of Directors expectation that the transaction will be approved until the end of 2017.
As of June 30, 2017 and December 31, 2016, the caption "Other investments" and respective impairment losses can be detailed as follows:
| 30.06.2017 | 31.12.2016 | |
|---|---|---|
| Investments | 7,906,437 | 7,713,531 |
| Impairment losses (note 12) | (3,660,124) | (4,220,393) |
| 4,246,313 | 3,493,138 |
As of June 30, 2017, the caption includes participations that do not give rise to a significant influence on the capital of the companies Base M – Investimentos e Serviços, S.A., CEV - Consumem Verde, Biotecnologia das Plantas, S.A., and Sociedade Converde Unipessoal, Lda.. This item also includes the loans granted to these entities.
As of June 30, 2017 and December 31, 2016 these investments correspond to investments in non-public companies in which the Group has no significant influence. Their acquisition cost corresponds to a reliable approximation to their fair value, adjusted by the impairment costs.
The assessment of whether there is impairment in investments in associates considers, among other things, the financial indicators of the Companies, their operating results and their profitability for the shareholder, especially taking into account the capacity to distribute dividends.
During the six months' period ended 30 June 2017 there were no changes to the consolidation perimeter compared to 31 December 2016.
Investment properties held by F. Ramada Group relate to lands rented to third parties (Altri Group) under operational lease, through contracts signed in 2007 and 2008 with an average duration of 20 years, and with the possibility of an additional period of 6 years if certain events occur. Investment properties are measured at acquisition cost. The movement occurred in this caption during the six-month period ended as of June 30, 2017 and the year ended 31 December 2016 is as follows:
| 30.06.2017 | 31.12.2016 | |
|---|---|---|
| Opening balance (gross) | 85,953,689 | 85,963,976 |
| Aquisitions Disposals |
- - |
68,040 (78,327) |
| Closing balance (gross) | 85,953,689 | 85,953,689 |
| Impairment losses (note 12) | (1,100,000) | (1,100,000) |
| Closing balance (net) | 84,853,689 | 84,853,689 |
The leased land generated, during the six-month period ended as of June 30, 2017, income amounting, to approximately, 3,091,500 Euro (approximately 6,311,140 Euro in 2016).
The minimum future receipts for leases of forest land amount, to approximately, 6.4 million Euro in each of the following 5 years. After this period and until the end of the contracts, the minimum future receipts total, approximately 40 million Euro. The rents provided for each lease are updated at the end of each 2-year period, starting from the beginning of the civil year immediately following the signature of the contract, based on the consumer price index.
Given the land characteristics (land leased to third parties for forestry activity), frequent market transactions comparable for this type of assets do not occur. Accordingly, the Board of Directors considers that it is not possible to reliably estimate the fair value of the land, and, as such, it is recorded at acquisition cost. However, it is the Board of Directors belief that, given the amount of rents collected annually, the market value of these assets will not be significantly different from its book value.
Part of the land (amounting to, approximately, 74 million Euro) is given as collateral for certain borrowings.
In accordance with current legislation, the tax returns are subject to review and correction by the tax authorities over a period of four years (five years for Social Security), except when tax losses have occurred, tax benefits have been granted, or inspections, complaints or disputes are on-going. In these cases, depending on the circumstances, the above referred period deadlines can be extended or suspended. Therefore, the tax returns of F. Ramada and its subsidiaries for the years 2013 to 2016 may still be subject to review.
The Board of Directors of F. Ramada believes that any potential corrections arising from reviews/inspections of these tax returns by the tax authorities will not have a significant effect on the consolidated financial statements as of June 30, 2017.
The movement occurred in deferred tax assets and liabilities in the six-month period ended as of June 30, 2017 and 2016, was as follows:
| 30.06.2017 | ||
|---|---|---|
| Deferred tax assets |
Deferred tax liabilities |
|
| Balance as of January 1, 2017 | 3,673,642 | 31,125 |
| Effects on income statement | ||
| Others | 3,573 | (1,900) |
| Balance as of June 30, 2017 | 3,677,215 | 29,225 |
| 30.06.2016 | ||
| Deferred tax | Deferred tax | |
| assets | liabilities | |
| Balance as of January 1, 2016 | 1,778,714 | 35,081 |
| Effects on income statement | ||
| Others | (49,828) | - |
| Balance as of June 30, 2016 | 1,728,886 | 35,081 |
As of June 30, 2017 and December 31, 2016 the caption "Cash and cash equivalents" included in the consolidated statement of financial position can be detailed as follows:
| 30.06.2017 | 31.12.2016 | |
|---|---|---|
| Cash | 22,425 | 14,730 |
| Bank deposits | 18,523,267 | 17,205,484 |
| 18,545,692 | 17,220,214 | |
| Bank overdrafts (note 10) | (5,162,740) | (7,183,087) |
| Cash and equivalents | 13,382,952 | 10,037,127 |
As of June 30, 2017, F. Ramada's fully subscribed and paid up capital consisted of 25,641,459 shares with a nominal value of 1 Euro each. As of the same date, F. Ramada Investimentos, SGPS, S.A. held 2,564,145 own shares, corresponding to 9.999996% of the share capital of the Company, acquired by 1,641,053 Euro.
On April 26, 2017, the Board of Directors unanimously resolved to distribute gross dividends of 0.28 Euro per share.
As of June 30, 2017 and December 31, 2016, the captions "Bank loans" and "Other loans" can be detailed as follows:
| 30.06.2017 | 31.12.2016 | |||
|---|---|---|---|---|
| Current | Non current | Current | Non current | |
| 3,986,753 | 39,487,401 | 3,985,753 | 43,473,155 | |
| Bank loans | 3,986,753 | 39,487,401 | 3,985,753 | 43,473,155 |
| Commercial paper | 25,500,000 | 4,000,000 | 22,250,000 | 5,000,000 |
| Other bank loans | 7,050,005 | - | 6,650,005 | - |
| Bank overdrafts | 5,162,740 | - | 7,183,087 | - |
| Factoring | 1,511,052 | - | 1,650,941 | - |
| Other loans | 39,223,797 | 4,000,000 | 37,734,033 | 5,000,000 |
| 43,210,550 | 43,487,401 | 41,719,786 | 48,473,155 |
It is the Board of Directors understanding that the loans' book value does not differ significantly from its fair value. The nominal amount of loans as of June 30, 2017, will be reimbursed as follows:
| 30.06.2017 | 31.12.2016 | ||||
|---|---|---|---|---|---|
| Reimbursement year |
Amount | Estimated interests |
Reimbursement year |
Amount | Estimated interests |
| Current | Current | ||||
| 2017 | - | - | |||
| 2018 | 43,210,550 | 707,000 | 2017 | 41,719,786 | 757,000 |
| 43,210,550 | 707,000 | 41,719,786 | 757,000 | ||
| Non current | Non current | ||||
| 2018 | 1,000,000 | 25,000 | 2018 | 5,985,755 | 687,000 |
| 2019 | 6,000,000 | 615,000 | 2019 | 6,000,000 | 603,000 |
| 2020 | 5,000,000 | 528,000 | 2020 | 5,000,000 | 517,000 |
| 2021 | 4,000,000 | 459,000 | 2021 | 4,000,000 | 449,000 |
| 2022 | 4,000,000 | 396,000 | 2022 | 4,000,000 | 388,000 |
| 2023 | 4,000,000 | 333,000 | 2023 | 4,000,000 | 326,000 |
| 2024 | 3,987,401 | 271,000 | 2024 | 3,987,400 | 265,000 |
| 2025 | 3,500,000 | 215,000 | 2025 | 3,500,000 | 210,000 |
| 2026 | 3,500,000 | 159,000 | 2026 | 3,500,000 | 156,000 |
| 2027 | 3,500,000 | 103,000 | 2027 | 3,500,000 | 101,000 |
| 2028 | 5,000,000 | 19,000 | 2028 | 5,000,000 | 19,000 |
| 43,487,401 | 3,123,000 | 48,473,155 | 3,721,000 | ||
| 86,697,951 | 3,830,000 | 90,192,941 | 4,478,000 |
As of June 30, 2017, and December 31, 2016, the credit facilities used by the Group and the corresponding maximum amounts allowed were as follows:
| June 30, 2017 | December 31, 2016 | |||
|---|---|---|---|---|
| Authorized amount |
Used amount | Authorized amount |
Used amount | |
| Other bank loans | 21,200,000 | 7,050,005 | 21,200,000 | 6,650,005 |
| Bank overdrafts | 15,000,000 | 5,162,740 | 15,000,000 | 7,183,087 |
| Commercial paper program | ||||
| 12/2017 | 5,000,000 | 4,750,000 | 5,000,000 | 5,000,000 |
| 07/2018 | 1,750,000 | 1,250,000 | 1,750,000 | 1,750,000 |
| 08/2019 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 |
| 07/2019 | 7,500,000 | 4,000,000 | 7,500,000 | 4,000,000 |
| 07/2020 | 3,000,000 | 2,500,000 | 3,000,000 | 2,500,000 |
| 06/2020 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 |
| 07/2020 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 |
| 11/2020 | 3,000,000 | 3,000,000 | 3,000,000 | - |
| 34,250,000 | 29,500,000 | 34,250,000 | 27,250,000 |
During the six-month period ended as of June 30, 2017, these loans bear interest at normal market rates depending on the nature and term of the credit obtained.
During the six-month period ended as of June 30, 2017, and the year ended as of December 31, 2016, the Group did not enter into any loan default.
Additionally, as of June 30, 2017, there are no covenants associated with the loans obtained.
As of June 30, 2017, and December 31, 2016, the caption "Other current liabilities" can be detailed as follows:
| 30.06.2017 | 31.12.2016 | |
|---|---|---|
| Accrued expenses | ||
| Accrued payroll | 4,813,802 | 4,450,848 |
| Interests payable | 324,659 | 779,491 |
| Other | 2,916,080 | 2,101,239 |
| Deferred income | 23,624,904 | 8,317,187 |
| 31,679,445 | 15,648,765 |
The caption "Deferred income" mainly includes anticipated invoicing regarding storage systems sales.
The movements that occurred in provisions and impairment losses for the six-month period ended as of June 30, 2017 can be detailed as follows:
| Provisions | Impairment losses in current assets |
Impairment losses in investments |
Impairment losses in inventory |
Impairment losses in investments properties |
Total | |
|---|---|---|---|---|---|---|
| (note 4.3) | (note 6) | |||||
| Opening balance 01.01.2017 | 2,883,080 | 14,256,157 | 4,220,393 | 1,428,048 | 1,100,000 | 23,887,678 |
| Exchange rate variation | (297) | (193) | - | (436) | - | (926) |
| Increases | 23,222 | 161,529 | 192,906 | 10,610 | - | 388,267 |
| Reversals | (100,000) | (93,420) | (753,175) | (136) | - | (946,731) |
| Utilizations | - | (1,408,172) | - | - | - | (1,408,172) |
| Closing balance 30.06.2017 | 2,806,005 | 12,915,901 | 3,660,124 | 1,438,086 | 1,100,000 | 21,920,116 |
The increases and reversals recorded in provisions and impairment losses for the six-month period ended as of June 30, 2017, were recorded in the profit and loss statement caption "Provisions and impairment losses".
The amount recorded in the caption "Provisions" as of June 30, 2017 relates to the Board of Directors best estimate to cover possible losses arising from works carried out in the area of storage solutions. In this regard, and in view of the increasing complexity of the constructions in question, their size, and the fact that a large part of them relate to external markets, the Board of Directors decide to reinforce the provisions in the year ended December 31, 2016.
The Board of Directors believes that, based on the opinion of their legal advisors, as of June 30, 2017 there are no assets or liabilities associated with probable or possible tax contingencies that should be reported in the financial statements as of 30 June, 2017.
Earnings per share for the six-month period ended as of June 30, 2017, and 2016 were determined taking into consideration the following amounts:
| 30.06.2017 | 30.06.2016 | |
|---|---|---|
| Net profit considered for the computation of basic and diluted earnings per share | 7,061,005 | 5,749,481 |
| Number of shares Number of own shares |
25,641,459 2,564,145 |
25,641,459 2,564,145 |
| Weighted average number of shares used to compute the basic and diluted earnings per share | 23,077,314 | 23,077,314 |
| Earnings per share | ||
| Basic | 0.31 | 0.25 |
| Diluted | 0.31 | 0.25 |
There are no situations in the Group that might represent a reduction on earnings per share, arising from stock options, warrants, convertible bonds or other rights embedded in ordinary shares.
The main balances with related parties as of June 30, 2017 and 2016 are related to Altri Group and may be detailed as follows:
| Rents | ||||
|---|---|---|---|---|
| 30.06.2017 30.06.2016 |
||||
| Altri Group | 3,091,500 | 3,091,500 | ||
| 3,091,500 | 3,091,500 |
Apart from the companies included in the consolidation (Note 4), the companies considered to be related parties as of June 30, 2017, are the following:
9
In accordance with the origin and nature of the income generated by the Group, the main segments identified are as follows:
These segments were identified considering the business units which develop activities whose income and cost may be distinguished, and for which it is produced separate financial information, its operating results are reviewed and taken decisions by the management.
The segregation of activities by segments as of June 30, 2017 and 2016 is made up as follows:
| June 30, 2017 | |||||
|---|---|---|---|---|---|
| Industry | Real Estate | Intra-group eliminations |
Total | ||
| Total assets | 151,861,110 | 91,808,198 | (7,767,544) | 235,901,764 | |
| Total liabilities | 97,394,928 | 67,717,451 | (7,767,544) | 157,344,835 | |
| Operating investments (a) | 2,344,772 | - | - | 2,344,772 | |
| Profit from foreign market customers | 66,561,069 | 3,105,548 | - | 69,666,617 | |
| Profit from operations with other segments | 21,912 | 685,998 | (707,910) | - | |
| Cash-flow from operating activities (b) | 8,402,797 | 3,203,594 | - | 11,606,391 | |
| Amortizations | (2,587,035) | (199,188) | - | (2,786,223) | |
| Earnings before interest and taxes (c) | 5,815,762 | 3,004,406 | - | 8,820,168 | |
| Financial profits | 165,099 | - | (74,384) | 90,715 | |
| Financial costs | (297,567) | (542,090) | 74,384 | (765,273) | |
| Share of results of joint ventures and associated companies | 991,304 | - | - | 991,304 | |
| Earnings before taxes | 6,674,598 | 2,462,316 | - | 9,136,914 | |
| Income taxes | (1,391,257) | (675,125) | - | (2,066,382) | |
| Net profit | 5,283,341 | 1787,191 | - | 7,070,532 | |
(a) - Investments in non-current assets, except financial instruments, deferred tax assets and financial investments
(b) - Operating results + amortizations
(c) - Earnings before interest and taxes excluding Group operations
(Amounts expressed in Euro)
| June 30, 2016 | ||||
|---|---|---|---|---|
| Industry | Real Estate | Intra-group eliminations |
Total | |
| Total assets | 113,107,252 | 91,343,782 | (7,639,877) | 196,811,157 |
| Total liabilities | 63,515,639 | 70,902,961 | (7,639,877) | 126,778,723 |
| Operating investments (a) | 2,953,714 | 192,170 | - | 3,145,884 |
| Profit from foreign market customers | 59,681,113 | 3,129,697 | - | 62,810,810 |
| Profit from operations with other segments | 21,912 | 682,326 | (704,238) | - |
| Cash-flow from operating activities (b) | 7,984,043 | 2,552,906 | - | 10,536,949 |
| Amortizations | (2,254,797) | (135,684) | - | (2,390,481) |
| Earnings before interest and taxes (c) | 5,729,246 | 2,417,222 | - | 8,146,468 |
| Financial profits | 218,143 | - | (119,049) | 99,094 |
| Financial costs | (484,353) | (754,960) | 119,049 | (1,120,264) |
| Share of results of joint ventures and associated companies | 885,000 | - | - | 885,000 |
| Earnings before taxes | 6,348,036 | 1,662,262 | - | 8,010,298 |
| Income taxes | (1,579,883) | (664,586) | - | (2,244,469) |
| Net profit | 4,768,153 | 997,676 | - | 5,765,829 |
(a) - Investments in non-current assets, except financial instruments, deferred tax assets and financial investments
(b) - Operating results + amortizations
(c) - Earnings before interest and taxes excluding Group operations
These financial statements are a translation of financial statements originally issued in Portuguese in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, which, in some aspects, may not conform to or be required by the law or generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.
The financial statements were approved by the Board of Directors and authorized for issuance in July 27, 2017.
The Chartered Accountant The Board of Directors
João Manuel Matos Borges de Oliveira – Chairman
Paulo Jorge dos Santos Fernandes
Domingos José Vieira de Matos
Pedro Miguel Matos Borges de Oliveira
Ana Rebelo de Carvalho Menéres de Mendonça
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