Quarterly Report • Sep 1, 2009
Quarterly Report
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CORTICEIRA AMORIM; S.G.P.S., S.A. Sociedade Aberta
Capital Social: EUR 133 000 000,00 C.R.C. Sta. Maria da Feira NIPC e Matrícula n.º: PT 500 077 797 Edifício Amorim I Rua de Meladas, n.º 380 Apartado 20 4536-902 MOZELOS VFR PORTUGAL
Tel.: + 351 22 747 54 00 Fax: + 351 22 747 54 07
Internet: www.amorim.com/cortica.html E-mail: [email protected]
In accordance with the law and IAS 34 (Interim Financial Reporting) CORTICEIRA AMORIM, SGPS, SA, a Portuguese public company, hereby presents its
During the second quarter of 2009 (Q2 2009) ‐ and contrary to what was recorded in the first quarter of 2009 (Q1 2009) ‐ some of the leading economic indicators began to take a turn for the better; in particular, stock exchange performance and several confidence indicators had a positive development. Even the Euro zone industrial production indicator – probably the most important indicator to CORTICEIRA AMORIM – reached positive territory in May 2009 for the first time since last summer. But the 0.5% increase in May 2009 compared to April 2009 (propelled by the positive performance of the heavy‐weighted Germany and France) did not offset the fall (‐16.8%) as compared to May 2008.
Similarly to what was reported in Q1 2009, the cork industry as well as the Portuguese industry in general faced a significant slackness in demand. Despite the announcement of exceptional measures to support the cork sector, the financial situation of cork manufacturing companies continued to deteriorate in Q2 2009.
It should also be stressed that the world alcoholic beverages market has been showing a deconsolidation trend. With a view to building and maintaining a sounder balance sheet, large multinational companies have been disposing of some business branches, restructuring their business and recentering their activities. The effects of this move – that are believed to be positive for CORTICEIRA AMORIM – are not to be felt in a very near future.
In reaction to the difficult moment that the world economy was facing since November 2008, on February 3, 2009 CORTICEIRA AMORIM announced its business streamlining by adapting its production capacity to a falling demand for its products. The goal of this measure ‐ together with a set of other measures implemented in‐house (with a lesser impact on the public opinion) ‐ was to make the organization more sustainable, both financially and economically, in view of a significant decrease in sales of its products.
Among such measures some deserve a special mention, for example, measures aimed at increasing productivity and those aimed at adapting the number of employees to the new pace of demand. It is our intention that this move towards more agile practices will go beyond the scope of the individual companies in order to benefit other member companies of CORTICEIRA AMORIM. In view of increasing demanding delivery deadlines our objective is not to fail any order due to difficulties in meeting the delivery terms and conditions.
Sales in Q2 2009 reached ‐11.4%, thus decelerating the decrease in sales pace in Q1 2009 (‐17.4%). During the first six months of 2009 sales were down 14.4% compared to the same period a year ago.
As far as output is concerned CORTICEIRA AMORIM reported a 15.4% decrease. Attention shall be drawn to the fact that, in May, the industrial production of its two main markets fall 16.8% in the Euro zone and to 13.5% in the USA. CORTICEIRA AMORIM is considered to have outperformed the cork industry in general.
Opposing the effects of the above negative climate, we shall not fail to mention the occurrence of two exogenous factors positively influencing CORTICEIRA AMORIM: maintaining quite low benchmark interest rates and, despite the more recent devaluation trend, obtaining a more favourable USD average exchange rate in comparison to the first six months of 2008.
In spite of huge difficulties faced by CORTICEIRA AMORIM as a result of a deteriorating world economy, the Company managed to achieve two essential goals:
We are aware that we are still at the beginning of a long process of recovery in profitability levels, but the accomplishment of these above two purposes – although, for the moment, in respect of only a quarter and, therefore, subject to reversals in future ‐ is a good reason for increasing the level of confidence and enthusiasm of the whole team that bolsters CORTICEIRA AMORIM's leading position in the world's cork industry.
The Raw Material BU – in its role as a main supplier to the value chain of CORTICEIRA AMORIM – experienced the effect of a decreasing downstream business. Some batches of cork yielded a poor return both in Q1 2009 and in Q2 2009. The combination of these two adverse factors resulted in a negative current EBIT (1.3 M€) in the first six months of 2009. At the date of this report – and as far as cork purchases is concerned ‐ cork requirements for the next financial year were practically fulfilled. Attention shall be drawn to the fact that cork purchases were made at a time when a large part of the purchasers in the market were facing financial difficulties and, in addition, it was the year with the poorest cork harvest over many years.
Benefitting from the good performances achieved in May and June – similar to the ones attained in the best performing months of the last financial year – the Cork Stoppers BU has largely outperformed the other Business Units of CORTICEIRA AMORIM. If it is too soon to speak about sales recovery in absolute terms (‐7.6% in Q2 2009 versus ‐14% in Q1 2009), an increase in gross margin and a decrease in operating costs allowed to offset the negative impact of a reduction in sales. In the first half of 2009 the current EBIT reached 9.4 M€ (‐8.1%) showing a 16.8% decrease in Q1 2009 and a 2% decrease in Q2 2009.
Such pace of reduction in Sales deceleration is due to a cumulative series of factors, in particular because of the fact that wineries restarted bottling because a new grape harvest season was about to begin soon and the effect of CORTICEIRA AMORIM's market share increase. Despite the fact that overriding crises affect the whole industrial fabric, they have a lower impact on the best positioned companies, not only as regards their operational situation but also their financial position.
During the first six months of 2009 – and with the exception of Neutrocork® and colmated cork stoppers ‐ the sales of all types of cork stoppers decreased both in terms of quantity and value. Among the most important markets, only the US market did not undergo a decrease in sales; the companies of this BU reported an approx. 3% increase in value in the US market. The French market, the most important bottling market, was deeply affected by a decreasing demand. The last available official data on the champagne market showed a decrease by 34% in February 2009 and by 23% in May 2009, although the fall in the sales of the Maisons reached 28%. As far as the Bordeaux market is concerned, it is estimated that Bordeaux wine bottling shall have decreased by 17%. In view of these drops, the sales performance of CORTICEIRA AMORIM in the French market (‐10% in the first six months of 2009) denotes an important market share gain. The good sales performance of the new Acquamark® cork stopper is also worth of a special mention.
The sales made and the profit obtained by this BU did not undergo any significant changes in Q2 2009. The crisis hit both the European and the US construction industry and the sales of this BU continued to be highly penalized by that crisis. Sales fell by 18.7% to 56.4 M€. This decrease extended to all product families in a similar way. With the exception of one or other less important market, the decrease in sales affected all the markets and, in particular the Russian and the Spanish markets, where a decrease higher than 50% was observed. As previously mentioned in the interim report Q1 2009, the Russian market underwent an almost total stagnation in the first two months of 2009. Sales to the Russian market were resumed at a moderate pace only in Q2 2009.
Despite a heavy investment in advertising, the sales of new products and new collections did not bear the desirable fruitful effects yet. Luxury Vinyl Tiles (LVT) were the exception, with the sales of this product falling just short of the target. As far as the other products is concerned, it is expected that sales in the second half of 2009 will be in the region of the planned sales target.
The effect of a sharp drop in sales added to the effect of high operational costs resulted in an EBIT of ‐3.9 M€ (+3.8 M€ in the first half of 2008). Attention shall be drawn to the fact that operational costs in the first six months of 2009 suffered the impact of the consolidation entry of Cortex (approx. 0.9 M€). In addition to this, advertising costs relating to the new collection was concentrated on the first half, having resulted in an addition of 1.6 M€ to this item. Of note are also the costs incurred with the new plant, which costs relate to an increase in the weight of floating floors vis‐à‐ vis total sales as well as information system upgrading costs. The impact of costs will be reduced in the second half of 2009 as a result of a series of measures under way, especially in respect of advertising costs as well as several measures taken with a view to progressively reducing other costs. We anticipate that operating costs will have increased at a more moderate pace by the end of the current financial year.
The sales of this BU continued to be affected by a steep drop in orders from practically every market, in particular from the US construction and automotive sectors. In line with what occurred in the Floor and Wall Coverings BU, this BU faced also an almost total stagnation that hit the Russian market in the first months of the current financial year. Sales decreased by 20.4% in the first six months of 2009 but, even so, the pace of decrease of sales decelerated because in Q1 2009 sales had sunk 24.9%.
In comparison to the current EBIT performance in Q1 2009, a significant recovery shall be pointed out in Q2 2009. In view of ‐1.5 M€ registered in Q1 2009, in Q2 2009, current EBIT reached 0.6 M€, a positive – although low – value. The aforementioned slight sales recovery, a better gross margin percentage and, particularly, the impact of operating cost reduction in Q2 2009 were the most important factors that led to a trend reversal in the EBIT.
The Composite Cork BU was the most affected BU by the reduction of personnel. However, this BU is getting ready to give a quick answer when the demand for its products shall be at a level similar to the one existing prior to the current slump.
The sales made by this BU decreased by 15.9% in the first six months of 2009, a slight recovery in comparison to Q1 2009 (‐16.7%). The sharp decrease in sales to the Middle East – in particular to the United Arab Emirates ‐ is the major justification for this drop. In line with what occurred in Q1 2009, EBIT continued to be supported by better gross
margin percentages as a result of a less weight of goods vis‐à‐vis total sales, of a higher selling price for its main product (that is, expanded pure agglomerated cork) and with raw material yielding a better return. The EBIT achieved 0.65 M€ in the first six months of 2009 slightly less than the 0.71 M€ EBIT in the first half of 2008.
As described in the business summary of each BU, the consolidated sales of CORTICEIRA AMORIM were adversely affected by a reduction in demand for its products. This situation that was being felt since November 2008 led to a 14.4% decrease in consolidated sales in the first six months of 2009, with consolidated total sales amounting to 212.5 M€. In addition, as it may be inferred from the business summary of each BU, the pace of sales decrease slowed in Q2 2009. In this period, sales decreased by 11.4%, having the Cork Stoppers BU largely contributed to this deceleration. It is estimated that every Business Unit shall have gained market shares in its respective markets.
Gross margin percentages both for Q1 2009 and Q2 2009 as well as for the six‐month period ended in June 30, 2009 were fairly similar to the ones recorded in the corresponding periods last year. In view of the fact that no significant increases or decreases in the cost of raw material were reported, it can be said that in general CORTICEIRA AMORIM managed to maintain the selling price of its products. This effort of having been able to maintain the selling prices – even if assisted by a stronger average USD exchange rate when compared with the average USD exchange rate in the first six months of 2008 ‐ has to be understood in a general framework of a falling demand for industrial products and for cork‐related products.
Operating costs totalled 100 M€ and are inclusive of an amount of 4.5 M€ relating to severance costs. These costs are the result of a reduction of personnel announced in the first days of February 2009.
As far as operating costs is concerned, attention shall also be drawn to the fact that the 6% decrease in both external supplies and personnel costs – the two most important items of operating costs – in the first half of 2009 (even if restructuring costs are not taken into account) is still far from offsetting the effect of the sales decrease (‐14.4%) or the gross margin reduction (‐16.5%).
Impairments totalled 1.4 M€ and were largely due to impairment loss of trade receivables. The difficult situation of many companies (in particular, building companies) prevented them from honouring their financial commitments, leading to a record of high costs in this account. On the other hand, exchange gains and investment subsidies related gains in the first half of 2009 offset, at least partially, those costs.
Total operating cost performance shows an approx. 3 M€ decrease in Q2 2009 in comparison to Q1 2009. This decrease is exclusive of the effect of the above restructuring process. In comparison with the first six months of 2008 it can be said that operating cost constraint resulted in a positive Earnings Before Taxes (EBT) and even a net profit in Q2 2009. However, this favourable evolution was only possible due to the the exceptional performance of the financial function.
The current Q1 EBIT was slightly negative in comparison to 7.1 M€ at the end of Q1 2008. However, the EBIT performed rather favourably in Q2 2009 and showed even a trend reversal. In fact, after a ‐0.09 M€ registered in Q1 current Q2 EBIT achieved a positive value (3.7 M€). As referred to previously, the slight sales recovery, the maintenance of a gross margin percentage and, particularly, the impact of an operating cost reduction were the most important factors that led to a trend reversal in EBIT.
The second reason for an improvement in Q2 2009 was an interest payment reduction. Based on a reduction in net debt (‐37 M€ from year‐end 2008) and in interest rates, this resulted in the payment of less 1.5 M€ of interest than in the first six months of 2008. The measures taken relating to purchases (particularly purchases of raw material), CAPEX retrenchment and the beginning of confirming transactions with our suppliers contributed to the above reduction in net debt.
After income tax estimation and minority interests, the net loss for the six‐month period ended in June 30, 2009 was ‐3,486 K€, an improvement in comparison to ‐4,595 K€ in Q1 2009. This signifies that net profit in Q2 2009 amounted to 1,109 K€.
Being comparable, the amount shown in the Balance Sheet for the six‐month period ended in June 30, 2009 is approx. 28 M€ less than that shown in the Balance Sheet for the year ended December 2008 (547 M€ versus 575 M€). Inventory decrease (28 M€) and a net debt reduction (36 M€) are the most important factors responsible for a decrease in the consolidated Balance Sheet of CORTICEIRA AMORIM.
As regards the net debt structure, the weight of medium and long term debt increased over the first six months of 2009. This increase led again to a 2:3 ratio for the medium and the long term debt versus a 1:3 ratio for the short term debt.
In spite of CORTICEIRA AMORIM's loss, due to the said decrease of total Balance Sheet, its equity to total assets ratio improved again, rising from 42.9% at the end of 2008 to 44.2% at the end of the first six months of 2009.
| 2Q09 | 2Q08 | Variation | 1H09 | 1H09 | Variation | |
|---|---|---|---|---|---|---|
| Sales | 110.299 | 124.504 | ‐ 11,41% | 212.473 | 248.124 | ‐ 14,37% |
| Gross Margin – Value | 49.929 | 59.227 | ‐ 15,70% | 99.058 | 118.635 | ‐ 16,50% |
| % 1) | 46,38 | 46,70 | ‐0,32 p.p. | 46,10 | 46,68 | ‐0,58 p.p. |
| Operating Costs ‐ current 2) | 46.247 | 50.420 | ‐ 8,28% | 95.466 | 102.680 | ‐ 7,03% |
| EBITDA ‐ current | 9.162 | 15.004 | ‐ 38,94% | 14.649 | 28.177 | ‐ 48,01% |
| EBIT ‐ current | 3.682 | 8.807 | ‐ 58,19% | 3.592 | 15.955 | ‐ 77,49% |
| Res tructuring cos ts | 670 | 0 | N/A | 4.515 | 0 | N/A |
| Net Income | 1.109 | 3.510 | ‐ 68,40% | ‐3.486 | 6.890 | N/A |
| Earnings per share 3) | 0,0085 | 0,0269 | ‐ 68,34% | ‐0,0268 | 0,0528 | N/A |
| EBITDA/Net Interest (x) | 5,72 | 4,31 | + 1,41 X | 3,63 | 4,33 | ‐ 0,70 X |
| Equity/Net Assets | ‐ | ‐ | ‐ | 44,16% | 40,77% + 3,39 p.p. | |
| Net Bank Debt | ‐ | ‐ | ‐ | 185.595 | 238.931 | ‐ 22,32% |
1) Related to Production
2) Includes financial costs and revenues other than interest, and extraordinary items
3) Net Income / Average outstanding shares (euros/share)
The launch of CORTICEIRA AMORIM's Sustainability Report 2008 distinguishes once again our Organization ‐ which is the only company in the cork industry that publishes its proposed sustainability objectives and commitments ‐ and confirms our Company's strategic commitment towards a sustainable development. This is the only possible way to ensure ‐ both in the medium and long term ‐ a successful leadership based on responsible competitiveness and the creation of value for all stakeholders.
This Sustainability Report provides details of the major objectives achieved and the most important initiatives undertaken, of which the following are worth of a special mention:
CORTICEIRA AMORIM is committed to achieve a number of specific goals by reducing its CO2 emissions by a further 4.5%, by increasing investment in R&D, by improving its main indicators in occupational health and safety and by increasing its employee training and education.
The reversal of some indicators will led to think that the recovery will be certain for the second half. CORTICEIRA AMORIM conviction is that the recovery will only be materially felt later.
Because of this, second half planning is taking in account actual demand levels. Gaining all possible orders will be, together with operating costs reduction, the main priority. This will mean that all major efforts made during the first half have to be maintained. As an unfavourable factor, USD exchange rate will put a additional pressure in the US business margins. Offsetting these effect interest rates will present lower rates during second half.
As a final goal, CORTICEIRA AMORIM wants that second half activity will reverse the losses of first half, so that year‐ end will register a profit.
During the Company's long history, which already encompasses three centuries, it has successfully coped with profound, sometimes radical transformations in society and come through two World Wars. Throughout this history, CORTICEIRA AMORIM as correctly and in a timely fashion identified the risks and uncertainties associated with its business and faced them with confidence as opportunities and challenges.
CORTICEIRA AMORIM which has 139 years of accumulate know‐how of the cork sector, recognises that over the short‐ term its performance can be affected by the following factors, which are closely scrutinised and evaluated:
From the long term factors that CORTICEIRA AMORIM recognises as possibly affecting its performance, the following are to be highlighted:
During first half 2009, CORTICEIRA AMORIM purchased in several stock market sessions 498,349 shares, corresponding to 0.375% of its share capital, at a average price of 0.599€/share, totalling 298,683.48 €, as set below:
| Session | Description | Average Price (€) | Total (€) | |
|---|---|---|---|---|
| 09‐04‐2009 | Purchase of 170 000 shares | |||
| Transactions: | 10.000 | 0,56 | 5.600,00 | |
| 3.234 | 0,56 | 1.811,04 | ||
| 8.400 | 0,57 | 4.788,00 | ||
| 2.000 | 0,57 | 1.140,00 | ||
| 1.366 | 0,57 | 778,62 | ||
| 6.034 | 0,57 | 3.439,38 | ||
| 1.966 | 0,57 | 1.120,62 | ||
| 3.700 | 0,58 | 2.146,00 | ||
| 6.300 | 0,58 | 3.654,00 | ||
| 5.700 | 0,58 | 3.306,00 | ||
| 4.300 | 0,58 | 2.494,00 |
| 5.000 | 0,58 | 2.900,00 | ||
|---|---|---|---|---|
| 5.000 | 0,58 | 2.900,00 | ||
| 5.000 | 0,58 | 2.900,00 | ||
| 543 | 0,58 | 314,94 | ||
| 2.500 | 0,58 | 1.450,00 | ||
| 3.500 | 0,58 | 2.030,00 | ||
| 3.457 | 0,58 | 2.005,06 | ||
| 793 | 0,58 | 459,94 | ||
| 4.207 | 0,58 | 2.440,06 | ||
| 5.000 | 0,58 | 2.900,00 | ||
| 5.000 | 0,57 | 2.850,00 | ||
| 5.000 | 0,57 | 2.850,00 | ||
| 5.000 | 0,57 | 2.850,00 | ||
| 5.000 | 0,57 | 2.850,00 | ||
| 5.000 | 0,57 | 2.850,00 | ||
| 10.000 | 0,57 | 5.700,00 | ||
| 10.000 | 0,57 | 5.700,00 | ||
| 6.792 | 0,57 | 3.871,44 | ||
| 793 | 0,58 | 459,94 | ||
| 2.415 | 0,58 | 1.400,70 | ||
| 1.585 5.415 |
0,58 0,58 |
919,30 3.140,70 |
||
| 585 | 0,58 | 339,30 | ||
| 19.415 | 0,58 | 11.260,70 | ||
| 14‐04‐2009 | Purchase of 277 675 shares | |||
| Transactions: | 10.000 | 0,59 | 5.900,00 | |
| 146 | 0,61 | 89,06 | ||
| 5.000 | 0,61 | 3.050,00 | ||
| 4.000 | 0,61 | 2.440,00 | ||
| 1.000 | 0,61 | 610,00 | ||
| 35.000 | 0,61 | 21.350,00 | ||
| 10.000 | 0,61 | 6.100,00 | ||
| 1.000 | 0,61 | 610,00 | ||
| 10.000 | 0,61 | 6.100,00 | ||
| 33.854 | 0,61 | 20.650,94 | ||
| 6.146 | 0,61 | 3.749,06 | ||
| 3.854 | 0,61 | 2.350,94 | ||
| 11.146 | 0,61 | 6.799,06 | ||
| 10.000 | 0,61 | 6.100,00 | ||
| 10.000 | 0,61 | 6.100,00 | ||
| 40.000 | 0,61 | 24.400,00 | ||
| 10.000 | 0,61 | 6.100,00 | ||
| 1.000 | 0,61 | 610,00 | ||
| 9.000 | 0,61 | 5.490,00 | ||
| 8.854 | 0,61 | 5.400,94 | ||
| 1.251 | 0,61 | 763,11 | ||
|---|---|---|---|---|
| 6.424 | 0,61 | 3.918,64 | ||
| 3.576 | 0,61 | 2.181,36 | ||
| 26.424 | 0,61 | 16.118,64 | ||
| 5.000 | 0,61 | 3.050,00 | ||
| 5.000 | 0,61 | 3.050,00 | ||
| 10.000 | 0,61 | 6.100,00 | ||
| 15‐04‐2009 | Purchase of 50 674 shares | |||
| Transactions: | 7.150 | 0,62 | 4.433,00 | |
| 1.210 | 0,62 | 750,20 | ||
| 9.314 | 0,63 | 5.867,82 | ||
| 686 | 0,63 | 432,18 | ||
| 9.314 | 0,63 | 5.867,82 | ||
| 10.000 | 0,63 | 6.300,00 | ||
| 13.000 | 0,63 | 8.190,00 | ||
| Total shares purchased during first half 2009: | 498.349 | 298.683,48 |
No sales of treasury stock were made.
As of June 30, 2009, CORTICEIRA AMORIM held 3 087 683 of treasury stock, representing 2.322% of its own share capital.
These transactions, as described above, were achieved profiting from a good market opportunity and were possible because of the sound financial position of the company. These transactions were considered to have no material impact in the share market price and free float.
Qualified stockholders list as of June 30, 2009:
| Stockholder | Stocks | % |
|---|---|---|
| (quantity) | ||
| Amorim Capital, SGPS, SA | 90.162.161 | 67,791% |
| Luxor ‐ Sociedade Gestora de Participações Sociais, S.A. | 3.069.230 | 2,308% |
| Portus Security Corretora de Mercadorias, Ltda. | 7.400.000 | 5,564% |
| Directamente | 6.400.000 | 4,812% |
| Via Accionista/Gestor | 1.000.000 | 0,752% |
| Bestinver Gestión, SGIIC, S.A por imputação de: | 6.752.309 | 5,077% |
| BESTINVER BOLSA, F.I. | 4.541.582 | 3,415% |
| BESTINFOND F.I. | 1.267.969 | 0,953% |
| BESTINVER MIXTO, F.I. | 545.929 | 0,410% |
| SOIXA SICAV, S.A. | 163.296 | 0,123% |
| TEXRENTA INVERSIONES SICAV, S.A. | 31.111 | 0,023% |
| CORFIN INVERSIONES SICAV, S.A. | 25.103 | 0,019% |
| RODAON INVERSIONES, SICAV, S.A. | 21.602 | 0,016% |
| TIBEST CINCO, SICAV, SA | 18.965 | 0,014% |
| INVERS. EN BOLSA SIGLO XXI, SICAV, S.A. | 17.209 | 0,013% |
| ATON INVERSIONES SICAV, SA | 13.384 | 0,010% |
| Total qualified stockholders | 116.587.087 | 89,981% |
|---|---|---|
| Commerzbank AG Via Dresdner Bank AG |
9.203.387 9.203.387 |
6,920% 6,920% |
| IBERFARMA SICAV, S.A. | 2.569 | 0,002% |
| TAWARZAR 2‐S2 SICAV, S.A. | 3.440 | 0,003% |
| Opec Inversiones, SICAV, S.A. | 3.720 | 0,003% |
| ZAMARRON SICAV, S.A. | 4.068 | 0,003% |
| HELDALIN INVERSIONES SICAV, S.A. | 4.133 | 0,003% |
| LINKER INVERSIONES, SICAV, SA | 5.359 | 0,004% |
| CAMPO DE ORO, SICAV, S.A. | 5.576 | 0,004% |
| Cartera Millennium SICAV, S.A. | 6.592 | 0,005% |
| ACCS., CUPS. Y OBS. SEGOVIANAS, SICAV, S.A. | 7.224 | 0,005% |
| ENTRECAR INVERSIONES, SICAV, S.A. | 8.971 | 0,007% |
| PASGOM INVERSIONES, SICAV, S.A. | 9.645 | 0,007% |
| DIVALSA DE INVERSIONES SICAV, SA | 10.491 | 0,008% |
| H202 Inversiones SICAV, S.A. | 10.875 | 0,008% |
| MERCADAL DE VALORES SICAV, SA | 11.691 | 0,009% |
| TIGRIS INVERSIONES, SICAV, SA | 11.805 | 0,009% |
Amorim ‐ Investimentos e Participações, S.G.P.S., S.A., held, as of June 30, 2009, an indirect qualified participation in CORTICEIRA AMORIM (90 162 161 shares corresponding to 67,791% of its share capital). This indirect participation was held through Amorim Capital ‐ Sociedade Gestora de Participações Sociais, S.A. A Amorim – Investimentos e Participações, S.G.P.S., S.A. is 100% held by Interfamília II, S.G.P.S., S.A.
As of June 30, 2009, CORTICEIRA AMORIM held 3 087 683 of treasury stock.
After June 30, 2009, and up to the date of the present report, no relevant events have occurred that will materially affect the financial position and future results of CORTICEIRA AMORIM and the group of affiliated companies included in the consolidated company.
The Board of Directors would like to take this opportunity to express its gratitude to:
To all our Employees, whose willingness and commitment have contributed so much to the development and growth of the companies belonging to the CORTICEIRA AMORIM Group, we express our sincere appreciation.
In accordance with line c) of number 1 of article 246 of the Portuguese Securities Code, the members of the Board of Directors state that, to the best of their knowledge, the first semester 2009 accounts and other documents included in the statement of accounts were drawn up in accordance with the applicable accounting standards, giving a true and accurate account of assets and debts, of the financial situation and profits/losses of CORTICEIRA AMORIM, S.G.P.S., S.A. and the companies that are consolidated by the group. They also state that the management report faithfully expresses the business evolution, performance and position of CORTICEIRA AMORIM, S.G.P.S., S.A. and the companies that are consolidated by the Group and that the report includes a special chapter describing the main risks and uncertainties of the Company's businesses.
Mozelos, July 31, 2009
The Board of Directors of CORTICEIRA AMORIM, S.G.P.S., S.A.
António Rios de Amorim Chairman of the Board of Directors
Joaquim Ferreira de Amorim Member of the Board of Directors
Member of the Board of Directors
Luísa Alexandra Ramos Amorim Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
| thousand euros | ||||
|---|---|---|---|---|
| Notes | June 2009 |
December 2008 |
June 2008 |
|
| Assets | ||||
| Property, plant and equipment | VI | 178.531 | 179.777 | 174.925 |
| Investment property | VI | 9.328 | 9.349 | 9.369 |
| Goodwill | VII | 18.798 | 13.498 | 13.440 |
| Investments in associates | III e VIII | 5.516 | 10.427 | 3.232 |
| Intangible assets | VI | 772 | 808 | 543 |
| Other financial assets | VIII | 2.502 | 2.490 | 5.848 |
| Deferred tax assets | IX | 10.504 | 8.224 | 10.286 |
| Non-current assets | 225.950 | 224.573 | 217.642 | |
| Inventories | X | 177.735 | 205.659 | 214.952 |
| Trade receivables | XI | 111.379 | 103.423 | 124.247 |
| Current tax assets | X11 | 14.782 | 20.322 | 19.774 |
| Other current assets | XIII | 11.344 | 16.148 | 15.650 |
| Cash and cash equivalents | XIV | 6.146 | 4.596 | 6.318 |
| Current assets | 321.387 | 350.149 | 380.942 | |
| Total Assets | 547.337 | 574.722 | 598.584 | |
| Equity | ||||
| Share capital | XV | 133.000 | 133.000 | 133.000 |
| Own shares | XV | $-2.800$ | $-2.501$ | $-2.501$ |
| Other reserves | XV | 104.635 | 100.480 | 96.710 |
| Net Income | $-3.486$ | 6.153 | 6.890 | |
| Minority interest | XVI | 10.308 | 9.593 | 9.493 |
| Equity | 241.656 | 246.724 | 243.592 | |
| Liabilities | ||||
| Interest-bearing loans | XVII | 130.014 | 118.266 | 132.520 |
| Other borrowings and creditors | XIX | 8.804 | 7.728 | 6.201 |
| Provisions | XXVII | 4.445 | 4.732 | 4.597 |
| Deferred tax liabilities | 1X | 5.240 | 5.002 | 5.579 |
| Non-current liabilities | 148.503 | 135.728 | 148.898 | |
| Interest-bearing loans | XVII | 61.727 | 109.292 | 112.729 |
| Trade payables | XVIII | 41.967 | 33.267 | 32.033 |
| Other borrowings and creditors | XIX | 44.294 | 37.955 | 49.544 |
| Tax liabilities | XX | 9.190 | 11.756 | 11.790 |
| Current liabilities | 157.178 | 192.270 | 206.095 | |
| Total Liabilities and Equity | 547.337 | 574.722 | 598.584 |
| thousand euros | |||
|---|---|---|---|
| Notes | 1H2009 | 1H2008 | |
| Sales | $\vee$ | 212.473 | 248.124 |
| Costs of goods sold and materials consumed | $-115.896$ | $-135.500$ | |
| Change in manufactured inventories | 2.481 | 6.012 | |
| Gross Margin | 99.058 | 118.636 | |
| 46,1% | 46,7% | ||
| Third party supplies and services | XXI | 36.977 | 39.820 |
| Staff costs | XXII | 47.768 | 49.827 |
| Impairments of assets | XXIII | 1.415 | 363 |
| Other gains $(+)$ and cost $(-)$ | XXIV | 1.751 | $-448$ |
| EBITDA - current | 14.649 | 28.178 | |
| Depreciation | VI | 11.057 | 12.222 |
| EBIT - current | 3.592 | 15.956 | |
| Restructuring costs | XXII | 4.515 | $\Omega$ |
| Net interest | XXV | $-4.030$ | $-6.505$ |
| Share of (loss)/profit of associates | VIII | 478 | 444 |
| Profit before tax | $-4.474$ | 9.895 | |
| Income tax | IX | $-1.323$ | 2.410 |
| Profit after tax | $-3.151$ | 7.485 | |
| Minority interest | XVI | 335 | 594 |
| Net Income attributable to the equity holders of Corticeira Amorim | $-3.486$ | 6.891 | |
| Earnings per share - Basic e Diluted (euros per share) | XXX | $-0,027$ | 0,053 |
| thousand euros | ||
|---|---|---|
| 2Q2009 | 2Q2008 | |
| Sales | 110.299 | 124.504 |
| Costs of goods sold and materials consumed | $-57.716$ | $-67.607$ |
| Change in manufactured inventories | $-2.654$ | 2.331 |
| Gross Margin | 49.929 | 59.227 |
| 46,4% | 46,7% | |
| Third party supplies and services | 17.798 | 20.248 |
| Staff costs | 23.424 | 24.393 |
| Impairments of assets | 195 | 206 |
| Other gains (+) and cost (-) | 650 | 623 |
| EBITDA - current | 9.162 | 15.003 |
| Depreciation | 5.480 | 6.197 |
| EBIT - current | 3.682 | 8.807 |
| Restructuring costs | 670 | $\Omega$ |
| Net interest | $-1.601$ | $-3.481$ |
| Share of (loss)/profit of associates | 171 | 215 |
| Profit before tax | 1.582 | 5.540 |
| Income tax | 302 | 1.811 |
| Profit after tax | 1.279 | 3.729 |
| Minority interest | 171 | 219 |
| Net Income attributable to the equity holders of Corticeira Amorim | 1.109 | 3.510 |
| Earnings per share - Basic e Diluted (euros per share) | 0,008 | 0,027 |
| thousand euros | ||
|---|---|---|
| 1H2009 | 1H2008 | |
| Net Income (before Min. Interest) | ‐3.151 | 7.485 |
| Cha nge in deriva tive fina ncial ins truments fair val ue | ‐2.350 | 130 |
| Cha nge in transla tion di fferences | 354 | ‐876 |
| Net Income directly registered in Equity | ‐1.996 | ‐746 |
| Total Net Income registered | ‐5.147 | 6.739 |
| Attributable to: | ||
| Corticei ra Amorim Sha reholders | ‐5.482 | 6.145 |
| Mi nori ty Interes ts | 335 | 594 |
| thousand euros | ||
|---|---|---|
| 2Q2009 | 2Q2008 | |
| Net Income (before Min. Interest) | 1.279 | 3.729 |
| Cha nge in deriva tive fina ncial ins truments fair val ue | ‐184 | 174 |
| Cha nge in transla tion di fferences | 12 | ‐771 |
| Net Income directly registered in Equity | ‐172 | ‐597 |
| Total Net Income registered | 1.107 | 3.132 |
| Attributable to: | ||
| Corticei ra Amorim Sha reholders | 936 | 2.913 |
| Mi nori ty Interes ts | 171 | 219 |
| thousand euros | ||
|---|---|---|
| 1H2009 | 1H2008 | |
| OPERATING ACTIVITIES | restatement | |
| Collections from customers | 213.034 | 246.539 |
| Payments to suppliers | $-141.614$ | $-207.938$ |
| Payments to employees | $-47.471$ | $-45.219$ |
| Operational cash flow | 23.949 | $-6.618$ |
| Payments/collections - income tax | $-2.096$ | $-1.842$ |
| Other collections/payments related with operational | 27.384 | 27.014 |
| CASH FLOW BEFORE EXTRAORDINARY ITEMS | 49.237 | 18.554 |
| INVESTMENT ACTIVITIES | ||
| Collections due to: | ||
| Tangible assets | 112 | 973 |
| Investment property | 22 | 413 |
| Interests and similar gains | 251 | 129 |
| Investment subsidies | 3.652 | 2.571 |
| Dividends | 0 | 100 |
| Payments due to: | ||
| Tangible assets | $-9.755$ | $-12.978$ |
| Financial investments | $-21$ | $-1.338$ |
| Intangible assets | -8 | $-15$ |
| CASH FLOW FROM INVESTMENTS | $-5.747$ | $-10.145$ |
| FINANCIAL ACTIVITIES | ||
| Collections due to: | ||
| Loans | $\Omega$ | 5.462 |
| Others | 78 | 82 |
| Payments due to: | ||
| Loans | $-35.479$ | $\Omega$ |
| Interests and similar expenses | $-4.816$ | $-6.852$ |
| Dividends | $-177$ | $-8.087$ |
| Acquisition of treasury stock | $-299$ | $-38$ |
| Others | $-386$ | $-315$ |
| CASH FLOW FROM FINANCING | $-41.079$ | $-9.748$ |
| Change in cash | 2.411 | $-1.339$ |
| Exchange rate effect | 41 | $-349$ |
| Perimeter effect | ||
| Cash at beginning | $-2.488$ | $-2.835$ |
| Cash at end | $-36$ | $-4.523$ |
| thousand euros | ||
|---|---|---|
| 2Q2009 | 2Q2008 | |
| OPERATING ACTIVITIES | restatement | |
| Collections from customers | 112.449 | 133.674 |
| Payments to suppliers | $-68.456$ | $-127.527$ |
| Payments to employees | $-19.713$ | $-21.620$ |
| Operational cash flow | 24.280 | $-15.473$ |
| Payments/collections - income tax | $-1.189$ | $-1.415$ |
| Other collections/payments related with operational | 13.245 | 33.854 |
| CASH FLOW BEFORE EXTRAORDINARY ITEMS | 36.336 | 16.966 |
| INVESTMENT ACTIVITIES | ||
| Collections due to: | ||
| Tangible assets | 86 | $-34$ |
| Investment property | $\mathbf{1}$ | 352 |
| Interests and similar gains | 102 | 36 |
| Investment subsidies | 2.988 | 2.571 |
| Dividends | 0 | 100 |
| Payments due to: | ||
| Tangible assets | $-5.207$ | $-8.490$ |
| Financial investments | $-17$ | -937 |
| Intangible assets | -8 | 142 |
| CASH FLOW FROM INVESTMENTS | $-2.055$ | $-6.260$ |
| FINANCIAL ACTIVITIES | ||
| Collections due to: | ||
| Loans | 0 | 2.153 |
| Others | 36 | 37 |
| Payments due to: | ||
| Loans | $-29.047$ | $\Omega$ |
| Interests and similar expenses | $-2.957$ | $-5.039$ |
| Dividends | $-177$ | $-8.087$ |
| Acquisition of treasury stock | $-299$ | 0 |
| Others | $-197$ | $-150$ |
| CASH FLOW FROM FINANCING | $-32.641$ | $-11.086$ |
| Change in cash | 1.640 | $-380$ |
| Exchange rate effect | 30 | $-256$ |
| Perimeter effect | ||
| Cash at beginning | $-1.707$ | $-3.887$ |
| Cash at end | $-36$ | $-4.523$ |
| thousand euros | |||||||
|---|---|---|---|---|---|---|---|
| Balance Beginning |
Approp. of N‐1 profit |
Dividends | Net Profit N |
Increases / Decreases |
Translation Differences |
End Balance |
|
| June 30, 2009 | |||||||
| Equity: | |||||||
| Sha re Capi tal | 133.000 | ‐ | ‐ | ‐ | ‐ | ‐ | 133.000 |
| Trea s ury Stock ‐ Fa ce Value | ‐2.589 | ‐ | ‐ | ‐ | ‐499 | ‐ | ‐3.088 |
| Trea s ury Stock ‐ Dis counts and Premi ums | 88 | ‐ | ‐ | ‐ | 199 | ‐ | 287 |
| Paid‐in Capi tal | 38.893 | ‐ | ‐ | ‐ | ‐ | ‐ | 38.893 |
| IFRS Transi tion Adjus tments | ‐8.675 | ‐ | ‐ | ‐ | ‐ | 11 | ‐8.664 |
| Hedge Accounti ng | 3.272 | ‐ | ‐ | ‐ | ‐2.350 | ‐ | 922 |
| Reserves | |||||||
| Legal Reserve | 7.445 | ‐ | ‐ | ‐ | ‐ | ‐ | 7.445 |
| Othe r Reserves | 62.037 | 6.153 | ‐ | ‐ | ‐42 | ‐83 | 68.065 |
| Transla tion Di fference | ‐2.493 | ‐ | ‐ | ‐ | ‐ | 468 | ‐2.025 |
| 230.979 | 6.153 | 0 | 0 | ‐2.692 | 396 | 234.836 | |
| Net Profit for the Year | 6.153 | ‐6.153 | ‐ | ‐3.486 | ‐ | ‐ | ‐3.486 |
| Minority interests | 9.593 | ‐ | ‐225 | 181 | ‐47 | 806 | 10.308 |
| Total Equity | 246.724 | 0 | ‐225 | ‐3.305 | ‐2.739 | 1.202 | 241.658 |
| June 30, 2008 | |||||||
| Equity: | |||||||
| Sha re Capi tal | 133.000 | ‐ | ‐ | ‐ | ‐ | ‐ | 133.000 |
| Trea s ury Stock ‐ Fa ce Value | ‐2.568 | ‐ | ‐ | ‐ | ‐21 | ‐ | ‐2.589 |
| Trea s ury Stock ‐ Dis counts and Premi ums | 105 | ‐ | ‐ | ‐ | ‐17 | ‐ | 88 |
| Paid‐in Capi tal | 38.893 | ‐ | ‐ | ‐ | ‐ | ‐ | 38.893 |
| IFRS Transi tion Adjus tments | ‐12.312 | ‐ | ‐ | ‐ | 3.691 | 57 | ‐8.564 |
| Hedge Accounti ng | ‐219 | ‐ | ‐ | ‐ | 130 | ‐ | ‐89 |
| Reserves | |||||||
| Legal Reserve | 7.445 | ‐ | ‐ | ‐ | ‐ | ‐ | 7.445 |
| Othe r Reserves | 49.909 | 23.245 | ‐7.825 | ‐ | ‐3.809 | ‐ | 61.520 |
| Transla tion Di fference | ‐1.681 | ‐ | ‐ | ‐ | ‐ | ‐815 | ‐2.496 |
| 212.572 | 23.245 | ‐7.825 | 0 | ‐26 | ‐758 | 227.208 | |
| Net Profit for the Year | 23.245 | ‐23.245 | ‐ | 6.890 | ‐ | ‐ | 6.890 |
| Minority interests | 9.573 | ‐ | ‐242 | 594 | 150 | ‐582 | 9.493 |
| Total Equity | 245.390 | 1 | ‐8.067 | 7.484 | 124 | ‐1.340 | 243.591 |
| T. | INTRODUCTION | |
|---|---|---|
| Ш. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
| III. | COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS | |
| IV. | EXCHANGE RATES USED IN CONSOLIDATION | |
| V. | SEGMENT REPORT | |
| VI. | TANGIBLE AND INTANGIBLE FIXED ASSETS | |
| VII. | GOODWILL …………………………………………………………………………………………… | |
| VIII. | EQUITY COMPANIES AND OTHER FINANCIAL ASSETS | |
| IX. | INCOME TAX | |
| Х. | INVENTORIES ……………………………………………………………………………………………… | |
| XL. | TRADE RECEIVABLES | |
| XII. | RECOVERABLE TAXES | |
| XIII. | OTHER ASSETS | |
| XIV. | CASH AND CASH EQUIVALENTS | |
| XV. | CAPITAL AND RESERVES | |
| XVI. | MINORITY INTERESTS | |
| XVII. | INTEREST BEARING DEBT | |
| XVIII. | SUPPLIERS | |
| XIX. | OTHER LOANS AND CREDITORS | |
| XX. | TAX LIABILITIES | |
| XXI. | THIRD PARTY SUPPLIES AND SERVICES | |
| XXII. | STAFF COSTS | |
| XXIII. | IMPAIRMENTS OF ASSETS | |
| XXIV. | OTHER OPERATING GAINS AND LOSSES | |
| XXV. | NET INTEREST | |
| XXVI. | RELATED-PARTY TRANSACTIONS | |
| XXVII. | GUARANTEES, CONTINGENCIES E COMMITMENTS | |
| XXVIII. | EXCHANGE RATE CONTRACTS | |
| XXIX. | ACTIVITY DURING THE YEAR | |
| XXX. | OTHER INFORMATION |
At the beginning of 1991, Corticeira Amorim, S.A. was transformed into CORTICEIRA AMORIM, S.G.P.S., S.A., the holding company for the cork business sector of the Amorim Group. In this report, CORTICEIRA AMORIM will be the designation of CORTICEIRA AMORIM, S.G.P.S., S.A., and in some cases the designation of CORTICEIRA AMORIM, S.G.P.S. together with all of its subsidiaries.
CORTICEIRA AMORIM, directly or indirectly, holds no interest in land properties used to grow and explore cork tree. Cork tree is the source of cork, the main raw material used by CORTICEIRA AMORIM production units. Cork acquisition is made in an open market, with multiple agents, both in the demand side as in the supply side.
CORTICEIRA AMORIM is mainly engaged in the acquisition and transformation of cork into a numerous set of cork and cork related products, which are distributed worldwide through its network of sales company.
CORTICEIRA AMORIM is a Portuguese company with a registered head office in Mozelos, Santa Maria da Feira. Its share capital amounts to 133 million euros, and is represented by 133 million shares, which are publicly traded in the Euronext Lisboa – Sociedade Gestora de Mercados Regulamentados, S.A.
These financial statements were approved in the Board Meeting of July 31, 2009.
Except when mentioned, all monetary values are stated in thousand euros (Thousand euros = K euros = K€).
Some figures of the following notes may present very small differences not only when compared with the total sum of the parts, but also when compared with figures published in other parts of this report. These differences are due to rounding aspects of the automatic treatment of the data collected.
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented.
Consolidated statements were prepared based on a going concern basis and using the records as stated in the companies' books, which adopted Portuguese general accepted accounting principles. Accounting adjustments and reclassifications were made in order to comply with accounting policies followed by the IFRS, as adopted by the European Union (IAS – International Accounting Standards and the IFRS – International Financial Reporting Standards) and legal for use as of January 1, 2009. The transition date from the local GAAP was January 1, 2004.
Group companies, often designated as subsidiaries, are entities over which CORTICEIRA AMORIM has a shareholding of more than one‐half of its voting rights, or has the power to govern its management, namely its financial and operating policies.
Group companies are consolidated line by line, being the position of third‐party interests in the shareholding of those companies stated in the balance sheet in the "Minority Interests" account. Date of first consolidation or de‐ consolidation is, in general, the beginning or the end of the quarter when the conditions for that purpose are fulfilled.
Losses for the period that are attributable to Minority Interests will be debited to the Minority Interest account until its balance equals to zero, being all subsequent losses fully attributed to CORTICEIRA AMORIM. In subsequent reversal of losses, all profits will be attributed to CORTICEIRA AMORIM up to the full recovery of prior losses appropriated. Afterwards the usual appropriation of results between CORTICEIRA AMORIM and third‐party interests will be reassumed.
In the rare case where the minority part has the obligation to share its portion for the losses after its balance sheet account is cancelled, a receivable will be recorded in the consolidated Balance sheet.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.
Inter‐company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred.
Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding between 20% and 50% of voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill. Future impairments of goodwill will be adjusted against the carrying amount of investments The Group's share of its associates post‐acquisition profits or losses is recognised in the income statement, in the "Gain/(losses) in associates" account, and its share of post‐acquisition movements in reserves is recognised in reserves. The carrying amount is also adjusted by dividends received. When the Group's share of losses in an associate equals or exceeds its interest in the associate, the group does not recognise further losses, unless it has incurred obligation on behalf of the associate, in this case the liabilities will be recorded in a "Provisions" account.
Consolidated financial statements are presented in thousands of euros. Euro is the legal currency of CORTICEIRA AMORIM, S.G.P.S., S.A., and is the currency in which two thirds of its business is made and so Euro is considered to be its functional and presentation currency.
Assets and liabilities denominated in foreign currency are translated to euros using year‐end exchange rates. Net exchange differences arising from the different rates used in transactions and the rate used in its settlements is recorded in the income statement.
Assets and liabilities from non‐euro subsidiaries are translated at the balance sheet date exchange rate, being its costs and gains from the income statement translated at the average exchange rate for the period / year.
Tangible fixed assets are originally their respective historical cost (including attributable expenses) or production cost, including, whenever applicable, interest costs incurred throughout the respective construction or start‐up period, which are capitalised until the asset begins operating.
As part of the allocation of the fair value to the identifiable assets and liabilities in an acquisition process (IFRS 3), land and buildings of the subsidiaries as of January 1, 1991, were revalued by independent experts. Same procedure was followed for companies acquired later than that date.
Under IFRS 1, 16, and as of January 1, 2004, some of the relevant industrial equipment, fully, or in the near‐term, depreciated, and of which is expected a medium or long term use, was subject to a revaluation process.
Depreciation is calculated on the straight‐line basis, over the following years, which represent a reasonable estimate of the useful lives:
| Number of years | |
|---|---|
| Buildings | 20 to 50 |
| Plant machinery | 6 to 10 |
| Motor vehicles | 4 to 7 |
| Office equipment | 4 to 8 |
Depreciation is charged since the beginning of the financial year in which the asset is brought into use, except for big investment projects where depreciation begins with the start‐up of production. The asset's residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
Current maintenance on repair expenses are charged to the actual income statement in which they occurred. Cost of operations that can extend the useful expected life of an asset, or from which are expected higher and significative future benefits, are capitalized.
An asset's carrying amount is written down to its recoverable amount and charged to the income statement if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses and disposals are included in the income statement. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to reserves.
Includes land and buildings not used in production.
Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. If positive, will be included as an asset in the "goodwill" account. If negative, it will be registered as a gain for the period.
Goodwill will be tested annually for impairment; impairment losses will be charged to the income statement and, consequently, its carrying amount adjusted.
Inventories are valued at the lower of acquisition cost or production cost and net realisable value. Acquisition cost includes direct and indirect expenses incurred in order to have those inventories at its present condition and place. Where the net realisable value is lower than production cost, an adjustment is made to reduce inventories to this lower value. This adjustment will be reversed or reduced whenever the impairment situation no longer takes place.
Year‐end quantities are determined based on the accounting records, which are confirmed by the physical inventory taking. Raw materials, consumables and by‐products are valued at weighted average cost, and finished goods and work‐in‐progress at the average production cost which includes direct costs and indirect costs incurred in production.
Trade and other receivables are registered initially at cost, adjusted for any subsequent impairment losses which will be charged to the income statement.
Medium and long‐term receivables will be measured at amortised cost using the effective interest rate of CORTICEIRA AMORIM for similar periods.
Cash includes cash in hand, deposits held at call in banks, time deposits and other no‐risk short‐term investments with original maturities of three months or less. Bank overdrafts are also recorded in this caption.
Includes interest bearing loans amounts. Any costs attributable to the lender, will be deducted to the loan amount and charged, during its life, using the effective interest rate.
Interests are usually charged to the income statement as they occur. Interests arising from loans related with capital expenditure for periods longer than 12 months will be capitalised and charged to the specific asset under construction. Capitalisation will cease when the project is complete or suspended.
Except for companies included in groups of fiscal consolidation, income tax is calculated separately for each subsidiary, on the basis of its net result for the period adjusted according to tax legislation.
In the consolidated financial statements differences between the tax due for the current period and prior periods and the tax already paid or to be paid by each of the group companies are registered whenever it is likely that, on an individual company basis, a deferred tax will have to be paid or to be recovered in the foreseeable future (liability method).
CORTICEIRA AMORIM Portuguese employees benefit only from the national welfare plan. Employees from foreign subsidiaries (about 25% of total CORTICEIRA AMORIM) or are covered exclusively by local national welfare plans or benefit from complementary plans, being it defined contribution plans or defined benefit plans.
As for the defined contribution plans, contributions are recognised as employee benefit expense when they are due. The liability recognised in the balance sheet in respect of defined benefit plans is the present value of the defined benefit obligation, less the fair value of plan assets, as calculated annually by pension fund experts.
CORTICEIRA AMORIM recognises a liability and an expense for bonuses attributable to a large number of directors. These benefits are based on estimations that take in account the accomplishment of both individual goals and a pre‐ established CORTICEIRA AMORIM level of profits.
Provisions are recognised when CORTICEIRA AMORIM has a present legal or constructive obligation as a result of past events, when it is more likely than not an outflow of resources will be required to settle the obligation and when a reliable estimation is possible.
Provisions are not recognised for future operating losses. Restructuring provisions are recognised with a formal detail plan and when third parties affected are informed.
Revenue comprises the value of the consideration received or receivable for the sale of goods and finished products. Revue is shown, net of value‐added tax, returns, rebates, and discounts, including cash discounts. Revenue is also adjusted by any prior period's sales corrections.
Services rendered are immaterial and, generally, are refunds of costs related with finish product sales.
Sales revenue is recognised when the significant risk and rewards of ownership of the goods are transferred to the buyer and its amount can be reliably measured. Revenue receivable after one year will be discounted to its fair value.
Grants received are related generally with fixed assets expenditure. No‐repayable grants are present in the balance sheet as deferred income, and recognised as income on a systematic basis over the useful life of the related asset. Repayable interest bearing grants are presented as interests bearing debt; if no‐interest bearing, they are presented as "Other borrowings and creditors". Medium and long‐term no‐interest bearing repayable grants are presented with its net present value, using an interest discount rate similar to CORTICEIRA AMORIM interest bearing debt for same period.
When a contract indicates that the significant risks and rewards of the ownership of the asset are transferred to CORTICEIRA AMORIM, leasing contracts will be considered as financial leases.
All other leasing contracts are treated as operating leases. Payments made under operating leases are charged to the income statement.
CORTICEIRA AMORIM uses derivatives financial instruments as forward and spot exchange rate contracts, options and swaps; these are intended to hedge its business financial risks and are not used for speculative purposes. CORTICEIRA AMORIM accounts for these instruments as hedge accounting, following all its standards. Dealing is carried out by a central treasury department (dealing room) on behalf of the subsidiaries, under policies approved by the Board of Directors.
Derivatives are initially recorded at cost and subsequently re‐measured at their fair value.
The method of recognising is as follows:
Changes in the fair value of derivatives that qualify as fair value hedges and that are expected to be highly effective, are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
Changes in the fair value of derivatives that qualify as cash flow edges and that are expected to be highly effective, are recognised in equity; the gain or loss relating to the ineffective portion is recognised immediately in the income statement.
For the moment, CORTICEIRA AMORIM is not considering any foreign exchange hedge over its net investments in foreign units (subsidiaries).
CORTICEIRA AMORIM has fully identified the nature of its activities' risk exposure and documents entirely and formally each hedge; uses its information system to guarantee that each edge is supported by a description of: risk policy, purpose and strategy, classification, description of risk, identity of the instrument and of the risk item, description of initial measurement and future efficiency, identification of the possible derivative portion which will be excluded from the efficiency test. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, or the forecasted transaction no longer remains highly provable or simply is abandoned, or the decision to consider the transaction as a hedge, the company will de‐recognised the instrument.
| Company | Head Office | Country | 1H09 | |
|---|---|---|---|---|
| Raw Materials | ||||
| Amorim Natural Cork, S.A. | Vale de Cortiças ‐ Abrantes | PORTUGAL | 100% | |
| Amorim & Irmãos ‐ IV, S.A. | Al cânta ra | SPAIN | 100% | |
| Amorim & Irmãos, S.A. (Ma téria s Prima s ) | (a) Ponte Sôr | PORTUGAL | 100% | |
| Amorim Flores tal Ca talunya, SL | Ca s sa de la Selva ‐ Gi rona | SPAIN | 100% | |
| Amorim Flores tal España, SL | San Vicente Al cánta ra | SPAIN | 100% | |
| Amorim Flores tal Espanha, S.A. | San Roque Cádi z | SPAIN | 100% | |
| Amorim Tunisie, S.L. | Taba rka | TUNISIA | 100% | |
| Coma tral ‐ C. de Ma rocai ne de Trans f. du Liège, S.A. | Skhi ra t | MOROCCO | 100% | |
| Cork Interna tional, SARL | Taba rka | TUNISIA | 100% | |
| SIBL ‐ Socié té Indus trielle Bois Liége | Jijel | ALGELIA | 51% | |
| Socié té Fabrique Liège de Taba rka, S.A. | Taba rka | TUNISIA | 100% | |
| Socié té Nouvelle du Liège, S.A. (SNL) | Taba rka | TUNISIA | 100% | |
| Socié té Tunisienne d'Indus trie Bouchonnière | (e) Taba rka | TUNISIA | 45% | |
| Cork Stoppers | ||||
| Amorim & Irmãos, SGPS, S.A. | Santa Maria Lamas | PORTUGAL | 100% | |
| Amorim & Irmãos, S.A. | (a) Santa Ma ria Lama s | PORTUGAL | 100% | |
| Amorim Argenti na, S.A. | Tapiales ‐ Buenos Ai res | ARGENTINA | 100% | |
| Amorim Aus trala sia | Adelai de | AUSTRALIA | 100% | |
| Amorim Benelux, BV ‐ A&I | (b) Tholen | NETHERLANDS | 100% | |
| Amorim Cork Améri ca, Inc. | Cali fornia | U.S. AMERICA | 100% | |
| Amorim Cork Aus trália, Pty Ltd | Vi c | AUSTRALIA | 100% | |
| Amorim Cork Deuts chland GmbH & Co KG | Mainzer | GERMANY | 100% | |
| Amorim Cork Itália, SPA | Conegliano | ITALY | 100% | |
| Amorim Cork South Africa | Cape Town | SOUTH AFRICA | 100% | |
| Amorim France, S.A.S. | Champfleury | FRANCE | 100% | |
| Apli fin ‐ Aplicações Financei ra s, S.A. | Mozelos | PORTUGAL | 100% | |
| Ca rl Ed. Meyer Korken | Delmenhors t | GERMANY | 100% | |
| Chapui s, S.L. | (h) Gi rona | SPAIN | 100% | |
| Equipa r, Pa rtici pações Integrada s, Lda. | Coruche | PORTUGAL | 100% | |
| FP Cork, Inc. | Cali fornia | U.S. AMERICA | 100% | |
| Franci s co Oller, S.A. | Gi rona | SPAIN | 87% | |
| Hunga rocork, Amorim, RT | Budapes te | HUNGARY | 100% | |
| Indús tria Corchera, S.A. | (f) | Santiago | CHILE | 50% |
| KHB ‐ Kork Handels Beteiligung, GMBH | Delmenhors t | GERMANY | 100% | |
| Korken Schies se r Ges.M.B.H. | (i) | Viena | AUSTRIA | 69% |
| Ll osent & Fors chner Korken GmbH | (i) | Obe rwal ters dorf | AUSTRIA | 69% |
| M. Cligne t & Cie | Bezannes | FRANCE | 100% | |
| Olimpiadas Ba rcelona 92, S.L. | (h) Gi rona | SPAIN | 100% | |
| Portocork Améri ca, Inc. | Cali fornia | U.S. AMERICA | 100% | |
| Portocork France | Bordéus | FRANCE | 100% | |
| Portocork Inte rnacional, S.A. | Santa Ma ria Lama s | PORTUGAL | 100% | |
| S.A. Oller et Cie | Reims | FRANCE | 87% | |
| S.C.I. Friedland | Cére t | FRANCE | 100% | |
| Socié té Nouvelle des Bouchons Tres ca ses | (e) Perpignan | FRANCE | 50% | |
| Victor y Amorim, SL | (f) | Nava rre te ‐ La Rioja | SPAIN | 50% |
26
| Company | Head Office | Country | 1H09 |
|---|---|---|---|
| Floor and Wall Coverings | |||
| Amorim Revestimentos, S.A. | Lourosa | PORTUGAL | 100% |
| Amorim Benelux, BV - AR | (b) Tholen | NETHERLANDS | 100% |
| Amorim Cork Distribution Netherlands BV | Tholen | NETHERLANDS | 100% |
| Amorim Cork GmbH | Delmenhorts | GERMANY | 100% |
| Amorim Deutschland, GmbH & Co. KG - AR | (d) Delmenhorts | GERMANY | 100% |
| Amorim Flooring (Switzerland) AG | Zug | SWITZERLAND | 100% |
| Amorim Flooring Austria GesmbH | Viena | AUSTRIA | 100% |
| Amorim Flooring Investments, Inc. | Hanover - Maryland | U.S. AMERICA | 100% |
| Amorim Flooring Nordic A/s | Greve | DENMARK | 100% |
| Amorim Flooring North America Inc | Hanover - Maryland | U.S. AMERICA | 100% |
| Amorim Japan Corporation | (g) Tokyo | JAPAN | 100% |
| Amorim Revestimientos, S.A. | Barcelona | SPAIN | 100% |
| Amorim Wood Suplies, GmbH | Bremen | GERMANY | 100% |
| Cortex Korkvertriebs GmbH | Fürth | GERMANY | 100% |
| Corticeira Amorim - France SAS - AR | (c) Lavardac | FRANCE | 100% |
| Dom KorKowy, Sp. Zo. O. | (f) Kraków | POLAND | 50% |
| Inter Craft Coatings, Lda. | S. Paio de Oleiros | PORTUGAL | 50% |
| US Floors, Inc. | (e) Dalton - Georgia | U.S. AMERICA | 25% |
| Zodiac Kork- und Holzprodukte GmbH | Fürth | GERMANY | 100% |
| Composite Cork | |||
| Amorim Cork Composites, S.A. | Mozelos | PORTUGAL | 100% |
| Amorim (UK) Ltd. | Horsham West Sussex | UNITED KINGDOM | 100% |
| Amorim Benelux, BV - ACC | (b) Tholen | NETHERLANDS | 100% |
| Amorim Cork Composites Inc. | Trevor Wisconsin | U.S. AMERICA | 100% |
| Amorim Deutschland, GmbH & Co. KG - ACC | (d) Delmenhorts | GERMANY | 100% |
| Amorim Industrial Solutions - Imobiliária, S.A. | Corroios | PORTUGAL | 100% |
| Chinamate (Xi'an) Natural Products Co. Ltd | Xi'an | CHINA | 100% |
| Chinamate Development Co. Ltd | Hong Kong | CHINA | 100% |
| Corticeira Amorim - France SAS - ACC | (c) Lavardac | FRANCE | 100% |
| Drauvil Europea, SL | San Vicente Alcantara | SPAIN | 100% |
| Postya - Serviços de Consultadoria, Lda. | Funchal - Madeira | PORTUGAL | 100% |
| Samorim (Joint Stock Company Samorim) | (e) Samara | RUSSIA | 50% |
| Insulating Cork | |||
| Amorim Isolamentos, S.A. | Vendas Novas | PORTUGAL | 80% |
| Holding - Other | |||
| Corticeira Amorim, SGPS, S.A. | Mozelos | PORTUGAL | 100% |
| Ginpar, S.A. (Générale d'Investiss. et Participation) | Skhirat | MARROCOS | 100% |
| Amorim Cork Research, Lda. | Mozelos | PORTUGAL | 100% |
| Sopac - Soc. Port. de Aglomerados de Cortiça, Lda | Montijo | PORTUGAL | 100% |
| Vatrya - Serviços de Consultadoria, Lda | Funchal - Madeira | PORTUGAL | 100% |
$(b)$ One single company: Amorim Benelux, BV.
One single company: Corticeira Amorim - France SAS. $(c)$
One single company: Amorim Deutschland, GmbH & Co. KG. $(d)$
$(e)$ Equity method consolidation.
$(f)$ CORTICEIRA AMORIM controls the operations of the company - line-by-line consolidation method.
Consolidation started as of January 1, 2009. $(g)$
In merger process with Francisco Oller, S.A. $(h)$
27
Immaterial companies Amorim Cork Bulgaria, Moldamorim, Amorim Cork Beijing were not consolidated. Subsidiary Amorim & Irmãos VII, SRL was liquidated during the first half 2009.
| Consolidation June 30, 2009 |
First Half End | Average | |
|---|---|---|---|
| Argenti ne Pes o | ARS | 5,32590 | 4,85328 |
| Aus tralian Dolla r | AUD | 1,73590 | 1,87897 |
| Bra zilian Real | BRL | 2,7469 | 2,9213 |
| Canadia n Dolla r | CAD | 1,62750 | 1,60541 |
| Swiss Fra nc | CHF | 1,52650 | 1,50568 |
| Chilean Pes o | CLP | 747,960 | 780,623 |
| Yuan Renmi nbi | CNY | 9,58480 | 9,11427 |
| Danish Krone | DKK | 7,44700 | 7,44929 |
| Algeria n Dina r | DZD | 100,5521 | 95,7173 |
| Euro | EUR | 1 | 1 |
| Pound Sterling | GBP | 0,85210 | 0,89392 |
| Hong Kong Dolla r | HDK | 10,8747 | 10,3409 |
| Forint | HUF | 271,550 | 289,983 |
| Yen | JPY | 135,510 | 127,274 |
| Morocca n Di rham | MAD | 11,2356 | 11,1375 |
| Me ti cal | MZM | 36,77 | 35,25 |
| Norwegian Krone | NOK | 9,0180 | 8,89558 |
| Zloty | PLN | 4,45200 | 4,47575 |
| Ruble | RUB | 43,6070 | 44,0834 |
| Swedish Kronor | SEK | 10,81250 | 10,86144 |
| Tunisian Di na r | TND | 1,8923 | 1,8546 |
| US Dolla r | USD | 1,41340 | 1,33278 |
| Rand | ZAR | 10,88530 | 12,25488 |
CORTICEIRA AMORIM is organised in the following Business Units (BU):
For purposes of this Report, the Business approach was selected as the primary segment. This is consistent with the formal organization and evaluation of business. The following table shows the main indicators of the said units, and, whenever possible, the reconciliation with the consolidated indicators:
| thousand euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| 1H2009 | Raw Materials |
Cork Stoppers |
Floor & Wall Coverings |
Composite Cork |
Insulation Cork |
Holding | Adjust. | Consolid. |
| Trade Sales | 3.356 | 123.635 | 54.358 | 27.283 | 3.839 | 2 | ‐ | 212.473 |
| Other BU Sales | 38.872 | 1.989 | 1.006 | 4.735 | 385 | 361 | ‐47.348 | ‐ |
| Total Sales | 42.228 | 125.624 | 55.364 | 32.018 | 4.224 | 363 | ‐47.348 | 212.473 |
| EBIT | ‐1.344 | 9.372 | ‐3.931 | ‐959 | 652 | ‐1.409 | 1.211 | 3.592 |
| Assets | 93.027 | 248.819 | 119.497 | 74.348 | 11.886 | 5.140 | ‐5.515 | 547.202 |
| Liabilities | 14.852 | 57.481 | 25.801 | 13.427 | 1.803 | 3.663 | 188.519 | 305.546 |
| Capex | 643 | 4.250 | 3.201 | 1.357 | 315 | ‐ | ‐ | 9.766 |
| Year Depreciation | ‐1.630 | ‐4.567 | ‐2.867 | ‐1.629 | ‐333 | ‐31 | ‐ | ‐11.057 |
| Non‐cash cost | ‐36 | ‐497 | ‐258 | ‐673 | ‐20 | 2 | ‐ | ‐1.482 |
| Gains/Losses in associated companies |
2 | 303 | 174 | ‐ | ‐ | ‐ | ‐ | 478 |
| 1H2008 | Raw Materials |
Cork Stoppers |
Floor & Wall Coverings |
Composite Cork |
Insulation Cork |
Holding | Adjust. | Consolid. |
|---|---|---|---|---|---|---|---|---|
| Trade Sales | 3.628 | 139.930 | 66.911 | 33.114 | 4.477 | 63 | ‐ | 248.123 |
| Other BU Sales | 52.487 | 2.199 | 1.183 | 7.188 | 547 | 267 | ‐63.872 | ‐ |
| Total Sales | 56.115 | 142.129 | 68.094 | 40.302 | 5.024 | 330 | ‐63.872 | 248.123 |
| EBIT | 3.273 | 10.195 | 3.829 | ‐445 | 705 | ‐1.651 | 49 | 15.955 |
| Assets | 138.072 | 279.804 | 111.035 | 85.486 | 11.822 | 5.296 | ‐32.931 | 598.584 |
| Liabilities | 21.602 | 65.978 | 25.425 | 17.844 | 2.277 | 6.923 | 214.944 | 354.993 |
| Capex | 409 | 4.157 | 5.986 | 1.407 | 292 | 25 | ‐ | 12.276 |
| Year Depreciation | ‐1.765 | ‐5.117 | ‐2.948 | ‐2.061 | ‐300 | ‐31 | ‐ | ‐12.222 |
| Non‐cash cost | ‐79 | 411 | ‐327 | ‐213 | ‐29 | ‐49 | ‐ | ‐286 |
| Gains/Losses in associated companies |
9 | 435 | ‐ | ‐ | ‐ | ‐ | ‐ | 444 |
Adjustments = eliminations inter‐BU and amounts not allocated to BU.
EBIT =Profit before interests, minorities and income tax.
Provisions and asset impairments were considered the only relevant material cost.
Segments assets do not include DTA (deferred tax asset) and non‐trade group balances.
Segments liabilities do not include DTL (deferred tax liabilities), bank loans and non‐trade group balances.
The decision to report EBIT figures allows a better comparison of the different BU performances, disregarding the different financial situations of each BU. This is also coherent with the existing Corporate Departments, as the Financial Department is responsible for the bank negotiations, being the tax function the responsibility of the Holding Company.
Cork Stoppers BU main product is the different kinds of existing cork stoppers. The main markets are the bottling countries, from the traditional ones like France, Italy, Germany, Spain and Portugal, to the new markets like USA, Australia, Chile, South Africa and Argentina.
Raw Materials BU is, by far, the most integrated in the production cycle of CORTICEIRA AMORIM, with 90% of its sales to others BU, specially to Cork Stoppers BU. Main products are bark and discs.
The remaining BU produce and sell a vast number of cork products made from cork stoppers waste. Main products are cork floor tiles, cork rubber for the automotive industry and antivibratic systems, black agglomerates for insulation and acoustic purposes, technical agglomerates for civil construction and shoe industry, as well as granulates for agglomerated, technical and champagne cork stoppers.
Major markets for flooring and insulation products are in Europe and for cork rubber products the USA. Major production sites are in Portugal, where most of the invested capital is located. Products are distributed in practically all major markets through a fully owned network of sales companies. About 70% of total consolidated sales are achieved through these companies.
Capex was concentrated in Portugal. Assets in foreign subsidiaries totalize 228 million euros, and are mostly composed by inventories (72 million), customers (71 million) and tangible fixed assets (39 million).
Sales by markets:
| thousand euros | ||||
|---|---|---|---|---|
| Markets | 1H2009 | 1H2008 | ||
| European Union | 140.868 | 66,3% | 163.364 | 65,8% |
| From which: Portugal | 10.675 | 5,0% | 14.009 | 5,6% |
| Other European countries | 8.832 | 4,2% | 14.482 | 5,8% |
| Uni ted Sta tes | 34.981 | 16,5% | 35.528 | 14,3% |
| Other Ame ri can countries | 14.087 | 6,6% | 16.352 | 6,6% |
| Aus trala sia | 9.940 | 4,7% | 13.509 | 5,4% |
| Afri ca | 3.261 | 1,5% | 4.081 | 1,6% |
| Others | 504 | 0,2% | 807 | 0,3% |
| TOTAL | 212.473 | 100% | 248.123 | 100% |
30
| thousand euros | ||||||
|---|---|---|---|---|---|---|
| Land and Buildings |
Plant Equipment |
Other | Advances and In‐ progress |
Tangible Fixed Assets |
Intangible Fixed Assets |
|
| Gros s Val ue | 213.510 | 250.323 | 39.036 | 13.883 | 516.752 | 784 |
| Deprecia tion and impai rments | ‐124.045 | ‐181.962 | ‐34.616 | 0 | ‐340.623 | ‐152 |
| Opening balance (Jan 1, 2008) | 89.465 | 68.361 | 4.420 | 13.883 | 176.129 | 632 |
| INCREASE | 287 | 3.152 | 490 | 8.505 | 12.434 | 14 |
| PERIOD DEPREC. AND IMPAIRMENTS | ‐3.178 | ‐8.158 | ‐869 | 0 | ‐12.205 | ‐7 |
| SALES AND OTHER DECREASES | ‐527 | ‐994 | ‐19 | 621 | ‐919 | ‐ |
| TRANSFERS AND RECLASSIFICATIONS | 1.100 | 2.811 | ‐271 | ‐3.480 | 160 | ‐96 |
| TRANSLATION DIFFERENCES | ‐151 | ‐440 | ‐62 | ‐22 | ‐675 | ‐ |
| Gross Value | 213.865 | 249.112 | 37.864 | 19.506 | 520.347 | 787 |
| Depreciation and impairments | ‐126.869 | ‐184.380 | ‐34.174 | 0 | ‐345.423 | ‐244 |
| Closing balance (Jun 30, 2008) | 86.996 | 64.732 | 3.690 | 19.506 | 174.924 | 543 |
| Gros s Val ue | 215.568 | 248.109 | 34.035 | 17.196 | 514.908 | 1.058 |
| Deprecia tion and impai rments | ‐128.152 | ‐177.911 | ‐29.068 | 0 | ‐335.131 | ‐250 |
| Opening balance (Jan 1, 2009) | 87.416 | 70.198 | 4.967 | 17.196 | 179.777 | 808 |
| INCREASE | 274 | 1.597 | 509 | 7.378 | 9.758 | 8 |
| PERIOD DEPREC. AND IMPAIRMENTS | ‐2.880 | ‐7.146 | ‐990 | 0 | ‐11.016 | ‐6 |
| SALES AND OTHER DECREASES | 262 | 358 | ‐26 | ‐1.045 | ‐451 | ‐1 |
| TRANSFERS AND RECLASSIFICATIONS | 133 | 1.322 | 173 | ‐1.730 | ‐102 | ‐36 |
| TRANSLATION DIFFERENCES | 26 | 491 | 54 | ‐22 | 549 | ‐1 |
| Gross Value | 216.171 | 251.318 | 33.654 | 21.777 | 522.920 | 1.076 |
| Depreciation and impairments | ‐130.941 | ‐184.485 | ‐28.963 | 0 | ‐344.389 | ‐304 |
| Closing balance (Jun 30, 2009) | 85.230 | 66.833 | 4.691 | 21.777 | 178.531 | 772 |
| thousand euros | ||||
|---|---|---|---|---|
| Openning | Increases | Translation Differences |
Closing | |
| Raw ma te rial BU | 4.195 | ‐6 | 4.189 | |
| Cork Stoppers BU | 5.000 | 5.000 | ||
| Flooring BU | 4.303 | 5.627 | ‐321 | 9.609 |
| Composi te BU | 0 | 0 | ||
| Goodwill | 13.498 | 5.627 | ‐327 | 18.798 |
The increase is due to the acquisition of US Floors at the end of 2008.
Equity Companies:
$\bullet$
| thousand euros | ||
|---|---|---|
| 1H2009 | 2008 | |
| Initial Balance | 10.427 | 2.906 |
| In $/$ Out | $-5.499$ | 7.185 |
| Results | 478 | 454 |
| Dividends | $\Omega$ | $-100$ |
| Exchange Differences | 120 | 7 |
| Other | $-10$ | $-25$ |
| End Balance | 5.516 | 10.427 |
The differences between the tax due for the current period and prior periods and the tax already paid or to be paid of said periods is registered as "deferred tax" in the consolidated income statement, according to note II j), and amounts to K€ 2,264 (1H2008: K€ 171).
On the Balance sheet this effect amounts to K€ 10,504 (31/12/2008: K€ 8,223) as Deferred tax asset, and to K€ 5,240 (31/12/2008: K€ 5,002) as Deferred tax liability.
It is conviction of the Board that, according to its business plan, the amounts registered in deferred tax assets will be recovered as for the tax carry forward losses concerns.
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Related with Intangible Fixed Assets cancelled | 528 | 409 | 526 |
| Related with Inventories / Customers and Debtors impairments | 3.948 | 3.774 | 1.009 |
| Related with Tax Losses | 5.077 | 3.089 | 6.221 |
| Related with Tax Benefits | 951 | 951 | 2.146 |
| Other | 0 | 0 | 384 |
| Deferred Tax Assets | 10.504 | 8.223 | 10.286 |
| Related with Fixed Tangible Assets | 4.440 | 4.369 | 4.010 |
| Related with Inventories | 796 | 533 | 1.185 |
| Other | 4 | 100 | 384 |
| Deferred Tax Liabilities | 5.240 | 5.002 | 5.579 |
| Current Income Tax | $-941$ | $-3.445$ | $-2.581$ |
| Deferred Income Tax | 2.264 | $-2.057$ | 171 |
| Income Tax | 1.323 | $-5.502$ | $-2.410$ |
Following chart explains the effective income tax rate, from the original income tax rate of most of Portuguese companies:
| Income Tax Conciliation | |
|---|---|
| Income Tax ‐ Legal | 26,50% |
| Other e ffects | 0,20% |
| Income tax ‐ effective (1) | 26,70% |
(1) Income Tax / PBT, Equity Gains and Minority Interests
CORTICEIRA AMORIM and a large group of its Portuguese subsidiaries are taxed since January 1, 2001, as a group special regime for tax purposes (RETGS), as according to article 63, of the income tax code (CIRC). The option for this special regime is renewable every five years.
According to law, tax declarations for CORTICEIRA AMORIM and its Portuguese subsidiaries are subject of revision and possible correction from tax authorities generally during the next four years.
No material effects in the financial statements as of June 30, 2009, are expected by the Board of CORTICEIRA AMORIM and its subsidiaries from the revisions of tax declarations that will be held by the tax authorities.
As first half does not correspond to a normal tax period, following is presented the information regarding tax losses amounts and its time limits for utilisation as stated in December 2008 accounts:
| milhares de euros | ||||||
|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 and further |
TOTAL | |
| RETGS | 22.404 | 22.404 | ||||
| Other Portuguese companies | 256 | 2.572 | 439 | 3.267 | ||
| Foreign companies | 22.714 | 22.714 | ||||
| Non utilised tax losses | 0 | 256 | 2.572 | 439 | 45.118 | 48.385 |
As for the foreign companies, the year 2013 and further was considered for those situations that correspond to tax losses to carry forward with no limit of utilization.
In RETGS there are doubts regarding the future utilisation of around 20.5 million euros as for Portuguese companies and 10 million euros for foreign companies.
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Goods | 13.640 | 18.808 | 14.779 |
| Finished and semi‐finished goods | 79.507 | 77.288 | 88.744 |
| By‐products | 569 | 275 | 248 |
| Work in progres s | 13.921 | 13.927 | 11.850 |
| Raw ma terial s | 72.160 | 98.331 | 100.137 |
| Advances | 965 | 290 | 2.620 |
| Goods impai rments | ‐893 | ‐908 | ‐785 |
| Finished and semi‐finished goods impai rments | ‐1.930 | ‐2.145 | ‐2.422 |
| Raw ma terial s impai rments | ‐202 | ‐205 | ‐219 |
| Inventories | 177.735 | 205.659 | 214.952 |
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Gros s amount | 123.212 | 113.817 | 133.129 |
| Impai rments | ‐11.833 | ‐10.394 | ‐8.883 |
| Trade receivables | 111.379 | 103.423 | 124.246 |
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Value added ta x | 11.647 | 16.705 | 15.277 |
| Other taxes | 3.135 | 3.617 | 4.497 |
| Recoverable taxes | 14.782 | 20.322 | 19.774 |
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Advances to s uppliers | 2.125 | 1.707 | 4.328 |
| De ferred a s se ts | 2.912 | 4.426 | 4.593 |
| Hedge a ccounting a s se ts | 2.406 | 3.330 | 591 |
| Others | 3.901 | 6.685 | 6.138 |
| Other current assets | 11.344 | 16.148 | 15.650 |
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Ca s h | 141 | 134 | 391 |
| Bank Balances | 3.896 | 2.740 | 3.797 |
| Others | 2.109 | 1.722 | 2.130 |
| Cash and cash equivalents | 6.146 | 4.596 | 6.318 |
As of June 30, 2009, the share capital is represented by 133,000,000 ordinary registered shares, conferring dividends, with a par value of 1 Euro.
The Board of CORTICEIRA AMORIM is authorised to raise the share capital, one or more times, respecting the conditions of the commercial law, up to € 250,000,000.
In several trading sessions, CORTICEIRA AMORIM bought, during the first half, 498,349 of its own shares, representing 0.375% of its total share capital, with an average unit price of € 0.599, totalling € 298,683.48.
As of June 30, 2009, CORTICEIRA AMORIM held 3,087,683 of its own shares, representing 2.322% of its share capital.
In the Shareholders' General Meeting of March 19, 2009, no dividends were approved.
| thousand euros | |||
|---|---|---|---|
| 1S2009 | 2008 | 2007 | |
| Dividends approved ‐ 2008:0,060 and 2007:0,055 (euros per share) | 0 | 7.980 | 7.315 |
| Portion a ttri butable to own s ha res | 0 | ‐155 | ‐140 |
| Dividends paid | 0 | 7.825 | 7.175 |
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Initial Balance | 9.593 | 9.573 | 9.573 |
| In / Out | 0 | 260 | 0 |
| Res ul ts | 336 | 968 | 594 |
| Dividends | ‐225 | ‐571 | ‐242 |
| Exchange Di ferrences | 806 | ‐1.026 | ‐582 |
| Others | ‐202 | 389 | 150 |
| End Balance | 10.308 | 9.593 | 9.493 |
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Bank l oans | 53.545 | 100.208 | 101.887 |
| Overdra fts | 6.182 | 7.084 | 10.841 |
| Commercial Pape r | 2.000 | 2.000 | 0 |
| Interest‐bearing loans ‐ current | 61.727 | 109.292 | 112.728 |
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Bank l oans | 28.065 | 29.981 | 30.235 |
| Reimbursable s ubsidies | 16.949 | 16.285 | 16.285 |
| Commercial Pape r | 85.000 | 72.000 | 86.000 |
| Interest‐bearing loans ‐ non‐current | 130.014 | 118.266 | 132.520 |
| thousand euros |
| Total | 130.014 | |
|---|---|---|
| Afte r 01/01/2015 | 1.553 | |
| Between 01/01/2014 and 31/12/2014 | 72 | |
| Between 01/01/2013 and 31/12/2013 | 72 | |
| Between 01/01/2012 and 31/12/2012 | 76.774 | |
| Between 01/01/2011 and 31/12/2011 | 51.543 | |
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Suppliers ‐ current account | 36.768 | 29.411 | 28.375 |
| Suplliers ‐ accruall s | 5.199 | 3.856 | 3.658 |
| Suppliers | 41.967 | 33.267 | 32.033 |
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Non interes t bea ring grants | 5.993 | 4.887 | 1.063 |
| Other | 2.811 | 2.841 | 5.138 |
| Other loans and creditors ‐ non current | 8.804 | 7.728 | 6.201 |
| Non interes t bea ring grants | 24 | 791 | 4.376 |
| De ferred cos ts | 22.482 | 17.157 | 25.361 |
| De ferred gains ‐ grants | 8.402 | 9.018 | 7.953 |
| Hedge accounting ‐ de ferred liabili ties | 518 | 0 | 147 |
| Other | 12.868 | 10.989 | 11.707 |
| Other loans and creditors ‐ current | 44.294 | 37.955 | 49.544 |
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Income Tax | 847 | 2.426 | 2.443 |
| Value Added Tax | 5.536 | 5.086 | 6.563 |
| Social Securi ty | 1.786 | 2.814 | 1.914 |
| Othe rs | 1.021 | 1.430 | 782 |
| Tax liabilities | 9.190 | 11.756 | 11.702 |
| thousand euros | ||
|---|---|---|
| 1H2009 | 1H2008 | |
| Communications | 847 | 878 |
| Insurance | 1.695 | 2.202 |
| Subcontractors | 749 | 530 |
| Power | 3.479 | 3.696 |
| Tools | 585 | 738 |
| Oil and gas | 356 | 636 |
| Rentals | 2.430 | 2.212 |
| Transports | 6.632 | 7.495 |
| Travel | 1.708 | 1.750 |
| Commissions | 2.241 | 2.700 |
| Special Services | 4.927 | 4.615 |
| Advertising | 4.899 | 3.961 |
| Maintenance | 2.537 | 2.845 |
| Others | 3.892 | 5.561 |
| Third party supplies and services | 36.977 | 39.820 |
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 1H2008 | ||
| Boards remuneration | 212 | 306 | |
| Employees remuneration | 36.842 | 37.573 | |
| Social Security and other | 7.806 | 7.923 | |
| Severance costs | 5.269 | 1.782 | |
| Other | 2.154 | 2.243 | |
| Staff costs | 52.283 | 49.827 | |
| Average number of employees | 3.506 | 3.886 |
The restructuring costs totalling 4.515 K€ as stated in the Income Statement by Nature (first half) is included in the Severance costs line.
| thousand euros | |||
|---|---|---|---|
| 1H2009 | 2008 | 1H2008 | |
| Receivables | 1.734 | 2.486 | 180 |
| Inventories | ‐394 | ‐356 | ‐58 |
| Others | 75 | ‐79 | 241 |
| Impairments of Assets | 1.415 | 2.051 | 363 |
| thousand euros | ||
|---|---|---|
| 1H2009 | 1H2008 | |
| Indi rect taxes | ‐791 | ‐704 |
| Provi sions | ‐67 | 77 |
| Net exchange di fferences | 701 | ‐1.000 |
| Gains (losses ) in disposal of a s se ts | 30 | 397 |
| Subsidies ‐ opera ti ng | 116 | 77 |
| Subsidies ‐ equipment | 1.160 | 744 |
| Othe r | 603 | ‐39 |
| Other operating gains (+) and losses (‐) | 1.751 | ‐448 |
| tho usand euro s | ||
|---|---|---|
| 1H2009 | 1H2008 | |
| In te re s t cos ts ‐ bank l oa ns | 3.747 | 6.098 |
| In te re s t cos ts ‐ de l a ye d pa yme n ts | 2 | 0 |
| Stamp ta x ‐ i n te re s t | 60 | 85 |
| Stamp ta x ‐ ca pi ta l | 42 | 42 |
| In te re s t cos ts ‐ othe r | 443 | 379 |
| 4.295 | 6.604 | |
| In te re s t gains ‐ bank de pos i ts | ‐134 | ‐28 |
| In te re s t gains ‐ othe r loans | ‐13 | ‐5 |
| In te re s t gains ‐ de l a ye d pa yme n ts | ‐8 | ‐17 |
| In te re s t gains ‐ othe r | ‐110 | ‐50 |
| ‐265 | ‐100 | |
| Net interest | 4.030 | 6.505 |
39
CORTICEIRA AMORIM consolidates indirectly in AMORIM - INVESTIMENTOS E PARTICIPACÕES, S.G.P.S., S.A. (AIP) with head-office at Mozelos (Santa Maria da Feira, Portugal), Amorim Group holding company.
As of June 30, 2009, indirect stake of AIP in CORTICEIRA AMORIM was 69.40% of the voting rights.
CORTICEIRA AMORIM related party transactions are, in general, due to the rendering of services through some of AIP subsidiaries (Amorim Serviços e Gestão, S.A., Amorim Viagens e Turismo, S.A., OSI - Sistemas Informáticos e Electrotécnicos, Lda.). Total sales of these subsidiaries to the remaining CORTICEIRA AMORIM companies totalled 1,693 K€ (1S2008: 2,619 K€).
Balances at year-end 2008 and June 2009 are those resulting from the usual payment terms (from 30 to 60 days) and so are considered to be immaterial.
Services rendered from related-parties are based on the "cost plus" basis raging from 2% to 5%
During its operating activities CORTICEIRA AMORIM issued in favour of third-parties guarantees amounting to K€ 200.744 (2008: K€ 194.472).
| thousand euros | ||
|---|---|---|
| Beneficiary | Amount | Purpose |
| Government agencies | 8.200 | Capex grants / subsidies |
| Tax authority | 5.029 | Tax lawsuits |
| Banks | 181.583 | Loans guarantees |
| Other | 5.931 | Miscellaneous guarantees |
| TOTAL | 200.744 |
The total amount of K€ 2,927 recorded as "provisions" is considered to be adequate to face any tax lawsuit effect. As for the press-release of June 18, 2008, no new developments were registered.
As of June 30, 2009, future expenditure resulting from long-term motor vehicle rentals totals K€ 1,591, and for computer hardware and software totals K€ 616.
| tho usand euro s | ||
|---|---|---|
| 1H2009 | ||
| USD | 3.201 | 55% |
| ZAR | 2.433 | 42% |
| GBP | 177 | 3% |
| HUF | 12 | 0% |
| Hedging long positions ‐ Forwards | 5.824 | 100% |
| USD | 4.208 | 100% |
| ZAR | 14 | 0% |
| Hedging short positions ‐ Forwards | 4.222 | 200% |
| USD | 25.346 | 100% |
| Hedging long positions ‐ Options | 25.346 | 100% |
| USD | 3.548 | 100% |
| Hedging short positions ‐ Options | 3.548 | 100% |
As of June 30, 2009, options and forwards outright contracts related with sales currencies were as follows:
CORTICEIRA AMORIM sales are composed by a wide range of products that are sold through all the five continents, over 100 countries. Due to this notorious variety of products and markets, it is not considered that this activity is concentrated in any special period of the year. Traditionally first half, specially the second quarter, has been the best in sales; third and fourth quarter switch as the weakest one.
a) Gross margin (percentage)
Gross margin (percentage) as shown in the Earnings Statement (by nature of expenses) calculation used as denominator the value of Production (Sales + Change in manufactured inventories).
b) Net profit per share calculation used the average number of issued shares deducted by the number of average owned shares. The non‐existence of potential voting rights justifies the same net profit per share for basic and diluted.
41
thousand euros
| 1H2009 | 2008 | 1H2008 | |
|---|---|---|---|
| Tota l issued s ha re s | 133.000.000 | 133.000.000 | 133.000.000 |
| Ave ra ge n r. o f trea s u ry s ha re s | 2.755.333 | 2.578.584 | 2.584.871 |
| Ave ra ge n r. o f outs ta ndi ng s ha re s | 130.244.667 | 130.421.416 | 130.415.129 |
| Net Pro fi t (thous a nd e u ros ) | ‐3.486 | 6.153 | 6.890 |
| Net Pro fi t per s ha re (e u ros ) | ‐0,027 | 0,047 | 0,053 |
Chairman of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Securities issued by the Company and by companies with which the Company is in a control o r group relationship, which securities are owned, were traded o r pledged by the members o f the Company's Governing Bodies [Regulation no. 5/2008, article 9.1(a) o f the Portuguese Securities Market Commission]
Pursuant to article 20.1(b) of the Portuguese Securities Market Act, Amorim Capital, SGPS, SA's shareholding in CORTICEIRA AMORIM is ascribable to Amorim – Investimentos e Participações, SGPS, SA and to Interfamília II, SGPS, SA, companies in which Mr António Rios de Amorim (Chairman of the Board of Directors of CORTICEIRA AMORIM), Mr Joaquim Ferreira de Amorim (a member of the Board of Directors of CORTICEIRA AMORIM) and Mrs Luísa Alexandra Ramos Amorim (a member of the Board of Directors of CORTICEIRA AMORIM) perform managerial functions;
43
(iv) On June 30, 2009 Sociedade Agrícola Triflor, SA ‐ a company in which Mr Joaquim Ferreira de Amorim (a member of the Board of Directors of CORTICEIRA AMORIM) and Mr André de Castro Amorim (a member of the Board of Directors of CORTICEIRA AMORIM) perform managerial functions ‐ owned 285,956 shares in CORTICEIRA AMORIM. During the half year ended 30th June, 2009 no shares in CORTICEIRA AMORIM were traded by Sociedade Agrícola Triflor, SA.
Company's shares traded by the officers o f the Company o r by the officers o f companies with which the Company is in a control relationship o r by people in close relationship to said officers [Regulation no. 5/2008, Art. 9.1(a) o f the Portuguese Securities Market Commission]
During the half year ended 30th June, 2009 no Company's shares were traded by the officers of the Company or by the officers of companies with which the Company is in a control relationship or by people in close relationship to said officers.
Mozelos, July 31, 2009 The Board of CORTICEIRA AMORIM, S.G.P.S., S.A.
António Rios de Amorim Chairman of the Board of Directors
Joaquim Ferreira de Amorim Member of the Board of Directors
Nuno Filipe Vilela Barroca de Oliveira
Member of the Board of Directors
Luísa Alexandra Ramos Amorim
Member of the Board of Directors
José da Silva Carvalho Neto
Member of the Board of Directors
Member of the Board of Directors
PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. o'Porto Bessa Leite Complex Rua António Bessa Leite, 1430 - 5º 4150-074 Porto Portugal Tel +351 225 433 000 Fax +351 225 433 499
1 In accordance with the Portuguese Securities Market legislation ("Código dos Valores Mobiliários") we present the limited review report on the consolidated financial information for the period of six months ended 30 June 2009 of Corticeira Amorim, SGPS, SA, comprising the consolidated Management Report, the consolidated balance sheet (which shows total assets of Euros 547.337 thousand and total shareholder's equity of Euros 241.656 thousand, which includes a net loss of Euros 3.486 thousand), the consolidated statements of income by nature, the consolidated statement of changes in equity and the consolidated cash flow statement for the period then ended and the corresponding notes to the accounts.
2 It is the responsibility of the Company's Management: (i) to prepare consolidated financial statements which present fairly, in all material respects, the financial position of the company and its subsidiaries, the consolidated changes in equity and the consolidated results and cash flows of their operations; (ii) to prepare consolidated financial statements applying the International Financial Reporting Standards (IFRS), as adopted in the European Union, in particular the International Accounting Standard nº 34 – Interim Financial Information, and the principles requested by the Portuguese Security Market legislation; (iii) to adopt appropriate accounting policies and criteria; (iv) to maintain adequate systems of internal accounting controls; and (v) to disclose any relevant fact that has influenced the activity of the company and its subsidiaries, its financial position or results.
3 Our responsibility is to verify the consolidated financial information presented on these documents, in particular if it is complete, faithful, actual, comprehensible, objective and lawful, in accordance with Portuguese Security Market legislation with the objective of expressing an independent and professional report on this information based on our review.
Corticeira Amorim, SGPS, SA
4 We conducted our limited review in accordance with the Standards and Technical Recommendations approved by the Portuguese Institute of Statutory Auditors applicable to limited review engagements, which require that we plan and perform the review to obtain moderate assurance as to whether the consolidated financial statements are free of material misstatement. Our limited review consisted, principally, in inquiries and analytical procedures designed to evaluate: (i) the faithfulness of the assertions in the financial information; (ii) the adequacy and consistency of the accounting principles adopted, taking into account the circumstances; (iii) the applicability, or not, of the going concern basis; (iv) the overall presentation of the financial statements; and (v) verification of the completeness, faithfulness, actuality, comprehensiveness, objectivity and lawfulness of the information presented, in accordance with the Portuguese Securities Market legislation.
5 Our review also included the verification of the consistency of the consolidated Management Report with the information contained in the financial statements
6 We believe that our review provides a reasonable basis for our limited review report.
7 Based in our limited review, which was performed in order to provide a moderate level of assurance, nothing has come to our attention that cause us to conclude that the consolidated financial statements of the period of six months ended 30 June 2009 contain material errors that affect their conformity with the International Financial Reporting Standards (IFRS), as adopted in the European Union, in particular the International Accounting Standard nº 34 – Interim Financial Information, and the information there included is complete, faithful, actual, comprehensible, objective and lawful.
Porto, 28 August 2009
PricewaterhouseCoopers & Associados, S.R.O.C., Lda. represented by:
José Pereira Alves, R.O.C.
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