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Altri SGPS — Earnings Release 2015
Feb 25, 2016
1914_iss_2016-02-25_950741df-4dd8-4538-bd73-86714e423a68.pdf
Earnings Release
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ALTRI, SGPS, S.A. Public Company
Head Office: Rua do General Norton de Matos, 68, r/c – Porto Fiscal Number 507 172 086 Share Capital: 25,641,459 Euros
Financial Information – 2015 (Unaudited)
Key indicators 2015:
- 1,022.3 thousand tons of pulp produced (+3.2%)
- 1,011.8 thousand tons of pulp sold (+1.6%)
- 938.4 thousand tons of pulp exported (+0.5%)
- Record levels for financial indicators
- Total revenue: 664.8 million Euro (+20.3%)
- EBITDA: 221.1 million Euro (+94.7%)
- Net profit: 117.7 million Euro (+214.7%)
- Free Cash Flow to equity (net debt variation plus dividends paid): 150.5 million Euro
- Decrease of net debt: 82.8 million Euro when compared to 2014
- Dividends paid: 67.7 million Euro
- Net Debt (31 December 2015): 442.6 million Euro
- Financial Ratios
- Return on invested capital (NOPAT/(Equity + net debt): 17.5%
- Free cash flow yield (Free cash flow/market capitalization): 15.4%
- Free cash flow/ton:147.2 Euro
The financial information was prepared in accordance with the International Financial Reporting Standards (IFRS).
Quarterly Income Statement
| 4Q 2014 | 4Q 2015 | 4Q15/4Q14 Var% |
3Q 2015 | 4Q15/3Q15 Var% |
|
|---|---|---|---|---|---|
| Total Revenues | 146,171 | 170,546 | 16.7% | 181,492 | -6.0% |
| Costs of sales | 65,317 | 58,646 | -10.2% | 63,244 | -7.3% |
| External supplies and services | 41,004 | 41,695 | 1.7% | 42,383 | -1.6% |
| Payroll expenses | 8,602 | 10,802 | 25.6% | 8,818 | 22.5% |
| Others expenses | 267 | -460 | -272.1% | 1,892 | -124.3% |
| Provisions and impairment losses | -259 | 1,928 | 2,031 | -5.1% | |
| Total expenses (a) | 114,931 | 112,611 | -2.0% | 118,369 | -4.9% |
| EBITDA (b) | 31,240 | 57,935 | 85.5% | 63,123 | -8.2% |
| Margin | 21.4% | 34.0% | +12.6 pp | 34.8% | -0.8 pp |
| Amortization and depreciation | 10,770 | 13,577 | 26.1% | 13,111 | 3.6% |
| EBIT (c) | 20,470 | 44,358 | 116.7% | 50,012 | -11.3% |
| Margin | 14.0% | 26.0% | +12.0 pp | 27.6% | -1.8 pp |
| Results of associated companies | 702 | 821 | 17.0% | 1,423 | -42.3% |
| Financial costs | -7,190 | -7,781 | 8.2% | -7,355 | 5.8% |
| Financial income | 2,165 | 1,827 | -15.6% | 1,482 | 23.3% |
| Financial profit | -4,323 | -5,133 | 18.7% | -4,450 | 15.3% |
| Profit before income tax | 16,147 | 39,225 | 142.9% | 45,562 | -13.9% |
| Icome tax | -1,613 | -6,269 | s s |
-11,134 | s s |
| Non-controlling interests | 6 | 0 | s s |
0 | s s |
| Profit for the period attributable to parent company's shareholders | 14,528 | 32,956 | 126.8% | 34,428 | -4.3% |
(a) Operating costs excluding amortisation, financial expenses and income tax
(b) EBITDA = Earnings before interests, taxes, depreciation and amortisation
(c) EBIT = Earnings before interest and taxes
The fourth quarter of 2015 was marked by a decrease of quantities sold, corresponding to a normal year-end seasonal effect, driven by customer inventory reduction.
During the fourth quarter of 2015, total revenues reached 170.5 million Euro, representing a decrease of 6% compared to the third quarter of 2015 and an increase of 17% compared to the fourth quarter of 2014.
Operational costs, excluding amortizations, financial costs and taxes, reached, in the fourth quarter of 2015, 112.6 million Euro, which represents a decrease of 4.9% compared to the third quarter. This evolution in costs is related essentially to the decrease of cost of sales, which had a total decrease of 4.6 million Euro when compared to third quarter of 2015.
The fourth quarter of 2015 EBITDA amounted to 57.9 million Euro, with an EBITDA margin of 34.0%, which represents a decrease of 0.8 p.p. when compared to the EBITDA margin in third quarter of 2015 and an increase of 12.6 p.p. compared to the EBITDA margin in the fourth quarter of 2014.
Net income reached about 33.0 million Euro, which represents a decrease of 4.3% compared to the previous quarter, and an increase of 126.8% compared to the same period in 2014.
Annual Income Statement
| thousand euro | 2014 | 2015 | 2015/2014 Var% |
|---|---|---|---|
| Total Revenues | 552,858 | 664,825 | 20.3% |
| Costs of sales | 254,825 | 237,903 | -6.6% |
| External supplies and services | 152,040 | 162,836 | 7.1% |
| Payroll expenses | 29,778 | 35,277 | 18.5% |
| Others expenses | 2,759 | 4,049 | 46.8% |
| Provisions and impairment losses | -78 | 3,652 | s s |
| Total expenses (a) | 439,323 | 443,717 | 1.0% |
| EBITDA (b) | 113,535 | 221,108 | 94.7% |
| Margin | 20.5% | 33.3% | +12.7 pp |
| Amortization and depreciation | 48,520 | 52,834 | 8.9% |
| EBIT (c) | 65,015 | 168,274 | 158.8% |
| Margin | 11.8% | 25.3% | +13.6 pp |
| Results of associated companies | 2,741 | 2,950 | 7.6% |
| Financial costs | -34,506 | -31,946 | -7.4% |
| Financial income | 7,365 | 8,274 | 12.3% |
| Financial profit | -24,401 | -20,722 | -15.1% |
| Profit before income tax | 40,614 | 147,552 | 263.3% |
| Icome tax Non-controlling interests |
-3,223 9 |
-29,879 17 |
s s 90.3% |
| Profit for the period attributable to parent company's shareholders | 37,382 | 117,656 | 214.7% |
(a) Operating costs excluding amortisation, financial expenses and income tax
(b) EBITDA = Earnings before interests, taxes, depreciation and amortisation
(c) EBIT = Earnings before interest and taxes
Record production in 2015: 1.02 million tons of pulp produced
The year 2015 was, once again, a record year in terms of production and pulp sales. Thus, during this year Altri's industrial units produced 1.022 million tons of pulp (+3.2%), which includes 97.5 thousand tons of dissolving pulp (DP). In terms of pulp sales, in 2015 were sold 923.7 thousand tons of bleached pulp and about 88.1 thousand tons of dissolving pulp.
Therefore, in 2015, Altri's total revenues reached 664.8 million Euro, which represents an increase of about 20.3% compared to 2014. The pulp sales reached 564.7 million Euro, which represents an increase of 25.9% compared to pulp sales in 2014.
Europe (excluding Portugal) is the main destination market, representing 75% of the Group sales, approximately 760 thousand tons. Asia is the second biggest market, representing about 9% of the pulp sales, and is also the destination market of the dissolving pulp currently produced in Caima.
In terms of pulp use, tissue paper producers are the Altri's main clients, with a share of 49%.
Pulp Sales: detail by region
Pulp sales: detail by use
Costs analysis
Excluding depreciation, financial costs and taxes, in 2015 total costs reached 443.7 million Euro, which represents an increase of 1% compared to 2014.
Breaking down the cost evolution, the cost of sales decreased 6.6%, essentially by the decrease in the consumption of wood and chemicals. Regarding the evolution of external supplies and services, the increase compared to 2014 is due essentially to the increase in the price of electricity.
EBITDA reaches a record 221 million Euro
EBITDA in 2015 reached 221.1 million Euro, an increase of 95% compared to 2014, with an EBITDA margin of 33.3% (+12.7 p.p.). The operational income (EBIT) recorded an increase of 158% compared to 2014, reaching 168.3 million Euro.
The financial result amounted to a net charge of 20.7 million Euro, corresponding to an average cost of debt below 3%. The caption "Gains and losses in associated companies" essentially refers to the appropriation of 50% of the profit of EDP Bioeléctrica, a company 50% owned by Altri and consolidated by the equity method.
Altri's net income reached 117.7 million Euro, having registered an increase of 215% comparing to the previous year.
Free cash flow of 150.5 million Euro in 2015
The total investment (CAPEX) performed in 2015 by the industrial units was 32 million Euro.
Altris's nominal remunerated debt, net of cash as of 31 December 2015 reached 442.6 million Euro corresponding to a decrease 82.8 million Euro compared to 2014 (525.4 million Euro). It should be highlighted that, in 2015 the company paid 67.7 million Euro in dividends. The free cash flow generated in 2015 reached 150.5 million Euro.
Therefore, the company kept its priority financial strategy, which is based on systematic annual reduction of net debt through free cash flow generated by operating activities. Thus, it is noted that between 2009 and 2015 the net debt was reduced by 357 million Euro.
Evolution of equity free cash flow since 2010
Statement of Financial Position as of 31 December 2015
| thousand euros | 2014 | 2015 | Var% |
|---|---|---|---|
| Biological assets | 105,158.8 | 101,472.9 | -4% |
| Tangible assets | 384,285.5 | 364,119.6 | -5% |
| Goodwill | 265,531.4 | 265,531.4 | 0% |
| Investmens available for sale | 10,691.2 | 10,691.1 | 0% |
| Others | 43,226.9 | 42,756.7 | -1% |
| Total non current assets | 808,893.7 | 784,571.7 | -3% |
| Inventories | 54,725.4 | 56,396.6 | 3% |
| Customers | 88,868.1 | 91,521.3 | 3% |
| Cash and cash equivalents | 260,855.0 | 243,154.2 | -7% |
| Others | 25,913.7 | 19,597.6 | -24% |
| Total current assets | 430,362.3 | 410,669.6 | -5% |
| Total assets | 1,239,256.0 | 1,195,241.4 | -4% |
| Shareholder's equity and non controlling interests | 272,264.0 | 322,349.6 | 18% |
| Bank loans | 103,837.5 | 153,587.5 | 48% |
| Other loans | 278,276.9 | 413,733.4 | 49% |
| Reimbursable financial incentives | 11,723.8 | 17,439.1 | 49% |
| Others | 48,330.3 | 45,566.5 | -6% |
| Total non current liabilities | 442,168.5 | 630,326.6 | 43% |
| Bank loans | 77.2 | 10,775.0 | 13852% |
| Other current loans | 398,648.0 | 105,438.1 | -74% |
| Reimbursable financial incentives | 9,082.8 | 558.9 | -94% |
| Suppliers | 61,686.4 | 61,243.4 | -1% |
| Others | 55,329.1 | 64,549.8 | 17% |
| Total current liabilities | 524,823.5 | 242,565.3 | -54% |
Pulp market
According to data from Pulp and Paper Products Council (PPPC) in 2015, the total demand for hardwood pulp increased 5.5%, which represents, in absolute amounts, an increase of 1.2 million tons.
In the fourth Quarter of 2015, the BEKP price, in EUR, was marked by an increase of 1% of the price in EUR compared to the previous quarter. Thereby, the average market price was 732 EUR/ton, in the fourth quarter of 2015, which compares with an average market price (PIX) of 724 EUR/ton, in the third quarter of 2015.
Evolution of BEKP pulp price in Europe since 2003 until the end of 2015 (EUR) Source: FOEX
Altri – business profile
Altri is a reference in European eucalyptus pulp producers. In addition to pulp production, the Company is also present in the renewable power production business from forest base sources namely the industrial cogeneration through black liquor and biomass. The forestry strategy is based on the full use of all the components provided by the forest: pulp, black liquor and forest wastes.
Currently, Altri manages over 84 thousand hectares of forest in Portugal, entirely certified from the Forest Stewardship Council® (FSC®)1 and from the Programme for the Endorsement of Forest Certification (PEFC), two of the most worldwide acknowledged certification entities.
Currently, Altri has three pulp mills in Portugal with an installed capacity that in 2015 reached 1 million tons/year of pulp eucalyptus. The company has some ongoing small projects of optimizing operating efficiency which will allow, in the medium term, an increase of the productive capacity.
Altri's organic structure is as follows:
Oporto, February 25 th 2016
1 FSC-C004615