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Altri SGPS — Management Reports 2012
Sep 3, 2012
1914_ir_2012-09-03_487b4ce8-222c-44f2-bff1-7c8123f5b75c.pdf
Management Reports
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DIRECTORS' REPORT
Consolidated Accounts
1 st semester of 2012
| INTRODUCTION 3 |
|
|---|---|
| STOCK EXCHANGE EVOLUTION5 | |
| GROUP'S ACTIVITY 7 |
|
| FINANCIAL REVIEW9 | |
| SECOND SEMESTER 2012 OUTLOOK 12 |
|
| CORPORATE GOVERNANCE15 | |
| LEGAL MATTERS16 | |
| DECLARATION OF RESPONSIBILITY18 | |
| CLOSING REMARKS18 |
To the Shareholders
Pursuant to the legal requirements, the Board of Directors of Altri, S.G.P.S., S.A. (Public Company) hereby presents its Directors' Report for the first semester of 2012.
INTRODUCTION
Altri was incorporated as of March 2005, as a result of the demerger of Cofina. Altri is a reference European producer of bleached eucalyptus pulp and is a listed company included in NYSE Euronext Lisbon, integrating the PSI 20 (Portuguese Stock Index), the benchmark stock market index. In addition to pulp production, the company is also present in electric energy from forest renewable sources, namely industrial cogeneration, black liquor and biomass. The forestry strategy is based on full use of all the components provided by the forest: pulp, black liquor and forest wastes.
Over the past years, Altri invested in Portugal about 465 million euro, mainly on Celbi and Celtejo unities. Currently, Altri owns three pulp mills in Portugal with a total capacity above 850,000 tonnes/year of bleached eucalyptus pulp in 2011. The projects, which are in the conclusion phase of the learning curve, will increase the nominal production capacity of Altri close to 900 000 tonnes/year.
Currently, Altri manages over 85.000 hectares of forest in Portugal. The company obtained certification from the Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC), two of the most worldwide acknowledged certification entities.
Altri's industrial strategy implementation is based on integrated forest management in Portugal. This model is based on forest optimization, ensuring a full recovery of all its components. Thus, the eucalyptus is processed in Altri mills, producing pulp and power (cogeneration). The bark, the branches and forest waste are used to produce electric energy from biomass.
Until June 2008, Altri had another industrial activity through the F. Ramada, which was devoted to retail steel and development of industrial solutions for storage systems. In June 2008 took place the split of the F. Ramada. The strategic rationale of this operation lies in focusing exclusively Altri on their core business, forest management and production of pulp.
Since the beginning of its activity Altri carried out various acquisitions (Celtejo in 2005 and in 2006 Celbi) that allowed Altri to reinforce its position in its operating markets and by the development of a set of expansion activity projects.
For a better valuation of forest resources, Altri acquired in 2005, 50% of EDP Produção - Bioeléctrica, S.A., for, in partnership with EDP, producing electricity from forest biomass. This company is leader in its market segment with a share licenses, to the production of electricity by forest biomass, of 50%.
Altri's structure as of 30 June 2012 is as follows:
STOCK EXCHANGE EVOLUTION
(Note: in order to enable a better comparison of the stock fluctuations, the PSI 20 index has been considered as being equal in value to the opening price of the shares in question.)
The world economy continued in 2011 recovering from the deep recession observed in 2009. However, the economic growth in 2011 was below that recorded in 2010, mainly due to a gradual economic slowdown since the middle of the second quarter. This slowdown was the result of a combination of factors of persistent nature, particularly the intensification of financial turbulence associated with sovereign debt crisis in the eurozone
The sovereign debt crisis contributed to weaken the global economic recovery. Domestic demand in major advanced economies remained relatively weak as the result of the adjustment of balance sheets and debt reduction. Subsequent to the consolidation of public finances, domestic demand grew at relatively low levels in most economies.
In early 2012, the world economy showed signs of recovery, supported by calming financial markets due to the adoption of the second package of financial assistance to Greece, together with the introduction of measures by the European Central Bank. However, the resurgence of distrust of international investors about the sustainability of public finances of Spain and Italy and the uncertainty prevailing on the resolution of sovereign debt crisis in the euro area were reflected in increases in the yields of sovereign debt of some countries in the euro area, particularly Spain and Italy, from March 2012.
The evolution of equity markets in 2011 was influenced largely by the development of sovereign debt crisis in the euro area and the progressive deterioration of the outlook for global growth. Thus, after a first half of the year in which the equity markets remained relatively stable since the end of 2010, the second half of 2011 proved to be extremely adverse, especially for the banking sector.
In April 2012 the majority of the equity markets in advanced economies recovered from the losses recorded in 2011, but only partially and with the exception of the European banking sector that continued to be hampered by the uncertainty surrounding the sovereign debt crisis in the euro area.
Altri's share price closed the first six months of 2012 at 1.045 Euros per share, representing a depreciation of 13% over the end of 2011. The market capitalization at the end of that period was 214.4 million euros.
During the first half of 2012, Altri's share price reached the maximum of 1.229 Euros per share and the minimum of 0.98 Euros per share, with 14.4 million shares traded.
The main events that marked the evolution of the shares of the Company during the first half of 2012 can be described chronologically as follows:
On March 7, the Group announced the financial performance of the year 2011, with a consolidated net profit around 23 million Euros. The consolidated total revenues exceeded 486 million Euros, representing a decrease of 2.8% compared to 2010. Consolidated EBITDA amounted to 113.1 million Euros, registering a decrease of 29.3% compared to 2010. On that date shares' closing price reached 1.123 Euros per share;
- In a statement made on April 26 of 2012, Altri informed the market about the deliberations of the General Meeting held on that date which approved, among others, the proposed distribution of dividends corresponding to 0.02 Euros per share;
- Through a statement made on May 9, the Group announced the results of the first quarter of 2012. During this period the consolidated total revenues reached about 123 million Euros, representing a decrease of about 2% over the same period of 2011. The EBITDA reached about 28.6 million Euros, which means a decrease of about 12% over the first quarter of 2011.
GROUP'S ACTIVITY
With its genesis in the reorganization process of Cofina with the purpose of setting into a separate holding the industrial operations, Altri held until 1 June 2008 the investments in the paper, pulp, steel and storage systems, date considered for the demerger process the business of steel and storage systems. This reorganization is part of a focusing and business transparency strategy, aiming at giving greater visibility to each area and increasing market perception of value.
The main participations were Altri holds the majority of capital are indirectly hold, and are as follows:
- Caima Indústria de Celulose (Constância), producer and distributor of paper pulp;
- Celbi Celulose da Beira Industrial, S.A. (Figueira da Foz), producer and distributor of paper pulp;
- Celtejo Empresa de Celulose do Tejo, S.A. (Vila Velha de Ródão), producer and distributor of paper pulp;
- Altri Florestal (Constância), manager of the Group's forestry resources.
Moreover, in order to fulfil its energetic needs and expand its activity in a strategic sector, the Group holds a participation of 50% of the share-capital of EDP Bioeléctrica.
Location of the industrial units of the Group Location of the centrals of energy production
Altri's complete structure of participation as of 30 June 2012 is as follows:
Pulp market
The first semester of 2012, according to pulp BEKP price´s evolution, was characterized by a ascending behaviour, which has reach its peak in May after the main world competitors have announced the pulp prices of 800 USD per ton. Simultaneous, at the end of June 2012, the exchange rate EUR/USD evolution has contributed for pulp prices to achieve 626 EUR per ton.
On average, the price registered in the first semester of 2012 was 735 USD/ton (567€/ton). In the second quarter of that year, the average price recorded amounted to 772 USD/ton (600€/ton), corresponding to a growth of 10% and 13%, respectively, comparing to the average prices registered on the first three months of 2012.
Thus, according to data from the "Pulp and Paper Products Council" (PPPC) in the first six months of 2012, the level of demand for bleached paper pulp increase 1.6%, to 26.7 million ton, while the supply grown about 0.8%, to 29 million ton, which means a shipment to capacity ratio of 92%.
This growth of 1.6% was due, almost exclusively, to the significant growth in demand from China, which registered a rise of 15.2%.
During the second quarter of 2012, there was as increase in the number of days of stock for the hardwood folders producers, rising from 38 days in April to 40 days in June 2012. Nevertheless, in June 2011, Altri had 44 days of stock.
According to the weekly index PIX, currently, the market prices of hardwood pulp is 763USD/ton (610€/ton).
Market price evolution in BEKP pulp in Europe since 1990 to the end of 2nd Q 2012 (EUR) Source: Hawkins Wright
FINANCIAL REVIEW
The consolidated financial information of Altri on the first half of 2012 and comparative information for 2011 have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and in accordance with International Accounting Standard 34 - Interim Financial Reporting.
The key data and indicators of the consolidated operations of the Altri Group are detailed as follows:
| thousand euros | 2Q 2011 | 1Q 2012 | 2Q 2012 | 2Q12/2Q11 Var% |
2Q12/1Q12 Var% |
|---|---|---|---|---|---|
| Sales Services rendered Other income |
121.694 1.430 1.879 |
119.897 1.727 1.176 |
140.094 1.739 1.364 |
15,1% 21,6% -27,4% |
16,8% 0,7% 16,0% |
| Total revenues | 125.003 | 122.800 | 143.197 | 14,6% | 16,6% |
| Costs of sales External supplies and services Payroll expenses Other expenses Total expenses (a) |
50.992 31.740 8.389 3.130 94.251 |
51.259 34.952 6.974 1.025 94.210 |
57.115 36.346 9.633 2.080 105.174 |
12,0% 14,5% 14,8% -33,6% 11,6% |
11,4% 4,0% 38,1% 102,9% 11,6% |
| EBITDA (b) Margin |
30.752 24,6% |
28.590 23,3% |
38.023 26,6% |
23,6% +2,0 pp |
33,0% +3,3 pp |
| Amortisation and depreciation | 12.960 | 12.407 | 12.428 | -4,1% | 0,2% |
| EBIT (c) Margin |
17.792 14,2% |
16.182 13,2% |
25.595 17,9% |
43,9% -3,6 pp |
58,2% +4,7 pp |
| Gains and losses in associated companies and joint ventures Financial expenses Financial income |
608 -10.008 1.537 |
131 -10.173 1.651 |
955 -9.529 2.009 |
57,0% -4,8% 30,7% |
631,8% -6,3% 21,7% |
| Financial profit | -7.862,6 | -8.391,3 | -6.564,5 | -16,5% | -21,8% |
| Profit before income tax | 9.929 | 7.791 | 19.030 | 91,7% | s s |
| Income tax Minority interests |
-1.336 3 |
-1.436 1 |
-3.182 0 |
138,2% s s |
s s s.s. |
| Profit for the period from discountinued operations attributable to parent company's shareholders |
8.590 | 6.354 | 15.848 | 84,5% | 149,4% |
| Profit for the period from discountinued operations | -9 | - | - | - | s s |
| Consolidated net profit attributable to parent company's shareholders |
8.581 | 6.354 | 15.848 | 84,7% | 149,4% |
(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 2nd quarter of 2012 registered a record in sales and exports of pulp
Second quarter 2012 results are characterized by record pulp sales, either in terms of volume (242.8 thousand tons sold) either in turnover (122.3 million euro) and, simultaneously, by a reinforcement of the operational efficiency, which resulted in an increase in operating margins.
Total revenues of the second quarter of 2012 reached 143 million euro, representing a 15% increase compared with total revenues recorded in the same period of 2011. Compared with the first quarter of 2012, total revenues up by 17%.
In the second quarter of 2012, Altri produced about 229.1 thousand tons of pulp a 5% increase compared to 219.1 thousand tons of pulp produced in the second quarter of 2011.
Evolution of pulp production between 2Q 2011 and 2Q 2012 by industrial unit (thousands tons)
In terms of volumes, during the period under analysis, 243 thousand tons were sold, more than 7% than the pulp sales made in the first quarter of 2012 and more than 22% than the pulp sales made in the same period of 2011.
In terms of turnover, pulp sales, in the second quarter of 2012, amounted to 122.3 million euro, a rise of 16% compared to the second quarter of 2011 and of 20% compared to the first quarter of 2012.
In the second quarter of 2012, Altri exported about 224 thousand tons of pulp, which represents 92% of Altri's total sales. The amount of these exports reached 113.1 million euro. Both volumes and exported amounts posted a record in quarterly terms.
Net revenues of energy associated with cogeneration and other forest components amounted to 7.3 million euro, a 20% decrease over this net revenue registered in the second quarter of 2011 (9.1 million euro). This decrease was mainly motivated by the sharp rise in electric power costs, which were 33% higher compared with the same period of 2011.
Total costs, excluding depreciation, financial and tax amounted to 105.2 million euro, a 12% increase in relation to the same period of the previous year.
The increase registered in the caption External Supplies and Services can be explained, mostly, by the referred sharp rise in energy costs.
In Payroll expenses, during the second quarter, was recorded an amount higher than 2 million euro, related to a restructuring process that was completed in the meanwhile. This amount can be considered as one off of the second quarter of 2012.
EBITDA of 38 million euro and margin of 26.6%
EBITDA reached 38 million euro a 24% increase compared to the same period last year and an increase of about 33% compared to the first quarter of 2012.
Operating profit (EBIT) was about 25.6 million euro, which corresponds to a rise of about 44% compared to EBIT of the second period of 2011 and a 58% increase compared to the EBIT recorded in the first quarter of 2012.
Net income reached 15.8 million euro in the second quarter of 2012, up 149% compared to the current's year previous quarter.
Net profit of the first semester of 2012 reaches 22 million euro (+25%)
| thousand euros | 1S 2011 | 1S 2012 | 1S12/1S11 Var% |
|---|---|---|---|
| Sales | 243.759 | 259.991 | 7% |
| Services rendered | 2.471 | 3.466 | 40% |
| Other income | 4.508 | 2.540 | -44% |
| Total revenues | 250.737 | 265.997 | 6,1% |
| Costs of sales | 103.691 | 108.375 | 5% |
| External supplies and services | 61.434 | 71.298 | 16% |
| Payroll expenses Provisions and impairment losses |
15.929 0 |
16.606 0 |
4% - |
| Other expenses | 6.624 | 3.105 | -53% |
| Total expenses (a) | 187.679 | 199.384 | 6,2% |
| EBITDA (b) | 63.057 | 66.613 | 5,6% |
| Margin | 25,1% | 25,0% | -0,1 pp |
| Amortisation and depreciation | 26.376 | 24.836 | -5,8% |
| EBIT (c) Margin |
36.681 14,6% |
41.777 15,7% |
13,9% +1,1 pp |
| Gains and losses in associated companies and joint ventures Financial expenses |
357 -19.252 |
1.086 -19.702 |
204,0% 2,3% |
| Financial income | 3.369 | 3.660 | 8,7% |
| Financial profit | -15.525,9 | -14.955,8 | -3,7% |
| Profit before income tax | 21.155 | 26.821 | 26,8% |
| Income tax | -3.369 | -4.618 | 37,1% |
| Minority interests | 1 | 2 | s s |
| Profit for the period from discountinued operations attributable to parent company's shareholders |
17.786 | 22.202 | 24,8% |
| Profit for the period from discountinued operations | 11 | - | - |
| Consolidated net profit attributable to parent company's | 17.796 | 22.202 | 24,8% |
(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
In year-half terms, total revenues grew 6.1% amounting to 266 million euro leading to an EBITDA of about 66.6 million euro, an increase of 6% compared to the same period in 2011. The net profit of the first six months of 2012 reached 22.2 million euro (+25%).
This growth pattern was mainly achieved through operating efficiency reinforcement, since that, during the first half of 2012, the average selling prices of pulp were 8% lower on a like for like basis.
Cash flow generated in the second quarter of 2012 of 16.2 million euro
Total investment made between March and June of 2012 amounted to 4.9 million euro. So, in the first six months of 2012, Altri through its forest and industrial units invested about 8 million euro.
The nominal remunerated debt net of cash and investments available for sale in June 30, 2012 amounted to 665.9 million euro, having reduced by 12.4 million compared to December 31, 2011. Regarding the net debt recorded in the end of the first quarter of 2012 (682.1 million euro), the decrease amounted 16.2 million euro.
Financing needs are fully assured, holding the Group in cash and cash equivalents and investments available for sale, as of 30 June 2012, 120.7 million euro. Additionally, Altri Group holds 36 million euro in available financing lines not used.
Key balance sheet indicators
| thousand euro | 2011 | 2Q 2012 | Var% |
|---|---|---|---|
| Biological assets | 103.339,5 | 105.441,1 | 2% |
| Tangible assets | 460.118,9 | 440.867,2 | -4% |
| Goodw ill |
265.531,4 | 265.531,4 | 0% |
| Others | 33.057,5 | 43.517,3 | 32% |
| Total non current assets | 862.047,3 | 855.357,0 | -1% |
| Inventories | 61.728,9 | 58.142,1 | -6% |
| Customers | 66.672,8 | 97.925,7 | 47% |
| Cash and cash equivalentes | 112.746,9 | 106.577,4 | -5% |
| Others | 24.527,9 | 23.051,0 | -6% |
| Total current assets | 265.676,5 | 285.696,2 | 8% |
| Total assets | 1.127.723,8 | 1.141.053,2 | 1% |
| Shareholders's equity and minority interests140.762,6 | 145.558,6 | 3% | |
| Bank loans | 11.875,0 | 10.000,0 | -16% |
| Other loans | 499.878,0 | 488.438,6 | -2% |
| Reimbursable subsidies | 38.893,9 | 33.808,5 | |
| Others | 23.049,6 | 22.179,0 | -4% |
| Total non current liabilities | 573.696,5 | 554.426,1 | -3% |
| Bank loans | 157.121,7 | 150.027,0 | -5% |
| Other current loans | 127.658,5 | 134.049,7 | 5% |
| Reimbursable subsidies | 8.784,0 | 14.400,2 | |
| Suppliers | 66.608,8 | 68.709,2 | 3% |
| Others | 53.091,6 | 73.882,4 | 39% |
| Total current liabilities | 413.264,7 | 441.068,5 | 7% |
SECOND SEMESTER 2012 OUTLOOK
In September of 2012, the main industrial unit of Altri, Celbi, is going to make its annual stoppage for 10 days, which will impact production volumes and sales of that month.
CORPORATE GOVERNANCE
According to legal provisions, the Company is not required to provide information relating to corporate governance, since it is compulsory only in conjunction with the annual Directors' report.
LEGAL MATTERS
Own shares
Pursuant to the requirements of article 66 of the Commercial Company Code ("Código das Sociedades Comerciais"), the Directors inform that as of 30 June 2012 Altri and its subsidiaries had no own shares and did not acquire or sell any own shares during the period.
Shares held by Altri's corporate boards
Pursuant to the requirements of article 447 of the Commercial Companies Code ("Código das Sociedades Comerciais"), the Directors inform that, as of 30 June 2012, the held shares were as follows:
| Paulo Jorge dos Santos Fernandes | 14,001,492 |
|---|---|
| Pedro Macedo Pinto de Mendonça | 1,705,000 |
| Domingos José Vieira de Matos | 13,939,432 |
| João Manuel Matos Borges de Oliveira (a) | 20,570,091 |
| Laurentina da Silva Martins | 0 |
(a) – 20,570,091 shares correspond to the total number of shares of Altri, S.G.P.S., S.A. held by Caderno Azul – S.G.P.S., S.A. which the administrator João Manuel Matos Borges de Oliveira is shareholder.
As of 30 June 2012, the Statutory Auditor, the members of the Statutory Audit Board and of the Shareholders' General Meeting held no shares of the Company.
Participation in the Company's capital
Pursuant to the requirements of articles 16 and 20 of the Securities Market Code ("Código de Valores Mobiliários") and article 448 of the Commercial Companies Code ("Código das Sociedades Comerciais"), the Directors inform that, in accordance with the notifications received, the companies and/or individuals that hold qualified participations exceeding 2%, 5%, 10%, 20%, 33% and 50% of the voting rights, are as follows:
| Exceeding 2% of the voting rights | Shares Held |
Direct % of the voting rights |
|---|---|---|
| Credit Suisse AG | 10,190,874 | 4,97% |
| Pedro Miguel Matos Borges de Oliveira | 9,781,582 | 4,77% |
| Norges Bank | 4,149,572 | 2,02% |
| Exceeding 5% of the voting rights | Shares Held |
Direct % of the voting rights |
|---|---|---|
| PROMENDO – SGPS, S.A. (a) | 16,324,000 | 7,96% |
| Paulo Jorge dos Santos Fernandes | 14,001,492 | 6,83% |
| Domingos José Vieira de Matos | 13,939,432 | 6,80% |
| Ana Rebelo Mendonça Fernandes (b) | 13,463,782 | 6,56% |
| Bestinver Gestión S.A., SGIIC | 13,382,984 | 6,52% |
- (a) 16,324,000 shares of Altri SGPS, S.A. held by PROMENDO SGPS, S.A., are attributable to Ana Rebelo Mendonça Fernandes, manager and shareholder, holder of 59.6% of the capital.
- (b) It is also due to Ana Rebelo Fernandes Mendonça, in addition to the 16,324,000 of Altri SGPS, SA held by the company Promendo SGPS, SA mentioned in (b). Thus, in legal terms, are considered attributable to Ana Rebelo Fernandes Mendonça, a total of 29,787,782 shares, representing 14.52% of the capital and voting rights of Altri - SGPS, SA.
| Shares | Direct % of the voting | |
|---|---|---|
| Exceeding 10% of the voting rights | Held | rights |
| CADERNO AZUL – SGPS, S.A. (a) | 20,570,091 | 10,03% |
(a) 20,570,091 shares represent the total shares of Altri SGPS, SA owned by Caderno Azul - SGPS SA, which the administrator João Manuel Matos Borges de Oliveira is shareholder.
DECLARATION OF RESPONSIBILITY
The members of the Board of Directors of Altri, S.G.P.S., S.A. declare that they assume responsibility for this information and affirm that the items included herein are true and that, to the best of their knowledge, there are no omissions.
As required by article 8, nr. 3, of the Stock Exchange Regulation, the Board of Directors declares that the financial statements that integrate this report were not subject to Limited Review.
As required by article 21 of Decree-Law 411/91 of 17 October, the Board of Directors informs that there are no overdue debts to the State, namely with respect to Social Security.
CLOSING REMARKS
The Board of Directors concludes by expressing a vote of thanks to the Personnel of the Altri Group for their dedication and effort, and also wishes to express its' thanks to the other Corporate Boards and to the Financial Institutions that co-operated with the Group.
Oporto, August 29, 2012
The Board of Directors:
Paulo Jorge dos Santos Fernandes – President
João Manuel Matos Borges de Oliveira
Domingos José Vieira de Matos
Pedro Macedo Pinto de Mendonça
Laurentina da Silva Martins
Article 447 of the Commercial Companies Code ("Código das Sociedades Comerciais") and article 14 nr. 7 of the Portuguese Securities Regulator (CMVM) Regulation nr. 05/2008
Disclosure of shares and other securities held by the Board of Directors and by those discharging managerial responsibilities, as well as people with these closely related, in accordance with Article 248. B of the Portuguese Securities Code, and transactions made on them during the semester.
| Shares held at 31 | ||||||
|---|---|---|---|---|---|---|
| Member of the Board of Directors | Dec 2011 | Acquisitions Disposals | Jun 2012 | |||
| Paulo Jorge dos Santos Fernandes | 14.001.492 | - | - | 14.001.492 | ||
| João Manuel Matos Borges de Oliveira (allocation via CADERNO AZUL - SGPS, S.A.) | 18.693.320 | 1.876.771 | - | 20.570.091 | ||
| Domingos José Vieira de Matos | 13.939.432 | - | - | 13.939.432 | ||
| Pedro Macedo Pinto de Mendonça | 1.705.000 | - | - | 1.705.000 |
| Date | Nature | Volume | Price (€) | Location | No. Shares |
|---|---|---|---|---|---|
| 31-Dec-2011 | - | - | - | - | 18.693.320 |
| 9-Mar-2012 | Purchase | 91.328 | 1,124132 | NYSE Euronex t Lisbon |
18.784.648 |
| 12-Mar-2012 | Purchase | 100.000 | 1,109161 | NYSE Euronex t Lisbon |
18.884.648 |
| 13-Mar-2012 | Purchase | 76.800 | 1,103636 | NYSE Euronex t Lisbon |
18.961.448 |
| 14-Mar-2012 | Purchase | 73.446 | 1,105683 | NYSE Euronex t Lisbon |
19.034.894 |
| 15-Mar-2012 | Purchase | 20.000 | 1,108810 | NYSE Euronex t Lisbon |
19.054.894 |
| 16-Mar-2012 | Purchase | 80.000 | 1,114259 | NYSE Euronex t Lisbon |
19.134.894 |
| 19-Mar-2012 | Purchase | 61.202 | 1,107225 | NYSE Euronex t Lisbon |
19.196.096 |
| 20-Mar-2012 | Purchase | 42.877 | 1,117968 | NYSE Euronex t Lisbon |
19.238.973 |
| 21-Mar-2012 | Purchase | 26.650 | 1,134876 | NYSE Euronex t Lisbon |
19.265.623 |
| 22-Mar-2012 | Purchase | 30.212 | 1,151792 | NYSE Euronex t Lisbon |
19.295.835 |
| 23-Mar-2012 | Purchase | 104.768 | 1,145910 | NYSE Euronex t Lisbon |
19.400.603 |
| 27-Mar-2012 | Purchase | 147.410 | 1,163798 | NYSE Euronex t Lisbon |
19.548.013 |
| 28-Mar-2012 | Purchase | 200.000 | 1,161259 | NYSE Euronex t Lisbon |
19.748.013 |
| 29-Mar-2012 | Purchase | 252.968 | 1,161726 | NYSE Euronex t Lisbon |
20.000.981 |
| 30-Mar-2012 | Purchase | 520.000 | 1,158452 | NYSE Euronex t Lisbon |
20.520.981 |
| 27-Jun-2012 | Purchase | 16.250 | 1,018538 | NYSE Euronex t Lisbon |
20.537.231 |
| 28-Jun-2012 | Purchase | 9.284 | 1,023616 | NYSE Euronex t Lisbon |
20.546.515 |
| 29-Jun-2012 | Purchase | 23.576 | 1,032419 | NYSE Euronex t Lisbon |
20.570.091 |
| 30-Jun-2012 | Purchase | - | - | - | 20.570.091 |
João Manuel Matos Borges de Oliveira (allocation via CADERNO AZUL - SGPS, S.A.)
Statement Under the terms of Article 245, paragraph 1, c) of the Securities Code
The signatories individually declare that, to their knowledge, the Interim Management Report, the Individual and Consolidated Financial Statements prepared in accordance with the standards of the applicable International Financial Accounting as adopted by the European Union, and in accordance with the International Accounting Standard 34 – Interim Financial Reporting, and other accounting documents required by law or regulation, giving a truthful (fairly) and appropriate image, in all material respects, of the assets and liabilities, financial position and the consolidated and individual results of Altri, SGPS, S.A. ("Altri") and of the companies included in the consolidation perimeter and contains a description of the major risks and uncertainties that they face.
Oporto, August 29, 2012
Paulo Jorge dos Santos Fernandes Chairman of the Board of Directors
____________________________________________
____________________________________________
____________________________________________
____________________________________________
____________________________________________
João Manuel Matos Borges de Oliveira Member of the Board of Directors
Domingos José Vieira de Matos Member of the Board of Directors
Pedro Macedo Pinto de Mendonça Member of the Board of Directors
Laurentina da Silva Martins Member of the Board of Directors
CONSOLIDATED FINANCIAL STATEMENTS
ALTRI, SGPS, S.A.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012 AND 31 DECEMBER 2011
(Translation of financial statements originally issued in Portuguese – Note 20) (Amounts expressed in Euro)
| ASSETS | Notes | 30.06.2012 | 31.12.2011 |
|---|---|---|---|
| NON CURRENT ASSETS: | |||
| Biological assets | 105.441.062 | 103.339.502 | |
| Tangible fixed assets | 440.867.221 | 460.118.883 | |
| Investment property | 528.817 | 534.226 | |
| Goodwill | 265.531.404 | 265.531.404 | |
| Intangible assets | 736.752 | 989.355 | |
| Investments in associated companies and joint ventures | 4.2 | 8.121.281 | 7.034.600 |
| Investments available for sale | 4.3 | 14.144.404 | 10.093.935 |
| Other non current assets | 610.841 | 706.086 | |
| Deferred tax assets | 7 | 19.375.171 | 13.699.322 |
| Total non current assets | 855.356.953 | 862.047.313 | |
| CURRENT ASSETS: | |||
| Inventories | 58.142.076 | 61.728.889 | |
| Customers | 97.925.730 | 66.672.815 | |
| Other debtors | 8.070.932 | 9.087.406 | |
| State and other public entities | 11.929.668 | 12.100.688 | |
| Other current assets | 3.050.392 | 3.339.769 | |
| Cash and cash equivalents | 6 | 106.577.412 | 112.746.939 |
| Total current assets | 285.696.210 | 265.676.506 | |
| Total assets | 1.141.053.163 | 1.127.723.819 | |
| SHAREHOLDERS' FUNDS AND LIABILITIES | 30.06.2012 | 31.12.2011 | |
| SHAREHOLDERS' FUNDS: | |||
| Share capital | 8 | 25.641.459 | 25.641.459 |
| Legal reserve | 2.862.981 | 2.862.981 | |
| Other reserves | 94.744.954 | 89.585.006 | |
| Consolidated net profit / (loss) | 22.202.129 | 22.567.762 | |
| Total shareholders' funds attributable to the parent company's shareholders | 145.451.523 | 140.657.208 | |
| Non controlling interests | 107.080 | 105.421 | |
| Total Shareholders' funds | 145.558.603 | 140.762.629 | |
| LIABILITIES: | |||
| NON CURRENT LIABILITIES: | |||
| Bank loans | 9 | 10.000.000 | 11.875.000 |
| Other loans | 9 | 488.438.595 | 499.878.011 |
| Reimbursable subsidies | 9 | 33.808.499 | 38.893.917 |
| Other non current creditors | 699.819 | 699.819 | |
| Other non current liabilities | 18.889.218 | 20.755.952 | |
| Deferred tax liabilities | 7 | 440.279 | 444.167 |
| Provisions | 10 | 2.149.668 | 1.149.668 |
| Total non current liabilities | 554.426.078 | 573.696.534 | |
| CURRENT LIABILITIES: | |||
| Bank loans | 9 | 150.027.025 | 157.121.714 |
| Other loans | 9 | 134.049.674 | 127.658.514 |
| Reimbursable subsidies | 9 | 14.400.165 | 8.784.029 |
| Suppliers | 68.709.223 | 66.608.803 | |
| Other current creditors | 8.016.977 | 8.233.010 | |
| State and other public entities | 3.077.552 | 1.736.137 | |
| Other current liabilities | 30.506.596 | 28.370.465 | |
| Derivatives | 11 | 32.281.270 | 14.751.984 |
| Total current liabilities | 441.068.482 | 413.264.656 | |
| Total shareholders' funds and liabilities | 1.141.053.163 | 1.127.723.819 | |
The accompanying notes form an integral part of the consolidated financial statements.
ALTRI, SGPS, S.A.
CONSOLIDATED STATEMENTS OF PROFIT AND LOSS FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2012 AND 2011
(Translation of financial statements originally issued in Portuguese – Note 20) (Amounts expressed in Euro)
| SEMESTER ENDED | QUARTER ENDED | |||||
|---|---|---|---|---|---|---|
| Notes | 30.06.2012 | 30.06.2011 | 30.06.2012 | 30.06.2011 | ||
| Continuing operations | ||||||
| Sales | 259.991.465 | 243.758.506 | 140.094.159 | 121.694.455 | ||
| Services rendered | 3.465.532 | 2.470.609 | 1.738.956 | 1.429.534 | ||
| Other income | 14 | 2.540.367 | 4.507.525 | 1.364.065 | 1.878.960 | |
| Cost of sales | (108.374.785) | (103.691.380) | (57.115.382) | (50.992.198) | ||
| External supplies and services | (71.298.197) | (61.434.318) | (36.346.046) | (31.739.665) | ||
| Payroll expenses | (16.606.187) | (15.929.215) | (9.632.566) | (8.389.275) | ||
| Amortisation and depreciation | (24.835.791) | (26.376.438) | (12.428.368) | (12.959.842) | ||
| Other expenses | 15 | (3.105.152) | (6.624.265) | (2.079.897) | (3.130.296) | |
| Gains and losses in associated companies and joint ventures | 4.2 | 1.085.651 | 357.151 | 955.138 | 608.426 | |
| Financial expenses | 12 | (19.701.833) | (19.251.636) | (9.528.995) | (10.008.151) | |
| Financial income | 12 | 3.660.355 | 3.368.541 | 2.009.353 | 1.537.114 | |
| Profit before income tax | 26.821.425 | 21.155.081 | 19.030.417 | 9.929.061 | ||
| Income tax | (4.617.637) | (3.368.702) | (3.181.851) | (1.335.969) | ||
| Net profit | 22.203.788 | 17.786.379 | 15.848.566 | 8.593.092 | ||
| Attributable to: | ||||||
| Parent company's shareholders | 13 | 22.202.129 | 17.785.817 | 15.845.697 | 8.590.227 | |
| Non controlling interests | 1.659 | 562 | 2.869 | 2.865 | ||
| Discontinued operations | ||||||
| Profit for the period from discontinued operations | 4.4 | - | 10.546 | - | (9.262) | |
| Attributable to: | ||||||
| Parent company's shareholders | - | 10.546 | - | (9.262) | ||
| Non controlling interests | - | - | - | - | ||
| Consolidated net profit | 22.203.788 | 17.796.925 | 15.848.566 | 8.583.830 | ||
| Attributable to: | ||||||
| Parent company's shareholders | 13 | 22.202.129 | 17.796.363 | 15.845.697 | 8.580.965 | |
| Non controlling interests | 1.659 | 562 | 2.869 | 2.865 | ||
| 22.203.788 | 17.796.925 | 15.848.566 | 8.583.830 | |||
| Earnings per share: | ||||||
| Continuing operations | ||||||
| Basic | 13 | 0,11 | 0,09 | 0,08 | 0,04 | |
| Diluted | 13 | 0,11 | 0,09 | 0,08 | 0,04 | |
| Continuing and discontinued operations | ||||||
| Basic | 13 | 0,11 | 0,09 | 0,08 | 0,04 | |
| Diluted | 13 | 0,11 | 0,09 | 0,08 | 0,04 |
The accompanying notes form an integral part of the consolidated financial statements.
ALTRI, S.G.P.S., S.A.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2012 AND 2011
(Translation of financial statements originally issued in Portuguese – Note 20)
(Amounts expressed in Euro)
| SEMESTER ENDED | QUARTER ENDED | |||||
|---|---|---|---|---|---|---|
| Notes | 30.06.2012 | 30.06.2011 | 30.06.2012 | 30.06.2011 | ||
| Net consolidated profit / (loss) for the period | 22.203.788 | 17.796.925 | 15.848.566 | 8.933.830 | ||
| Change in fair value of cash flow hedging derivatives | 7 and 11 | (13.324.393) | 4.879.879 | (4.832.001) | 3.838.967 | |
| Other comprehensive income | (13.324.393) | 4.879.879 | (4.832.001) | 3.838.967 | ||
| Total comprehensive income for the period | 8.879.395 | 22.676.804 | 11.016.565 | 12.772.797 | ||
| Attributable to: Shareholders' of the parent company Non controlling interests |
8.877.736 1.659 |
22.676.242 562 |
11.013.696 2.869 |
12.769.932 2.865 |
The accompanying notes form an integral part of the consolidated financial statements.
ALTRI, S.G.P.S., S.A.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE SIX MONTHS PERIODS ENDED 30 JUNE 2012 AND 2011
(Translation of financial statements originally issued in Portuguese – Note 20) (Amounts expressed in Euro)
| Attributable to the parent company's shareholders | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Other reserves | ||||||||||
| Others | ||||||||||
| reserves and | Non | Total | ||||||||
| Hedging | retained | Total others | controlling | shareholder's | ||||||
| Notes | Share capital | Legal reserve | reserves | earnings | reserves | Net profit | Total | interests | funds | |
| Balance as of 1 January 2011 | 25.641.459 | 2.862.981 | (14.855.870) | 39.387.315 | 24.531.445 | 62.014.069 | 115.049.954 | 112.365 | 115.162.319 | |
| Appropriation of the consolidated net profit of 2010 | - | - | - | 62.014.069 | 62.014.069 | (62.014.069) | - | - | - | |
| Dividends | - | - | - | (4.102.633) | (4.102.633) | - | (4.102.633) | - | (4.102.633) | |
| Others | - | - | - | (21.890) | (21.890) | - | (21.890) | (2.995) | (24.885) | |
| Total comprehensive income for the period | - | - | 4.879.879 | - | 4.879.879 | 17.796.363 | 22.676.242 | 562 | 22.676.804 | |
| Balance as of 30 June 2011 | 25.641.459 | 2.862.981 | (9.975.991) | 97.276.861 | 87.300.870 | 17.796.363 | 133.601.673 | 109.932 | 133.711.605 | |
| Balance as of 1 January 2012 | 25.641.459 | 2.862.981 | (7.685.749) | 97.270.755 | 89.585.006 | 22.567.762 | 140.657.208 | 105.421 | 140.762.629 | |
| Appropriation of the consolidated net profit of 2011 | - | - | - | 22.567.762 | 22.567.762 | (22.567.762) | - | - | - | |
| Dividends | - | - | - | (4.102.633) | (4.102.633) | - | (4.102.633) | - | (4.102.633) | |
| Others | - | - | - | 19.212 | 19.212 | - | 19.212 | - | 19.212 | |
| Total comprehensive income for the period | - | - | (13.324.393) | - | (13.324.393) | 22.202.129 | 8.877.736 | 1.659 | 8.879.395 | |
| Balance as of 30 June 2012 | 8 | 25.641.459 | 2.862.981 | (21.010.142) | 115.755.096 | 94.744.954 | 22.202.129 | 145.451.523 | 107.080 | 145.558.603 |
The accompanying notes form an integral part of the consolidated financial statements.
ALTRI , SGPS, S.A.
CONDENSED CONSOLIDATED CASH-FLOW STATEMENTS FOR THE SIX AND THREE MONTHS PERIODS ENDED 30 JUNE 2012 AND 2011
(Translation of financial statements originally issued in Portuguese – Note 20) (Amounts expressed in Euro)
| SEMESTER ENDED | QUARTER ENDED | ||||
|---|---|---|---|---|---|
| Notes | 30.06.2012 | 30.06.2011 | 30.06.2012 | 30.06.2011 | |
| Operating activities: | |||||
| Cash flow from operating activities (1) | 36.993.387 | 21.898.998 | 25.688.302 | 7.456.374 | |
| Investment activities: | |||||
| Collections relating to: | |||||
| Investments | 6 | 200.000 | 4.495.000 | - | 1.115.000 |
| Tangible assets | 371.476 | 1.382.380 | 149.335 | - | |
| Interest and similar income | 2.019.500 | 2.089.112 | 934.079 | 1.003.084 | |
| Investment subsidies | 530.718 | - | 138.931 | - | |
| Payments relating to: | |||||
| Investments | 6 | (4.050.469) | (7.281) | (4.041.469) | (7.281) |
| Intangible assets | (3.223) | (213.772) | - | (53.291) | |
| Tangible assets | (6.436.270) | (11.625.045) | (3.954.828) | (6.011.329) | |
| Cash flow from investment activities (2) | (7.368.268) | (3.879.606) | (6.773.952) | (3.953.817) | |
| Financing activities: | |||||
| Collections relating to: | |||||
| Loans obtained | 15.847.581 | 19.007.797 | 6.779.510 | 180.561 | |
| Payments relating to: | |||||
| Interest and similar costs | (29.490.624) | (3.000.000) | (7.579.806) | (2.965.836) | |
| Loans obtained | (18.011.256) | (18.590.896) | (3.897.193) | (3.966.716) | |
| Cash flow from financing activities (3) | (4.102.633) | (4.102.633) | (4.102.633) | (4.102.633) | |
| (35.756.932) | (6.685.732) | (8.800.122) | (10.854.624) | ||
| Cash and cash equivalents at the beginning of the period | |||||
| Effect of change in the companies consolidated | 111.418.007 | 129.653.370 | 95.171.966 | 148.224.025 | |
| Variation of cash and cash equivalents: (1)+(2)+(3) | - | (115.072) | - | - | |
| Cash and cash equivalents at the end of the period | 6 | (6.131.813) | 11.333.660 | 10.114.228 | (7.352.067) |
| 105.286.194 | 140.871.958 | 105.286.194 | 140.871.958 | ||
The accompanying notes form an integral part of the consolidated financial statements.
(Translation of notes originally issued in Portuguese – Note 20)
(Amounts expressed in Euro)
1. INTRODUCTORY NOTE
Altri, SGPS, S.A. ("Altri" or "Company") was incorporated as of 1 March 2005, has its head-office located at Rua General Norton de Matos, 68, r/c – Porto, Portugal and its shares are listed in the NYSE Lisbon Euronext Stock Exchange. Its main activity is the management of investments.
Altri was incorporated as a result of the reorganization process of Cofina, SGPS, S.A. occurred in 2005, through the demerger of the investment previously held by this group in Celulose do Caima, SGPS, S.A. (representing 97.23% of this company's share capital), under a simple demerger operation predicted in item 1.a), article 118 of the Commercial Companies Code ("Código das Sociedades Comerciais").
Altri is the parent company of a group of companies listed in Note 4 known as Altri Group. The current activity of Altri Group focuses on the production of bleached paper pulp of eucalyptus through three production units (Celbi in Figueira da Foz, Caima in Constância do Ribatejo and Celtejo in Vila Velha de Ródão).
Due to this new reality of Altri Group, the Board of Directors believe that there is only one business segment (production and commercialization of bleached paper pulp from eucalyptus) and the management information is also analyzed on this basis, for which the segmental information mentioned in Note 16 is limited by this.
The consolidated financial statements of Altri Group are presented in Euro rounded off to the unit, which is the currency used by the Group in its operations and considered as the functional currency.
2. MAIN ACCOUNTING POLICIES AND BASIS FOR PRESENTATION
The consolidated financial statements as of 30 June 2012 were prepared using accounting policies consistent with the International Financial Reporting Standards and in accordance with the International Accounting Standard and International Accounting Standard 34 – Interim Financial Reporting and includes the statement of financial position, the statement of profit and loss, the statement of comprehensive income, the statement of changes in equity and the condensed statement of cash flows as well as the selected explanatory notes.
The accounting policies used in the preparation of the consolidated financial statements of Altri are consistent with those used in the year ended 31 December 2011.
3. CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF MISTAKES
During the period there were no changes in accounting policies and were identified no material mistakes related to previous years.
ALTRI, S.G.P.S., S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 30 JUNE 2012 (Translation of notes originally issued in Portuguese – Note 20)
(Amounts expressed in Euro)
4. INVESTMENTS
4.1 INVESTMENTS IN SUBSIDIARIES
The companies included in the consolidated financial statements by the full consolidation method, its headquarters, percentage participation held and main activity as of 30 June 2012 and 31 December 2011, are as follows:
| Company | Head Office | Percentage Held | Activity | |
|---|---|---|---|---|
| Mother-Company: Altri, SGPS, S.A. |
Oporto | 2012 | 2011 | Investment management |
| Group Caima / Celtejo / Celbi: | ||||
| Celulose do Caima, SGPS, S.A. | Figueira da Foz | 100% | 100% | Investment management |
| Caima Indústria de Celulose, S.A. | Constância | 100% | 100% | Production and commercialization of pulp |
| Altri Florestal, S.A. | Figueira da Foz | 100% | 100% | Sylvan exploration |
| Caima Energia – Empresa de Gestão e Exploração de Energia, S.A. | Constância | 100% | 100% | Production of thermal and electrical energy |
| Invescaima – Investimentos e Participações, SGPS, S.A. | Figueira da Foz | 100% | 100% | Investment management |
| Inflora – Sociedade de Investimentos Florestais, S.A. | Figueira da Foz | 100% | 100% | Sylvan exploration |
| Celtejo – Empresa de Celulose do Tejo, S.A. | Vila Velha de Ródão | 99,83% | 99,83% | Production and Commercialization of pulp |
| Altri - Energias Renováveis, SGPS, S.A. |
Lisboa | 99,83% | 99,83% | Investment management |
| Celulose Beira Industrial (Celbi), S.A. | Figueira da Foz | 100% | 100% | Production and Commercialization of pulp |
| Celbinave – Tráfego e Estiva SGPS, Unipessoal, Lda. | Figueira da Foz | 100% | 100% | Freightage of ships |
| Viveiros do Furadouro Unipessoal, Lda. | Óbidos | 100% | 100% | Production of plants in nurseries and services related w ith forests and landscapes |
| Altri, Participaciones Y Trading, S.L. | Madrid, Espanha | 100% | 100% | Investment management and commercialization of pulp |
| Altri Sales, S.A. | Nyon, Suiça | 100% | 100% | Commercialization of pulp |
| Pedro Frutícola, Sociedade Frutícola, Lda. | Constância | 100% | 100% | Agriculture production |
| Captaraíz Unipessoal, Lda. | Figueira da Foz | 100% | 100% | Property buying and selling |
All the above companies were included in the Altri Group consolidated financial statements in accordance with the full consolidation method.
4.2 INVESTMENTS IN ASSOCIATED COMPANIES AND JOINT VENTURES
The associated companies and joint ventures, percentage of capital held and main activity as of 30 June 2012 and 31 December 2011 are as follows:
| Company | Percentage held | Activity | |
|---|---|---|---|
| 2012 | 2011 | ||
| Associated companies: | |||
| Operfoz – Operadores do Porto da Figueira da Foz, Lda. | 33,33% | 33,33% | Harbor operations |
| Joint ventures: | |||
| EDP – Produção Bioeléctrica, S.A. | 50% | 50% | Electric energy production |
Those associated companies and joint ventures were included in the Altri Group consolidated financial statements in accordance with the equity method.
AS OF 30 JUNE 2012
(Translation of notes originally issued in Portuguese – Note 20)
(Amounts expressed in Euro)
The book value, net assets, share capital and net profit for the period ended on 30 June 2012 for these associated companies and joint ventures are as follows:
| Company | Book value (a) | Asset | Equity | Net profit |
|---|---|---|---|---|
| Associated companies: | ||||
| Operfoz – Operadores do Porto da Figueira da Foz, Lda. | 491,377 | 4,004,458 | 1,474,128 | 341,114 |
| Joint ventures: | ||||
| EDP – Produção Bioeléctrica, S.A. | 7,629,904 | 151,060,789 | 10,887,861 | 2,053,341 |
| 8,121,281 |
(a) – includes loans granted.
4.3 INVESTMENTS AVAILABLE FOR SALE
As of 30 June 2012 and 31 December 2011 the investments available for sale are as follows:
| Company | Book value | |
|---|---|---|
| 2012 | 2011 | |
| Rigor Capital - Produção de Energia. Lda. | 10.000.000 | 10.000.000 |
| Others investments | 4.144.404 | 93.935 |
| 14.144.404 | 10.093.935 |
The caption "Investments available for sale" includes financial investments under 20%, in companies where Altri Group has no significant influence on its management, which are stated at acquisition cost, reduced by impairment losses.
4.4 ASSETS CLASSIFIED AS HELD FOR SALE OR IN DISCONTINUATION
During the year ended 31 December 2011 Altri Group sold its subsidiary Socasca – Recolha e Comércio de Recicláveis, S.A. ("Socasca").
The detail of profits and losses from the operational unit in discontinuation – Sócasca in 30 June 2011 is as follows:
| 30.06.2012 | |
|---|---|
| Sócasca | |
| Sales and services rendered | 2,160,333 |
| Other income | 261,406 |
| Cost of sales | (912,544) |
| External supplies and services | (1,083,871) |
| Payroll expenses | (173,416) |
| Other expenses | (35,410) |
| Amortisation and depreciation | (154,952) |
| Provisions and impaiment losses | (2,576) |
| Financial expenses | (44,561) |
| Profit before income tax | 14,409 |
| Income tax | (3,863) |
| Net profit | 10,546 |
This financial participation was sold during the year ended 31 December 2011 for an amount of 2,300,000 Euro (Note 6) of which up to 30 June 2012 were received 700,000 Euros, and to that date Altri is to receive the amount of 1.600.000 Euro.
(Amounts expressed in Euro)
5. CHANGES OCCURED IN THE CONSOLIDATION PERIMETER
During the period ended 30 June 2012, there were no changes in the consolidation perimeter compared to 31 December 2011.
6. CASH AND CASH EQUIVALENTS
As of 30 June 2012 and 2011, the caption "Cash and cash equivalents" can be detailed as follows:
| 30.06.2012 | 30.06.2011 | |
|---|---|---|
| Cash Bank deposits |
15,136 106,562,276 106,577,412 |
26,448 141,759,337 141,785,785 |
| Bank overdrafts (Note 9) | (1,291,218) | (913,827) |
| Cash and cash equivalents | 105,286,194 | 140,871,958 |
During the period ended 30 June 2012, receipts from investments were as follows:
| ========= | ========= | |
|---|---|---|
| 2.300.000 | 200.000 | |
| Sócasca – Recolha e Comércio de Recicláveis, S.A. (Note 4.4) | 2.300.000 --------------- |
200.000 ---------------- |
| Transaction Amount |
Amount received |
During the period ended 30 June 2011, receipts from investments were as follows:
| Transaction amount |
Amount received |
|
|---|---|---|
| EDP – Produção Bioeléctrica, S.A. (a) | 4.295.000 | 4.295.000 |
| Sócasca – Recolha e Comércio de Recicláveis, S.A. (b) | 200.000 | 200.000 |
| --------------- 4.495.000 |
---------------- 4.495.000 |
|
| ========= | ========= |
(a) – Repayment of loans granted
(b) – Advances received due to the sale of Socasca – Recolha e Comércio de Recicláveis, S.A. (Nota 4.4)
During the period ended 30 June 2012, payments from investments were as follows:
| ========= | ========= | |
|---|---|---|
| 4.050.469 | 4.050.469 | |
| --------------- | ---------------- | |
| Other investments available for sale (Note 4.3) | 4.050.469 | 4.050.469 |
| Transaction amount |
Amount paid |
(Translation of notes originally issued in Portuguese – Note 20)
(Amounts expressed in Euro)
7. CURRENT AND DEFERRED TAXES
In accordance with current legislation, tax returns are subject to review and correction by the tax authorities during a four-year period (five years for Social Security), with the exception when there have been tax losses, cases with there have been granted tax benefits, or tax inspections or claims are in progress, in which cases the periods may be extended or suspended. Therefore, the Company tax returns for the years 2008 to 30 June 2012 are still subject to review.
The Board of Directors believes that any potential corrections resulting from reviews/inspections of these tax returns by the tax authorities will not have a significant effect on the consolidated financial statements as of 30 June 2012.
The movements occurred in deferred tax assets and liabilities in the periods ended in 30 June 2012 and 2011 were as follows:
| 2012 | ||
|---|---|---|
| Deferred tax assets | Deferred tax liabilities | |
| 13.699.322 | 444.167 | |
| 825.262 | - | |
| 29.992 | (3.888) | |
| 855.254 | (3.888) | |
| 4.820.595 | - | |
| 19.375.171 | 440.279 | |
| 2011 | ||
| Deferred tax assets | Deferred tax liabilities | |
| 14.712.478 | 777.344 | |
| 850.994 | - | |
| 195.998 | (3.471) | |
| 1.046.992 | (3.471) | |
| (1.759.412) | - | |
| 14.000.058 | 773.873 | |
8. SHARE CAPITAL
As of 30 June 2012 the Company's fully subscribed and paid up capital consisted of 205,131,672 shares with a nominal value of 12.5 cents of a Euro each.
At 9 February 2011 Altri, SGPS, S.A. was notified that pursuant to decision of the President of the Notaries and Registrars Institute (Instituto dos Registos e Notariado) the appeal brought by Altri against the decision of the Commercial Registry Office of Oporto, which on account of alleged doubts registered as provisional the corporate change approved at the General Shareholders Meeting of Altri held on 17 May 2010, specifically changing the nominal value of the shares in the company's capital (Altri shares) from 0.25 Euro to 0.125 Euro, as result of which the share capital of Altri, in the amount of 25,641,459.00 Euro was represented by 205,131,672 shares. On 22 February 2011, the shares began trading on NYSE Euronext Lisbon with the new nominal value, having the restatement operationally achieved by diving each share in two, on 25 February 2011.
(Translation of notes originally issued in Portuguese – Note 20)
(Amounts expressed in Euro)
As of 30 June 2012 there were no entities holding more than 20% of the Company's subscribed share capital.
9. BANK LOANS AND OTHER LOANS
As of 30 June 2012 and 31 December 2011, the captions "Bank loans" and "Other loans" can be detailed as follows:
| Current | Non current | Total | Current | Non current | Total |
|---|---|---|---|---|---|
| 158,735,807 | |||||
| 1,291,218 | - | 1,291,218 | 1,291,218 | - | 1,291,218 |
| 150,027,025 | 10,000,000 | 160,027,025 | 150,027,025 | 10,000,000 | 160,027,025 |
| 113,000,000 | 116,000,000 | 229,000,000 | 112,691,047 | 115,863,110 | 228,554,157 |
| - 22,450,360 |
375,000,000 - |
375,000,000 22,450,360 |
- 21,358,627 |
372,575,485 - |
372,575,485 21,358,627 |
| 135,450,360 | 491,000,000 | 626,450,360 | 134,049,674 | 488,438,595 | 622,488,269 |
| 14,400,165 | 33,808,499 | 48,208,664 | 14,400,165 | 33,808,499 | 48,208,664 |
| 834,686,049 | 298,476,864 | 532,247,094 | 830,723,958 | ||
| 148,735,807 | Nominal Value 10,000,000 299,877,550 534,808,499 |
158,735,807 | 30/06/2012 148,735,807 |
Book Value 10,000,000 |
| 31/12/2011 | ||||||
|---|---|---|---|---|---|---|
| Nominal Value | Book Value | |||||
| Current | Non current | Total | Current | Non current | Total | |
| Bank loans | 155,806,954 | 11,875,000 | 167,681,954 | 155,792,782 | 11,875,000 | 167,667,782 |
| Bank overdrafts | 1,328,932 | - | 1,328,932 | 1,328,932 | - | 1,328,932 |
| Bank loans | 157,135,886 | 11,875,000 | 169,010,886 | 157,121,714 | 11,875,000 | 168,996,714 |
| Commercial paper | 111,000,000 | 128,000,000 | 239,000,000 | 110,629,490 | 127,831,518 | 238,461,008 |
| Bonds | - | 375,000,000 | 375,000,000 | - | 372,046,493 | 372,046,493 |
| Other loans | 18,086,859 | - | 18,086,859 | 17,029,024 | - | 17,029,024 |
| Other loans | 129,086,859 | 503,000,000 | 632,086,859 | 127,658,514 | 499,878,011 | 627,536,525 |
| Reimbursable incentives | 8,784,029 | 38,893,917 | 47,677,946 | 8,784,029 | 38,893,917 | 47,677,946 |
| 295,006,774 | 553,768,917 | 848,775,691 | 293,564,257 | 550,646,928 | 844,211,185 |
As of 30 June 2012, there are bank overdrafts amounted to 15,510,000 Euro (8,900,000 Euro as of 30 June 2011), classified in the caption "Bank Loans".
The expenditures with the constitution of the loans were deducted from its nominal value, being these recognized as financial expenses along the loan's life period (Note 12).
10. ACCUMULATED PROVISIONS AND IMPAIRMENT LOSSES
The movements occurred in provisions and impairment losses for the periods ended at 30 June 2012 and 2011 can be detailed as follows:
| 30.06.2012 | ||||||
|---|---|---|---|---|---|---|
| Impairment losses in | ||||||
| Provisions | accounts receivable | Total | ||||
| Opening balance | 1,149,668 | 6,851,677 | 8,001,345 | |||
| Increases | 1,000,000 | - | 1,000,000 | |||
| Utilizations | - | - | - | |||
| Closing balance | 2,149,668 | 6,851,677 | 9,001,345 | |||
| 30.06.2011 | ||||||
| Impairment losses in | ||||||
| Provisions | accounts receivable | Total |
| Opening balance | 1,980,728 | 6,791,109 | 8,771,837 |
|---|---|---|---|
| Increases | - | - | - |
| Utilizations | - | (6,695) | (6,695) |
| Closing balance | 1,980,728 | 6,784,414 | 8,765,142 |
(Translation of notes originally issued in Portuguese – Note 20)
(Amounts expressed in Euro)
The increase in impairment losses occurred in the period ended 30 June 2012 were recorded against the caption "Payroll expenses" of the consolidates profit and loss statement, according to its purpose.
The amount recorded under the caption "Provisions", at 30 June 2012 and 2011, is the best estimate of the Administration in order to face all the losses that may be supported due to the general risks from the activity of Altri's Group.
11. DERIVATIVE FINANCIAL INSTRUMENTS
As of 30 June 2012 and 2011 the companies of Altri's Group had contracts concerning financial derivative instruments to hedge of variations in pulp price and interest rates being these instruments registered according to its fair value.
The companies of Altri's Group only use derivatives to hedge cash flows from the operations generated by its activity.
As of 30 June 2012 and 2011 the detail of the financial derivative instruments are as follows:
| Pulp price hedging derivatives |
Interest rates derivatives |
Total | ||
|---|---|---|---|---|
| Opening balance as of 31.12.2011 | (302,933) | (14,449,051) | (14,751,984) | |
| Derivatives fair value variation/cessation Effects on shareholders' funds Effects on the profit and loss statement |
(17,709,811) - |
(481,112) 661,637 |
(18,190,923) 661,637 |
|
| Closing balance as of 30.06.2012 | (18,012,744) | (14,268,526) | (32,281,270) | |
| Pulp price hedging derivatives |
Interest rates derivatives |
Total | ||
| Opening balance as of 31.12.2010 | (8,735,277) | (14,721,501) | (23,456,778) | |
| Derivatives fair value variation/cessation Effects on shareholders' funds Effects on the profit and loss statement |
1,877,816 - |
4,761,475 263,559 |
6,639,291 263,559 |
|
| Closing balance as of 30.06.2011 | (6,857,461) | (9,696,467) | (16,553,928) |
12. FINANCIAL RESULTS
The financial results for the periods ended at 30 June 2012 and 2011 are detailed as follows:
| 30-06-2012 | 30-06-2011 | |
|---|---|---|
| Financial expenses: | ||
| Interest | 14.014.741 | 13.143.002 |
| Other financial expenses | 5.687.092 | 6.108.634 |
| 19.701.833 | 19.251.636 | |
| Financial income: | ||
| Interest | 2.609.491 | 2.708.065 |
| Other financial income | 1.050.864 | 660.476 |
| 3.660.355 | 3.368.541 | |
The caption "Other financial expenses" includes, mainly, expenses incurred with the establishment of the loans which are being recognized as costs through the life period of the respective loan (Note 9) and losses relative to interest rate financial derivative instruments (Note 11).
(Translation of notes originally issued in Portuguese – Note 20)
(Amounts expressed in Euro)
The "Gains and losses in associated companies and joint ventures" relate to the appropriation of the Group share in the results of the investments in the associated companies and joint ventures (Note 4.2).
13. EARNINGS PER SHARE
Earnings per share in the six months periods ended as of 30 June 2012 and 2011 were calculated considering the following amounts:
| 30-06-2012 | 30-06-2011 | |
|---|---|---|
| Share number considered for the computation of basic and diluted earning | 205.131.672 | 205.131.672 |
| Net profit considered for the computation of basic and diluted earning for continuing operations | 22.202.129 | 17.785.817 |
| Continuing operations earnings per share Basic Diluted |
0,11 0,11 |
0,09 0,09 |
| Net profit considered for the computation of basic and diluted earning for continuing and non-continuing activities | 22.202.129 | 17.796.363 |
| Continuing and non-continuing operations earnings per share Basic Diluted |
0,11 0,11 |
0,09 0,09 |
14. OTHER INCOME
As of 30 June 2012 the caption of the statement of profit and loss "Other Income" is detailed as follows:
| 30/06/2012 | |
|---|---|
| Investment and exploration subsidies | 1,419,729 |
| Gains obtained from the alienation of fixed assets | 88,397 |
| Other income | 1,032,241 |
| 2,540,367 |
15. OTHER EXPENSES
As of 30 June 2012 the caption of the statement of profit and loss "Other expenses" is detailed as follows:
| 30/06/2012 | |
|---|---|
| Direct taxes and charges Losses in commodities derivative contracts Other costs |
746,290 1,862,675 496,187 |
| 3,105,152 |
16. SEGMENTAL INFORMATION
On 16 April 2008, the Board of Administration of Altri, S.G.P.S., S.A. approved a simple reorganization project of this society which implies the split of Altri's two business units that operates in the pulp and paper sector and in the steel and storage systems sector. This reorganization aimed a bigger focus and transparency on ALTRI's business, and giving each of the areas an opportunity to be better seen and better evaluated by the market, and allows Altri Group to focus its activity on its core business, production and commercialization of bleached paper pulp form eucalyptus, so the Board of Directors believe that there is only one business segment and the management information is reported and analyzed on this basis.
(Translation of notes originally issued in Portuguese – Note 20)
(Amounts expressed in Euro)
17. RELATED PARTIES
The participated companies of the Group realize between them and at market prices, transactions that classifies as transactions with related parties.
In the consolidation procedures the transactions between the companies included in consolidation by the full consolidation method are eliminated, once the consolidated financial statements present the owner and its subsidiaries information as one single company, therefore they are not disclosed in this note.
During the periods ended at 30 June 2012 and 2011, there were no transactions with the Directors of the Group and were no granted loans.
As of 30 June 2012 and 2011 the balances and transactions with related parties are as follow:
| Purchases and services | Sales and services | Interest income | ||||
|---|---|---|---|---|---|---|
| Transactions | 30.06.2012 | 30.06.2011 | 30.06.2012 | 30.06.2011 | 30.06.2012 | 30.06.2011 |
| Associated companies and joint ventures (a) | - | - | 2,372,786 | 3,237,392 | 292,441 | 320,618 |
| Other related parties (b) | 4,062,552 | 4,036,869 | - | - | - | - |
| 4,062,552 | 4,036,869 | 2,372,786 | 3,237,392 | 292,441 | 320,618 | |
| Accounts payable | Accounts receivable | Granted Loans | ||||
| Balances | 30.06.2012 | 30.06.2011 | 30.06.2012 | 30.06.2011 | 30.06.2012 | 30.06.2011 |
| Associated companies and joint ventures (a) | 295,683 | - | 461,712 | 735,426 | 16,807,905 | 17,372,905 |
| Other related parties (b) | 651,646 | 20,250 | 8 1 |
- | - | - |
| 947,329 | 20,250 | 461,793 | 735,426 | 16,807,905 | 17,372,905 |
(a) All entities consolidated by the equity method as of 30 June 2012 and 2011 (Note 4.2);
(b) Were considered as related parties the companies of Ramada Group.
Besides the transactions identified above, there are no other transactions with related companies.
Besides the companies included in consolidation (Note 4), entities considered as related parties as of 30 June 2012 can be detailed as follow:
Adcom Media Anúncios e Publicidade, S.A. Alteria, S.G.P.S., S.A. Storax – Equipements, S.A. Caderno Azul, S.G.P.S., S.A. Caminho Aberto, S.G.P.S., S.A. Cofihold, S.G.P.S., S.A. Cofina, SGPS, S.A. Cofina B.V. Cofina Media, SGPS, S.A. Cofina Eventos e Comunicação, S.A. Destak Brasil – Editora de Publicações, S.A. Destak Brasil – Empreendimentos e Participações, S.A. Edisport – Sociedade de Publicações, S.A. Edirevistas – Sociedade Editorial, S.A. Efe Erre Participações, S.G.P.S., S.A. Elege Valor, S.G.P.S., S.A. F. Ramada – Investimentos, SGPS, S.A. F. Ramada – Aços e Indústrias, S.A. F. Ramada – Produção e Comercialização de Estruturas Metálicas de Armazenagem, S.A. F. Ramada II, Imobiliária, S.A. F. Ramada Serviços de Gestão, Lda. Grafedisport – Impressão e Artes Gráficas, S.A. Livre Fluxo, S.G.P.S., S.A. Malva – Gestão Imobiliária, S.A. Mediafin, SGPS, S.A. Metronews – Publicações S.A. Mercados Globais – Publicação de Conteúdos, Lda. Presselivre – Imprensa Livre, S.A. Sociedade Imobiliária Porto Seguro – Investimentos Imobiliários, S.A. Storax Racking Systems, Ltd.
ALTRI, S.G.P.S., S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF 30 JUNE 2012
(Translation of notes originally issued in Portuguese – Note 20)
(Amounts expressed in Euro)
Storax Benelux Transjornal – Edição de Publicações, S.A. Torres da Luz – Investimentos Imobiliários, S.A. Universal Afir – Aços, Máquinas e Ferramentas, S.A. VASP – Sociedade de Transportes e Distribuições, Lda Web Works – Desenvolvimento de Aplicações para Internet, S.A. Valor Autêntico, SGPS, S.A.
18. APPLICATION OF THE NET INCOME
Relating to the year ended in 2011, the Board of Directors proposed, in its general report, that the individual net loss of Altri, SGPS, S.A. in the amount of 2,913,284.89 Euro will be transferred to returned earnings. The proposal was approved in the General Assembly held on 26 April 2012.
The Board of Directors proposed also the distribution of free reserves in the amount of 4,102,633.44 Euro, as dividends, corresponding to a dividend of 0.02 Euro by share, this proposal was also approved on the General Assembly held on 26 April 2012.
19. FINANCIAL STATEMENTS APPROVAL
The financial statements were approved by the Board of Directors and authorized for issuance in 28 August 2012.
20. EXPLANATION ADDED FOR TRANSLATION
These consolidated financial statements are a translation of financial statements originally issued in Portuguese, prepared using accounting policies consistent with the International Financial Reporting Standards and with accordance with the International Accounting Standard 34 – Interim Financial Reporting, some of which may not conform or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.
The Board of Directors, Paulo Jorge dos Santos Fernandes – President João Manuel Matos Borges de Oliveira Pedro Macedo Pinto de Mendonça Domingos José Vieira de Matos Laurentina da Silva Martins