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Cemat Interim / Quarterly Report 2016
3426_rns_2016-08-25_357f20ec-1572-4f89-9c71-1f1bd5b63096.pdf
Interim / Quarterly Report
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CeMat
Nasdaq Copenhagen A/S
Nikolaj Plads 6
DK-1007 København K
Announcement no 30/2016
Company reg. (CVR) no.: 24 93 28 18
25 August 2016
CEMAT A/S
Interim report, Q2 2016
1 January–30 June 2016
FOCUS NOW ON OPTIMISING AND SELLING THE PROPERTY PORTFOLIO
"The sale of the silicon business to GlobalWafers was approved at the company's extraordinary general meeting held on 17 June 2016 and completed as of 1 July 2016. The costs of the continuing operations have subsequently been adjusted. The company has excess liquidity which is expected to allow for DKK 120 million to be returned to the shareholders of Cemat. Going forward, we will focus on optimisation and sale of our property portfolio in Poland."
Kalle Hvidt Nielsen, CEO
HIGHLIGHTS OF THE QUARTER
- On 17 June, the sale of Topsil's silicon business to GlobalWafers was approved at an extraordinary general meeting, and the listed company Topsil Semiconductor Materials A/S with the remaining activities changed its name to Cemat A/S.
- The sale was completed as of 1 July, and in immediate continuation of the divestment, the costs of Cemat were adjusted by measures including severance agreements with the members of the Management Board and by reducing the number of members of the Board of Directors.
- The consideration amounted to DKK 355 million on a debt-free basis, and after completion of the transaction, repayment of bank debt and the adjustment of the cost level, the company expects to have excess liquidity allowing for DKK 120 million to be returned to the shareholders of Cemat.
- As the transaction was not completed until in Q3 2016, this H1 report must be divided into continuing and discontinued operations.
- EBITDA from the property business was DKK 1.9 million in Q2 2016 (Q2 2015: DKK 1.7 million).
- A profit of DKK 33.6 million was posted for Q2 2016 and a loss of DKK 58.8 million for H1 2016, of which DKK 33 million was attributable to release from a supplier contract and DKK 7.1 million to impairment of the assets of the silicon business.
OUTLOOK FOR 2016
- Revenue for Cemat A/S is expected to amount to DKK 36 million in 2016, assuming that the Polish silicon business (Topsil GlobalWafers) stays on as a tenant throughout 2016 and purchases utilities (hydrogen, power, water, etc.) from Cemat'70 at the same level as previously.
- EBITDA generated by the Polish property business (Cemat'70) is expected to be around DKK 6 million. The costs of Cemat A/S will be significantly higher than expected in the coming years as the restructuring took place in the middle of the year.
- For the year as a whole, EBITDA is expected to amount to a loss of DKK 15 million, impacted by restructuring costs of approximately DKK 12 million. In this estimate, the operating costs of Cemat A/S before restructuring costs are expected to be DKK 9 million, which, as described in announcement 28/16 of 3 August 2016, is expected to be reduced to approximately DKK 2 million in the coming years.
- The guidance is based on an exchange rate of DKK 170/PLN 100.
CEMAT / INTERIM REPORT, Q2 2016
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FINANCIAL HIGHLIGHTS FOR THE GROUP (UNAUDITED)
| DKK'000 | Q2 2016 | Q2 2015 | H1 2016 | H1 2015 | FY 2015 |
|---|---|---|---|---|---|
| Income statement: | |||||
| Revenue | 3,525 | 3,599 | 7,187 | 7,458 | 14,456 |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | (156) | (2,807) | (2,931) | (5,546) | (8,976) |
| Operating profit/(loss) (EBIT) | (1,282) | (4,024) | (5,258) | (7,944) | (13,711) |
| Net financials | (5,048) | (2,778) | (7,600) | (5,932) | (12,534) |
| Profit/(loss) for the period, continuing operations | (6,452) | (6,945) | (12,990) | (14,041) | (26,752) |
| Profit/(Loss) for the period, discontinuing operations | 40,099 | 1,913 | (45,832) | (4,739) | (63,313) |
| Profit/(loss) for the period | 33,648 | (5,032) | (58,822) | (18,779) | (90,065) |
| Of which attributable to parent shareholders | 33,440 | (5,156) | (59,114) | (18,911) | (90,298) |
| Cash flow statement: | |||||
| Cash flows from operating activities | (24,492) | (7,073) | (30,830) | (5,062) | (16,668) |
| Cash flows from investing activities | (364) | (324) | (667) | (774) | (1,473) |
| Investments in property, plant and equipment | (364) | (324) | (667) | (774) | (1,473) |
| Balance sheet: | |||||
| Share capital | 132,029 | 132,029 | 132,029 | ||
| Equity attributable to parent company shareholders | 170,992 | 316,094 | 243,912 | ||
| Equity attributable to non-controlling shareholders | 15,652 | 16,658 | 16,782 | ||
| Total consolidated equity | 186,644 | 332,752 | 260,694 | ||
| Total assets | 524,150 | 647,235 | 556,092 | ||
| Invested capital | 446,015 | 513,412 | 440,069 | ||
| Net interest-bearing debt | 252,750 | 182,155 | 182,462 | ||
| Net woking capital (NWC) | 112,151 | 114,474 | 117,643 | ||
| Financial ratios: | |||||
| EBITDA margin (%) | (4.4) | (78.0) | (40.8) | (74.4) | (62.1) |
| EBIT-margin/profit margin (%) | (36.4) | (111.8) | (73.2) | (106.5) | (94.8) |
| Return on invested capital (%) | (0.3) | (0.8) | (1.2) | (1.5) | (2.8) |
| Equity ratio | 35.6 | 51.4 | 35.6 | 51.4 | 46.9 |
| Return on equity (%) | 19.1 | (1.5) | (26.3) | (5.5) | (29.8) |
| Current number of shares (thousands) | 528,114 | 528,114 | 528,114 | 528,114 | 528,114 |
| Earnings per share (DKK) | 0.06 | (0.01) | (0.11) | (0.04) | (0.17) |
| Price per share (DKK) | 0.29 | 0.44 | 0.29 | 0.44 | 0.28 |
| Average number of employees (FTE) | 34 | 35 | 35 | 36 | 35 |
CEMAT / INTERIM REPORT, Q2 2016
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DIVESTMENT OF THE SILICON BUSINESS
The shareholders of Topsil approved the divestment of the silicon business to GlobalWafers at the extraordinary general meeting held on 17 June 2016. In continuation of this, the transaction was completed as of 1 July 2016, and the listed holding company has changed its name to Cemat A/S.
The consideration was DKK 355 million on a debt-free basis. After the completion of the transaction and the repayment of bank debt (DKK 191 million including interest of DKK 8 million), payment of transaction costs (DKK 17 million), management adjustments (DKK 12 million) and the holding company's operating costs, it is expected that the listed company will have excess liquidity allowing for DKK 120 million to be returned to Cemat's shareholders.
The schedule for the distribution of the excess liquidity to shareholders is as follows:
- September 2016: An extraordinary general meeting will be held to decide how the excess liquidity is to be paid out (by way of a share buyback programme or an extraordinary dividend).
If the shareholders resolve to pay an extraordinary dividend, the disbursement is expected to take place in October 2016, and if the shareholders adopt a share buyback programme, it will follow the schedule set out below:
- October 2016: Adoption of a resolution by the shareholders in general meeting to cancel shares that have been sold back to the company (if a share buyback programme is adopted).
- November 2016: Disbursement to shareholders.
Reference is made to announcement no. 28/16 of 3 August 2016 for a detailed account of the sales process and a description of the continuing property business.
As the divestment had not been finally completed by 30 June 2016, IFRS requires that Topsil's income statement, balance sheet and cash flow statement for the period ended on and as of 30 June 2016 must be divided into continuing and discontinued operations. The comparative figures in the income statement have consequently been restated to reflect the continuing operations. The comparative figures in the balance sheet have not been restated
and consequently show the business as at 31 December 2015 and 30 June 2015.
CONTINUING OPERATIONS
Cemat A/S' business operations comprise a listed holding company in Denmark for the property business in Poland, operated through the 77.66% owned subsidiary Cemat'70 S.A. There are no other business operations in the Danish listed company.
The ongoing efforts to divest the assets of the Polish property business will continue unabated.
Cemat'70 owns 133 thousand sqm of land and 41 thousand sqm of buildings on Wolczynska 133 in the Bielany district, which is located approximately 10 kilometres NW of the centre of Warsaw. Bielany has undergone significant development over the past years with a large number of housing units and new retail businesses being established in the area. The land held by Cemat'70 is currently classified for industrial purposes, but the company is working to reclassify the land to residential and services usage to include it in the ongoing development of the district.
Cemat'70 engages in the letting of premises and land and the provision of utilities to its tenants, including power, water, technical gases and facility services, etc. Cemat'70 has approximately 90 tenants and an occupancy rate of approximately 75%. Topsil GlobalWafers is the biggest tenant, and any major changes in the operations of Topsil GlobalWafers would affect Cemat'70 accordingly.
Revenue was DKK 3.5 million in Q2 2016 (Q2 2015: DKK 3.6 million).
Costs were DKK 3.7 million in Q2 2016 (Q2 2015: DKK 6.4 million) and DKK 10.1 million in H1 2016 (H1 2015: DKK 13.0 million). This line item includes operating costs in the Polish property company and administrative expenses of the holding company related to being a listed company, including remuneration to the Board of Directors and the Management Board.
EBITDA was a loss of DKK 0.2 million in Q2 2016 (Q2 2015: a loss of DKK 2.8 million).
EBITDA of the property business was a profit of DKK 1.9 million in Q2 2016 and DKK 3.5 million in H1 2016. In the same period of 2015,
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EBITDA was DKK 1.7 million in Q2 and DKK 2.9 million in H1, respectively.
The operating profit has been calculated in accordance with IFRS and the accounting rules applicable to the transition period. This means that transactions with Topsil GlobalWafers continue to be eliminated. Moreover, the operating profit includes the full costs of the current management.
In early July, severance agreements were signed with the members of the Management Board, and in August it was decided to reduce the Board of Directors to three members. Michael Hedegaard Lyng and Jørgen Frost have stepped down, and Joanna Iwanowska-Nielsen has joined the Board of Directors, bringing strong skills and expertise in the Polish and international property markets. Severance costs in connection with the restructuring are expected to be around DKK 12 million. These costs were not recognised in Q2 as the restructuring did not take place until in early July.
Amortisation and depreciation for Q2 2016 was DKK 1.1 million, which was unchanged from the year-earlier period.
Net financials amounted to an expense of DKK 5.0 million in Q2 2016 (Q2 2015: an expense of DKK 2.8 million). The increase was the result of an increase of net interest-bearing debt and significantly higher interest rates following a renegotiation of the company's credit facilities. There were no exchange rate effects of any significance in the continuing operations as they are mainly in Polish zloty.
A loss from continuing operations of DKK 6.5 million was posted for the period (Q2 2015: a loss of DKK 6.9 million).
The profit for the period from discontinued operations was DKK 40.1 million.
Cemat posted a total profit after tax of DKK 33.6 million in Q2 2016 and a loss of DKK 58.8 million in H1 2016, of which a loss of DKK 33 million was attributable to release of a supplier contract and DKK 7.1 million to impairment relating to the assets of the silicon business.
CASH FLOW STATEMENT AND BALANCE SHEET
Cash flows from operating activities were an outflow of DKK 24.5 million in Q2 2016, and cash flows from investing activities were an inflow of DKK 0.4 million.
The Group's non-current assets totalled DKK 57.7 million at 30 June 2016, consisting of land and buildings, usufruct rights and production equipment in the property business.
The discontinued operations are stated in the balance sheet in two line items: Assets held for sale of DKK 459.5 million, and Liabilities relating to assets held for sale of DKK 69.5 million. The net value of discontinued operations is stated at DKK 390 million, including the agreed consideration of DKK 355 million, provisionally calculated compensation in respect of the silicon operations for H1 2016 of DKK 52 million deducted sales costs of DKK 17 million.
The divestment agreement with GlobalWafers is based on the balance sheet at 1 January 2016, and GlobalWafers consequently assumed the operating risk relating to the silicon business for H1 2016. Based on the agreed terms and the provisional statement for the silicon business for H1 2016, GlobalWafers must compensate Cemat an amount of around DKK 52 million in this respect, which is included in the DKK 120 million expected to be returned to the shareholders. GlobalWafers is currently in the process of validating the statement, and final acceptance of it and the transfer of the amount are expected to take place in the course of Q3 2016.
INTEREST-BEARING DEBT
At 30 June 2016, net interest-bearing debt stood at DKK 252.8 million, which was DKK 70.3 million higher than at 31 December 2015. The Group's interest-bearing debt was repaid in full in July 2016.
EQUITY
The Group's equity at 30 June 2016 stood at DKK 186.6 million, of which DKK 171 million was attributable to the shareholders of Topsil Semiconductor Materials A/S, and DKK 15.6 million was attributable to non-controlling interests in Cemat'70 S.A. The equity ratio was 35.6% at 30 June 2016.
DISCONTINUED OPERATIONS
The market situation in the silicon market continues to be affected by price pressure, which is also reflected in revenue for Q2 2016.
CEMAT / INTERIM REPORT, Q2 2016
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Revenue for Q2 2016 was DKK 64.3 million (Q2 2015: DKK 72.8 million).
Direct production costs were DKK 43.3 million in Q2 2016 (Q2 2015: 37.8 million), and the contribution margin was 32.6% against 48.1% in the year-earlier period. The contribution margin was, among other things, adversely affected by persistent price pressures, mix effects and sales of remelt worth DKK 3.8 million at a loss.
Renegotiations of raw materials contracts with the company's other raw materials supplier were finalised at end-June 2016. Under the agreement, a lump sum of USD 5 million (DKK 33 million) was paid to be released of the previous obligations. The lump sum is recognised in other external costs.
Other external costs and staff costs were DKK 60.4 million in Q2 2016 (Q2 2015: DKK 26.0 million). The increase was mainly due to the lump sum paid to be released from the said raw materials contract.
The average number of full-time employees of the discontinued operations was 290 in Q2 2016, representing a year-on-year reduction by 18.
The net assets have been written down to the expected sales value after costs etc. of DKK 390 million, which resulted in a write-down of the carrying amounts by DKK 7.1 million.
Cash flows from discontinued operations were an outflow of DKK 37.9 million in Q2 2016 (Q2 2015: an outflow of DKK 0.5 million). Q2 was adversely affected by the payment of a lump sum to be released from a previous raw materials contract.
The cash flow from investing activities was an inflow of DKK 2.7 million in Q2 2016, bringing the net cash flow of the discontinued operations to an outflow of DKK 40.7 million.
OUTLOOK FOR 2016
Revenue for Cemat A/S is expected to amount to DKK 36 million in 2016, assuming that the Polish silicon business (Topsil GlobalWafers A/S) stays on as a tenant throughout 2016 and purchases utilities (hydrogen, power, water, etc.) from Cemat'70 at the same level as previously.
EBITDA generated by the Polish property business (Cemat'70) is expected to be around DKK 6 million. The costs of Cemat A/S will be significantly higher than expected in the coming years as the restructuring took place in the middle of the year.
For the year as a whole, EBITDA is expected to amount to a loss of DKK 15 million, impacted by restructuring costs of approximately DKK 12 million. In this estimate, the operating costs of Cemat A/S before restructuring cost are expected to be DKK 9 million, which, as described in announcement 28/16 of 3 August 2016, are expected to be reduced to approximately DKK 2 million in the coming years.
The guidance is based on an exchange rate of DKK 170/PLN 100.
The forward-looking statements in this interim report reflect Management's current expectations for certain future events and financial results. Forward-looking statements are inherently subject to uncertainty, and actual results may therefore differ materially from expectations.
Factors that may cause actual results to deviate materially from expectations include, but are not limited to, general economic developments, the financial markets, changes in the silicon market, legislation, changes in demand for the company's products, and competition.
CEMAT / INTERIM REPORT, Q2 2016
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INVESTOR RELATIONS COMMUNICATION
Please direct any questions regarding this announcement to CEO Kalle Hvidt Nielsen or CFO Jesper Bodeholt through Susanne Hesselkjær, Executive Secretary, tel.: +45 2926 6752, [email protected].
SHAREHOLDER PORTAL
At Cemat's shareholder portal at www.cemat.dk, shareholders can access information on their shareholdings and register their email addresses for electronic distribution of documents for general meetings and other material relevant to shareholders.
EMAIL SERVICE
Under "Contacts" on Cemat's website, it is possible to subscribe to and unsubscribe from Top-sil's electronic email service to receive annual reports, quarterly reports and other company announcements.
Prior to the publication of an interim report, Topsil observes a four-week silent period.
ANNOUNCEMENTS 2016
| 29 | 05.08 | Decisions of extraordinary general meeting |
|---|---|---|
| 28 | 03.08 | Information to the shareholders before the extraordinary general meeting |
| 27 | 14.07 | Revised notice to convene extraordinary general meeting |
| 26 | 08.07 | Waiver of obligation to proceed with takeover on shares in Cemat A/S |
| 25 | 04.07 | Entering severance agreements with the management board of Cemat A/S |
| 24 | 01.07 | Notice to convene extraordinary general meeting |
| 23 | 01.07 | Conclusion of the agreement with GlobalWafers |
| 22 | 30.06 | The Danish Business Authority has made a decision |
| 21 | 23.06 | New raw materials agreement |
| 20 | 20.06 | Receipt of request for convening an extraordinary general meeting |
| 19 | 18.06 | Updated Articles of Association |
| 18 | 17.06 | Decisions of extraordinary general meeting |
| --- | --- | --- |
| 17 | 17.06 | Announcement of increased offer from GW and public offer from NSIG |
| 17 | 17.06 | Public offer from National Silicon Industry Group (in Danish) |
| 16 | 17.06 | The Board's assessment of the offer from National Silicon Industry Group |
| 15 | 16.06 | Announcement about offer for Topsil's silicon business |
| 14 | 15.06 | Proxies for extraordinary general meeting 17 June 2016 |
| 13 | 01.06 | Major shareholder announcement (in Danish) |
| 12 | 31.05 | Interim report, Q1 2016 |
| 11 | 25.05 | Notice to convene Extraordinary General Meeting |
| 10 | 24.05 | Major Shareholder Announcement |
| 9 | 23.03 | Warrant programme and updated Articles of Association |
| 8 | 20.05 | Postponement of Q1 2016 interim report |
| 7 | 20.05 | Agreement on sale of silicon business |
| 6 | 04.05 | Warrant programme for Management Board and executive officers |
| 5 | 26.04 | Updated Articles of Association |
| 4 | 25.04 | Decisions of the Annual General Meeting |
| 3 | 20.04 | Company announcement |
| 2 | 01.04 | Notice to convene Annual General Meeting |
| 1 | 31.03 | Annual Report 2015 |
FINANCIAL CALENDAR
The Board of Directors has decided no longer to prepare quarterly reports and will only prepare H1 and annual reports going forward. The financial calendar will be updated accordingly.
This announcement has been prepared in a Danish-language and an English-language version. In the event of any discrepancies, the Danish version shall prevail.
CEMAT/ INTERIM REPORT, Q2 2015
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MANAGEMENT STATEMENT
The Board of Directors and the Management Board have today considered and adopted the interim report of Topsil Semiconductor Materials A/S for the six months ended 30 June 2016.
The interim report is presented in accordance with IAS 34 "Interim financial reporting" as adopted by the EU and Danish disclosure requirements for interim reports of listed companies.
In our opinion, the interim financial statements give a true and fair view of the Group's assets, liabilities and financial position at 30 June 2016 and of the results of the Group's operations and cash flows for the three months ended 30 June 2016.
In our opinion, the management report includes a fair review of the development and performance of the business and financial position of the Group, the financial results for the period as well as the financial position in general of the consolidated companies, together with a description of the principal risks and uncertainties that the Group faces.
Frederikssund, 25 August 2016
MANAGEMENT BOARD
Kalle Hvidt Nielsen CEO
Jesper Bodeholt CFO
Michael Lisby Jensen CSO
BOARD OF DIRECTORS:
Jens Borelli-Kjær Chairman
Eivind Dam Jensen Deputy Chairman
Joanna L. Iwanowska-Nielsen Board member
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INCOME STATEMENT
| DKK'000 | Q2 2016 | Q2 2015 | H1 2016 | H1 2016 | FY 2015 |
|---|---|---|---|---|---|
| Revenue | 3,525 | 3,599 | 7,187 | 7,458 | 14,456 |
| Costs | (3,680) | (6,406) | (10,118) | (13,004) | (23,432) |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | (156) | (2,807) | (2,931) | (5,546) | (8,976) |
| Depreciation, amortisation and impairment | (1,127) | 1,217 | (2,327) | (2,398) | (4,735) |
| Operating profit/(loss) (EBIT) | (1,282) | (4,024) | (5,258) | (7,944) | (13,711) |
| Net financials | (5,048) | (2,778) | (7,600) | (5,932) | (12,534) |
| Profit/(loss) before tax | (6,330) | (6,802) | (12,858) | (13,876) | (26,245) |
| Tax on profit/(loss) for the period | (122) | (143) | (132) | (165) | (507) |
| Profit/(loss) for the period from continuing operations | (6,452) | (6,945) | (12,990) | (14,041) | (26,752) |
| Profit/(loss) for the period, discontinued operations | 40,099 | 1,913 | (45,832) | (4,739) | (63,313) |
| Profit/(loss) for the period, including discontinued operations | 33,648 | (5,032) | (58,822) | (18,779) | (90,065) |
| Appropriation of profit/(loss) for the period: | |||||
| Parent company shareholders | 33,440 | (5,156) | (159,114) | (18,911) | (90,298) |
| Non-controlling interests | 208 | 124 | 292 | 132 | 233 |
| 33,648 | (5,032) | (58,822) | (18,779) | (90,065) | |
| Earnings per share: | |||||
| Earnings per share (DKK) | 0.06 | (0.01) | (0.11) | (0.04) | (0.17) |
| Diluted earnings per share (DKK) | 0.06 | (0.01) | (0.10) | (0.03) | (0,16) |
STATEMENT OF COMPREHENSIVE INCOME
| DKK'000 | Q2 2016 | Q2 2015 | H1 2016 | H1 2016 | FY 2015 |
|---|---|---|---|---|---|
| Profit/(loss) for the period | 33,648 | (5,032) | (58,822) | (18,779) | (90,065) |
| Foreign exchange adjustment, foreign companies | (12,961) | (5,071) | (15,973) | 6,336 | 4,904 |
| Comprehensive income for the period | 20,687 | (10,103) | (74,795) | (12,444) | (85,161) |
| Parent company shareholders | 21,156 | (9,778) | (73,665) | (12,517) | (85,358) |
| Non-controlling interests | (469) | (325) | (1,130) | 73 | 197 |
| 20,687 | (10,103) | (74,795) | (12,444) | (85,161) |
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CASH FLOW STATEMENT
| DKK'000 | Q2 2016 | Q2 2015 | H1 2016 | H1 2015 | FY 2015 |
|---|---|---|---|---|---|
| Operating profit/(loss) (EBIT) | (1,282) | (4,024) | (5,258) | (7,944) | (13,711) |
| Depreciation, amortisation and impairment | 1,127 | 1,217 | 2,327 | 2,398 | 4,735 |
| Share-based payment recognised in the income statement | 376 | 450 | 746 | 852 | 1,511 |
| Change in net working capital | (21,743) | (1,524) | (23,477) | 9,126 | 7,066 |
| Tax paid/received | (125) | (155) | (253) | (252) | (508) |
| Financial income received | 3 | 1 | 6 | 8 | 28 |
| Financial expenses paid | (2,847) | (3,038) | (4,921) | (9,250) | (15,789) |
| Cash flows from operating activities | (24,492) | (7,073) | (30,830) | (5,062) | (16,668) |
| Acquisition etc. of intangible assets | - | - | - | - | - |
| Acquisition etc. of property, plant and equipment | (364) | (324) | (667) | (774) | (1,473) |
| Cash flows from investing activities | (364) | (324) | (667) | (774) | (1,473) |
| Loans and credits raised | 61,870 | 13,440 | 65,454 | 3,762 | 3,772 |
| Cash flows from financing activities | 61,870 | 13,440 | 65,454 | 3,762 | 3,772 |
| Change in cash and cash equivalents, continuing operations | 37,014 | 6,042 | 33,957 | (2,074) | (14,369) |
| Change in cash and cash equivalents, discontinued operations | (40,653) | (2,378) | (38,580) | 3,820 | 15,716 |
| Change in cash and cash equivalents | (3,639) | 3,664 | (4,623) | 1,746 | 1,347 |
| Cash and cash equivalents at beginning of period | 7,757 | 6,976 | 8,830 | 6,903 | 6,903 |
| Market value adjustment of cash and cash equivalents | (123) | (1,515) | (212) | 477 | 580 |
| Cash and cash equivalents at end of period | 3,995 | 9,126 | 3,995 | 9,126 | 8,830 |
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BALANCE SHEET, ASSETS
| DKK'000 | 30.06.2016 | 30.06.2015 | FY 2015 |
|---|---|---|---|
| Goodwill | - | 17,593 | - |
| Completed development projects | - | 26,796 | 24,985 |
| Development projects in progress | - | 7,196 | 10,712 |
| Rights of use | 13,133 | 14,504 | 13,877 |
| Intangible assets | 13,133 | 66,089 | 49,575 |
| Land and buildings | 37,019 | 164,941 | 161,955 |
| Plant and machinery | 4,856 | 160,966 | 105,900 |
| Other fixtures and fittings, tools and equipment | 37 | 1,357 | 949 |
| Property, plant and equipment under construction | 2,636 | 5,584 | 4,049 |
| Property, plant and equipment | 44,548 | 332,848 | 272,854 |
| Other non-current receivables | - | 6,744 | 4,545 |
| Financial assets | - | 6,744 | 4,545 |
| Deferred tax asset | - | 24 | 7,553 |
| Non-current assets | 57,682 | 405,705 | 334,527 |
| Inventories | 570 | 167,251 | 163,384 |
| Receivables | 1,272 | 45,001 | 36,558 |
| Other receivables | 122 | 15,695 | 8,902 |
| Income tax receivable | - | 2,163 | 2,014 |
| Prepayments | 977 | 2,294 | 1,877 |
| Receivables | 2,371 | 65,153 | 49,351 |
| Assets held for sale | 459,531 | - | - |
| Cash and cash equivalents | 3,996 | 9,126 | 8,830 |
| Current assets | 466,468 | 241,529 | 221,565 |
| Assets | 524,150 | 647,235 | 556,092 |
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BALANCE SHEET, EQUITY AND LIABILITIES
| DKK'000 | 30.06.2016 | 30.06.2015 | FY 2015 |
|---|---|---|---|
| Share capital | 132,029 | 132,029 | 132,029 |
| Translation reserve | (34,050) | (18,044) | (19,499) |
| Reserve for share-based payment | 5,189 | 3,784 | 4,443 |
| Retained earnings | 67,824 | 198,325 | 126,939 |
| Equity attributable to parent company shareholders | 170,992 | 316,094 | 243,912 |
| Equity attributable to non-controlling interests | 15,652 | 16,658 | 16,782 |
| Equity | 186,644 | 332,752 | 260,694 |
| Due to credit institutions | - | - | 6,812 |
| Finance lease liabilities | 288 | 538 | 419 |
| Prepayments received from customers | - | 17,279 | - |
| Other non-current liabilities | 465 | 2,362 | 2,579 |
| Deferred tax liabilities | 7,296 | 4,239 | 7,795 |
| Non-current liabilities | 8,049 | 24,418 | 17,605 |
| Due to credit institutions | 256,746 | 191,281 | 184,480 |
| Finance lease liabilities | 232 | 224 | 232 |
| Trade payables | 531 | 54,023 | 50,160 |
| Prepayments received from customers | - | 9,506 | 25,331 |
| Income tax payable | 44 | 72 | - |
| Other payables | 2,373 | 28,536 | 15,453 |
| Deferred income | - | 6,422 | 2,137 |
| Liabilities relating to assets held for sale | 69,531 | - | - |
| Current liabilities | 329,457 | 290,065 | 277,793 |
| Total liabilities | 335,462 | 314,483 | 295,398 |
| Equity and liabilities | 524,150 | 647,235 | 556.092 |
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STATEMENT OF CHANGES IN EQUITY
| DKK'000 | Share capital | Transla-tion reserve | Reserve for share-based payment | Retained earnings | Equity Attribut-able to parent company share-holders | Equity Attribut-able to non-controlling interests | Total equity |
|---|---|---|---|---|---|---|---|
| Equity at 01.01.2015 | 132,029 | (24,439) | 2,932 | 217,237 | 327,759 | 16,585 | 344,344 |
| Profit/(loss) for the year | - | - | - | (18,912) | (18,912) | 132 | (18,780) |
| Other comprehensive income | - | 6,395 | - | - | 6,395 | (59) | 6,336 |
| Comprehensive income | 132,029 | (18,044) | 2,932 | 198,325 | 315,242 | 16,658 | 331,900 |
| Share-based payment | - | - | 852 | - | 852 | - | 852 |
| Equity at 30.06.2015 | 132,029 | (18,044) | 3,784 | 198,325 | 316,094 | 16,658 | 332,752 |
| Equity at 01.01.2016 | 132,029 | (19,499) | 4,443 | 126,939 | 243,912 | 16,782 | 260,694 |
| Profit/(loss) for the year | - | - | - | (59,115) | (59,115) | 292 | (58,823) |
| Other comprehensive income | - | (14,551) | - | - | (14,551) | (1,422) | (15,973) |
| Comprehensive income | 132,029 | (34,050) | 4,443 | 67,824 | 170,246 | 15,652 | 185,898 |
| Share-based payment | - | - | 746 | - | 746 | - | 746 |
| Equity at 30.06.2016 | 132,029 | (34,050) | 5,189 | 67,824 | 170,992 | 15,652 | 186,644 |
CEMAT / INTERIM REPORT, Q2 2016
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NOTES TO THE FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, RISKS, ETC.
The interim report is presented in accordance with IAS 34 "Interim financial reporting" as adopted by the EU and additional Danish disclosure requirements for the interim reports of listed companies.
The interim report has been neither audited nor reviewed. The accounting policies are consistent with those of the Annual Report 2015, which includes a full description of the accounting policies.
For accounting estimates and judgments, see note 2, page 38 of the Annual Report 2015. For information on risks, see note 32, pages 56-58, and the section on risk management on pages 16-17 of the Annual Report 2015.
The sales process with a view to divesting the Group's silicon segment has had the effect that Cemat's income statement, balance sheet and cash flow statement for the period ended on and as at 30 June 2016 are divided into continuing operations (the property segment) and discontinued operations (the silicon segment). The comparative figures in the income statement have been restated to reflect the continuing operations. The comparative figures in the balance sheet have not been restated and consequently show the total business as at 31 December 2015 and 30 June 2015.
According to the accounting regulations, Management must consider whether the quarterly report can be prepared on a going concern basis. Based on the estimated outlook for the continuing operations, the management of Cemat believes that the existing cash reserves and expected future cash flows will be sufficient to maintain operations and fund any measures planned.
2 DISCONTINUED OPERATIONS
The comparative figures in the income statement and the cash flow statement have been restated to reflect the discontinued operations. In H1 2016, a pro rata impairment loss in an aggregate amount of DKK 7.1 million was recognised in respect of intangible assets and property, plant and equipment. This was done as a consequence of the takeover offer from GlobalWafers.
| DKK'000 | Income statement, discontinued operations | Q2 2016 | Q2 2015 | H1 2016 | H1 2015 | FY 2015 |
|---|---|---|---|---|---|---|
| Revenue | 64,306 | 72,842 | 119,978 | 129,101 | 272,846 | |
| Direct production costs | (43,325) | (37,826) | (74,229) | (66,050) | (150,457) | |
| Other external expenses and staff costs | (60,424) | (25,981) | (84,323) | (51,557) | (95,781) | |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | (39,442) | 9,036 | (38,573) | 11,495 | 26,608 | |
| Depreciation, amortisation and impairment | 80,920 | (6,478) | (7,112) | (12,700) | (90,538) | |
| Operating profit/(loss) (EBIT) | 41,478 | 2,557 | (45,686) | (1,205) | (63,930) | |
| Net financials | (320) | (1,255) | (541) | (4,137) | (5,964) | |
| Profit/(loss) before tax | 41,157 | 1,302 | (46,227) | (5,342) | (69,894) | |
| Tax on profit/(loss) for the period | (1,058) | 611 | 395 | 604 | 6,581 | |
| Profit/(loss) for the period | 40,099 | 1,913 | (45,832) | (4,739) | (63,313) | |
| Financial ratios | 32.6 | 48.1 | 38.1 | 48.8 | 44.9 | |
| Contribution ratio (%) | (61.3) | 12.4 | (32.2) | 8.9 | 9.8 | |
| EBITDA margin (%) | 64,5 | 3.5 | (38.1) | (0.9) | (23.4) | |
| EBIT margin/profit margin (%) | 528,114 | 528,114 | 528,114 | 528,114 | 528,114 | |
| Earnings per share (DKK) | 0.08 | 0.00 | (0.09) | (0.01) | (0.12) | |
| Average number of employees, (FTE) | 290 | 308 | 293 | 313 | 307 |
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CEMAT / INTERIM REPORT, Q2 2016
Page 14 of 14
| DKK'000 | Q2 2016 | Q2 2015 | H1 2016 | H1 2015 | FY 2015 |
|---|---|---|---|---|---|
| Operating profit/(loss) (EBIT) | 41,478 | 2,557 | (45,686) | (1,205) | (63,930) |
| Depreciation, amortisation and impairment | (80,920) | 6,478 | 7,112 | 12,700 | 90,538 |
| Change in net working capital | 1,525 | (9,567) | 4,148 | (3,762) | (4,987) |
| Tax paid/received | - | - | - | - | 2,014 |
| Financial income received | - | - | - | - | - |
| Financial expenses paid | - | - | - | - | - |
| Cash flows from operating activities | (37,917) | (531) | (34,425) | 7,733 | 23,635 |
| Acquisition of intangible assets | (2,578) | (1,413) | (3,866) | (2,140) | (5,961) |
| Acquisition of property, plant and equipment | (158) | (434) | (289) | (1,773) | (2,201) |
| Disposal of property, plant and equipment | - | - | - | - | 243 |
| Cash flows from investing activities | (2,736) | (1,847) | (4,155) | (3,913) | (7,919) |
| Loans and credits raised | - | - | - | - | - |
| Cash flows from financing activities | - | - | - | - | - |
| Change in cash and cash equivalents | (40,653) | (2,378) | (38,580) | 3,820 | 15,716 |
| Change in cash and cash equivalents, continuing operations (financial expenses) | 40,653 | 2,378 | 38,580 | (3,820) | (15,716) |
| Change in cash and cash equivalents, discontinued operations | - | - | - | - | - |
| Cash and cash equivalents at beginning of period | - | - | - | - | - |
| Market value adjustment of cash and cash equivalents | - | - | - | - | - |
| Cash and cash equivalents at end of period | - | - | - | - | - |
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| DKK'000
Assets held for sale | H1 2016 |
| --- | --- |
| Completed development projects | 27,992 |
| Development projects in progress | 11,108 |
| Intangible assets | 39,100 |
| Land and buildings | 120,447 |
| Plant and machinery | 94,935 |
| Other fixtures and fittings, tools and equipment | 698 |
| Property, plant and equipment under construction | 1,284 |
| Property, plant and equipment | 217,364 |
| Other non-current receivables | 6,632 |
| Financial assets | 6,632 |
| Deferred tax asset | 12,956 |
| Non-current assets | 276,051 |
| Inventories | 141,040 |
| Receivables | 32,032 |
| Other receivables | 5,132 |
| Income tax receivable | 1,970 |
| Prepayments | 3,306 |
| Receivables | 42,439 |
| Cash and cash equivalents | - |
| Current assets | 183,480 |
| Assets | 459,531 |
| DKK'000
Liabilities relating to assets held for sale | H1 2016 |
| --- | --- |
| Prepayments received from customers | 1,977 |
| Other non-current liabilities | 13,114 |
| Deferred tax liabilities | 15,091 |
| Non-current liabilities | 23,064 |
| Trade payables | 12,720 |
| Prepayments received from customers | 16,302 |
| Other payables | 2,355 |
| Deferred income | 54,440 |
| Current liabilities | 69,531 |
CEMAT / INTERIM REPORT, Q2 2016
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3 EVENTS AFTER THE BALANCE SHEET DATE
After the balance sheet date, the sale of the silicon business to GlobalWafers has been completed, severance agreements have been signed with members of the Management Board, and the Board of Directors has been reduced to three members.
Reference is made to the specific company announcements for additional details, and to the list of company announcements for the year under the IR communications section in this quarterly report.
4 FINANCIAL HIGHLIGHTS AND KEY RATIOS
The financial ratios have been calculated in accordance with "Recommendations and Financial Ratios 2015" issued by the Danish Finance Society. The individual calculation formulas are provided in note 1, page 37, of the Annual Report 2015.
Cemat at a glance
Cemat A/S (previously Topsil Semiconductor Materials A/S) is a listed holding company, whose activities are operation, development and sales of the Polish property company CeMat '70 S.A. in Warsaw. It is the objectives of CeMat '70 to prepare the company's assets for a divestment and sell them off.
CeMat '70 owns 133,000 sqm of land and 41,000 sqm buildings on the outskirts of Wasaw approximately 8 kilometres from the centre of a district called Bielany, which has undergone significant development over the past few years with a large number of housing units and new retail businesses being established. The land held by CeMat '70 is classified for industrial purposes.
CeMat '70 is working to reclassify the land to residential and retail land to include it in the ongoing development of the district. CeMat '70 has around 90 tenants. CeMat '70 engages in the letting of premises and land and the provision of utilities, including power, water and gas and facility services, etc. to its tenants.
For more information, go to www.cemat.dk
Cemat A/S
Siliciumvej 1
DK-3600 Frederikssund
Denmark
Tel.: +45 47 36 56 00
E-mail: [email protected]
Internet: www.cemat.dk
CVR no.: 24 93 28 18
CEMAT / INTERIM REPORT, Q2 2016