Earnings Release • Nov 22, 2017
Earnings Release
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| Revenue In million € |
30/09/2017 | 30/09/2016 | Change |
|---|---|---|---|
| Dredging and Environment | 1,739.3 | 1,358.0 | +28.1% |
| Contracting | 512.8 | 580.2 | -11.6% |
| Other divisions and eliminations |
-1.4 | 30.5 | n.s. |
| Total | 2,250.7 | 1,968.7 | +14.3% |
| Order book In million € |
30/09/2017 | 31/12/2016 | 30/09/2016 |
| Dredging and Environment |
3,980.0 | 3,800.0 | 3,855.0 |
| Contracting | 980.1 | 850.5 | 841.2 |
| Other divisions | 107.5 | 106.2 | 110.4 |
| Total | 5,067.6 | 4,756.7 | 4,806.6 |
| Net financial debt In million € |
30/09/2017 | 31/12/2016 | 30/09/2016 |
| Dredging and Environment including restatements (*) |
452.2 | 155.0 | 269.3 |
| Other divisions & Holding | 46.0 | 58.1 | 73.8 |
| Total | 498.2 | 213.1 | 343.1 |
(*) Including amounts restated to take account of the recognition at fair value of the identifiable assets and liabilities of DEME following the acquisition of an additional 50% of the DEME shares on 24 December 2013.
| In million € | 30/09/2017 | 31/12/2016 | 30/09/2016 |
|---|---|---|---|
| Revenue | 1,739.3 | 1,978.2 | 1,358.0 |
| Economic revenue (*) | 1,746.7 | 1,978.2 | 1,369.1 |
| Net financial debt (**) | 449.7 | 151.2 | 265.1 |
| Net economical financial debt ()(*) | 458.2 | 154.6 | 266.2 |
| Order book | 3,980.0 | 3,800.0 | 3,855.0 |
(*) The economic approach consists in proportionally consolidating the jointly controlled companies (accounting rules applicable before 1 January 2014).
(**) Excluding amounts restated to take account of the recognition at fair value of the identifiable assets and liabilities of DEME following the acquisition of an additional 50% of the DEME shares on 24 December 2013.
Revenue for the first nine months of the year amounted to € 1,746.7 million, which is up by 27.6 %.
GeoSea reported a particularly high level of activity. In the third quarter of 2017, the Innovation, flagship of GeoSea's fleet, finished the installation of 42 monopiles for the Rentel wind farm off the Belgian coast, and is now working on the Horns Rev 3 project in Denmark where 49 monopiles are being installed.
In Germany, GeoSea continued work on the Merkur and Hohe See/Albatross EPCI contracts.
In the dredging segment, activity in the third quarter of 2017 was similar to the same period in 2016. In Singapore, DEME has just passed the halfway stage of its TTP1 project (Tuas Terminal - Phase 1).
The order book grew in 2017 to nearly €4 billion.
Several substantial orders were won during the third quarter of 2017:
It should be pointed out that four major contracts are not included in the order book at 30 September 2017:
Investments in the first nine months of 2017 amounted to €584.6 million, and primarily consist of down payments on the vessels under construction, the capitalization of maintenance costs, and the acquisition of the company A2SEA.
On 31 August 2017, DEME closed the acquisition of A2SEA (Danish company owning two vessels equipped with the latest technologies, Sea Installer and Sea Challenger). The impact of this acquisition on DEME's net financial debt amounted to €166.9 million.
At the end of September 2017, the dredger Scheldt River, with a capacity of 8,400 m³, was ceremonially launched in Antwerp. Like the dredger Minerva, which was launched in June 2017, the Scheldt River can run on LNG (Liquefied Natural Gas), thereby substantially reducing the emission of greenhouse gases.
Despite the very high level of investment, DEME's net financial debt remains below €500 million thanks to its operating cash flow and improved working capital requirement (mainly at GeoSea).
DEME's revenue is expected to amount to approximately €2.5 billion. The EBITDA margin is expected to remain close to the historical average (between 16% and 20%).
Key figures
| In million € | 30/09/2017 | 31/12/2016 | 30/09/2016 |
|---|---|---|---|
| Revenue | 512.8 | 770.5 | 580.2 |
| Order book | 980.1 | 850.5 | 841.2 |
| In million € | 30/09/2017 | 30/09/2016 |
|---|---|---|
| Construction | 355.3 | 418.7 |
| Buildings, Belgium | 245.6 | 313.9 |
| Buildings, International | 109.7 | 104.8 |
| Multitechnics | 111.8 | 115.5 |
| Rail Infra & Utility Networks | 45.7 | 46.0 |
| Total Contracting | 512.8 | 580.2 |
The division's revenue for the first nine months of 2017 decreased by 11.6% to €512.8 million.
The decrease is almost entirely attributable to the Buildings segment in Belgium, due to the delayed start of several contracts.
The main projects under construction include the Lycée Français in Luxembourg, the real estate complex AGORA in Louvain-la-Neuve (Belgium), and the ZNA hospital in Antwerp (Belgium).
The other segments reported overall stable revenue.
| In million € | 30/09/2017 | 31/12/2016 |
|---|---|---|
| Construction | 741.7 | 648.7 |
| Buildings, Belgium | 521.7 | 505.0 |
| Buildings, International | 220.0 | 143.7 |
| Multitechnics | 163.8 | 143.4 |
| Rail Infra & Utility Networks | 74.6 | 58.4 |
| Total Contracting | 980.1 | 850.5 |
The order book came to €980.1 million, up 15.2%.
All segments of the Contracting division contributed to the growth of the order book; this was particularly significant at CFE Polska, which reported numerous commercial successes in the last few months.
Order intake in the third quarter of 2017 was particularly high at VMA and in the Rail Infra & Utility Networks segment. In Luxembourg, CLE won a substantial contract for the construction of a residential complex for BPI Luxembourg (Kiem project).
Following the decision of the board of directors to examine the combination of the activities of Van Laere group and CFE Contracting under CFE, the following steps were taken:
The final stage, which is currently in progress, is the drafting and finalization of the sales contract and the compilation of the report of the committee of independent directors.
The board of directors of CFE will make its final decision on the basis of those two documents.
The objective is to complete the transaction before the end of the 2017 financial year.
Revenue for the Contracting division will be lower than in 2016. Despite this expected decrease, the operating income will show a marked improvement compared to 2016.
Evolution of real estate projects
| In million € | 30/09/2017 | 31/12/2016 |
|---|---|---|
| Properties being marketed | 9 | 17 |
| Properties under construction | 38 | 35 |
| Properties in development | 64 | 78 |
| Total | 111 | 130 |
During the first nine months of the year, BPI, the leading company of CFE's real estate division, sold three major stakes, which it held in the Kons (Luxembourg), Oosteroever (Ostend, Belgium) and Ronndriesch (Luxembourg) projects. The first two sales took place in the first half of 2017, the third in the third quarter of 2017.
Those transactions and the high level of sales of residential projects account for the decrease in real estate projects.
During the third quarter of 2017, BPI, through its Polish branch, acquired a majority stake in a company owning a building plot in Poznan on which a residential property of 13,000 m² above ground (Vilda Park project) will be built. A second acquisition is planned in the coming months in Warsaw (Ostroroga project) after the site has been decontaminated by the seller.
The division's net profit will reach an all-time high, slightly up compared to 30 June 2017.
The latest projects in progress internationally in buildings and in civil engineering in Belgium are being finalized, except for the Brussels-South wastewater treatment plant project, where the completion is scheduled over a longer period.
Our receivables from the Chadian government remain unchanged since 31 December 2016. Negotiations continue with the Chadian authorities and financial institutions to refinance the outstanding receivables on the Grand Hotel.
CFE confirmed that its consolidated revenue will increase significantly in 2017, albeit to a lesser degree than initially expected due to delays in the start-up and award of new projects at DEME and in Contracting.
Excluding potential non-recurring items, the Group's net result, share of the group, for 2017 is expected to be in line with last year.
Publication of financial statements 2017 28 February 2018 (before opening of the stock market) Ordinary General Shareholders meeting 3 May 2018 Publication of interim statements 2018 25 May 2018 (before opening of the stock market) Publication of half-year financial statements 2018 Publication of interim statements 2018
31 August 2018 (before opening of the stock market)
23 November 2018 (before opening of the stock market)
* * *
CFE, founded in 1880 is a Belgian industrial group active in three different divisions. The first, Dredging, Environment, Offshore and Infra, is carried out by its wholly owned subsidiary DEME, one of the world leaders in the field. DEME has a modern fleet of multipurpose vessels equipped with the latest technologies. The second, Contracting, encompasses the group's construction, multitechnics and rail activities in Belgium, Luxembourg, Poland and Tunisia. The third, Real Estate Development, covers the real estate projects developed by BPI in Belgium, Luxembourg and Poland.
The CFE group currently employs more than 7,000 people and is active on every continent. CFE is listed on Euronext Brussels and is 60.40% owned by Ackermans & van Haaren.
* * *
This press release is available on our website at www.cfe.be.
For further information, please contact, at CFE:
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