Quarterly Report • Sep 17, 2012
Quarterly Report
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CORTICEIRA AMORIM; S.G.P.S., S.A. Sociedade Aberta
Capital Social: EUR 133 000 000,00 C.R.C. Sta. Maria da Feira NIPC e Matrícula n.º: PT 500 077 797 Edifício Amorim I Rua de Meladas, n.º 380 Apartado 20 4536-902 MOZELOS VFR PORTUGAL
Tel.: + 351 22 747 54 00 Fax: + 351 22 747 54 07
Internet: www.amorim.com/cortica.html E-mail: [email protected]
In accordance with the law, the Directors of CORTICEIRA AMORIM, SGPS, SA, a Public Company, present their:
The economic activity in CORTICEIRA AMORIM's major markets continued to show a very modest growth pace. Europe, the most important destination of our products, even recorded a noticeable slowdown and a number of its member states officially slipped back into recession in the second quarter of 2012 (2Q12). Even the U.S.A. - CORTICEIRA AMORIM's second largest business market - although maintaining positive rates of economic growth, could not escape a cooling global economy. On the date of this Report, successive downward revisions of growth forecasts – from which even China could not escape - are released by major organizations that track global economic trends and performance.
Despite that overall economic environment, in the first half of 2012 CORTICEIRA AMORIM managed to keep its growth levels both in total sales and net profit it has been recording over the last quarters. A rare combination of good performances in its two main Business Units (BU) - the Cork Stoppers BU and the Floor and Wall Coverings BU – contributed to leverage our Company's consolidated business and net profit indicators. The growth in sales continues to be a direct result of increased sales of products by CORTICEIRA AMORIM in addition to the price effect achieved through some increases in prices, as well as the exchange rate effect, particularly the appreciation of the US dollar.
In comparison with the same period a year before, CORTICEIRA AMORIM recorded its tenth consecutive quarter of consolidated sales growth:
| 2Q12 / 2Q11: | +7.0% |
|---|---|
| 1Q12 / 1Q11: | +9.0 % |
| 4Q11 / 4Q10: | +4.8% |
| 3Q11 / 3Q10: | +8.9% |
| 2Q11 / 2Q10: | +13.0% |
| 1Q11 / 1Q10: | +6.3% |
| 4Q10 / 4Q09: | +10.1% |
| 3Q10 / 3Q09: | +11.5% |
| 2Q10 / 2Q09: | +7.7% |
| 1Q10 / 1Q09: | +10.9 % |
| 4Q09 / 4Q08: | -3.8% |
Sales totaled EUR 275 million (€ 275 M) in 1H12, an increase of 8% and € 20 M compared with the same period in 2011.
The good sales performance was driven by a positive development in terms of margins and profitability. EBITDA to sales ratio amounted to 16.3% in the first half of 2012; in 2Q12 it exceeded 18%, thus outperforming CORTICEIRA AMORIM's previous figures recorded in the past years. In absolute terms, the Company's EBITDA amounted to € 44.8 M in 1H12, up by +12.7% (€ 5 M) on 1H11.
Net profit totaled € 17.716 M in the first half of 2012, a 28.2% increase compared to € 13.814 M in 1H11.
Net profit was € 11.954 M in the second quarter of 2012, 38% higher than in the same period last year.
As appropriately disclosed by CORTICEIRA AMORIM, our Company acquired a 90.91% stake in Trefinos, S.L. at the end of the first half of 2012. With almost a century-old history, Trefinos, S.L. is a group of companies that leads the manufacture and sale of champagne and sparkling wine cork stoppers in Catalonia, Spain. Trefinos' balance sheet will be consolidated with CORTICEIRA AMORIM's financial statements as of the beginning of 2H12.
A total dividend of € 8.2 M (6.5 euro cents per share) was paid out to shareholders on 30 April 2012.
Sales of the Raw Materials BU grew by 16.5% and contributed to a rise of about 14% in the value chain of the CORTICEIRA AMORIM Group. That performance of the Raw Materials BU was the result of the manufacture of high quantities of cork acquired in 2011 as well as an enhanced integration into the production cycle of CORTICEIRA AMORIM.
The batches of cork acquired last year began to be manufactured in the first half of 2012. Gross margins were negatively affected by higher purchase prices of cork in 2011, as such increase was not reflected in the transfer prices to the Cork Stoppers BU.
In its turn, increased production required the allocation of more operational resources. Among those resources, electricity and transport costs deserve a special mention as they grew faster than production (26% and 20%, respectively) as a result of their purchase price escalation.
EBITDA amounted to € 6.3 M, about a half of the amount recorded in 1H11 (€ 14.3 M).
The cork harvesting season was taking place on the date hereof. The harvesting of cork is being negatively affected by adverse weather conditions. CORTICEIRA AMORIM believes, however, that a lower amount of cork harvested during the 2012 season will not have a material adverse effect on its business in 2013.
The growth in the global wine market, particularly in the U.S.A. and China, continued to have a positive influence on this BU's sales. Even the expected slowdown in wine consumption was largely offset by CORTICEIRA AMORIM's successful effort to gain further market share, not only in respect of alternative wine closures, particularly synthetic corks, but also as concerns cork itself. The leadership in the cork industry, the level of services provided and the quality and range of products offered, have contributed to the Company obtaining successive market share gains that explain the bulk of the growth rate recorded by CORTICEIRA AMORIM since early 2009. To conclude, the positive exchange rate effect in the first half year of 2012, particularly against the US dollar, deserves a particular mention. In fact, the appreciation of this currency (average 1H12: 1.296 vs 1H11: 1.403) accounted for approximately a 2% increase in sales in the first half year of 2012 compared to the same period a year ago.
Total sales in 1H12 amounted to € 162.5 M, up by 6.6 % compared to the same period in 2011. In addition to the above currency effects, growth was primarily driven by higher sales volumes, with 78 million more cork stoppers being sold than in the same period last year.
With the exception of champagne corks, whose sales stabilized, all types of cork stoppers raised their sales. Worth a special mention is the 19% increase in the sales of Neutrocork® stoppers, a fact largely justified by the volume effect. Sales of natural cork wine stoppers and Twin Top® corks grew by 6% and 10%, respectively, a fact that due to its importance in terms of sales volume to the business of this BU is worth pointing out.
The three traditional major markets - France, the USA and Italy - posted increases of 7%, 10% and 3%, respectively. The U.S. market benefited from the appreciation of the US dollar against the euro.
As far as the other major markets is concerned, the sales progress in the Argentinean market (+49%) is worth mentioning. That performance was essentially due to the success of changing the approach to that market; in fact, CORTICEIRA AMORIM acquired a 50% stake in Corchos de Argentina at the end of 2011. It should also be stressed that sales to the Portuguese and Australian markets increased as a result of winning high value new customers.
This BU's EBITDA amounted to € 25.8 M in 1H12, representing a year-on-year increase of 33%. This growth is largely explained by higher sales and an increased gross margin percentage as a result of the currency effect.
In the second quarter of 2012 the Floor and Wall Coverings BU kept a sales growth pace similar to that recorded in 1Q12. At the end of 1H12, total sales amounted to € 68.1 M, up 13.7% from the same period a year earlier.
Total sales of products manufactured by this BU were over € 55 M, representing a year-on-year increase of 12%. Nonmanufactured products such as wood reversed the downward trend of recent quarters and showed an increase of 16%. The perimeter effect caused by the consolidation of Timbermam from the second half of 2011 should be taken into consideration. This effect more than justifies the growth in product sales.
The sales of Cork Style and LVT - the two main products manufactured by the Floor and Wall Coverings BU – rose 25% and 5%, respectively.
Europe's central markets continued to show signs of weakness, particularly as far as traditional manufactured products is concerned. In contrast, this BU's sales growth has been backed for several quarters by the U.S. market and the Eastern European markets.
The gross margin percentage in 1H12 rose to 49% (1H11: 45.4%). This indicator also shows an improvement in terms of manufactured products. Despite the negative effect of the U.S. dollar exchange rate on purchases of wood veneered floor coverings, the gross margin percentage of sales has also increased. Trade sales profited from Timbermam inclusion in the consolidated financial statements.
The BU's EBITDA totalled € 8.4 M in 1H12 and more than doubled the figure of € 3.6 M in 1H11.
The sales of this BU grew by 3%, but the sales to end customers rose more than 6%. Contrary to what happened in the two main BU – the Cork Stoppers BU and the Floor and Wall Coverings BU - the volume effect was not the main contributory factor to the sales growth. This BU's sales increase was equally shared by the exchange rate effect and the price effect. It should be pointed out that this BU is the most sensitive to changes in the US dollar exchange rate.
If we do not consider the sales decrease in the Floor and Wall Coverings BU as a result of a decision made in-house, all BU's segments recorded sales increases with the exception of the sealing products segment, whose sales stagnated.
The sales of the Industry segment – the most important one – grew approx. 5% with the U.S. market deserving a special mention. Sales figures in the European markets in 1H12 are similar to those a year before.
The sales of sealing products benefited from a stronger US dollar as the U.S. market is very important for the sale of these products.
As far as the construction segment is concerned, the sales growth in the Russian and German markets is worth a special mention.
The gross margin percentage and, as a result, the profits of this BU have been adversely affected by a rise in the price of raw materials, in particular cork waste.
In fact, the price of cork waste and other raw materials such as polyurethane and rubber have impacted margins and earnings significantly. And similarly to other Business Units, the rising electricity and transport prices has also affected the Cork Composites BU.
Even so, EBITDA rose by 5% to € 4.7 M.
In the second quarter of 2012 there was some improvement in both the sales and profits of the Insulation Cork BU. 1H12 sales amounted to € 4.7 M and were similar to those in 1H11. The increase in the selling price of insulation corkboard – the main product manufactured by this BU – was sufficient to offset the fall in quantities of products sold. The postponement of some major projects continued to adversely affect the sales of this BU in this period, with Italy being the hardest hit market. In 2Q12 the French market – the most important one for this BU – managed to recover from the fall in 1Q12.
EBITDA amounted to € 1.1 M in 1H12 and was practically unchanged from 1H11.
As noted above, CORTICEIRA AMORIM's sales continued to grow in the first two quarters of 2012, quite a positive development. Sales revenue totaled € 275 M at the end of 1H12, up 8% (+ € 20 M) compared to 1H11. The products that contributed most to that increase were manufactured by the Floor and Wall Coverings BU (higher sales of LVT and Cork Style to Germany, North America and Eastern European countries) as well as higher sales of cork stoppers (natural cork wine stoppers and Neutrocork® stoppers to the U.S.A., France and Argentina).
The positive impact of the exchange rate, particularly the appreciation of the US dollar against the euro, should also be pointed out. The exchange rate effect exceeded € 5 M. The effect of Timbermam's inclusion in the consolidated financial statements of CORTICEIRA AMORIM reached € 3 M. In its turn, we estimate that selling price increases in some products might have generated an impact in the region of € 5 M and, thus, the bulk of the remaining balance to make up the € 20 M of sales growth shall be attributable to the sale of higher quantities of products.
The gross margin percentage has fallen more than 1%. The combined effect of a favorable exchange rate with higher selling prices and even the sales growth in the Floor and Wall Coverings BU was not sufficient to offset the impact of some negative effects. In fact, the higher raw material prices, in particular the increase in the price of reproduction cork harvested in 2011, the higher waste cork prices and, to a lesser extent, a less favorable sales mix in the Cork Composites BU and the Raw materials BU's lower yield, more than offset the positive effects set forth above.
Despite the drop in gross margin percentage, the significant increase in sales led to total sales of € 140.3 M in 1H12 compared to € 134 M in 1H11.
Operating costs grew only 1.4 %, well below the production growth figure (8.6 %). Comparing 1H12 with 1H11, it should be stressed, however, that this increase was favorably influenced by a positive impact of the EUR/USD exchange rate that amounted approx. to € 3.5 M. If only the progress in the two main components of these costs – staff costs and trade accounts payable – is taken into consideration, then operating costs increased by 4.8%. Similarly to what has occurred over the last quarters, electricity and transport costs rose again by more than a proportional increase in output. The increase in electricity costs grew 15%, nearly twice as much as the increase in output. Transport costs rose by 10%. Outsourcing also increased (+20%). Finally, comparing 1H12 with 1H11, it should be pointed out that 1H11 was impacted by the promotional costs of the international cork campaign promoted by APCOR (Portuguese Cork Association), whose costs were shared by CORTICEIRA AMORIM, as well as the costs related to the launch of a new collection of floor and wall coverings.
The 5.4% growth in staff costs is partly explained by an increase in the average number of employees (77 or +2.3%) and the inclusion of Timbermam in the consolidated financial statements (+1%).
EBITDA amounted to EUR 44.8 M in 1H12, a 12.7% increase compared to 1H11. The EBITDA to Sales ratio reached 16.3% in the first half of 2012 and it amount to 18.1% in 2Q12. Thus, in these two periods, this indicator was well above CORTICEIRA AMORIM's historical averages.
A number of non-recurring expenses related to impairments of assets were recorded in 1H12. An impairment of VAT receivable by Amorim's subsidiary "Amorim Argentina" in the amount of MARS 9.2 (equivalent to € 1.6 M at the average exchange rate for the half-year to 30 June 2012) was recorded in the first quarter of 2012. That decision was made after taking Argentina's latest developments into account.
An impairment in the value of land and buildings classified as Investment Property - owned by former Interchampanhe (a company based in Montijo) - in the amount of € 1 M was recorded in the second quarter of 2012. An impairment of the remaining goodwill related to the North African operations (particularly Tunisia) was also recorded in 2Q12. The social and political turmoil and instability and, in particular, the expected decline in revenue in that geographic area, led us to decide to record an impairment in the amount of € 2 M. Total non-recurring expenses amounted to € 4.6 M in the first half of 2012.
Net financial costs amounted to € 3.4 M in 1H12, comparing unfavorably with € 1.4 M in 1H11. CORTICEIRA AMORIM enjoyed the lowest interest rates in its history in the first half of 2011, particularly in 1Q11. Then, interest rates started to rise fueled by rising spreads and that, in addition to the reversal of the positive effect on interest rate swaps in 1H11, led the almost negligible net financial costs to more than double in 1H12, even when the net debt remained practically unchanged.
The estimated net income tax was € 8.1 M, being equivalent to an effective rate of 27.2%. There are no special events to be reported.
After recording non-controlling interests in the amount of € 0.5 M, the net profit for the first half of 2012 attributable to CORTICEIRA AMORIM's shareholders was € 17.716 M, a 28.3% increase from € 13.814 M in the first half of 2011.
As regards the business carried on in 2Q12, the net profit for the period was € 11.954 M, up 38% from a year earlier.
Total assets stood at EUR 640 M at the end of 1H12, an increase of EUR 35 M compared to the 2011 year-end level and EUR 72 M compared to the first half of 2011. Those increases were mainly due to an increase of EUR 23M in trade receivables and of € 35 M in inventories compared with December 2011 and June 2011, respectively. Increased business both in 2011 and in the first half of 2012 as a result of either higher sales and output or higher purchases explains the successive inflation of the Balance Sheet.
As far as Assets as at June 30, 2012 is concerned, it should be pointed out that an amount of € 15.1 M related to the acquisition of "Trefinos" is recorded in non-current assets and shown under Other Financial Assets. And this is because the group of companies headed by this new subsidiary will be brought under the consolidation umbrella only from 1 July 2012.
Worth mentioning is also an amount of approx. € 30 M of recoverable taxes. This figure is higher by about € 6 M and € 11 M as compared to the figure in December 2011 and June 2011, respectively. In addition to the effect of improved business performance, the increase in the amount between these two periods is due basically to late repayment of VAT, which has been occurring systematically since the second half of 2011. In June 2012, an amount of € 9.2 M relating to VAT repayment was lagging behind the legal deadlines (2011 year-end: € 3.1 M). From the amount of € 30 M of taxes recoverable at the end of the first half of 2012, VAT accounted for € 26 M. Late repayments contribute to artificially increase the debt of the companies, causing strangulation of their businesses and increased financial costs. CORTICEIRA AMORIM has always made use of the means provided by law to be reimbursed of such costs and expenses. This situation is distressing and damaging to our Company as interest earned by CORTICEIRA AMORIM on late repayments does not offset any interest charges incurred. The issue of rising debt levels is a situation that all companies try to avoid in all ways.
On the liabilities side, a special word should go to the interest bearing debt. If we add the amount of the interest bearing debt to the amount of cash and cash equivalents, we'll arrive at the net interest bearing debt, whose amount has not changed materially and was € 124.8 M in June 2012, € 117.4 M in December 2011 and € 121.1 M a year ago. Comparing to June 2011, however, if we consider that a total of € 8 M of dividends were paid in April, an amount of € 15 M for the purchase of Trefinos was paid in June and there were € 9 M of VAT in arrears, then the change becomes material. And the same reasoning prevails in comparison with December.
A new credit facility in the amount of € 20 M and a 3-year maturity was negotiated with a foreign financial institution in 1H12.
Shareholders' Equity was € 293 M at the end of the first half year of 2012. This amount mirrors an increase of € 11 M as a result of the profit for the first half year (€ 17.7 M) and a total of € 8.2 M of dividends paid.
At the end of the period under review, CORTICEIRA AMORIM's equity to total assets ratio was 45.7%. This is a decrease compared to December 2011 and June 2011 and was due to an inflated Consolidated Balance Sheet.
As disclosed to the market on June 20, 2012, CORTICEIRA AMORIM announced that, through its subsidiary Amorim & Irmãos, SGPS, SA, it acquired a 90.91 per cent stake in the share capital of Trefinos, SL, a company leading a group of six companies specialized in the manufacture and sale of champagne and sparkling wine corks stoppers.
Given that the acquisition was completed at the end of 1H12 and the financial statements of all companies were not yet completed, the Balance Sheets of the new Amorim's subsidiaries could not be included in the Consolidated Balance Sheet as of June 30, 2012. Thus, the amount of € 15.1 M related to the acquisition of "Trefinos" is recorded in non-current assets and shown under Other Financial Assets. Trefinos group's operations will be included in CORTICEIRA AMORIM's consolidated financial statements from July 1, 2012.
CORTICEIRA AMORIM's ongoing commitment to reliability and continuous investment have resulted in an unparalleled knowledge capital on cork allowing CORTICEIRA AMORIM to build up its portfolio of products and solutions, design new high value-added technical applications and challenge new business areas to put this unique raw material to the test. In the overwhelming majority of cases, cork meets all technical requirements impeccably and is the ultimate material in terms of sustainability.
Among the many measures implemented by CORTICEIRA AMORIM during the period under review, there are some that deserve a special mention as they have contributed to leverage the vast know-how of CORTICEIRA AMORIM as well as cork's unique green credentials:
CORTICEIRA AMORIM and Serpentine Gallery (London), a unique partnership geared towards the successful completion of the 2012 edition of one of the world's most important architectural events: the Serpentine Pavilion 2012.
Fruit of the creative genius of Swiss architects Jacques Herzog and Pierre de Meuron and the famous Chinese artist Ai Weiwei, the Serpentine Pavilion 2012 boasts with sophistication and originality the cork from Amorim.
Designed in two complementary planes – the first in the form of a large steel mirror and the second, protected by the first, recessed into the ground and entirely covered with insulation corkboard - the Serpentine Pavilion 2012 pays tribute to the legacy of previous editions, inviting us to discover their origins and their intimate connection with the land and the site where they are erected. Cork plays an essential role in this sensory and archaeological experience: the colour, smoothness, smell, feel and subtle lighting permeating every corner are reminiscent of the comfort of Nature.
Launch of new Wicanders 2012/2014 collections that reinvent traditional flooring concepts and bring them look, comfort and originality. In addition to the innovative Artcomfort, based on a design which makes use of pure materials to explore countless organic structures with a natural three-dimensional appearance, there is also Vinylcomfort, a glue-down solution with its current market status as the most modern and sustainable vinyl flooring, boasting a central layer of cork providing outstanding comfort.
CORTICEIRA AMORIM was invited by the European Commission to participate in the "12th European Forum on Ecoinnovation - Scaling-up Sustainable Construction through Value Chain Innovation", in Amsterdam, the Netherlands, as a case study in the context of sustainable construction. In this forum, the advantages of an integrated use of cork in the construction and rehabilitation of buildings, not only at an environmental and socio-economic level, but also at a performance level were explained. A wide range of cork-based sustainable solutions designed for construction projects, including MDFachada expanded insulation corkboard, AcoustiCORK underlayments and Wicanders wall and floor coverings were presented to the audience as well as the Company's supply chain, designed to generate no waste.
The Corksorb range of cork-based oil absorbents won the Product Innovation Award promoted by COTEC and Unicer. This award is intended to recognize innovative products developed by Portuguese companies, as a result of a steady and consistent innovation effort, which products are aimed at global markets.
Launched in 2010, the Corksorb range has won several prestigious awards. The COTEC/Unicer award was the 4th award won by this highly competitive natural absorbent product line providing greater absorbing capacity and generating 20 times less waste than a conventional mineral-based absorbent. By selectively absorbing oil and hydrocarbons and not water, CorkSorb is the ideal solution for any spill/leak situation, even in aquatic environments.
CORTICEIRA AMORIM launches a partnership with Wine & Spirit Education Trust, a respected UK-based educational charity aiming to provide high quality education and training in wines and spirits. CORTICEIRA AMORIM has thus become the latest wine trade company officially to support the important educational work developed by WSET, keeping in touch with the next generation in the wine industry and giving them the opportunity to know the unbeatable green credentials and sustainable benefits of natural cork.
| 1H12 | 1H11 | Variation | 2Q12 | 2Q11 | Variation | ||
|---|---|---|---|---|---|---|---|
| Sales | 274.996 254.678 | 8,0% | 143.721 134.262 | 7,0% | |||
| Gross Margin – Value | 140.309 133.965 | 4,7% | 72.453 | 67.596 | 7,2% | ||
| 1) | 49,3% | 51,1% | -1,82 p.p. | 49,1% | 50,8% | -1,76 p.p. | |
| Operating Costs - current | 106.395 105.517 | 0,83% | 51.748 | 50.705 | 2,06% | ||
| EBITDA - current | 44.765 | 39.732 | 12,7% | 26.037 | 22.653 | 14,9% | |
| EBITDA/Sales | 16,3% | 15,6% + 0,7 p.p. | 18,1% | 16,9% + 1,2 p.p. | |||
| EBIT - current | 33.914 | 28.448 | 19,2% | 20.705 | 16.891 | 22,6% | |
| Non-current costs | 2) | 4.619 | 3.563 | N/A | 2.776 | 1.736 | N/A |
| Net Income | 17.716 | 13.814 | 28,25% | 11.954 | 8.661 | 38,02% | |
| Earnings per share | 0,140 | 0,109 | 28,25% | 0,095 | 0,069 | 38,02% | |
| Net Bank Debt | 124.811 121.147 | 3.664 | - | - | - | ||
| Net Bank Debt/EBITDA (x) | 4) | 1,61 | 1,68 | -0,07 x | - | - | - |
| EBITDA/Net Interest (x) | 3) | 17,75 | 26,62 | -8,86 x | 18,98 | 22,66 | -3,67 x |
| Equity/Net Assets | 45,7% | 47,5% | -1,77 p.p. | - | - | - | |
1) Related to Production
2) 1H12 refers to Goodwill impairment (1995), land impairment (1000) and receivable TVA impairment (1624). 1H11 refers to Goodwill impairment.
3) Net interest includes interest from loans deducted of interest from deposits (excludes stamp tax and commissions)
4) Current EBITDA of the last four quarters
As stated in the report for the first half of 2011, it seems that the forecasts for a deteriorating economic environment in the second half of the year will remain mostly unchanged.
The global economy continues to lose momentum, a situation that is not affecting only Europe and part of the U.S. economy. This slowdown, which could even lead to an entry into negative territory in Europe, will certainly affect CORTICEIRA AMORIM' business. The long cycle of quarterly growth may be at stake.
There are a number of circumstances - such as maintaining the sales momentum, a favorable U.S. dollar/Euro exchange rate, the launch of a new product line of floor and wall coverings and the effect of bringing Trefinos' operations under the consolidation umbrella of CORTICEIRA AMORIM - that may offset the negative effects set forth above.
Although we anticipate a slower business growth and do not expect any new non-recurring expenses to occur, the results for the second half year of 2012 might not be very different from those in the first half.
The persistence of serious structural problems in the world economy and the foreign exchange risk, especially of the US dollar against the euro, are the two exogenous factors which may more broadly and adversely affect CORTICEIRA AMORIM's performance in the next six months.
As at June 30, 2012, CORTICEIRA AMORIM's portfolio consisted of 6,787,462 treasury stock representing 5.103% of its share capital. No sales or disposals of treasury stock were made over the half year under consideration.
In accordance with the provisions of Sections 14.6 and 14.7 of Regulation no.5/2008 of the Portuguese Securities Market Commission and as per information provided by persons / corporate bodies covered by this standard, we hereby disclose the following information:
a) CORTICEIRA AMORIM's shares held and/or sold directly by the members of the governing bodies of the Company:
10
b) CORTICEIRA AMORIM's shares held and/or sold by companies in which the members of the governing bodies of the Company perform managerial or supervisory duties:
i) As at December 31, 2011, Amorim Capital, SGPS, SA - a company in which Mr António Rios de Amorim (the Chairman of the Board of CORTICEIRA AMORIM) performed managerial duties - held 101,820314 CORTICEIRA AMORIM's shares representing approximately 76.557% of CORTICEIRA AMORIM's share capital. The following CORTICEIRA AMORIM's shares were sold by Amorim Capital, SGPA, SA in the first half of 2012:
| Transaction date | Market | Transaction | Price per share (€) | No. of shares sold |
|---|---|---|---|---|
| 28-06-2012 | OTC | Sale | 1.48 | 16,995,157 |
| 28-06-2012 | OTC | Sale | 1.48 | 16,995,157 |
| Total: | 33.990.314 |
iv) Sociedade Agrícola Triflor, SA - a company in which Mr Joaquim Ferreira de Amorim and Mr André de Castro Amorim (CORTICEIRA AMORIM's directors) performed managerial duties - held 285,956 CORTICEIRA AMORIM's shares. No CORTICEIRA AMORIM's shares were sold by Sociedade Agrícola Triflor, SA in the first half of 2012.
c) List of members holding not less than one-tenth of CORTICEIRA AMORIM's share capital: As at June 30, 2012, Amorim Capital - Sociedade Gestora de Participações Sociais, SA held 67,830,000 CORTICEIRA AMORIM's shares representing 51% of CORTICEIRA AMORIM's share capital.
Additional Information:
| Chairman: | Mr António Rios de Amorim |
|---|---|
| Vice-Chairman: | Mr Nuno Filipe Vilela Barroca de Oliveira |
| Members: | Mrs Cristina Rios de Amorim Baptista |
| Mrs Luísa Alexandra Ramos Amorim | |
| Mr Jorge Manuel Seabra de Freitas | |
| Mr Juan Ginesta Viñas | |
| Mr Fernando José de Araújo dos Santos Almeida | |
List of members holding qualified ownership interests as of 30 June 2012:
| Name of Shareholder | No. of shares | Interest (%) |
|---|---|---|
| Amorim Capital, SGPS, SA | 67,830,000 | 51.000% |
| Investmark Holdings BV | 24,875,157 | 18.778% |
| Amorim – Sociedade Gestora de Participações Sociais, SGPS, SA | 3,069,230 | 2.308% |
| Amorim International Participations BV | 16,995,157 | 12.778% |
| Qualified Ownership Interests – TOTAL | 112,869,000 | 84.864% |
As at June 30, 2012, Amorim - Investimentos e Participações, SGPS, SA, held an indirect qualified ownership interest in CORTICEIRA AMORIM of 67,830,000 shares representing a 51% stake in the share capital of the Company. Such indirect qualified ownership interest is held through Amorim Capital - Sociedade Gestora de Participações Sociais, SA.
Amorim - Investimentos e Participações, SGPS, SA is wholly owned by Interfamília II, SGPS, SA.
Investmark Holdings BV is wholly owned by Warranties, SGPS, SA which, in turn, is 70% owned by Mr Americo Ferreira de Amorim.
Amorim International Participations BV is wholly owned by Amorim - Sociedade Gestora de Participações Sociais, SA and, therefore, this company directly and indirectly has a qualified ownership interest in CORTICEIRA AMORIM of 20,064,387 shares representing a 15.086% stake in the share capital of CORTICEIRA AMORIM.
As of June 30, 2012, CORTICEIRA AMORIM held a total of 6,787,462 treasury stock.
After June 30, 2012 and up to the date hereof, no other relevant events have occurred which might materially affect the financial position and future profit or loss of CORTICEIRA AMORIM and its subsidiaries included in the consolidation taken as a whole.
In accordance with the requirements of Section 246.1(c) of the Portuguese Securities Market Act, the directors state that, to the best of their knowledge, the financial statements for the half year ended June 30, 2012 and all other accounting documents have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of CORTICEIRA AMORIM, SGPS, SA and the undertakings included in the consolidation taken as a whole. The directors further state that the Directors' Report faithfully describes the development, performance and position of CORTICEIRA AMORIM's business and the undertakings included in the consolidation taken as a whole. The Directors' Report contains a special section describing the main risks and uncertainties that could impact our business in the next six months.
| thousand euro | |||||
|---|---|---|---|---|---|
| Notes | June 2012 |
December 2011 |
June 2011 |
||
| Assets | |||||
| Property, plant and equipment | VIII | 171.379 | 172.372 | 168.671 | |
| Investment property | VIII | 6.279 | 7.576 | 7.960 | |
| Goodwill | I X |
9.724 | 11.849 | 11.781 | |
| Investments in associates | V e X | 6.454 | 5.967 | 5.959 | |
| Intangible assets | VIII | 420 | 427 | 470 | |
| Other financial assets | X | 18.453 | 3.573 | 3.392 | |
| Deferred tax assets | XI | 6.049 | 6.105 | 7.417 | |
| Non-current assets | 218.759 | 207.869 | 205.650 | ||
| Inventories | XII | 219.295 | 224.922 | 183.726 | |
| Trade receivables | XIII | 139.477 | 116.758 | 133.318 | |
| Current tax assets | XIV | 29.873 | 23.662 | 19.127 | |
| Other current assets | XV | 9.215 | 10.160 | 13.918 | |
| Cash and cash equivalents | XVI | 23.707 | 21.681 | 12.175 | |
| Current assets | 421.566 | 397.183 | 362.263 | ||
| Total Assets | 640.324 | 605.053 | 567.913 | ||
| Equity | |||||
| Share capital | XVII | 133.000 | 133.000 | 133.000 | |
| Treasury stock | XVII | -6.247 | -6.247 | -6.247 | |
| Other reserves | XVII | 135.384 | 117.827 | 117.656 | |
| Net Income | 17.716 | 25.274 | 13.814 | ||
| Non-Controlling Interest | XVIII | 13.029 | 12.439 | 11.569 | |
| Total Equity | 292.883 | 282.292 | 269.792 | ||
| Liabilities | |||||
| Interest-bearing loans | XIX | 58.323 | 62.464 | 48.567 | |
| Other borrowings and creditors | XXI | 13.278 | 10.525 | 923 | |
| Provisions | XXIX | 20.256 | 16.700 | 14.659 | |
| Deferred tax liabilities | XI | 5.572 | 6.103 | 5.861 | |
| Non-current liabilities | 97.429 | 95.792 | 70.009 | ||
| Interest-bearing loans | XIX | 90.195 | 76.641 | 84.755 | |
| Trade payables | XX | 98.611 | 105.939 | 92.843 | |
| Other borrowings and creditors | XXI | 39.092 | 30.565 | 34.144 | |
| Tax liabilities | XXII | 22.115 | 13.824 | 16.368 | |
| Current liabilities | 250.013 | 226.969 | 228.112 | ||
| Total Liabilities and Equity | 640.324 | 605.053 | 567.913 |
| thousand euro | |||||
|---|---|---|---|---|---|
| 2Q12 | 2Q11 | Notes | 1H12 | 1H11 | |
| non audited | non audited | ||||
| 143.720 | 134.262 | Sales | VII | 274.996 | 254.678 |
| -75.219 | -65.401 | Costs of goods sold and materials consumed | -144.315 | -128.090 | |
| 3.951 | -1.265 | Change in manufactured inventories | 9.628 | 7.377 | |
| 72.453 | 67.596 | Gross Margin | 140.309 | 133.965 | |
| 49,1% | 50,8% | 49,3% | 51,1% | ||
| 23.926 | 21.646 | Third party supplies and services | XXIII | 46.346 | 44.446 |
| 25.393 | 24.066 | Staff costs | XXIV | 50.852 | 48.254 |
| -489 | 613 | Impairments of assets | XXV | 691 | 1.087 |
| 2.318 | 1.998 | Other gains | XXVI | 5.322 | 3.835 |
| 9 6 |
-616 | Other costs | XXVI | -2.977 | -4.281 |
| 26.037 | 22.653 | Current EBITDA | 44.765 | 39.732 | |
| 5.332 | 5.762 | Depreciation | VIII | 10.851 | 11.284 |
| 20.705 | 16.891 | Current EBIT | 33.914 | 28.448 | |
| 2.776 | 1.736 | Non-current costs | XXIV | 4.619 | 3.563 |
| -1.837 | -1.324 | Net financial costs | XXVII | -3.422 | -1.372 |
| 386 | 327 | Share of (loss)/profit of associates | X | 381 | 547 |
| 16.478 | 14.160 | Profit before tax | 26.254 | 24.060 | |
| 4.094 | 5.229 | Income tax | XI | 8.084 | 9.890 |
| 12.384 | 8.931 | Profit after tax | 18.169 | 14.170 | |
| 428 | 270 | Non-controlling Interest | XVIII | 453 | 356 |
| 11.955 | 8.661 | Net Income attributable to the equity holders of Corticeira Amorim | 17.716 | 13.814 | |
| 0,095 | 0,069 | Earnings per share - Basic e Diluted (euros per share) | XXXIII | 0,140 | 0,109 |
| thousand euro | ||||
|---|---|---|---|---|
| 2Q12 | 2Q11 | 1H12 | 1H11 | |
| non audited |
non audited |
|||
| 12.383 | 8.931 | Net Income (before Min. Interest) | 18.169 | 14.170 |
| -412 | -279 | Change in derivative financial instruments fair value | -101 | 131 |
| 179 | 112 | Change in translation differences | 948 | -394 |
| -233 | -167 | Net Income directly registered in Equity | 847 | -263 |
| 12.150 | 8.764 | Total Net Income registered | 19.016 | 13.907 |
| Attributable to: | ||||
| 11.590 | 8.509 | Corticeira Amorim Shareholders | 18.203 | 14.088 |
| 560 | 255 | Non-controlling Interest | 813 | -181 |
15
| thousand euro | ||||
|---|---|---|---|---|
| 2Q12 | 2Q11 | 1H12 | 1H11 | |
| (non audited) |
(non audited) |
|||
| OPERATING ACTIVITIES | ||||
| 143.364 | 130.389 | Collections from customers | 278.137 | 239.426 |
| -105.674 | -110.294 | Payments to suppliers | -232.233 | -222.601 |
| -22.823 | -21.089 | Payments to employees | -45.646 | -43.242 |
| 14.867 | -994 | Operational cash flow | 258 | -26.417 |
| -1.399 | -2.789 | Payments/collections - income tax | -1.663 | -2.885 |
| 3.243 | 6.969 | Other collections/payments related with operational activities | 26.718 | 40.243 |
| 16.711 | 3.186 | CASH FLOW BEFORE EXTRAORDINARY ITEMS (1) | 25.313 | 10.941 |
| INVESTMENT ACTIVITIES | ||||
| Collections due to: | ||||
| 279 | 46 | Tangible assets | 367 | 231 |
| 0 | - 1 |
Intangible assets | 0 | 30 |
| 0 | 0 | Investment property | 0 | 0 |
| 32 | -64 | Other assets | 75 | 88 |
| 292 | 857 | Interests and similar gains | 457 | 938 |
| 1.196 | -15 | Investment subsidies | 2.927 | 54 |
| Payments due to: | ||||
| -5.010 | -8.007 | Tangible assets | -8.704 | -14.360 |
| -15.105 | -678 | Financial investments | -15.105 | -693 |
| -22 | -46 | Intangible assets | -28 | -46 |
| 0 | 0 | Other assets | 0 | - 8 |
| -18.338 | -7.908 | CASH FLOW FROM INVESTMENTS (2) | -20.011 | -13.766 |
| FINANCIAL ACTIVITIES | ||||
| Collections due to: | ||||
| 0 | 0 | Loans | 2.970 | 0 |
| 138 | 376 | Others | 235 | 376 |
| Payments due to: | ||||
| -2.347 | -17.624 | Loans | 0 | -6.349 |
| -2.127 | -1.557 | Interests and similar expenses | -3.494 | -2.457 |
| -8.439 | -12.445 | Dividends | -8.439 | -13.058 |
| 0 | 0 | Acquisition of treasury stock | 0 | 0 |
| -559 | -171 | Others | -1.330 | -337 |
| -13.334 | -31.421 | CASH FLOW FROM FINANCING (3) | -10.058 | -21.825 |
| -14.961 | -36.143 | Change in Cash (1) + (2) + (3) | -4.756 | -24.650 |
| 315 | -49 | Exchange rate effect | 267 | -424 |
| 16.888 | 30.062 | Cash at beginning | 6.731 | 18.944 |
| 2.242 | -6.130 | Cash at end | 2.242 | -6.130 |
| thousand euro | |||||||
|---|---|---|---|---|---|---|---|
| Balance Beginning |
Appropria tion of N-1 profit |
Divi dends |
Net Profit N |
Increa ses |
Translation Differences |
End Balance |
|
| June 30, 2012 | |||||||
| Equity: | |||||||
| Share Capital | 133.000 | - | - | - | - | - 133.000 | |
| Treasury Stock - Face Value | -6.787 | - | - | - | - | - | -6.787 |
| Treasury Stock - Discounts and Premiums | 541 | - | - | - | - | - | 541 |
| Paid-in Capital | 38.893 | - | - | - | - | - | 38.893 |
| IFRS Transition Adjustments | -8.332 | - | - | - | 0 | 15 | -8.317 |
| Hedge Accounting | -11 | - | - | - | -101 | - | -112 |
| Reserves | |||||||
| Legal Reserve | 12.243 | - | - | - | - | - | 12.243 |
| Other Reserves | 76.469 | 25.274 | -8.204 | - | -760 | - | 92.779 |
| Translation Difference | -1.435 | - | - | - | 681 | 652 | -102 |
| 244.580 | 25.274 | -8.204 | 0 | -180 | 667 262.138 | ||
| Net Profit for the Year | 25.274 | -25.274 | - | 17.716 | - | - | 17.716 |
| Minority interests | 12.439 | - | -223 | 453 | -26 | 386 | 13.029 |
| Total Equity | 282.293 | 0 | -8.427 | 18.169 | -206 | 1.053 292.883 | |
| June 30, 2011 | |||||||
| Equity: | |||||||
| Share Capital | 133.000 | - | - | - | - | - 133.000 | |
| Treasury Stock - Face Value | -6.787 | - | - | - | - | - | -6.787 |
| Treasury Stock - Discounts and Premiums | 541 | - | - | - | - | - | 541 |
| Paid-in Capital | 38.893 | - | - | - | - | - | 38.893 |
| IFRS Transition Adjustments | -8.634 | - | - | - | - | 81 | -8.553 |
| Hedge Accounting | -164 | - | - | - | 131 | - | -33 |
| Reserves | 0 | ||||||
| Legal Reserve | 10.887 | 1.357 | - | - | - | - | 12.243 |
| Other Reserves | 69.450 | 19.178 | -12.621 | - | -147 | - | 75.860 |
| Translation Difference | -1.305 | - | - | - | 490 | 62 | -753 |
| 235.880 | 20.535 | -12.621 | 0 | 475 | 143 244.411 | ||
| Net Profit for the Year | 20.535 | -20.535 | - | 13.814 | - | - | 13.814 |
| Minority interests | 12.131 | - | -432 | 357 | 50 | -537 | 11.569 |
| Total Equity | 268.546 | - | 1 -13.053 | 14.171 | 525 | -394 269.794 | |
| I. | INTRODUCTION 19 | |
|---|---|---|
| II. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 19 | |
| III. | FINANCIAL RISK MANAGEMENT 24 | |
| IV. | CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS 26 | |
| V. | COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS 27 | |
| VI. | EXCHANGE RATES USED IN CONSOLIDATION 29 | |
| VII. | SEGMENT REPORT 30 | |
| VIII. | TANGIBLE, INTANGIBLE FIXED ASSETS AND INVESTMENT PROPERTY 32 | |
| IX. | GOODWILL 32 | |
| X. | EQUITY COMPANIES AND OTHER FINANCIAL ASSETS 33 | |
| XI. | INCOME TAX 33 | |
| XII. | INVENTORIES 35 | |
| XIII. | TRADE RECEIVABLES 35 | |
| XIV. | RECOVERABLE TAXES 36 | |
| XV. | OTHER ASSETS 36 | |
| XVI. | CASH AND CASH EQUIVALENTS 37 | |
| XVII. | CAPITAL AND RESERVES 37 | |
| XVIII. | NON-CONTROLLABLE INTERESTS 38 | |
| XIX. | INTEREST BEARING DEBT 38 | |
| XX. | SUPPLIERS 39 | |
| XXI. | OTHER LOANS AND CREDITORS 39 | |
| XXII. | TAX LIABILITIES 39 | |
| XXIII. | THIRD PARTY SUPPLIES AND SERVICES 40 | |
| XXIV. | STAFF COSTS 40 | |
| XXV. | IMPAIRMENTS OF ASSETS 41 | |
| XXVI. | OTHER OPERATING GAINS AND LOSSES 41 | |
| XXVII. | NET INTEREST 42 | |
| XXVIII. | RELATED-PARTY TRANSACTIONS 42 | |
| XXIX. | PROVISIONS, GUARANTEES, CONTINGENCIES E COMMITMENTS 42 | |
| XXX. | EXCHANGE RATE CONTRACTS 43 | |
| XXXI. | ACTIVITY DURING THE YEAR 44 | |
At the beginning of 1991, Corticeira Amorim, S.A. was transformed into CORTICEIRA AMORIM, S.G.P.S., S.A., the holding company for the cork business sector of the Amorim Group. In this report, CORTICEIRA AMORIM will be the designation of CORTICEIRA AMORIM, S.G.P.S., S.A., and in some cases the designation of CORTICEIRA AMORIM, S.G.P.S. together with all of its subsidiaries.
CORTICEIRA AMORIM, directly or indirectly, holds no interest in land properties used to grow and explore cork tree. Cork tree is the source of cork, the main raw material used by CORTICEIRA AMORIM production units. Cork acquisition is made in an open market, with multiple agents, both in the demand side as in the supply side.
CORTICEIRA AMORIM is mainly engaged in the acquisition and transformation of cork into a numerous set of cork and cork related products, which are distributed worldwide through its network of sales company.
CORTICEIRA AMORIM is a Portuguese company with a registered head office in Mozelos, Santa Maria da Feira. Its share capital amounts to 133 million euros, and is represented by 133 million shares, which are publicly traded in the Euronext Lisboa – Sociedade Gestora de Mercados Regulamentados, S.A.
These financial statements were approved in the Board Meeting of July 25, 2012.
Except when mentioned, all monetary values are stated in thousand euros (Thousand euros = K euros = K€).
Some figures of the following notes may present very small differences not only when compared with the total sum of the parts, but also when compared with figures published in other parts of this report. These differences are due to rounding aspects of the automatic treatment of the data collected.
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented.
Consolidated statements were prepared based on a going concern basis and using the records as stated in the companies' books, which adopted local general accepted accounting principles. Accounting adjustments and reclassifications were made in order to comply with accounting policies followed by the IFRS, as adopted by the European Union (IAS – International Accounting Standards and the IFRS – International Financial Reporting Standards) and legal for use as of January 1, 2012, namely IAS 34. The transition date from the local GAAP was January 1, 2004.
Group companies, often designated as subsidiaries, are entities over which CORTICEIRA AMORIM has a shareholding of more than one-half of its voting rights, or has the power to govern its management, namely its financial and operating policies.
Group companies are consolidated line by line, being the position of third-party interests in the shareholding of those companies stated in the balance sheet in the "Minority Interests" account. Date of first consolidation or deconsolidation is, in general, the beginning or the end of the quarter when the conditions for that purpose are fulfilled.
Profit or loss is allocated to the shareholders of the mother company and to the non-controlling interest in proportion of their correspondent parts of capital, even in the case that non-controlling interest become negative.
IFRS 3 is applied to all business combinations past January 1, 2010, according to Regulamento no. 495/2009, of June 3, as adopted by the European Commission. When acquiring subsidiaries the purchasing method will be followed. According to the revised IFRS, the acquisition cost will be measured by the given fair value assets, by the assumed liabilities and equity interest issued. Transactions costs will be charged as incurred and the services received. The exceptions are the costs related with debt or capital issued. These must be registered according to IAS 32 and IAS 39. Identifiable purchased assets and assumed liabilities will be initially measured at fair value. The acquirer shall recognized goodwill as of the acquisition date measured as the excess of (i) over (ii) below:
In the case that (ii) exceeds (i), a difference must be registered as a gain.
Non-controlling Interest are recorded at fair value or in the proportion of the percentage held in the net asset of the acquiree, as long as it is effectively owned by the entity. The others components of the non-controlling interest are registered at fair value, except if other criteria is mandatory.
Inter-company transactions, balances, dividends and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated but considered an impairment indicator of the asset transferred.
Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding between 20% and 50% of voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill. Future impairments of goodwill will be adjusted against the carrying amount of investments The Group's share of its associates post-acquisition profits or losses is recognised in the income statement, in the "Gain/(losses) in associates" account, and its share of post-acquisition movements in reserves is recognised in reserves. The carrying amount is also adjusted by dividends received. When the Group's share of losses in an associate equals or exceeds its interest in the associate, the group does not recognise further losses, unless it has incurred obligation on behalf of the associate, in this case the liabilities will be recorded in a "Provisions" account.
Consolidated financial statements are presented in thousands of euros. Euro is the legal currency of CORTICEIRA AMORIM, S.G.P.S., S.A., and is the currency in which two thirds of its business is made and so Euro is considered to be its functional and presentation currency.
Assets and liabilities denominated in foreign currency are translated to euros using year-end exchange rates. Net exchange differences arising from the different rates used in transactions and the rate used in its settlements is recorded in the income statement.
Assets and liabilities from non-euro subsidiaries are translated at the balance sheet date exchange rate, being its costs and gains from the income statement translated at the average exchange rate for the period / year.
Tangible fixed assets are originally their respective historical cost (including attributable expenses) or production cost, including, whenever applicable, interest costs incurred throughout the respective construction or start-up period, which are capitalised until the asset begins operating.
As part of the allocation of the fair value to the identifiable assets and liabilities in an acquisition process (IFRS 3), land and buildings of the subsidiaries as of January 1, 1991, were revalued by independent experts. Same procedure was followed for companies acquired later than that date.
Under IFRS 1, 16, and as of January 1, 2004, some of the relevant industrial equipment, fully, or in the near-term, depreciated, and of which is expected a medium or long term use, was subject to a revaluation process.
Depreciation is calculated on the straight-line basis, over the following years, which represent a reasonable estimate of the useful lives:
| Number of years | |
|---|---|
| Buildings | 20 to 50 |
| Plant machinery | 6 to 10 |
| Motor vehicles | 4 to 7 |
| Office equipment | 4 to 8 |
Depreciation is charged since the beginning of the financial year in which the asset is brought into use, except for big investment projects where depreciation begins with the start-up of production. The asset's residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
Current maintenance on repair expenses are charged to the actual income statement in which they occurred. Cost of operations that can extend the useful expected life of an asset, or from which are expected higher and significative future benefits, are capitalized.
An asset's carrying amount is written down to its recoverable amount and charged to the income statement if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses and disposals are included in the income statement. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to reserves.
Includes land and buildings not used in production.
Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. If positive, will be included as an asset in the "goodwill" account. If negative, it will be registered as a gain for the period.
In Business combinations after January 1, 2010, Goodwill will be calculated as referred in b).
Goodwill will be tested annually for impairment; impairment losses will be charged to the income statement and, consequently, its carrying amount adjusted.
Inventories are valued at the lower of acquisition cost or production cost and net realisable value. Acquisition cost includes direct and indirect expenses incurred in order to have those inventories at its present condition and place. Where the net realisable value is lower than production cost, an adjustment is made to reduce inventories to this lower value. This adjustment will be reversed or reduced whenever the impairment situation no longer takes place.
Year-end quantities are determined based on the accounting records, which are confirmed by the physical inventory taking. Raw materials, consumables and by-products are valued at weighted average cost, and finished goods and work-in-progress at the average production cost which includes direct costs and indirect costs incurred in production.
Trade and other receivables are registered initially at cost, adjusted for any subsequent impairment losses which will be charged to the income statement.
Medium and long-term receivables will be measured at amortised cost using the effective interest rate of CORTICEIRA AMORIM for similar periods.
Cash includes cash in hand, deposits held at call in banks, time deposits and other no-risk short-term investments with original maturities of three months or less. In the Consolidated Statement of Cash Flow, this caption includes Bank overdrafts.
Includes interest bearing loans amounts. Any costs attributable to the lender, will be deducted to the loan amount and charged, during its life, using the effective interest rate.
Interests are usually charged to the income statement as they occur. Interests arising from loans related with capital expenditure for periods longer than 12 months will be capitalised and charged to the specific asset under construction. Capitalisation will cease when the project is complete or suspended.
Except for companies included in groups of fiscal consolidation, income tax is calculated separately for each subsidiary, on the basis of its net result for the period adjusted according to tax legislation.
In the consolidated statements of financial position, differences between the tax due for the current period and prior periods and the tax already paid or to be paid by each of the group companies are registered whenever it is likely that, on an individual company basis, a deferred tax will have to be paid or to be recovered in the foreseeable future (liability method).
CORTICEIRA AMORIM Portuguese employees benefit exclusively from the national welfare plan. Employees from foreign subsidiaries (about 25% of total CORTICEIRA AMORIM) or are covered exclusively by local national welfare plans or benefit from complementary plans, being it defined contribution plans or defined benefit plans.
As for the defined contribution plans, contributions are recognised as employee benefit expense when they are due. The liability recognised in the consolidated statements of financial position in respect of defined benefit plans is the present value of the defined benefit obligation, less the fair value of plan assets, as calculated annually by pension fund experts.
CORTICEIRA AMORIM recognises a liability and an expense for bonuses attributable to a large number of directors. These benefits are based on estimations that take in account the accomplishment of both individual goals and a preestablished CORTICEIRA AMORIM level of profits.
Provisions are recognised when CORTICEIRA AMORIM has a present legal or constructive obligation as a result of past events, when it is more likely than not an outflow of resources will be required to settle the obligation and when a reliable estimation is possible.
Provisions are not recognised for future operating losses. Restructuring provisions are recognised with a formal detail plan and when third parties affected are informed.
Revenue comprises the value of the consideration received or receivable for the sale of goods and finished products. Revue is shown, net of value-added tax, returns, rebates, and discounts, including cash discounts. Revenue is also adjusted by any prior period's sales corrections.
Services rendered are immaterial and, generally, are refunds of costs related with finish product sales.
Sales revenue is recognised when the significant risk and rewards of ownership of the goods are transferred to the buyer and its amount can be reliably measured. Revenue receivable after one year will be discounted to its fair value.
Grants received are related generally with fixed assets expenditure. No-repayable grants are present in the balance sheet as deferred income, and recognised as income on a systematic basis over the useful life of the related asset. Repayable interest bearing grants are presented as interests bearing debt; if no-interest bearing, they are presented as "Other borrowings". Noncurrent no-interest bearing repayable grants are presented with its net present value, using an interest discount rate similar to CORTICEIRA AMORIM interest bearing debt for same period.
When a contract indicates that the significant risks and rewards of the ownership of the asset are transferred to CORTICEIRA AMORIM, leasing contracts will be considered as financial leases.
All other leasing contracts are treated as operating leases. Payments made under operating leases are charged to the income statement.
CORTICEIRA AMORIM uses derivatives financial instruments as forward and spot exchange rate contracts, options and swaps; these are intended to hedge its business financial risks and are not used for speculative purposes. CORTICEIRA AMORIM accounts for these instruments as hedge accounting, following all its standards. Dealing is carried out by a central treasury department (dealing room) on behalf of the subsidiaries, under policies approved by the Board of Directors. Derivatives are initially recorded at cost in the consolidated statements of financial position and subsequently re-measured at their fair value. The method of recognising is as follows:
Changes in the fair value of derivatives that qualify as fair value hedges and that are expected to be highly effective, are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
Changes in the fair value of derivatives that qualify as cash flow edges and that are expected to be highly effective, are recognised in equity; the gain or loss relating to the ineffective portion is recognised immediately in the income statement.
For the moment, CORTICEIRA AMORIM is not considering any foreign exchange hedge over its net investments in foreign units (subsidiaries).
CORTICEIRA AMORIM has fully identified the nature of its activities' risk exposure and documents entirely and formally each hedge; uses its information system to guarantee that each edge is supported by a description of: risk policy, purpose and strategy, classification, description of risk, identity of the instrument and of the risk item, description of initial measurement and future efficiency, identification of the possible derivative portion which will be excluded from the efficiency test.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, or the forecasted transaction no longer remains highly provable or simply is abandoned, or the decision to consider the transaction as a hedge, the company will de-recognised the instrument.
CORTICEIRA AMORIM activities expose it to a variety of financial risks: market risks (including currency risk and interest rate risk), credit risk, liquidity risk and capital risk.
CORTICEIRA AMORIM operates in various international markets, being, consequently, exposed to exchange rates variations in the local currencies in which conducts its business. Around 30% of its total sales are denominated in currencies other than its reporting currency (euro). Of that percentage around 20% is USD denominated. The remaining sales are concentrated in South African rand, Chilean peso, British pound and Australian dollar. About 90% of the goods and services acquired are euro based. Most of the remaining value is denominated in USD.
Exchange rate risk derives not only from the effects of the exchange rates variations in non-euro assets and liabilities euro counter value, but also from the effects in the book orders (future transactions) and from net investments in operating units located in non-euro areas.
Exchange rate risk management policy established by CORTICEIRA AMORIM Board points out to a total hedging of the assets deriving from sales in the most important currencies and from USD acquisitions. As for book orders up to 90 days, each Business Unit responsible will decide according to exchange rate evolution. Book orders, considered relevant, due after 90 days, will be presented by the Business Unit responsible to the Board.
As of June 30, 2012, exchange rates different from the actual as of that date, would have no material effect in financial assets or liabilities values, due to the said hedging policy. As for book orders any effect would be registered in Equity. As for non-euro net investments in subsidiaries/associate, any exchange rate effect would be registered in Equity, because CORTICEIRA AMORIM does not hedge this type of assets. As these investments are not considered relevant, the register of the effects of exchange rates variations was, during the prior years within a narrow range (1H12: -102K€, 2011: -1,435K€, 2010 and -1,305K€).
All interest bearing debt is linked to variable interest rate. Most of the risk derives from the noncurrent-term portion of that debt. As for December 31, 2011, noncurrent-term debt was 39% of total interest bearing debt (2011: 46%). During 2010 Corticeira Amorim, SGPS, SA signed an interest rate swap regarding the economic hedging of the interest rate risk. In its books, this was registered as an available-for-sale derivative. As of June 30, 2012, for each 0.1% variation in euro based debt, a total effect of -150 K€ in CORTICEIRA AMORIM profits would be registered.
Credit risk is due, mainly, to receivables from customers related to trade sales. Credit risk is monitored by the operating companies Financial Departments, taking in consideration its history of trade relations, financial situation as well as other types of information that CORTICEIRA AMORIM business network has available related with each trading partner. Credit limits are analysed and revised, if necessary, on a regular basis. Due to the high number of customers, spread through all continents, the most important of them weighting less than 2.5% of total sales, credit risk is naturally diminished.
Liquidity is defined as the capacity to settle assumed responsibilities. Liquidity risk hedging is accomplished through the availability of a certain number of credit lines, which are not used. With these lines, CORTICEIRA AMORIM can settle positions in a very short period, allowing for the necessary flexibility in conducting its business.
Liquidity reserve is composed mainly, by non-used credit line facilities. Based in estimated cash flows, liquidity reserve performance will be as follows:
| thousand euros | |
|---|---|
| 2012 | |
| Opening balance | 143 |
| Operating cash in | 500 |
| Operating cash out | -420 |
| Investments | -16 |
| Interest and dividends | -15 |
| TVA flow | -35 |
| Income tax | -10 |
| Non-current debt payment | -75 |
| Use of additional credit lines / new credit lines | 95 |
| Saldo final | 167 |
CORTICEIRA AMORIM key objective is to assure business continuity, delivering a proper return to its shareholders and the correspondent benefits to its remaining stakeholders. A careful management of the capital employed in the business, using the proper combination of capital in order to reduce its costs, obtains the fulfilment of this objective. In order to achieve the proper combination of capital employed, the Board can obtain from the General Shareholders Meeting the approval of the necessary measures, namely adjusting the dividend pay-out ratio, the treasury stock, raising capital through new shares issue, sale of assets or other type of measures.
The key indicator for the said combination is the Equity / Assets ratio. CORTICEIRA AMORIM considers that a 40% ratio is a clear sign of a perfect combination, and a range between 35%-45%, depending on actual economic conditions and of the cork sector in particular, is the objective to be accomplished. The said ratio register was:
| Thousands euros | |||||
|---|---|---|---|---|---|
| Jun 30, 2012 |
2011 | 2010 | |||
| Equity | 292,883 | 282,292 | 268,545 | ||
| Assets | 640,324 | 605,053 | 561,730 | ||
| Ratio | 45.7% | 46.7% | 47.8% |
The Ratio was adversely affected by total assets variation, which increased about 35 million euros in the 1H12 and 43 million euros in 2011, largely due to a higher cork campaign acquisition. For this reason, raw material inventory was 35 million euros higher as of December 2011, when compared to December 2010. During 1H12, the main reason for that growth comes from a higher Trade receivables balance as a result of the sales increase.
Derivatives used by CORTICEIRA AMORIM have no public quotation because they are not traded in an open market. A proprietary model of CORTICEIRA AMORIM, developed by Reuters, calculates its fair value. In the case of the interest rates swap, the fair value was calculated by a financial institution. Trade and other receivables, adjusted by any necessary impairment, trade and other payables, investment grants and medium and long-term liabilities were discounted using an interest rate similar to the average interest rate that CORTICEIRA AMORIM registered at year-end 2011 (4.1%).
When evaluating equity and net income, CORTICEIRA AMORIM makes estimates and assumptions concerning events only effective in the future. In most cases, estimates were confirmed by future events. In such cases where it doesn't, variations will be registered when they'll be materialized.
As for 1H12, no estimates and judgements were identified as having important impact in CORTICEIRA AMORIM results if not materialized.
As for assets, goodwill amounts to 9,724 K€ (2011: 11,849 K€). This value is supported by impairment tests made at year-end 2011. The judgment used in these tests are key factors in order to decide or not if there is any impairment. Discount rate use in these tests ranged between 8.6% and 11.2%. In the particular case of North Africa subsidiaries and due to political risks arising during 2011, an impairment test was achieved as of June 30. A goodwill impairment of 1,995 K€ was registered as a result, mainly due to an expected deterioration of these markets profitability. Discount rate used was 10.6%. Still to be noted 6,049 K€ registered in deferred tax assets (2011: 6,105 K€). There will be no impairment if the business plans used in the tests will be accomplished in the future.
| COMPANY | HEAD OFFICE | COUNTRY | 1H12 |
|---|---|---|---|
| Raw Materials | |||
| Amorim Natural Cork, S.A. | Vale de Cortiças - Abrantes | PORTUGAL | 100% |
| Amorim Florestal, S.A. | Ponte de Sôr | PORTUGAL | 100% |
| Amorim Florestal España, SL | San Vicente Alcántara | SPAIN | 100% |
| Amorim Florestal Mediterrâneo, SL | Cádiz | SPAIN | 100% |
| Amorim Tunisie, S.L. | Tabarka | TUNISIA | 100% |
| Comatral - C. de Marocaine de Transf. du Liège, S.A. | Skhirat | SPAIN | 100% |
| Cork International, S.A.R.L. | Tabarka | TUNISIA | 100% |
| SIBL - Société Industrielle Bois Liége | Jijel | ALGERIA | 51% |
| Société Nouvelle du Liège, S.A. (SNL) | Tabarka | TUNISIA | 100% |
| Société Tunisienne d'Industrie Bouchonnière | (d) Tabarka | TUNISIA | 45% |
| Vatrya - Serviços de Consultadoria, Lda | Funchal - Madeira | PORTUGAL | 100% |
| Cork Stoppers | |||
| Amorim & Irmãos, SGPS, S.A. | Santa Maria Lamas | PORTUGAL | 100% |
| Amorim & Irmãos, S.A. | Santa Maria Lamas | PORTUGAL | 100% |
| Amorim Argentina, S.A. | Tapiales - Buenos Aires | ARGENTINA | 100% |
| Amorim Australasia, Pty Ltd | Adelaide | AUSTRALIA | 100% |
| Amorim Cork América, Inc. | California | U. S. AMERICA | 100% |
| Amorim Cork Beijing, Ltd | Beijing | CHINA | 100% |
| Amorim Cork Bulgaria EOOD | Plovdiv | BULGARIA | 100% |
| Amorim Cork Deutschland GmbH & Co KG | Mainzer | GERMANY | 100% |
| Amorim Cork España, S.L. | San Vicente Alcántara | SPAIN | 100% |
| Amorim Cork Itália, SPA | Conegliano | ITALY | 100% |
| Amorim Cork South Africa (Pty) Ltd | Cape Town | SOUTH AFRICA | 100% |
| Amorim France, S.A.S. | Champfleury | FRANCE | 100% |
| Carl Ed. Meyer Korken | Delmenhorst | GERMANY | 100% |
| Chapuis, S.L. | Girona | SPAIN | 100% |
| Corchos de Argentina, S.A. | (d) Mendoza | ARGENTINA | 50% |
| Equipar, Participações Integradas, Lda. | Coruche | PORTUGAL | 100% |
| FP Cork, Inc. | California | U. S. AMERICA | 100% |
| Francisco Oller, S.A. | Girona | SPAIN | 87% |
| Hungarocork, Amorim, RT | Budapest | HUNGARY | 100% |
| Indústria Corchera, S.A. | (e) Santiago | CHILE | 50% |
| Korken Schiesser Ges.M.B.H. | Vienna | AUSTRIA | 69% |
| Olimpiadas Barcelona 92, S.L. | Girona | SPAIN | 100% |
| Portocork América, Inc. | California | U. S. AMERICA | 100% |
| Portocork France | Bordeaux | FRANCE | 100% |
| Portocork Internacional, S.A. | Santa Maria Lamas | PORTUGAL | 100% |
| Portocork Itália, S.A. | Conegliano | ITALY | 100% |
| S.A. Oller et Cie | Reims | FRANCE | 87% |
| S.C.I. Friedland | Céret | FRANCE | 100% |
| Société Nouvelle des Bouchons Trescases | (d) Perpignan | FRANCE | 50% |
| Victor y Amorim, Sl | (e) Navarrete - La Rioja | SPAIN | 50% |
| COMPANY | HEAD OFFICE | COUNTRY | 1H12 |
|---|---|---|---|
| Floor & Wall Coverings | |||
| Amorim Revestimentos, S.A. | Lourosa | PORTUGAL | 100% |
| Amorim Benelux, BV - AR | (a) Tholen | NETHERLANDS | 100% |
| Amorim Deutschland, GmbH - AR | (c) Delmenhorts | GERMANY | 100% |
| Amorim Flooring (Switzerland) AG | Zug | SWITZERLAND | 100% |
| Amorim Flooring Austria GesmbH | Vienna | AUSTRIA | 100% |
| Amorim Flooring Investments, Inc. | Hanover - Maryland | U. S. AMERICA | 100% |
| Amorim Flooring Nordic A/s | Greve | DENMARK | 100% |
| Amorim Flooring North America Inc | Hanover - Maryland | U. S. AMERICA | 100% |
| Amorim Japan Corporation | Tokyo | JAPAN | 100% |
| Amorim Revestimientos, S.A. | Barcelona | SPAIN | 100% |
| Cortex Korkvertriebs GmbH | Fürth | GERMANY | 100% |
| Corticeira Amorim - France SAS - AR | (b) Lavardac | FRANCE | 100% |
| Dom KorKowy, Sp. Zo. O. | (e) Kraków | POLAND | 50% |
| Timberman Denmark A/S | Hadsun | DENMARK | 50% |
| US Floors, Inc. | (d) Dalton - Georgia | U. S. AMERICA | 25% |
| Zodiac Kork- und Holzprodukte GmbH | Fürth | GERMANY | 100% |
| Composites Cork | |||
| Amorim Cork Composites, S.A. | Mozelos | PORTUGAL | 100% |
| Amorim (UK) Ltd. | Horsham West Sussex | UNITED KINGDOM | 100% |
| Amorim Benelux, BV - ACC | (a) Tholen | NETHERLANDS | 100% |
| Amorim Cork Composites Inc. | Trevor Wisconsin | U. S. AMERICA | 100% |
| Amorim Deutschland, GmbH - ACC | (c) Delmenhorts | GERMANY | 100% |
| Amorim Industrial Solutions - Imobiliária, S.A. | Corroios | PORTUGAL | 100% |
| Chinamate (Xi'an) Natural Products Co. Ltd | Xi'an | CHINA | 100% |
| Chinamate Development Co. Ltd | Hong Kong | CHINA | 100% |
| Corticeira Amorim - France SAS - ACC | (b) Lavardac | FRANCE | 100% |
| Drauvil Europea, SL | San Vicente Alcantara | SPAIN | 100% |
| Dyn Cork - Technical Industry, Lda | (d) Paços de Brandão | PORTUGAL | 50% |
| Postya - Serviços de Consultadoria, Lda. | Funchal - Madeira | PORTUGAL | 100% |
| Spheroil - Materiais Compósitos, Lda | Mozelos | PORTUGAL | 100% |
| Insulation Cork | |||
| Amorim Isolamentos, S.A. | Vendas Novas | PORTUGAL | 80% |
| Holding | |||
| Corticeira Amorim, SGPS, S.A. | Mozelos | PORTUGAL | 100% |
| Amorim Benelux, BV - A&I | (a) Tholen | NETHERLANDS | 100% |
| Amorim Cork Research, Lda. | Mozelos | PORTUGAL | 100% |
| Ginpar, S.A. (Générale d' Investiss. et Participation) | Skhirat | MOROCCO | 100% |
| Sopac - Soc. Port. de Aglomerados de Cortiça, Lda | Montijo | PORTUGAL | 100% |
| (a) One single company: Amorim Benelux, BV. |
(b) One single company: Corticeira Amorim - France SAS.
(c) One single company: Amorim Deutschland, GmbH & Co. KG.
(d) Equity method consolidation.
(e) CORTICEIRA AMORIM controls the operations of the company – line-by-line consolidation method.
As referred in the management report and as disclosed, at the end of June a 90.91% stake of Trefinos, S.L. was acquired by a total of 15.1 million euros. This company is the mother company of six companies, whose business are in the production and distribution of champagne cork stoppers. As of June 30, 2012, the management of Trefinos, S.L. and its subsidiaries still did not reflect the changes in the ownership that the referred acquisition will imply.
As for this, no new management members were yet denominated. Trefinos activity will be consolidated beginning July 1, 2012. Following are the main available indicators of Trefinos group:
| (thousand euros) | 2011 | 2010 |
|---|---|---|
| Consolidated sales | ND | 29,979 |
| Mother company sales | 32,696 | 27,946 |
| Consolidated assets | ND | 33,392 |
| Mother company assets | 33,248 | 29,524 |
| Consolidated net debt | ND | 2,661 |
| Mother company net debt | 6,070 | 2,435 |
| Consolidated equity | ND | 15,497 |
| Mother company equity | 16,061 | 15,025 |
| Consolidated profit | ND | 1,624 |
| Mother company profit | 1,349 | 1,300 |
| Exchage rates | First Half End 2012 |
First Half Average 2012 |
Average 2011 |
||
|---|---|---|---|---|---|
| Argentine Peso | ARS | 5,73015 | 5,69502 | 5,74419 | 5,56722 |
| Australian Dollar | AUD | 1,23390 | 1,25586 | 1,34839 | 1,27230 |
| Lev | BGN | 1,95570 | 1,95568 | 1,95561 | 1,95560 |
| Brazilian Real | BRL | 2,57880 | 2,41443 | 2,32651 | 2,41590 |
| Canadian Dollar | CAD | 1,28710 | 1,30403 | 1,37610 | 1,32150 |
| Swiss Franc | CHF | 1,20300 | 1,20483 | 1,23261 | 1,21560 |
| Chilean Peso | CLP | 633,280 | 638,506 | 672,362 | 671,960 |
| Yuan Renminbi | CNY | 8,04160 | 8,19939 | 8,99772 | 8,14490 |
| Danish Krone | DKK | 7,43340 | 7,43495 | 7,45065 | 7,43420 |
| Algerian Dinar | DZD | 99,6311 | 97,0396 | 100,684 | 97,9746 |
| Euro | EUR | 1 | 1 | 1 | 1 |
| Pound Sterling | GBP | 0,80680 | 0,82252 | 0,86788 | 0,83530 |
| Hong Kong Dollar | HDK | 9,8187 | 10,0681 | 10,8375 | 10,0501 |
| Forint | HUF | 287,770 | 295,450 | 279,373 | 314,580 |
| Yen | JPY | 100,130 | 103,310 | 110,959 | 100,200 |
| Moroccan Dirham | MAD | 11,0609 | 11,0971 | 11,2368 | 11,1105 |
| Norwegian Krone | NOK | 7,53300 | 7,57286 | 7,79337 | 7,75400 |
| Zloty | PLN | 4,24880 | 4,24590 | 4,12061 | 4,45800 |
| Ruble | RUB | 41,0010 | 39,6762 | 40,8812 | 41,6630 |
| Swedish Kronor | SEK | 8,77280 | 8,88240 | 9,02984 | 8,91200 |
| Tunisian Dinar | TND | 2,00020 | 1,99155 | 1,95438 | 1,93640 |
| US Dollar | USD | 1,25900 | 1,29647 | 1,39196 | 1,29390 |
| Rand | ZAR | 10,3669 | 10,2942 | 10,0970 | 10,4830 |
CORTICEIRA AMORIM is organised in the following Business Units (BU):
For purposes of this Report, the Business approach was selected as the primary segment. This is consistent with the formal organization and evaluation of business. The following table shows the main indicators of the said units, and, whenever possible, the reconciliation with the consolidated indicators:
| thousand euro | ||||||||
|---|---|---|---|---|---|---|---|---|
| 1H2012 | Raw Materials |
Cork Stoppers |
Floor & Wall Coverings |
Composite Cork |
Insulation Cork |
Holding | Ajustm. | Consolidated |
| Trade Sales | 3.970 | 159.442 | 66.143 | 40.771 | 4.280 | 390 | 0 | 274.996 |
| Other BU Sales | 60.575 | 3.107 | 1.911 | 6.446 | 404 | 1.043 | -73.485 | - |
| Total Sales | 64.545 | 162.549 | 68.054 | 47.216 | 4.684 | 1.432 | -73.485 | 274.996 |
| Current EBITDA | 6.308 | 25.784 | 8.424 | 4.707 | 1.133 | -1.632 | 4 1 |
44.765 |
| Assets | 113.087 | 304.600 | 114.724 | 83.991 | 13.082 | 11.067 | -228 | 640.324 |
| Liabilities | 31.802 | 98.005 | 35.197 | 25.256 | 2.057 | 18.642 | 136.482 | 347.442 |
| Capex | 855 | 4.352 | 212 | 2.832 | 388 | 4 7 |
0 | 8.686 |
| Year Depreciation | -1.041 | -5.288 | -2.620 | -1.574 | -303 | -26 | 0 | -10.851 |
| Non-cash cost | -1.967 | -3.529 | -290 | 6 7 |
-38 | -29 | 0 | -5.786 |
| Gains/Losses in associated companies |
-3 | 570 | -43 | -143 | 0 | 0 | 0 | 381 |
| 1H2011 | Raw Materials |
Cork Stoppers |
Floor & Wall Coverings |
Composite Cork |
Insulation Cork |
Holding | Ajustm. | Consolidated |
|---|---|---|---|---|---|---|---|---|
| Trade Sales | 1.628 | 149.641 | 58.092 | 38.440 | 4.354 | 1.103 | 1.420 | 254.678 |
| Other BU Sales | 53.006 | 2.901 | 1.770 | 7.269 | 348 | -26 | -65.268 | - |
| Total Sales | 54.634 | 152.543 | 59.862 | 45.709 | 4.702 | 1.077 | -63.848 | 254.678 |
| Current EBITDA | 14.282 | 19.353 | 3.570 | 4.465 | 1.167 | -1.941 | -1.164 | 39.732 |
| Assets | 100.194 | 272.437 | 113.356 | 72.361 | 11.357 | 2.671 | -4.463 | 567.913 |
| Liabilities | 22.741 | 76.789 | 28.094 | 22.076 | 1.465 | 17.550 | 129.405 | 298.121 |
| Capex | 2.819 | 6.134 | 1.808 | 2.523 | 210 | 0 | 0 | 13.494 |
| Year Depreciation | -1.608 | -4.771 | -2.919 | -1.669 | -296 | -22 | 0 | -11.284 |
| Non-cash cost | -46 | 416 | -4.006 | -409 | -58 | 0 | 0 | -4.102 |
| Gains/Losses in associated companies |
1 1 |
503 | 3 3 |
0 | 0 | 0 | 0 | 547 |
Adjustments = eliminations inter-BU and amounts not allocated to BU.
EBITDA =Profit before depreciation and amortisation, interests, non-controlling interests and income tax.
Provisions and asset impairments were considered the only relevant material cost which does no not involve disbursements.
Segments assets do not include DTA (deferred tax asset) and non-trade group balances.
Segments liabilities do not include DTL (deferred tax liabilities), bank loans and non-trade group balances.
The decision to report EBITDA figures allows a better comparison of the different BU performances, disregarding the different financial situations of each BU. This is also coherent with the existing Corporate Departments, as the Financial Department is responsible for the bank negotiations, being the tax function the responsibility of the Holding Company, like the use of tax advantages coming from tax consolidation instruments (RETGS).
Cork Stoppers BU main product is the different kinds of existing cork stoppers. The main markets are the bottling countries, from the traditional ones like France, Italy, Germany, Spain and Portugal, to the new markets like USA, Australia, Chile, South Africa and Argentina.
Raw Materials BU is, by far, the most integrated in the production cycle of CORTICEIRA AMORIM, with more than 95% of its sales to others BU, specially to Cork Stoppers BU. Main products are bark and discs.
The remaining BU produce and sell a vast number of cork products made from cork stoppers waste. Main products are cork floor tiles, cork rubber for the automotive industry and antivibratic systems, black agglomerates for insulation and acoustic purposes, technical agglomerates for civil construction and shoe industry, as well as granulates for agglomerated, technical and champagne cork stoppers.
Major markets for flooring and insulation products are in Europe and for cork rubber products the USA. Major production sites are in Portugal, where most of the invested capital is located. Products are distributed in practically all major markets through a fully owned network of sales companies. About 70% of total consolidated sales are achieved through these companies.
Capex was concentrated in Portugal. Assets in foreign subsidiaries totalize 253 million euro, and are mostly composed by inventories (87 million), customers (83 million) and tangible fixed assets (37 million).
Sales by markets:
| thousand euros | ||||
|---|---|---|---|---|
| Markets | 1H12 | 1H11 | ||
| European Union | 163.378 | 59,4% | 157.778 | 62,0% |
| From which: Portugal | 13.479 | 4,9% | 12.150 | 4,8% |
| Other European countries | 19.476 | 7,1% | 13.986 | 5,5% |
| United States | 52.291 | 19,0% | 45.271 | 17,8% |
| Other American countries | 17.155 | 6,2% | 17.399 | 6,8% |
| Australasia | 17.989 | 6,5% | 15.676 | 6,2% |
| Africa | 3.711 | 1,3% | 3.768 | 1,5% |
| Others | 996 | 0,4% | 799 | 0,3% |
| TOTAL | 274.996 | 100% | 254.678 | 100% |
31
| thousand euros | ||||||
|---|---|---|---|---|---|---|
| Land and buildings |
Machinery | Other | Total tangible assets |
Intangible assets |
Investment property |
|
| Gross Value | 206.169 | 277.480 | 36.931 | 520.580 | 4.214 | 14.320 |
| Depreciation and impairments | -126.743 | -201.213 | -24.196 | -352.152 | -3.602 | -6.587 |
| Opening balance (Jan 1, 2010) | 79.426 | 76.267 | 12.735 | 168.428 | 612 | 7.733 |
| INCREASE | 2.797 | 1.956 | 8.687 | 13.440 | 46 | 8 |
| PERIOD DEPREC. AND IMPAIRMENTS | -2.171 | -7.233 | -680 | -10.084 | -128 | -851 |
| SALES AND OTHER DECREASES | -45 | -464 | -224 | -733 | -30 | 0 |
| TRANSFERS AND RECLASSIFICATIONS | -884 | 820 | -1.566 | -1.630 | -29 | 1.069 |
| TRANSLATION DIFFERENCES | -233 | -407 | -111 | -751 | - 1 |
0 |
| Gross Value | 207.472 | 276.380 | 42.537 | 526.389 | 3.215 | 15.261 |
| Depreciation and impairments | -128.582 | -205.441 | -23.695 | -357.718 | -2.745 | -7.301 |
| Closing balance (Jun 30, 2010) | 78.890 | 70.939 | 18.842 | 168.671 | 470 | 7.960 |
| Gross Value | 209.776 | 286.731 | 39.230 | 535.737 | 3.168 | 15.078 |
| Depreciation and impairments | -129.640 | -211.646 | -22.080 | -363.366 | -2.741 | -7.502 |
| Opening balance (Jan 1, 2011) | 80.136 | 75.085 | 17.150 | 172.371 | 427 | 7.576 |
| INCREASE | 239 | 1.025 | 7.576 | 8.840 | 27 | 0 |
| PERIOD DEPREC. AND IMPAIRMENTS | -2.312 | -7.456 | -729 | -10.497 | -27 | -1.297 |
| SALES AND OTHER DECREASES | -17 | -232 | -112 | -361 | 0 | 0 |
| TRANSFERS AND RECLASSIFICATIONS | 310 | 526 | -1.575 | 579 | - 8 |
0 |
| TRANSLATION DIFFERENCES | 110 | 263 | 75 | 448 | 0 | 0 |
| Gross Value | 209.078 | 288.317 | 45.058 | 542.453 | 3.196 | 15.078 |
| Depreciation and impairments | -130.612 | -205.441 | -22.673 | -371.073 | -2.777 | -8.799 |
| Closing balance (Jun 30, 2011) | 78.466 | 70.529 | 22.385 | 171.380 | 419 | 6.279 |
The value of 6,279K€ (2011: 7,960K€) in Investment Property refers, mainly, to land and buildings not used for production purposes.
| thousand euros | ||||
|---|---|---|---|---|
| Openning | Increases / Decreases |
Translation Differences |
Closing | |
| Raw material BU | 1.995 | -1.995 | 0 | 0 |
| Corkstoppers BU | 6.934 | -130 | 0 | 6.804 |
| Corkflooring BU | 2.920 | 0 | 0 | 2.920 |
| Goodwill | 11.849 | -2.125 | 0 | 9.724 |
As stated in point IV, decrease in Raw material was due to the write-off of the remaining goodwill of North Africa subsidiaries. This cost was considered to be a non-current cost.
Decrease in Cork stoppers refers to an adjustment in the 2011 estimated goodwill of Corchos Argentina. This adjustment was booked against its equity value. As for 2011 Amorim Cork España acquisition, its assets and liabilities fair value were allocated during 2012. Its 200 K€ goodwill was expensed fully.
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Initial Balance | 5.967 | 5.362 | 5.362 |
| In / Out | 0 | 784 | 0 |
| Results | 384 | 91 | 547 |
| Dividends | 0 | -250 | 0 |
| Other | 104 | -20 | 50 |
| End Balance | 6.454 | 5.967 | 5.959 |
The value of 104 K€, includes 130 K€ due to the adjustment of the estimated equity at 2011 year-end of Corchos Argentina in face of actual value. A negative variation of 23 K€ is associated with exchange rate variation as of June 30, 2012.
At the end of 1H12, Other Financial Assets includes 15.1 M€ related with Trefinos, S.L. acquisition which will be consolidated line-by-line beginning 2012 second half. Remaining refers, mostly to financial applications and deposits acting as guaranties.
The differences between the tax due for the current period and prior periods and the tax already paid or to be paid of said periods is registered as "deferred tax" in the consolidated income statement, according to note II k), and amounts to K€ 334 (1H11: K€ -233).
On the Balance sheet this effect amounts to K€ 6,049 (30/06/2011: K€ 7,417) as Deferred tax asset, and to K€ 5,572 (30/06/2011: K€ 5,861) as Deferred tax liability.
It is conviction of the Board that, according to its business plan, the amounts registered in deferred tax assets will be recovered as for the tax carry forward losses concerns.
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Related with Inventories / Customers and Debtors impairments |
3.868 | 3.792 | 4.105 |
| Related with Tax Losses | 1.400 | 1.538 | 1.843 |
| Related with Tax Benefits | 0 | 0 | 515 |
| Others | 782 | 775 | 953 |
| Deferred Tax Assets | 6.049 | 6.105 | 7.417 |
| Related with Fixed Tangible Assets | 3.883 | 4.447 | 4.650 |
| Related with Inventories | 1.689 | 1.656 | 1.212 |
| Deferred Tax Liabilities | 5.572 | 6.103 | 5.861 |
| Current Income Tax | -8.418 | -12.132 | -9.657 |
| Deferred Income Tax | 334 | -1.615 | -233 |
| Income Tax | -8.084 | -13.747 | -9.890 |
Following chart explains the effective income tax rate, from the original income tax rate of most of Portuguese companies:
Income Tax Conciliation
| Income Tax - Legal | 26,5% |
|---|---|
| Effect arising from extraordinary taxation (derrama estadual) | 3,2% |
| Effect due to diferent tax rates (foreign subsidiaries) and other | 3,1% |
| Effect due to reversal of prior year tax estimates | -5,6% |
| Income tax - effective (1) | 27,2% |
(1) Income Tax / Pre-tax Profit, Equity Gains, Non-controlling Interests and non-current non-taxable costs
CORTICEIRA AMORIM and a large group of its Portuguese subsidiaries are taxed since January 1, 2001, as a group special regime for tax purposes (RETGS), as according to article 69, of the income tax code (CIRC). The option for this special regime is renewable every five years.
According to law, tax declarations for CORTICEIRA AMORIM and its Portuguese subsidiaries are subject of revision and possible correction from tax authorities generally during the next four years.
No material effects in the financial statements as of June 30, 2012, are expected by the Board of CORTICEIRA AMORIM and its subsidiaries from the revisions of tax declarations that will be held by the tax authorities.
Following is presented the information regarding tax losses amounts and its time limits for utilisation:
| thousand euros | ||||||
|---|---|---|---|---|---|---|
| 2012 | 2013 | 2014 | 2015 | 2016 and further |
TOTAL | |
| Foreign companies | 0 | 0 | 322 | 159 | 38.018 | 38.499 |
| Non utilised tax losses | 0 | 0 | 322 | 159 | 38.018 | 38.499 |
34
Due to the fact that the definitive tax reports are filled only at the end of the year, the information above states the situation as of the closing of 2011, with the changes from the semester activity.
As for the foreign companies, the year 2016 and further was considered for those situations that correspond to tax losses to carry forward with no limit of utilization. Tax losses from foreign subsidiaries that are in a reorganization process were not considered as they are not likely to be used.
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Goods | 19.185 | 17.170 | 15.742 |
| Finished and semi-finished goods | 82.550 | 73.317 | 76.271 |
| By-products | 596 | 472 | 744 |
| Work in progress | 12.535 | 11.615 | 11.344 |
| Raw materials | 103.823 | 124.096 | 78.475 |
| Advances | 4.366 | 1.056 | 4.906 |
| Goods impairments | -1.185 | -857 | -1.296 |
| Finished and semi-finished goods impairments | -2.455 | -1.759 | -2.244 |
| Raw materials impairments | -119 | -188 | -216 |
| Inventories | 219.295 | 224.922 | 183.726 |
Raw material increase from 1H11 was due to a higher volume of cork acquired during the last campaign, and also due to its higher acquisition price. As for the increase from 2011 year-end, this comes from the usual effect of the first half cork consumption being far larger than the residual quantities purchased during the period.
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Gross amount | 151.186 | 129.994 | 147.006 |
| Impairments | -11.710 | -13.236 | -13.687 |
| Trade receivables | 139.477 | 116.758 | 133.318 |
At the end of each period, Trade receivables credit quality is analysed. Due to specific business environment, balances unpaid up to 120 days are not impaired. From 120 to 180 days a 60% impairment register is considered. Over 180 days as well as all doubtful balances are fully impaired. These rules do not overcome specific cases analysis.
Due and past due balances are as follows:
| million euros | |||
|---|---|---|---|
| 1H12 | 1H11 | ||
| Due | 110 | 102 | |
| Past due between 0 and 120 days | 29 | 32 | |
| Past due between 120 and 180 days | 2 | 2 | |
| Doubtful and past due over 180 days | 10 | 12 | |
| Impairment | 12 | 14 |
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Value added tax (TVA) | 26,444 | 20,086 | 15,589 |
| Other taxes | 3,429 | 3,576 | 3,538 |
| Recoverable taxes | 29,873 | 23,662 | 19,127 |
TVA increasing trend balances are not only the result of the increase in activity but are mainly due to the growing delay of the reimbursement which is being postponed beyond legal limits by the tax authority. At 2011 year-end, the delay amounted to 3.1 M€. At the end of the semester, totalled 9.2 M€.
As stated, during the period a 1.6 M€ impairment related to TVA receivables from Argentinean tax authority was booked. This comes in accordance with recent situations occurred in that country.
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Advances to suppliers | 4,248 | 3,463 | 3,931 |
| Deferred assets | 1,715 | 2,563 | 2,593 |
| Hedge accounting assets | 267 | 252 | 688 |
| Others | 2,986 | 3,882 | 6,705 |
| Other current assets | 9,215 | 10,160 | 13,918 |
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Cash | 234 | 202 | 153 |
| Bank Balances | 12.192 | 5.778 | 11.603 |
| Time Deposits | 11.275 | 15.696 | 412 |
| Others | 6 | 5 | 7 |
| Cash and cash equivalents according to Balance Sheet | 23.707 | 21.681 | 12.175 |
| Overdraft | -21.465 | -14.950 | -18.305 |
| Cash and cash equivalents according to Cash Flow Stat. | 2.242 | 6.731 | -6.130 |
As of June 30, 2012, the share capital is represented by 133,000,000 ordinary registered shares, conferring dividends, with a par value of 1 Euro.
The Board of CORTICEIRA AMORIM is authorised to raise the share capital, one or more times, respecting the conditions of the commercial law, up to € 250,000,000.
During the first half, no transactions were done. As of June 30, 2011, CORTICEIRA AMORIM held 6,787,462 of its own shares, representing 5.103% of its share capital.
In the Shareholders' General Meeting of March 29, 2012, a dividend per share of 6.5 cents of euro was approved. The payment was made as of April, 30.
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 2010 | |
| Dividends paid: - 2012: 0,065 and 2011: 0,10 (euros per share) |
8,645 | 13,300 | 0 |
| Portion attributable to own shares | -441 | -679 | 0 |
| Dividends paid | 8,204 | 12,621 | 0 |
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Initial Balance | 12,439 | 12,131 | 12,131 |
| In / Out | 0 | 182 | 50 |
| Results | 453 | 1,141 | 356 |
| Dividends | -223 | -506 | -432 |
| Exchange Diferrences | 386 | -509 | -543 |
| Others | -26 | 0 | 8 |
| End Balance | 13,029 | 12,439 | 11,569 |
As of June 30, 2012, interest bearing loans was as follows:
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Bank loans | 63,355 | 54,802 | 75,231 |
| Overdrafts | 24,840 | 0 | 0 |
| Reimbursable subsidies | 0 | 124 | 7,524 |
| Commercial Paper | 2,000 | 21,715 | 2,000 |
| Interest-bearing loans - current | 90,195 | 76,641 | 84,755 |
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Bank loans | 22,823 | 1,936 | 3,139 |
| Bonds | 0 | 25,000 | 25,000 |
| Reimbursable subsidies | 0 | 28 | 428 |
| Commercial Paper | 35,500 | 35,500 | 20,000 |
| Interest-bearing loans - non-current | 58,323 | 62,464 | 48,567 |
As of June 30, 2012, interest bearing loans – non-current maturity is as follows:
| thousand euros | |
|---|---|
| Between 30/06/2013 and 31/12/2013 | 23,734 |
| Between 01/01/2014 and 31/12/2014 | 25,500 |
| Between 01/01/2015 and 31/12/2015 | 7,325 |
| After 01/01/2016 | 1,764 |
| Total | 58,323 |
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Suppliers - current account | 85,807 | 93,639 | 83,413 |
| Suppliers - accrualls | 12,804 | 12,300 | 9,430 |
| Suppliers | 98,611 | 105,939 | 92,843 |
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Non interest bearing grants | 11,587 | 8,898 | 122 |
| Other | 1,691 | 1,627 | 801 |
| Other loans and creditors - non current | 13,278 | 10,525 | 923 |
| Non interest bearing grants | 297 | 118 | 1,103 |
| Deferred costs | 25,270 | 16,421 | 22,927 |
| Deferred gains - grants | 5,141 | 5,663 | 6,041 |
| Other | 8,384 | 8,363 | 4,073 |
| Other loans and creditors - current | 39,092 | 30,565 | 34,144 |
Changes in Deferred costs are justified mainly by the changes that results from the booking and payment of the vacations bonus and vacations paid and Christmas bonus.
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Income Tax | 8,688 | 5,264 | 8,431 |
| Value Added Tax (TVA) | 10,257 | 3,662 | 4,944 |
| Social Security | 2,232 | 2,822 | 2,013 |
| Others | 939 | 2,076 | 980 |
| Tax liabilities | 22,115 | 13,824 | 16,368 |
Increase in TVA payables is due largely to the increase in foreign subsidiaries activities. Additionally, the split of Amorim & Irmãos, S.A. occurred during 4Q11 had as a consequence the increase of Amorim Florestal activity. As this is directed to the internal market, the TVA balance turns a liability value, when before the spilt, it was an asset value (Amorim & Irmãos was, and still it is, mainly an export company).
| thousand euros | ||
|---|---|---|
| 1H12 | 1H11 | |
| Communications | 665 | 681 |
| Information systems | 2,207 | 1,990 |
| Insurance | 1,655 | 1,587 |
| Subcontractors | 3,051 | 2,543 |
| Power | 5,684 | 4,932 |
| Security | 505 | 456 |
| Professional Fees | 310 | 263 |
| Tools | 686 | 656 |
| Oil and gas | 907 | 857 |
| Royalties | 801 | 725 |
| Rentals | 2,368 | 2,103 |
| Transports | 9,856 | 8,935 |
| Travel - Board | 412 | 354 |
| Travel | 1,747 | 1,827 |
| Commissions | 2,683 | 2,604 |
| Special Services | 3,492 | 3,421 |
| Advertising | 3,150 | 3,850 |
| Maintenance | 3,114 | 3,065 |
| Others | 3,053 | 3,597 |
| Third party supplies and services | 46,346 | 44,446 |
| thousand euros | ||
|---|---|---|
| 1H12 | 1H11 | |
| Board remuneration | 325 | 421 |
| Employees remuneration | 37,654 | 36,200 |
| Social Security and other | 8,070 | 7,817 |
| Severance costs | 743 | 370 |
| Other | 4,060 | 3,446 |
| Staff costs | 50,852 | 48,254 |
| Average number of employees | 3,400 | 3,323 |
| thousand euros | ||
|---|---|---|
| 1H12 | 1H11 | |
| Receivables | 2,370 | 1,292 |
| Inventories | -255 | -36 |
| Goodwill | 2,195 | 3,563 |
| Tangible assets | 0 | -170 |
| Others | 1,000 | 1 |
| Impairments of Assets | 5,310 | 4,650 |
Receivables impairment at 1H12, totalling 2,370 K€, includes 1,624 related with TVA from Amorim Argentina subsidiary. Goodwill impairment of 2,195 K€ includes 1,995 from North Africa and 200 from Amorim Cork España. Others (1,000 K€) refers to the Montijo land impairment included in Investment Property. Goodwill 1H11 (3,563 K€) derives from the associate US Floors write-off.
| thousand euros | ||
|---|---|---|
| 1H12 | 1H11 | |
| Net exchange diffences | 1,701 | 0 |
| Gain in fixed assets and p. investment disposals | 103 | 131 |
| Operating subsidies | 127 | 125 |
| Investment subsidies | 534 | 746 |
| Other | 2,857 | 2,833 |
| Other operating gains | 5,322 | 3,835 |
| thousand euros | ||
|---|---|---|
| 1H12 | 1H11 | |
| Net exchange diffences | 0 | 1,779 |
| Taxes (other than income) | 699 | 705 |
| Provisions | 644 | 20 |
| Loss in fixed assets and p. investment disposals | 87 | 471 |
| Bank charges | 328 | 336 |
| Other | 1,219 | 970 |
| Other operating losses | 2,977 | 4,281 |
| thousand euros | ||
|---|---|---|
| 1H12 | 1H11 | |
| Interest costs - bank loans | 2.978 | 1.938 |
| Interest costs - other entities | 554 | 714 |
| Stamp tax - interest | 42 | 39 |
| Stamp tax - capital | 112 | 97 |
| Interest costs - other | 385 | 6 |
| 4.071 | 2.794 | |
| Interest gains - bank deposits | 457 | 445 |
| Interest gains - other loans | 93 | 183 |
| Interest gains - delayed payments | 15 | 7 |
| Interest gains - other | 85 | 787 |
| 649 | 1.422 | |
| Net financial costs | 3.422 | 1.372 |
In Interest costs – other entities is include 266 K€ (1H12) and 172 K€ (1H11) of interest paid related with an interest rate swap. In interest cost – other (385 K€) is included a 49 K€ loss due to the fair value variation of the said swap. It is so also included 189 K€ related with commercial paper commissions.
In Interest gains – other (1H11), is included 637K€ related with the fair value of an interest rate swap.
CORTICEIRA AMORIM consolidates indirectly in AMORIM - INVESTIMENTOS E PARTICIPAÇÕES, S.G.P.S., S.A. (AIP) with head-office at Mozelos (Santa Maria da Feira, Portugal), Amorim Group holding company.
As of June 30, 2012, indirect stake of AIP in CORTICEIRA AMORIM was 51%, corresponding to 53.74% of the voting rights.
CORTICEIRA AMORIM related party transactions are, in general, due to the rendering of services through some of AIP subsidiaries (Amorim Serviços e Gestão, S.A., Amorim Viagens e Turismo, S.A., OSI – Sistemas Informáticos e Electrotécnicos, Lda.).
Balances at year-end 2011 and June 2012 are those resulting from the usual payment terms (from 30 to 60 days) and so are considered to be immaterial.
Services rendered from related-parties are based on the "cost plus" basis raging from 2% to 5%
| thousand euros | |||
|---|---|---|---|
| 1H12 | 2011 | 1H11 | |
| Income tax | 16.088 | 13.097 | 12.606 |
| Guarantees to customers | 1.403 | 1.270 | 918 |
| Others | 2.765 | 2.333 | 1.135 |
| Provisions | 20.256 | 16.700 | 14.659 |
During 1H12 some Portuguese subsidiaries booked income tax provisions totalling 2,990 K€. This value is considered to be appropriate regarding the conditions that have to be accomplished in the future in the tax benefits included in last May income tax statements presented to the authorities.
During 1H12, subsidiary Amorim Cork America booked in Others a 504 K€ provision related with a client claim. In this caption its also included a 750 K€ provision that subsidiary Amorim France registered in 2011. This is due to a patent lawsuit.
Live tax cases, in court stage or not, totals 19.4M€. These includes 10.1 M€ of capital and 9.3 M€ of correspondent tax.
It is considered appropriate the total value of 16,088 K€ of provisions related with contingencies regarding income tax.
During its operating activities CORTICEIRA AMORIM issued in favour of third-parties guarantees amounting to K€ 95,621 (2011: K€ 79,791).
| thousand euros | |
|---|---|
| Amount | Purpose |
| 2,920 | Capex grants / subsidies |
| 10,772 | Tax lawsuits |
| 81,657 | Credit lines |
| 272 | Miscellaneous guarantees |
| 95,621 | |
43 As of June 30, 2012, future expenditure resulting from long-term motor vehicle rentals totals K€ 2,097, and for computer hardware and software totals K€ 429.
As of June 30, 2012, options and forwards outright contracts related with sales currencies were as follows:
| thousand euros | ||
|---|---|---|
| 1H12 | ||
| USD | 10,277 | 63% |
| AUD | 4,470 | 27% |
| ZAR | 1,160 | 7% |
| HUF | 370 | 2% |
| CHF | 87 | 1% |
| Forward - long positions | 16,364 | 100% |
| SEK | 118 | 100% |
| Forward - short positions | 118 | 100% |
| USD | 29,810 | 100% |
| Options - long positions | 29,810 | 100% |
| USD | 1,883 | 100% |
| Options - short positions | 1,883 | 100% |
In the mean time between the semester closing and the date of this report a "knock-in" situation occurred in a 2,500 KUSD option. It is estimated that this will impact -172 K€ in the books and -282 K€ in cash.
CORTICEIRA AMORIM sales are composed by a wide range of products that are sold through all the five continents, over 100 countries. Due to this notorious variety of products and markets, it is not considered that this activity is concentrated in any special period of the year. Traditionally first half, specially the second quarter, has been the best in sales; third and fourth quarter switch as the weakest one.
Gross margin (percentage) as shown in the Earnings Statement (by nature of expenses) calculation used as denominator the value of Production (Sales + Change in manufactured inventories).
b) Net profit per share calculation used the average number of issued shares deducted by the number of average owned shares. The non-existence of potential voting rights justifies the same net profit per share for basic and diluted.
| 1H12 | 2011 | 1H11 | |
|---|---|---|---|
| Total issued shares | 133,000,000 | 133,000,000 | 133,000,000 |
| Average nr. of treasury shares | 6,787,462 | 6,787,462 | 6,787,462 |
| Average nr. of outstanding shares | 126,212,538 | 126,212,538 | 126,212,538 |
| Net Profit (thousand euros) | 17,716 | 25,274 | 13,814 |
| Net Profit per share (euros) | 0.140 | 0.200 | 0.109 |
| António Rios de Amorim Chairman |
|
|---|---|
| Nuno Filipe Vilela Barroca de Oliveira | |
| Vice-President | |
| Fernando José de Araújo dos Santos Almeida Member |
|
| Cristina Rios de Amorim Baptista Member |
|
| Luísa Alexandra Ramos Amorim | |
| Member | |
| Juan Ginesta Viñas Member |
|
| Jorge Manuel Seabra de Freitas Member |
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