Interim / Quarterly Report • Jul 28, 2016
Interim / Quarterly Report
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Dovre Group Plc Half year financial report July 28, 2016 at 8.45 a.m.
Dovre Group Plc issues today the company's half year financial report for the six months ended on 30 June 2016. The figures presented in this half year financial report are not audited. Last year's corresponding period in parentheses. Comparatives for 2015 include Norwegian Petroleum Consulting Group AS (NPC) as part of Dovre Group's Project Personnel business area as of May 28, 2015.
Guidance for 2016 (unchanged): Net sales are expected to be EUR 80 - 100 million and operating result is expected to be positive.
| 1-6 2016 |
1-6 2015 |
Change % |
1-12 2015 |
|
|---|---|---|---|---|
| EUR million | ||||
| Net sales | 47.8 | 54.9 | -12.9 | 115.9 |
| Operating result | 0.1 | -0.5 | 121.4 | -0.9 |
| % of net sales | 0.2 % | -1.0 % | -0.7 % | |
| Result | -0.8 | -0.7 | -8.7 | -2.0 |
| % of net sales | -1.6 % | -1.3 % | -1.7 % | |
| Net cash flow from operations | -1.7 | -3.0 | 45.8 | 2.0 |
| Net debt | -2.3 | -5.2 | -55.2 | -5.2 |
| Debt-equity ratio (Gearing), % | -8.9 % | -17.3 % | -48.6 | -19.1 % |
| Earnings per share, EUR: | ||||
| Undiluted | -0.01 | -0.01 | -24.4 | -0.02 |
| Diluted | -0.01 | -0.01 | -24.1 | -0.02 |
"The oil & gas market continues to be challenging, and will get worse before it gets better. However, signs of change for the better are on the increase: the price of oil seems to continue its volatile trend upwards; several oil & gas majors have announced ambitious investment plans in renewable energy; and in some markets and with some clients, we are already seeing increased activity. We expect the oil & gas service market to bottom out in 2016 and a gradual increase to begin in 2017. In other industries which we serve, project activity is already high.
We continue to reshape Dovre Group in order to be fit for the market. We have made significant progress in de-risking, diversification and cost saving:
One of the drivers behind the merger with NPC, which took place a year ago, was the de-risking of our client portfolio. Prior to the merger, both Dovre Group and NPC were highly dependent on their respective main clients. Since the merger, and following successful new client acquisition, we now have a balanced and robust client portfolio. Currently, only one client represents more than 10% of our total volume.
In Q1, we launched the target of 25% diversification – i.e. share of sales to non-oil & gas clients - by the end of the year. We have since increased this target to 30% and are well on track to reach that.
In Q1, we also launched a cost adaption program. Our target was more than 0.5 MEUR cost savings per annum, effective as of Q3/2016. So far, we have already implemented cost savings of more than 0.8 MEUR per annum, with full effect latest in Q3/2016. We will continue to streamline and digitalize our work processes and to improve our cost efficiency.
In H1, our Project Personnel business still suffered from declining volumes and prices in the oil & gas market. Net sales declined both year-on-year and quarter-on-quarter. On a more positive note, in H1 our relative gross margin improved and our fixed cost decreased significantly.
In H1 our Consulting operating profit increased significantly compared to previous year. Solid performance from Consulting, again."
In January – June, Dovre Group's net sales decreased by 12.9%, totaling EUR 47.8 (54.9) million. Project Personnel accounted for 92 (93) % and Consulting for 8 (7) % of the Group's net sales.
During the period under review, net sales for Project Personnel decreased by 13.4%, totaling EUR 44.1 (51.0) million. Part of the decline in net sales was due to the weakening of both the Canadian dollar and the Norwegian crown. Net sales for Consulting decreased by 6.2%, totaling EUR 3.7 (3.9) million. The decline in Consulting's net sales compared to H1/2015 was due to the impact of the weaker Norwegian crown and the divestment of the Group's non-core consulting business in Sweden in Q4/2015.
In January – June 2015, the Group's net sales including NPC (pro forma) would have been EUR 79 million.
By market area, EMEA's net sales totaled EUR 29.1 (31.7) million, accounting for 61 (58) % of the Group's net sales during the period under review. Net sales for AMERICAS were EUR 9.0 (18.9) million, accounting for 19 (34) % the Group's net sales. Net sales for APAC were EUR 9.7 (4.3) million, accounting for 20 (8) % the Group's net sales.
In H1 the Group was successful in securing several new frame agreements. We have published three of them: Pöyry Group, Lundin Norway and Statoil. The other remain confidential at the request of our clients.
| Net sales by reporting segment EUR million |
1-6 2016 |
1-6 2015 |
Change % |
1-12 2015 |
|---|---|---|---|---|
| Project Personnel | 44.1 | 51.0 | -13.4 | 108.8 |
| Consulting | 3.7 | 3.9 | -6.2 | 7.1 |
| Group total | 47.8 | 54.9 | -12.9 | 115.9 |
| Net sales by market area EUR million |
1-6 2016 |
1-6 2015 |
Change % |
1-12 2015 |
|---|---|---|---|---|
| EMEA | 29.1 | 31.7 | -8.3 | 68.1 |
| AMERICAS | 9.0 | 18.9 | -52.1 | 30.6 |
| APAC | 9.7 | 4.3 | 124.3 | 17.2 |
| Group total | 47.8 | 54.9 | -12.9 | 115.9 |
Dovre Group's market areas are:
During the period under review, the Group's operating result was EUR 0.1 (-0.5) million. The Group's operating result was 0.2 (-1.0) % of net sales. In H1/2015, the Group reported a total of EUR 1.1 million in costs relating to the merger with NPC, a total of EUR 0.6 million of which were due to restructuring and were reported in the Group's Project Personnel business area and a total of EUR 0.5 million due to external advisory services and reported in the Group's Other fucntions.
During the period under review, Project Personnel's operating result was EUR 0.5 (0.4) million. Consulting business area's operating result was EUR 0.5 (0.4) million. The operating result of the Group's Other functions was EUR -0.7 (-1.2) million.
| Operating result EUR million |
1-6 2016 |
1-6 2015 |
Change % |
1-12 2015 |
|---|---|---|---|---|
| Project Personnel | 0.5 | 0.4 | 25.0 | 1.0 |
| Consulting | 0.5 | 0.4 | 41.7 | 0.8 |
| Other functions | -0.7 | -1.2 | 39.9 | -1.9 |
| Unallocated | -0.2 | -0.1 | -41.7 | -0.8 |
| Group total | 0.1 | -0.5 | 121.4 | -0.9 |
During the period under review, the Group's result before taxes was EUR -0.8 (-0.6) million, including EUR - 0.5 (0.1) million of finance items. Majority of the finance costs are related to foreign exchange losses, both realized and unrealized. The result also includes the Group's share, EUR -0.4 (-0.2) million, of the results of its joint venture SaraRasa Bioindo Pte Ltd. The Group's share of profit and loss in joint ventures includes EUR -0.3 million impairment of deferred tax assets.
The Group's result after taxes was EUR -0.8 (-0.7) million. The Group's earnings per share was EUR -0.01 (- 0.01). The Group's return on average capital employed before taxes (ROI) was -2.4 (-4.1) %.
On June 30, 2016, the Group balance sheet total was EUR 45.2 (59.5) million. The Group's cash and cash equivalents totaled EUR 7.1 (8.7) million. In addition, the parent company and the subsidiaries have unused credit limits.
On June 30, 2016, the equity ratio was 58.5 (50.8) % and the debt-equity ratio (gearing) -8.9 (-17.3) %. The interest-bearing liabilities amounted to EUR 4.8 (3.5) million, accounting for 10.6 (5.8) % of the Group's shareholders' equity and liabilities. A total of EUR 2.8 (3.5) million of the Group's interest-bearing liabilities were current and a total of EUR 2.0 (0.0) million non-current.
Net cash flow from operating activities was EUR -1.7 (-3.0) million, which includes EUR -1.6 (-2.7) million change in working capital.
Net cash flow from investing activities was EUR -0.2 (0.4) million. Gross investments totaled EUR 0.2 (0.3) million, which were mainly to the Group's joint venture SaraRasa Bioindo Pte. Ltd. The merger with NPC is not included in the 2015 gross investments.
Net cash flow from financing activities was EUR -1.9 (0.7) million. The Group paid back more loans than it withdrew a total of EUR 0.9 (-1.9) million, of which 0.3 (0.0) million were non-current and EUR 0.6 (-1.9) million current. During the period under review, the Group paid a total of EUR 1.0 (1.3) million in dividends.
The balance sheet goodwill totaled EUR 16.1 (16.9) million on June 30, 2016. No indications of impairment exist.
On June 30, 2016, Dovre Group employed 521 (832) people, 474 (782) of which were employed by Project Personnel, 41 (45) by Consulting, and 6 (5) by Other functions.
During the period under review, the average number of personnel employed by the Group was 596 (530). Project Personnel employed 550 (478) and Consulting 41 (47) people. In the Project Personnel business area 27 (29) % of employees were independent contractors.
| Personnel | 1-6 | 1-6 | Change | 1-12 |
|---|---|---|---|---|
| average | 2016 | 2015 *) | % | 2015 *) |
| Project Personnel | 550 | 478 | 15.1 | 599 |
| Consulting | 41 | 47 | -12.8 | 45 |
| Other functions | 5 | 5 | 0.0 | 5 |
| Group total | 596 | 530 | 12.5 | 649 |
*) NPC's personnel consolidated into Dovre Group's personnel as of May 28, 2015.
Dovre Group Plc's Singaporean joint venture's, SaraRasa Bioindo Pte. Ltd's (Bioindo), Indonesian production unit was granted a legality certificate under the state of Indonesia's timber legality assurance system (SVLK) in Q2/2016. The certificate, issued by an independent assessment body, certifies that the raw material used
at the production plant, its origin, and processing meet the applicable national legality requirements. The certificate enables Bioindo to market its pellet production in, for example, Japan and Korea, who both recognize the SVLK certificate as a proof of the legality of the pellets' origin.
In May, the owners of Bioindo's production unit signed a shareholders' agreement with a new owner. The new owner is a local operator.
Dovre Group's investment in Bioindo is not part of the Group's core business.
On June 30, 2016, Dovre Group's share capital was EUR 9,603,084.48 and the total number of shares 99,868,769. There were no changes in the Group's total number of shares or the share capital during the period under review.
In January – June 2016, approximately 3.8 (12.1) million Dovre Group shares were exchanged on the Nasdaq Helsinki Ltd., corresponding to a trade of approximately EUR 1.2 (6.0) million. The lowest quotation was EUR 0.27 (0.36) and the highest EUR 0.36 (0.57). On June 30, 2016, the closing quotation was EUR 0.30 (0.47). The period-end market capitalization was approx. EUR 30.0 (46.9) million.
On June 30, 2016, the number of registered shareholders of Dovre Group Plc totaled 3,497 (3,593), including 8 (8) nominee-registers. Of the Group's shares, 0.4 (0.4) % are nominee-registered.
On June 30, 2016, members of the Group's Board of Directors and the CEO held, including holdings through controlled companies and family members living in the same household, a total of 4,883,408 (5,035,458) shares in the company, representing 4.9 (5.0) % of all shares.
Dovre Group has two option plans, 2010 and 2013. Each stock option entitles the holder to subscribe one share in Dovre Group Plc.
The share subscription period and price per series under the 2010 option plan are as follows:
The subscription period for Dovre Group Plc's 2010B option plan ended on February 28, 2016. No shares were subscribed for under the option plan. The remaining 395,000 stock options expired as unused. At the end of the period under review, a total of 570,000 stock options were outstanding under the 2010C option plan.
Under the 2013 option plan, the total number of stock options offered for subscription to Dovre Group's key personnel is 3,000,000. The share subscription period and price per series under the 2013 option plan are as follows:
No stock options were granted to key personnel under the Group's 2013 stock option plan during the period under review. A total of 100,000 stock options were returned to the company. At the end of the period under review, the company had granted a total of 2,585,000 options under the 2013 option plan and had in reserve a total of 415,000 options.
On June 30, 2016, the Group's CEO Patrick von Essen held a total of 675,000 stock options granted under the 2013A, 2013B, and 2013C option plans.
Dovre Group Plc's Annual General Meeting held on March 17, 2016, adopted the financial statements and consolidated financial statements for 2015 and discharged the members of the Board of Directors and the CEO from liability for the financial year ending on December 31, 2015. The Annual General Meeting decided on the use of the profit shown on the balance sheet and the payment of dividend, the composition and remuneration of the Board of Directors, the election of the Auditor and the authorization of the Board of Directors to decide on the repurchase of the Company's own shares and on the issuance of shares as well as the issuance of other special rights entitling to shares.
In accordance with the Board's proposal, the Annual General Meeting decided that a dividend of EUR 0.01 per share to be paid for the financial year 2015. The dividend was paid to a shareholder who, on the dividend record date March 21, 2016 is registered as a shareholder in the Company's shareholder register maintained by Euroclear Finland Ltd. The dividend was paid on March 30, 2016.
The Annual General Meeting decided that the number of Board members be set at four (4). Rainer Häggblom and Ilari Koskelo were re-elected as members of the Board, and Christian Bull Eriksson and Louis Harrewijn as new members of the Board. In its first meeting after the Annual General Meeting, the Board of Directors re-elected Rainer Häggblom as the Board's Chairman.
The Annual General Meeting resolved that the chairman of the Board is paid EUR 35,000, the vice chairman of the Board EUR 25,000, and each other member of the Board EUR 22,000 per year. In addition, reasonable travel expenses are also compensated. Out of the annual compensation, 40% of the total gross compensation will be used to purchase Dovre Group Plc's shares on regulated market in trading through Nasdaq Helsinki Ltd, or alternatively by using the own shares held by the company. The shares will be purchased and/or granted as soon as possible after the Annual General Meeting. The remaining 60% of the annual compensation that is to be paid in cash corresponds to the approximate amount necessary for the payment of the income taxes on the annual compensation and will be paid no later than April 30, 2016. The total amount of the annual compensation paid to Board members and the method of payment did not change from the previous year.
The Annual General Meeting re-elected the Authorized Public Accountant entity Ernst & Young Ltd as the Company's auditor, with APA Mikko Järventausta continuing as the Company's principal auditor.
The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the Company's own shares on the following conditions: the Board is entitled to decide on repurchase of a maximum of 9,900,000 of the Company's own shares, which shall be repurchased in deviation from the proportion to the holdings of the shareholders using the non-restricted equity and acquired through trading at the regulated market organized by Nasdaq Helsinki Ltd at the share price prevailing at the time of acquisition. This number of shares corresponds to approximately a maximum of 10.0% of the total number of shares in the Company. The shares may be repurchased in order to be used as consideration in possible acquisitions
or other arrangements related to the Company's business, to finance investments or as part of the Company's incentive program or to be held, otherwise conveyed or cancelled by the Company. The Board of Directors shall decide on other matters related to the repurchase of the Company's own shares. This repurchase authorization is valid until June 30, 2017 and revokes earlier repurchase authorizations.
The Annual General Meeting authorized the Board of Directors to decide on the issuance of new shares and/or the conveyance of own shares held by the Company and/or the granting of special rights referred to in Chapter 10, Section 1 of the Finnish Companies Act on the following conditions:
By virtue of the authorization, the Board may also decide on a directed issue of shares and special rights, i.e. waiving the pre-emptive subscription rights of the shareholders, under the requirements of the law. By virtue of the authorization, a maximum of 9,900,000 shares may be issued, corresponding to approximately a maximum of 10.0% of the Company's existing shares.The Board may use the authorization in one or more instalments. The Board may use the authorization to finance or conclude acquisitions or other arrangements, to strengthen the Company's capital structure, to incentive programs or other purposes decided by the Board. The new shares may be issued or the Company's own shares conveyed either against payment or free of charge. The new shares may also be issued as an issue without payment to the Company itself. The Board was authorized to decide on other terms of the issuance of shares and special rights. By virtue of the authorization, the Board of Directors may decide on the realization of the Company's own shares possibly held by the Company as pledge. The authorization is valid until June 30, 2017. The authorization revokes earlier authorizations to issue shares and grant option rights and other special rights entitling to shares.
Dovre Group Plc's listing prospectus concerning the listing of a total of 36,453,018 new shares in the company, issued as direct issue as part of the acquisition of NPC in May 2015, was approved by the Finnish Financial Supervisory Authority on March 8, 2016. The shares were listed on the official list of Nasdaq Helsinki Ltd on March 10, 2016. The shares are subject to a three (3) year lock-up period from the date of issue, lasting until May 28, 2018.
In the Project Personnel business area the Group's most significant risks include further cost cuttings by and reduced investment budgets for oil and gas clients. As a result of the merger with NPC, Project Personnel's market share in the Norwegian market has increased and market developments in Norway are increasingly important for the business area. In addition, expansion to new client segments requires expenditure and includes risks. The business area's other challenges are maintaining its competitiveness and profitability. Project Personnel business is project-based by nature, thus adding an element of uncertainty to forecasting. Dovre Group is responsible for the work performed by its consultants. However, the company has no overall responsibility for project delivery. The Group's operations in Russia have not been directly impacted by trade sanctions. However, there is a risk that if sanctions escalate the operations may be affected.
In the Consulting business area, general economic uncertainty does not affect as directly the demand for the Group's services. This is mainly due to the fact that one of the business area's main clients, the Norwegian public sector, aims to invest counter-cyclically. Project delivery involves minor risks due to both clients and the Group's own personnel such as project delays or loss of key personnel.
Dovre Group holds a minority share in a pellet production company SaraRasa Bioindo Pte. Ltd (Bioindo). Bioindo's production unit is located in Indonesia and is thus exposed to high country risk. Other significant
risks include risks relating to commercial agreements, including feedstock purchase and end-product sale agreements. Bioindo's financial information involves certain uncertainties, because the audit for 2015 is still ongoing.
The Group's reporting currency is euro. The Group's most important functional currencies are the Norwegian crown, the Canadian dollar, the Singaporean dollar, and the United States dollar. Although the Group's sales and corresponding expenses are mainly in the same currency, currency fluctuations can affect the Group's net sales and operating result. Foreign currency denominated assets and liabilities can also result in foreign exchange gains or losses. The Group's subsidiaries have significant bank balances in foreign currencies. The Group has not been hedging its currency positions.
The market is still affected by several uncertainties, including general economic trends, oil price, and political instability. Our main markets are, however, in politically and economically stable countries.
We expect Project Personnel demand in the oil and gas industry to further decline in 2016. We expect orders from other segments – i.e. power generation, power transmission and process industry - to increase. However, increased demand in other segments is not yet enough to compensate for the decline in oil and gas industry sales.
In the Consulting business area, market outlook is more positive.
Guidance for 2016 (unchanged): Net sales are expected to be EUR 80 - 100 million and operating result is expected to be positive.
Espoo, July 27, 2016
DOVRE GROUP PLC BOARD OF DIRECTORS
For additional information, please contact:
Dovre Group Plc Patrick von Essen, CEO ([email protected])
Heidi Karlsson, CFO ([email protected])
tel. +358-20-436 2000 www.dovregroup.com
As of January 1, 2016, Dovre Group applies the possibility allowed by amendments to the Finnish Securities Markets Act entered into force on November 26, 2015, not to release an interim report for the first three months and the first nine months of the financial year. Instead, the company will release a quarterly trading statement for the each period in question.
Dovre Group releases its remaining financial report in 2016 as follows:
Q3 trading statement for January 1 – September 30, 2016 on Thursday, October 27, 2016
Distribution Nasdaq Helsinki Ltd Major media www.dovregroup.com
The half year financial report is unaudited.
| EUR thousand | 1-6 2016 |
1-6 2015 |
Change % |
1-12 2015 |
|---|---|---|---|---|
| NET SALES | 47 837 | 54 908 | -12.9 | 115 947 |
| Other operating income | 131 | 15 | 773.3 | 47 |
| Material and services | -54 | -189 | -71.7 | -161 |
| Employee benefits expense | -43 251 | -49 153 | -12.0 | -103 546 |
| Depreciation and amortization | -297 | -215 | 38.1 | -538 |
| Other operating expenses | -4 251 | -5 904 | -28.0 | -12 608 |
| OPERATING RESULT | 115 | -538 | -121.4 | -858 |
| Financing income | 70 | 474 | -85.3 | 768 |
| Financing expenses Share of results in joint |
-553 | -336 | 64.5 | -456 |
| ventures | -405 | -230 | 76.1 | -1 295 |
| RESULT BEFORE TAX Tax on income from |
-772 | -630 | 22.6 | -1 841 |
| operations | 19 | -63 | -130.2 | -171 |
| RESULT FOR THE PERIOD | -753 | -693 | -8.7 | -2 012 |
| Other comprehensive income Other comprehensive income to be classified to profit or loss in subsequent periods: Translation differences Other comprehensive income for the period, net of tax TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
818 818 65 |
-108 -108 -801 |
857.4 857.4 108.1 |
-1 808 -1 808 -3 820 |
| Earnings/share (EUR) Basic, result for the period Diluted, result for the period |
-0.01 -0.01 |
-0.01 -0.01 |
-24.4 -24.1 |
-0.02 -0.02 |
| 1-6 | 1-6 | 1-12 | |
|---|---|---|---|
| Average number of shares | 2016 | 2015 | 2015 |
| Basic | 99,868,769 | 69,441,254 | 84,655,012 |
| Diluted | 99,956,200 | 69,782,005 | 84,979,307 |
| June 30, | June 30, | Dec. 31, | |
| Number of shares, period end | 2016 | 2015 | 2015 |
| Basic | 99,868,769 | 99,868,769 | 99,868,769 |
| EUR thousand | June 30, 2016 |
June 30, 2015 |
Change % |
Dec 31, 2015 |
|---|---|---|---|---|
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 3 750 | 4 513 | -16.9 | 3 882 |
| Goodwill | 16 084 | 16 853 | -4.6 | 15 588 |
| Tangible assets | 1 009 | 1 057 | -4.5 | 997 |
| Investments in joint ventures | 720 | 1 656 | -56.5 | 1 029 |
| Other receivables | 38 | 41 | -7.3 | 41 |
| Deferred tax assets | 342 | 315 | 8.6 | 308 |
| Non-current assets | 21 943 | 24 435 | -10.2 | 21 845 |
| Current assets | ||||
| Trade receivables and other receivables | 16 073 | 25 930 | -38.0 | 19 256 |
| Tax receivable. income tax | 19 | 464 | -95.9 | 37 |
| Cash and cash equivalents | 7 136 | 8 693 | -17.9 | 10 902 |
| Current assets | 23 228 | 35 087 | -33.8 | 30 195 |
| TOTAL ASSETS | 45 171 | 59 522 | -24.1 | 52 040 |
| EQUITY AND LIABILITIES | ||||
| Shareholders' equity | ||||
| Share capital | 9 603 | 9 603 | 0.0 | 9 603 |
| Reserve for invested non-restricted equity | 12 219 | 12 219 | 0.0 | 12 219 |
| Fair value reserve | 2 869 | 2 869 | 0.0 | 2 869 |
| Translation differences | -1 884 | -999 | 88.6 | -2 701 |
| Retained earnings | 3 623 | 6 564 | -44.8 | 5 339 |
| Shareholders' equity | 26 430 | 30 256 | -12.6 | 27 329 |
| Non-current liabilities | ||||
| Deferred tax liability | 953 | 1 306 | -27.0 | 1 012 |
| Non-current liabilities, interest-bearing | 1 950 | 0 | 100 | 2 250 |
| Other non-current liabilities | 38 | 42 | -9.5 | 41 |
| Non-current provisions | 226 | 313 | -27.8 | 292 |
| Non-current liabilities | 3 167 | 1 661 | 90.7 | 3 595 |
| Current liabilities | ||||
| Short-term liabilities, interest-bearing | 2 841 | 3 462 | -17.9 | 3 432 |
| Trade payables and other liabilities | 12 408 | 23 689 | -47.6 | 17 023 |
| Tax liability, income tax | 39 | 164 | -76.2 | 235 |
| Current provisions | 287 | 290 | -1.0 | 425 |
| Current liabilities | 15 574 | 27 605 | -43.6 | 21 116 |
| TOTAL EQUITY AND LIABILITIES | 45 171 | 59 522 | -24.1 | 52 040 |
| a) | b) | c) | d) | e) | f) |
|---|---|---|---|---|---|
| 9 603 | 463 | 0 | -892 | 12 285 | 21 459 |
| -693 | -693 | ||||
| -107 | -1 | -108 | |||
| 0 | 0 | 0 | -107 | -694 | -801 |
| 11 713 | 2 869 | 14 582 | |||
| 43 | 43 | ||||
| 46 | 46 | ||||
| -5 073 | -5 073 | ||||
| 0 | 11 756 | 2 869 | 0 | -5 027 | 9 598 |
| 9 603 | 12 219 | 2 869 | -999 | 6 564 | 30 256 |
| a) | b) | c) | d) | e) | f) |
| 9 603 | 12 219 | 2 869 | -2 701 | 5 339 | 27 329 |
| -753 | -753 | ||||
| 817 | 1 | 818 | |||
| 0 | 0 | 0 | 817 | -752 | 65 |
| 35 | 35 | ||||
| -999 | -999 | ||||
| 0 | 0 | 0 | 0 | -964 | -964 |
| 9 603 | 12 219 | 2 869 | -1 884 | 3 623 | 26 430 |
| 1-6 | 1-6 | Change | 1-12 | |
|---|---|---|---|---|
| EUR thousand | 2016 | 2015 | % | 2015 |
| Cash flow from operating activities | ||||
| Operating result | 115 | -538 | 121.4 | -858 |
| Adjustments: | ||||
| Depreciation / Amortization | 297 | 215 | 38.1 | 538 |
| Loss on disposal of investment | 0 | 0 | 381 | |
| Restructuring provision | 0 | 592 | -100.0 | 745 |
| Personnel expenses | 31 | 35 | -11.4 | 140 |
| Adjustments, total | 328 | 842 | -61.0 | 1 804 |
| Changes in working capital | ||||
| Trade and other receivables, increase (-) / | ||||
| decrease (+) | 3 613 | 312 | 1 058.0 | 5 217 |
| Trade and other payables, increase (+) / | ||||
| decrease (-) | -5 217 | -3 001 | -73.9 | -3 763 |
| Changes in working capital, total | -1 604 | -2 689 | 40.3 | 1 454 |
| Interest paid | -80 | -34 | -135.3 | -79 |
| Interest received | 21 | 20 | 5.0 | 54 |
| Other financial expenses paid and received | -142 | 58 | -344.8 | 148 |
| Income taxes paid | -288 | -706 | 59.2 | -521 |
| Net cash generated by operating activities | -1 650 | -3 047 | 45.8 | 2 002 |
| Cash flow from investing activities | ||||
| Acquisition of subsidiaries less cash and cash | ||||
| equivalents | 0 | 704 | -100.0 | 554 |
| Investments in tangible and intangible assets | -61 | -7 | -771.4 | -23 |
| Proceeds from sale of tangible assets | 0 | 0 | 12 | |
| Purchase of shares in joint ventures | -124 | 0 | -371 | |
| Loan receivables, increase (-) / decrease (+) | 0 | -324 | -61.7 | -324 |
| Net cash generated by investing activities | -185 | 373 | -149.6 | -152 |
| Cash flow from financing activities | ||||
| Stock options exercised | 0 | 44 | -100.0 | 43 |
| Proceeds from non-current loans | 0 | 0 | 3 000 | |
| Repayments of non-current loans | -300 | 0 | -150 | |
| Proceeds from short-term loans | 444 | 1 979 | -77.6 | 2 264 |
| Repayments of short-term loans | -1 070 | -102 | -949.0 | -867 |
| Dividends paid | -999 | -1 268 | -21.2 | -5 073 |
| Net cash generated by financing activities | -1 925 | 653 | -395.2 | -782 |
| Translation differences | -6 | 371 | -509 | |
| Change in cash and cash equivalents | -3 766 | -1 650 | 559 | |
| Cash and cash equivalents at beginning of the period | 10 902 | 10 343 | 10 343 | |
| Cash and cash equivalents at end of the period | 7 136 | 8 693 | 10 902 |
The half year financial report has been prepared in line with IAS 34 and, apart from the additions below, the same accounting principles have been applied as in the 2015 financial statements. Key indicator calculations remain unchanged and have been presented in the 2015 financial statements.
As of January 1, 2016, the Group has adopted the following revised, and amended IFRS standards with the effective date of January 1, 2016: IAS 1 Presentation of Financial Statements (amended), IFRS 11 Joint Arrangements (amended), IAS 38 Intangible Assets (amended), and Annual Improvements to IFRSs 2012- 2014 Cycle.
The Group has two reporting segments that are also the Group's strategic business areas:
The Group's segment information is based on internal management reporting prepared in accordance with IFRS standards. The Group does not allocate the parent company's intra-Group charges to segments for the purposes of segment reporting.
| EUR thousand | 1-6/2016 | % | 1-6/2015 | % |
|---|---|---|---|---|
| Project Personnel | 44 143 | 92.3 % | 50 970 | 92.8 % |
| Consulting | 3 694 | 7.7 % | 3 938 | 7.2 % |
| Total | 47 837 | 100.0 % | 54 908 | 100.0 % |
| Net sales by revenue type | ||||
| EUR thousand | 1-6/2016 | % | 1-6/2015 | % |
| Services | 47 640 | 99.6 % | 54 621 | 99.5 % |
| One-time license revenue | 107 | 0.2 % | 105 | 0.2 % |
| Recurring license revenue | 89 | 0.2 % | 182 | 0.3 % |
| EUR thousand | 1-6/2016 | 1-6/2015 | Change |
|---|---|---|---|
| Project Personnel | 485 | 387 | 24.9 % |
| Consulting | 506 | 357 | 41.6 % |
| Other functions | -695 | -1 155 | -39.9 % |
| Unallocated | -181 | -127 | 42.1 % |
| Total | 115 | -538 | -121.4 % |
In H1/2015, the Group reported a total of EUR 1.1 million in costs relating to the merger with NPC, a total of EUR 0.6 million of which were due to restructuring and were reported in the Group's Project Personnel business area and a total of EUR 0.5 million due to external advisory services and reported in the Group's Other functions.
Unallocated expenses include amortization of customer agreements and relations and share-based compensation recognized as expense in the income statement.
| June 30, | June 30, | Dec. 31, | |
|---|---|---|---|
| Average number of personnel | 2016 | 2015 | 2015 |
| Project Personnel | 550 | 478 | 599 |
| Consulting | 41 | 47 | 45 |
| Other functions | 5 | 5 | 5 |
| Total | 596 | 530 | 649 |
In the Project Personnel business area, 27 (29) % of personnel were independent contractors.
| EUR thousand | June 30, 2016 | June 30, 2015 | Dec. 31, 2015 |
|---|---|---|---|
| Carrying value, opening balance | 1 029 | 521 | 521 |
| Additions | 124 | 1 355 | 2 078 |
| Disposals | 0 | 0 | -352 |
| Share of profit and loss in joint ventures | -405 | -230 | -1 295 |
| Translation differences | -28 | 10 | 77 |
| At end of period | 720 | 1 656 | 1 029 |
Dovre Group Plc's joint venture is Singaporean SaraRasa Bioindo Pte. Ltd. (Bioindo), of which Dovre Group holds 29%. In May 2016, Bioindo, Bioindo's wholly owned subsidiary SaraRasa Sinergy Pte. Ltd., and a local Indonesian operator signed a shareholders' agreement, as a result of which Bioindo's holdings in SaraRasa Sinergy decreased to 70%.
Bioindo's financial information involves certain uncertainties. The company's audit for 2014 has been completed, but the audit for 2015 is still ongoing. Also, entries relating to the shareholders' agreement signed in May 2016 have not yet been completed. When calculating the share of profit and loss in joint ventures in 2016, Dovre Group has not taken into account the impact of the new shareholders' agreement. The agreement signed with the local operator will reduce Dovre Group's share of result of the result made by Sararasa Sinergy and the production unit located in Indonesia. The company's share of profit and loss in joint ventures includes impairment of deferred tax assets.
Balances with joint ventures
| EUR thousand | June 30, 2016 | June 30, 2015 | Dec. 31, 2015 |
|---|---|---|---|
| Trade receivables | 4 | 0 | 3 |
| Interest income | 0 | 26 | 26 |
| EUR thousand | June 30, 2016 | June 30, 2015 | Dec. 31, 2015 |
|---|---|---|---|
| Trade receivables | 13 967 | 23 382 | 17 581 |
| Other receivables | 121 | 117 | 262 |
| Prepayments and accrued income on sales | 1 306 | 1 577 | 822 |
| Other prepayments and accrued income | 679 | 854 | 590 |
| Total | 16 073 | 25 930 | 19 256 |
The book values of the receivables are based on a reasonable estimate of their fair values. No significant concentrations of credit risk are associated with the receivables. Other prepayments and accrued income include accrued expenses.
| EUR thousand | June 30, 2016 | June 30, 2015 | Dec. 31, 2015 |
|---|---|---|---|
| Not due | 12 259 | 19 285 | 11 616 |
| Overdue | |||
| 1 - 30 days | 463 | 3 258 | 5 506 |
| 31 - 60 days | 1 183 | 322 | 361 |
| 61 - 90 days | 41 | 92 | 21 |
| Over 90 days | 22 | 425 | 77 |
| Total | 13 967 | 23 382 | 17 581 |
| Changes in provisions, 2016 |
Jan 1, | Reversal of | Provisions | Translation | June 30, | |
|---|---|---|---|---|---|---|
| EUR thousand | 2016 | Increase | provisions | used | differences | 2016 |
| Restructuring provision | 697 | 0 | 0 | -204 | 21 | 514 |
| Other provisions | 21 | 0 | -4 | -17 | 0 | 0 |
| Total | 718 | 0 | -4 | -221 | 21 | 514 |
| EUR thousand | June 30, 2016 |
June 30, 2015 |
Dec. 31, 2015 |
|---|---|---|---|
| Trade receivables pledged as collateral | 10 752 | 2 844 | 10 413 |
| Floating charges | 3 000 | 0 | 3 000 |
| Pledged shares, book value in Group | 852 | 881 | 860 |
| Future minimum lease payments for non-cancellable | |||
| operating leases | |||
| June 30, | June 30, | Dec. 31, | |
| EUR thousand | 2016 | 2015 | 2015 |
| Not later than one year | 582 | 600 | 666 |
| Later than one year and not later than five years | 592 | 741 | 606 |
The Group's leases business premises and cars under various non-cancellable leases. The leases have varying lenghts, index clauses, and renewal and other terms.
Total 1 174 1 341 1 272
| 2016 | 2015 | 2016 | 2015 | 2015 | 2015 | |
|---|---|---|---|---|---|---|
| EUR thousand | 1-3 | 1-3 | 4-6 | 4-6 | 7-9 | 10-12 |
| NET SALES | 24 962 | 26 176 | 22 875 | 28 732 | 30 767 | 30 272 |
| Other operating income | 39 | 10 | 92 | 5 | 8 | 24 |
| Material and services | -27 | -107 | -27 | -82 | -62 | 90 |
| Employee benefits expense | -22 716 | -23 595 | -20 535 | -25 558 | -27 532 | -26 860 |
| Depreciation and amortization | -151 | -88 | -146 | -127 | -166 | -157 |
| Other operating expenses | -2 137 | -2 466 | -2 114 | -3 438 | -2 851 | -3 852 |
| OPERATING RESULT | -30 | -70 | 145 | -468 | 163 | -483 |
| EUR million | 1-6 2016 |
1-6 2015 |
1-12 2015 |
|---|---|---|---|
| Cash and cash equivalents | 7.1 | 8.7 | 10.9 |
| Interest-bearing liabilities | 4.8 | 3.5 | 5.7 |
| Net debt | -2.3 | -5.2 | -5.2 |
| Shareholders' equity | 26.4 | 30.3 | 27.3 |
| Balance sheet total | 45.2 | 59.5 | 52.0 |
| Return on equity, % | -3.2 % | -5.4 % | -8.2 % |
| Return on investment, % | -2.4 % | -4.1 % | -6.1 % |
| Debt-equity ratio (Gearing), % | -8.9 % | -17.3 % | -19.1 % |
| Equity-ratio, % | 58.5 % | 50.8 % | 52.5 % |
| Personnel (average for period) | 596 | 530 | 649 |
| Personnel (at end of period) | 521 | 832 | 714 |
| Earnings per share, EUR (basic, average for period) | -0.008 | -0.010 | -0.022 |
| Equity per share, EUR (basic, end of period) | 0.26 | 0.30 | 0.27 |
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