Interim / Quarterly Report • Nov 14, 2007
Interim / Quarterly Report
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INTERIM MANAGEMENT REPORT AND CONSOLIDATED FINANCIAL STATEMENTS - 3Q 2007
MOTA-ENGIL, SGPS, S.A. EDIFÍCIO MOTA TEL: 351 22 5190300
CAPITAL SOCIAL: 204 635 695 EUROS 4300-454 PORTO WWW.MOTA-ENGIL.PT MATRICULADA NA CONSERVATÓRIA DO REGISTO COMERCIAL DO PORTO COM O Nº 502 399 694 RUA MÁRIO DIONÍSIO, Nº 2 TEL: 351 21 4158200 NIPC: 502 399 694 2796-957 LINDA-A-VELHA FAX: 351 21 4158688
SOCIEDADE ABERTA RUA DO REGO LAMEIRO, Nº 38 FAX: 351 22 5190303
| thousand euros | |||||||
|---|---|---|---|---|---|---|---|
| 3007 | % T | A % | 3006 | %T | 3005 | % T | |
| (pro-forma) | |||||||
| Turnover | 1.063.568 | 9,9% | 968.005 | 965.823 | |||
| EBITDA | 189.979 | 17.9% | 77,1% | 107.252 | 11.1% | 108.562 | 11,2% |
| EBIT | 116.699 | 11,0% | 67,9% | 69.510 | 7,2% | 66.066 | 6,8% |
| Capital gain with stake in Martifer | 67.433 | 6,3% | 0 | 0 | |||
| Net financial income | (84.947) | $(8,0\%)$ | (197,8%) | (28.526) | (2,9%) | 791 (20. |
(2,2%) |
| Net income from equity method | 6.113 | 0,6% | 60.1% | 3.817 | 0.4% | 241 | 0,0% |
| Income before taxes | 105.298 | 9,9% | 135.0% | 44.802 | 4,6% | 45.517 | 4,7% |
| Net income Attributable to: |
98.539 | 9,3% | 246.8% | 28.414 | 2,9% | 27.367 | 2,8% |
| minority interests | 6.455 | 0,6% | 42,1% | 4.542 | 0,5% | 4.093 | 0,4% |
| Group | 92.084 | 8,7% | 285,7% | 23.872 | 2,5% | 23.273 | 2,4% |
The financial information reported was not audited. Pro-forma figures concern the proportional consolidation of MARTIFER GROUP.
| Highlights | 2 |
|---|---|
| Main Achievements | 4 |
| Consolidated Management Report | 5 |
| Financial analysis | 6 |
| Business analysis | 10 |
| Interim Consolidated Financial Information | 15 |
| Consolidated Profit & Loss Account | 16 |
| Consolidated Balance Sheet | 17 |
Consolidated Management Report
The performance in the third quarter remained good, both in terms of turnover and net income.
Consolidated turnover reached € 1.06 billion, up 10% year on year (2006: € 968 million).
The contribution of the transport concessions division was of paramount importance to achieve the aforementioned results and was due to the change in the consolidation method, from the equity to the proportional method.
Besides the contribution of transport concessions division to turnover (€ 78.1 million), the contribution to turnover of environment & services (+109% year on year) and industry & energy (+58% year on year) are also worth mentioning.
GROUP'S EBITDA and EBIT margins improved as compared to the same period of last year, allowing for an increase of both EBITDA and EBIT of € 82.7 million and € 47.2 million, respectively.
Margins' positive evolution was due to the contribution of transport concessions division, whose EBITDA margin reached 91.4% and EBIT margin 59.3% and by the growing contribution of the environment & services division.
Total capital expenditures reached € 165 million at the end of the third quarter (2006: € 105 million), € 135.8 million in fixed assets (2006: € 57 million) and € 29.4 million in financial assets (2006: € 48 million).
The increase in capital expenditures was mainly driven by the change in the consolidation method of transport concessions division that was, as previously mentioned, equity consolidated until last year and by the concession-type of assets in the environment & services division (Ports and Water).
On the other hand, as compared to the previous quarter, it is worth mentioning the increase in both industry & energy division (€ 43.2 million) and engineering & construction (€ 70 million) whose rationale is to allow for an expansion of their activities in new markets or accelerate growth in existing markets.
As far as financial investments are concerned, there was no material changes as compared to the previous quarter, the main items being financial stakes in real estate projects in Central Europe accounted for in the engineering & construction division.
This strong investment effort has been financed by debt that reached € 1.79 billion in the third quarter of the current year, € 930.6 million of which is non-recurring.
Recourse debt reached € 863.2 billion as compared to € 594 million in the same period of last year. The GROUP'S growth, both in terms of geographical reach (new Central European countries) and business diversification (acquisitions in logistics segment) justify the above mentioned evolution.
Financial expenses deteriorated to € 85 million as compared to € 20.4 million in the same quarter of last year. Besides the negative evolution of interest rates and the increase in the stock of debt the aforementioned deterioration was mainly due to the change in the consolidation method of the transport concessions division.
Following several corporate restructuring processes, namely within TERTIR GROUP and in the Polish affiliated companies, the corporate tax rate was optimised.
Net attributable income reached € 92.1 million in the third quarter, € 67.4 million of which obtained following the Initial Public Offering of MARTIFER in the previous quarter. However, were not for the latter, net income would have increased in approximately € 1 million, year on year.
Due to several awards in Angola, Malawi and Central Europe, backlog rose to above € 2 billion as compared to € 1.5 billion in December 2006.
On the back of the aforementioned evolution of the backlog was the performance of engineering & construction, mainly in foreign markets with Central Europe weighing 19% (December 2006: 17%) and Africa & Americas with 32% (December 2006: 29%).
As was already the case in 2006, the weight of foreign contracts has been increasing, strengthening the GROUP's positive view on its activities in these countries.
It should not, however, be underestimated the increasing weight of industry & energy division in the GROUP's backlog. In the last quarter it represented 11% as compared to 3% in December 2006 in spite of the reduction in the proportional consolidation percentage from 50% to 37.5%.
As far as the environment & services division is concerned, although the backlog did not fell, its weight decreased as compared to December 2006 (14%). It is worth mentioning that ports and water concessions were excluded from the computation of the backlog.
The breakdown of turnover is still dominated by the engineering & construction division despite the negative performance of the latter, unlike all the other divisions that had positive performances.
As such, turnover in engineering & construction was of € 720.6 million (2006: € 803.3 million), environment & services € 180.6 million (€ 86.2 million), industry & energy € 302.4 million (2006: € 189 million) and transport concessions € 78.1 million.
Engineering & construction no longer was the main contributor to EBITDA having been surpassed by transport concessions while environment & services also gained a higher visibility.
In the following pages we will analyse the activity of each division of the GROUP in the third quarter of 2007.
Turnover in the engineering & construction division fell 10% year on year to € 720.6 million (2006: € 803.3 million).
This performance was negatively affected by the domestic market, Central Europe and United States & Peru.
As far as the domestic market is concerned, despite the Group's efforts to counter the slowdown of domestic demand through an increased focus in specialised areas (railroad, hydro and signalling), a decrease in turnover was unavoidable.
The Central European market was still the second largest for the engineering & construction division but turnover slipped 12% as compared to the same period of the previous year. However, taking into consideration the recent evolution of the backlog in this area, the situation is expected to be reversed already in the next quarter.
As far as the Angolan market is concerned, the commercial effort deployed by the group in the sense of obtaining an increasing number of contract awards, both in private and public sectors, bore its fruits (2006: € 76.9 million; 2007: € 86.1 million).
The EBITDA margin fell to 9.9% (2006: 10.5%) and the EBIT margin to 5.5% (2006: 7%). The division's contribution to EBITDA was therefore € 71 million (2006: € 84.6 million) and to EBIT € 39.7 million (2006: € 56.1 million).
The performance of the Environment & services division at the turnover level was outstanding as compared to the same period of 2006, from € 86.2 million to € 180.6 million.
With the exception of the multi-services segment, all segments had a positive performance at the turnover level, mainly logistics with € 98.6 million as a consequence of the consolidation of TERTIR GROUP.
The 10% growth rate in the water segment does not include yet the contribution of Indaqua Matosinhos because the latter concession is only expected to be in operation at the end of the current year.
As for solid waste, turnover was of € 63.2 million (2006: € 55.5 million). This performance shows the maturity and development stage of this market in Portugal where the collection and treatment is increasingly considered a matter of public interest. The expectation is therefore for this segment to continue to perform well.
The division's contribution to EBITDA was of € 39.1 million (2006: € 22.5 million) and to EBIT was of € 25.4 million (2006: € 13.4 million).
The contribution of transport concessions to turnover and EBITDA reached € 78.1 million and € 71.4 million, respectively, or a 91.4% EBITDA margin.
Because the transport concessions started their full operation in the current year, there are no comparable figures for the same period of the previous year but turnover grew approximately 14% quarter on quarter.
BEIRAS LITORAL E ALTA concession with turnover of € 105.8 million was the main contributor to consolidated turnover, more than twice the turnover of any other concession (CONCESSÃO NORTE € 32.5 million, COSTA DE PRATA € 36.7 million and GRANDE PORTO € 40.6 million).
Porto, November 12th 2007
António Manuel Queirós Vasconcelos da Mota Chief Executive Officer
Eduardo Jorge de Almeida Rocha Chief Financial Officer
Interim Consolidated Financial Information
| 2007 | 2006 | ||
|---|---|---|---|
| Euro | Euro | ||
| Sales & provision of services | 1.063.567.539 | 968.005.271 | |
| Other income | 110.962.780 | 55.384.899 | |
| Cost of merchandise and of subcontracts | (606.971.076) | (566.215.104) | |
| Gross profit | 567.559.243 | 457.175.066 | |
| Third-party supplies & services | (180.896.414) | (167.521.410) | |
| Staff costs | (197.353.419) | (174.003.507) | |
| Other operating income /(costs) | 670.082 | (8.398.253) | |
| 189.979.492 | 107.251.896 | ||
| Depreciation | (68.796.556) | (37.267.488) | |
| Provisions and impairment losses | (4.484.265) | (474.062) | |
| Operating profit | 116.698.671 | 69.510.346 | |
| Capital gain with Martifer stake | 67.433.474 | - | |
| Financial profit/(loss) | (84.947.082) | (28.525.561) | |
| Gains / (losses) on associate companies | 6.112.783 | 3.816.932 | |
| Income tax | (6.758.668) | (16.387.955) | |
| Consolidated net profit for the period | 98.539.179 | 28.413.762 | |
| Attributable: | |||
| to minority interests | 6.455.329 | 4.541.686 | |
| to the Group | 92.083.850 | 23.872.076 | |
| Earnings per share: | 0,4704 | 0,1219 |
To be read in conjunction with the Notes to the Consolidated Financial Statements
| 2007 Euro |
2006 Euro |
|
|---|---|---|
| Assets | ||
| Non current | ||
| Goodwill | 182.009.121 | 56.935.679 |
| Intangible fixed assets | 7.710.813 | 3.516.578 |
| Concessions fixed assets | 1.113.763.202 | 25.491.864 |
| Tangible fixed assets | 438.982.530 | 341.797.009 |
| Financial investments under the equity method | 38.022.835 | 81.061.035 |
| Financial investments available for sale Investment properties |
101.333.032 | 89.358.210 |
| Customers & other debtors | 32.407.420 69.004.970 |
35.537.113 98.172.122 |
| Deferred tax assets | 27.960.066 | 26.872.139 |
| 2.011.193.989 | 758.741.749 | |
| Current Stocks |
222.289.283 | 160.500.796 |
| Customers | 564.690.414 | 513.869.238 |
| Other debtors | 188.372.725 | 120.561.275 |
| Other current assets | 235.951.826 | 114.951.961 |
| Derivatives | 6.966.901 | 2.457.191 |
| Cash & cash equivalents non recourse | 120.625.478 | 1.451.746 |
| Cash & cash equivalents with recourse | 69.400.309 | 62.457.628 |
| 1.408.296.936 | 976.249.835 | |
| Total Assets | 3.419.490.925 | 1.734.991.584 |
| Liabilities | ||
| Non current | ||
| Non recourse debt | 1.024.611.926 | 12.876.506 |
| Recourse debt | 653.698.431 | 479.734.749 |
| Sundry Creditors | 137.646.396 | 67.953.839 |
| Provisions | 29.341.565 | 24.047.700 |
| Other non-current liabilities Deferred tax liabilities |
62.241.322 18.170.823 |
4.396.751 20.405.792 |
| 1.925.710.463 | 609.415.337 | |
| Current | ||
| Non recourse debt | 26.654.484 | 1.052.302 |
| Recourse debt | 278.943.072 | 134.774.443 |
| Suppliers | 335.100.607 | 323.864.150 |
| Sundry Creditors Other current liabilities |
233.745.613 | 177.747.142 |
| 235.909.596 | 184.343.413 | |
| 1.110.353.372 | 821.781.450 | |
| Total liabilities | 3.036.063.835 | 1.431.196.787 |
| Equity | ||
| Share capital | 204.635.695 | 204.635.695 |
| Reserves | 43.699.723 | 46.104.909 |
| Consolidated net profit for the period | 92.083.850 | 32.205.403 |
| Equity attributable to the Group | 340.419.268 | 282.946.007 |
| Minority interests | 43.007.822 | 20.848.790 |
| Total equity | 383.427.090 | 303.794.797 |
| 3.419.490.925 | 1.734.991.584 |
To be read in conjunction with the Notes to the Consolidated Financial Statements
MOTA-ENGIL, SGPS, S.A. EDIFÍCIO MOTA TEL: 351 22 5190300
CAPITAL SOCIAL: 204 635 695 EUROS 4300-454 PORTO WWW.MOTA-ENGIL.PT MATRICULADA NA CONSERVATÓRIA DO REGISTO COMERCIAL DO PORTO COM O Nº 502 399 694 RUA MÁRIO DIONÍSIO, Nº 2 TEL: 351 21 4158200 NIPC: 502 399 694 2796-957 LINDA-A-VELHA FAX: 351 21 4158688
SOCIEDADE ABERTA RUA DO REGO LAMEIRO, Nº 38 FAX: 351 22 5190303
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