Quarterly Report • Sep 12, 2019
Quarterly Report
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| A. Representation of the Members of the Board of Directors3 | |
|---|---|
| B. Interim Board of Directors Management Report 4 | |
| C. Independent Auditor's Report26 | |
| D. Interim Financial Statements26 |
The,
a. Evangelos Mytilineos, Chairman of the Board of Directors and Chief Executive Officer
a. as far as we know, the interim separate and consolidated financial statements of the company " MYTILINEOS S.A." for the period 1st January 2019 to 30th June 2019, prepared according to the International Financial Reporting Standards, present truly and fairly the assets and liabilities, the equity and the financial results of the Group and the Company, as well as of the consolidated companies, for the period then ended, according to par. 3 - 5 of article 5 of L. 3556/2007 and the authorizing decisions of the BoD of the Hellenic Capital Market Commission.
b. as far as we know, the interim Board of Directors Management Report presents in a true and fair view the information required according to par. 6 of article 5 of L. 3556/2007 and the authorizing decisions of the BoD of the Hellenic Capital Market Commission.
The designees
Evangelos Mytilineos Spyridon Kasdas Dimitrios Papadopoulos
Chairman of the Board of Directors Vice – Chairman A' of the Executive Member of the and Chief Executive Officer Board of Directors Board of Directors
The present Board of Directors Interim Report pertains to the first half of 2019. The Report has been prepared so as to ensure compliance with the relevant provisions of law 3556/2007 (GGI 91A/30.4.2007) and the executive resolutions of the BOD of the HCMC.
The present report contains financial details on the entity titled «MYTILINEOS S.A.» and its subsidiaries and associated companies for the first half of 2019. It presents major events that occurred in the same period and their influence on interim financial statements. It also describes the main risks and uncertainties that may be faced by the Group member companies during the second half of 2019. Finally, it lists major transactions between the Company and its related parties.
During the first half of 2019, the Greek economy continued to stabilize and recover, after a decade of deep, accumulated recession. The increasing market confidence in Greece, was reflected in the downward trend of Greek government bond yields, which signals the gradual improvement of the country's funding.
The announcement of national polls at the end of the reference period, and the subsequent election of a single-party government with absolute majority in parliament, for the first time since 2009, strengthened the expectations regarding the prospects of the Greek economy in the near future.
The extent to which Greece will benefit from the positive economic sentiment, to speed up economic recovery, will depend on the progress of structural reforms and the adoption of an investment-friendly economic policy mix, combined with the safeguarding of fiscal stability.
The achievement of higher growth rates remains a critical challenge. The weak growth momentum following the completion of the economic adjustment programs, has been keeping the economy in a fragile state against domestic and external risks, while maintaining a level of uncertainty regarding the country's ability to service its public debt in the long term.
A low level of productive investments, the reduced ability of banks to fund the economic activity, mainly due to the high stock of NPLs, as well as the negative impact of a high primary surplus target, are among the main impediments to the acceleration of growth.
At the same time, significant downside risks arise from the external environment, including the slowdown of global economic activity, amid trade protectionism and geopolitical tensions, the uncertainty around the possibility of a nodeal Brexit and the risk of instability facing the economies of Italy and Turkey.
Keeping a close monitor on domestic and international developments, MYTILINEOS continued to implement a sound strategy, aimed at the company's extrovert growth and the further strengthening of its position in each of its core activity areas, building a solid basis, that will allow it to harness opportunities and maximize the benefits from the recovery of the Greek economy.
The decline in Aluminium prices during the second half of 2018 continued during the first half of 2019, mainly due to the withdrawal of the penalties against Rusal and the impact of the US – China trade war which affects demand worldwide.
More specifically, during the first half of 2019, the average price for Aluminium in the LME stood at \$1.826/t, down by approximately 17.3% in relation to the corresponding period of the previous year, was partially offset by increased premia for Aluminium products (+16.0%).
The API Index for Alumina, after its unprecedented rise in 2018, due to US sanctions affecting the largest producer of alumina and aluminium outside China, as well as the partial cessation of the world's biggest factory in Alumina production (ALUNORTE), returned to lower levels as the aforementioned circumstances ceased to exist. The price of H1 2019 was decreased by 17.4% in comparison to the average price of corresponding period of the previous year. At the same time, there has been a negative effect at the Alumina's sales prices except API.
The performance of the USD against Euro was strengthened, with the Euro/USD parity at 1.13 for the first half of 2019, compared to 1.21 of the corresponding period of the previous year.
Raw material prices have begun to decline, but the cost has been negatively affected by both the different mix of bauxites for alumina production and the increased CO2 emissions' price.
The financial results of the first half of 2019, reflect a positive course of the EPC & Infrastructure Sector (EPC Projects), proving its durability. More specifically, EPC Project Sector turnover for the first half of 2019 came up to € 235.7 million compared to € 196.0 million of the respective period of 2018.
The main factors for the above course of the EPC Sector are:
a) The continuation of the project «Engineering, Procurement, and Construction (EPC) of a 250 MW Power Plant» in Ghana, with a contractual value of \$ 369 million, which recorded a turnover of € 66.9 million during the first six months of 2019.
b) The project «Procurement, Engineering and Construction of a 100 MWp Photovoltaic Power Plant» in the Zhambyl area of Kazakstan (MKAT), with a contractual value of \$ 78.4 million and ΚΖΤ 5,118.7 million, which recorded a turnover of € 36.1 million.
c) The project «Integrated engineering, procurement and construction services (EPC) in four universities, which includes hybrid power production units with renewable sources and energy storage, street lighting and training centers as well as operation and maintenance services» in Nigeria, with a contractual value of NGN 12.6 billion (approx. €31.2 million), which in the current six-month period recorded a turnover of € 22.2 million.
d) The continuation of the project «Engineering, Procurement, and Construction (EPC) of a 192 MW Power Plant» in Ghana, with a contractual value of \$ 186.2 million, which recorded a turnover of € 20.6 million during the first six months of 2019.
e) The project «Procurement, Engineering and Construction of a 28 MWp Photovoltaic Power Plant» in the area Kyzylorda of Kazakstan (NOMAD) with a contractual value of \$ 21.6 million and ΚΖΤ 1,444.3 million, which recorded a turnover of € 11.9 million.
f) The continuation of the project «Construction of remaining infrastructure, permanent way, signalingtelecommanding, telecommunications and electrical engineering works for the tunnel facilities for the new railway line Kiato-Rododafni» with a contractual value of € 250.6 million, which in the current period recorded a turnover of € 11.4 million.
g) The continuation of the project «Construction and commissioning of an open-cycle, natural gas power plant, with two gas-turbines of a total 368.152 MW power in Algeria, with a contractual value of € 80.5 million and DZD 2,488 million, which in the current six-month period recorded a turnover of €10.8 million.
h) The project «Engineering, Procurement and Construction of a 300 MWp Photovoltaic Power Plant» in the Talavan area of Spain (TALASOL), with a contractual value of € 192.5 million, which in the current six-month period recorded a turnover of € 10.7 million.
Earnings before interest, tax, depreciation and amortization (EBITDA) for the EPC Sector in the first half of 2019 reached € 35.03 million. (14.9%).
In the early 2019, MYTILINEOS S.A.signed a contract for the construction of the Freight Center in Thriasio Plain, Western Attica, Greece, for an initial contractual amount of €109mn. The contract was signed with the consortium ETVA VIPE (Industrial Areas) and Goldair (THEK S.A), who are the Project's Concession Holders for the 60-year duration of the concession contract. The Thriasio Transit Project relates to the Design and Construction of the first Logistics Park in Greece, including the development of warehouses and supporting buildings covering a total surface of 235,000m2 within a land plot of 588,000m2, owned by GAIAOSE. In addition to the construction of building facilities, a road and a railway network will be constructed within the park aimed at supplying the warehouses. This combination of transport will be the first in the Greek logistics market.
Within 2019, MYTILINEOS S.A. also signed a contract with JAVNO PODJETJE ENERGETIKA LJUBLJANA, Ljubljana's energy company, engaged in electrical and thermal production, transmission and distribution, operating Slovenia's largest District Heating System. The contract involves the Engineering, Procurement and Construction of a new Combined Heat and Power (CHP) plant in Ljubljana, Slovenia, substituting to a large extent coal with natural gas, thus reducing coal consumption by 70%. This new dual fuel (natural gas or extra light fuel oil) combined heat and power plant with total electrical power output of 110MW, is expected to make a vital contribution to meeting the electricity and district / process heating needs of Ljubljana's citizens. The contract value amounts to €118 million.
In 2019, METKA EGN signed with Total Eren turnkey Engineering, Construction & Procurement contracts, for two photovoltaic ("PV") projects in Kazakhstan, totaling a capacity of 128 MWp. Specifically, the first Project ("Nomad") is a 28 MWp PV power plant located close to the village of Zhalagash in the Kyzylorda region and the second Project ("M-KAT") is a 100 MWp PV Power Plant located next to the village of Shu in the Zhambyl region.
ΜΕΤΚΑ EGN is now one of the preferred suppliers of Total Eren. This achievement reflects the trust, know-how and reliability which ΜΕΤΚΑ EGN has attained in the market. The total contractual value of the projects amounts approximately to 117 million USD.
METKA EGN has also signed a contract with Atacama Solar S.A., a subsidiary of the solar independent power producer Sonnedix, to undertake the EPC and O&M of the Atacama Solar II 170.65 MWp PV project located in the municipality of Pica, Tarapaca Region, in Chile. The scope of the project includes the engineering, procurement and construction (EPC) of the Atacama Solar II plant, as well as a contract for the operation and maintenance (O&M) services for two years. The total contract value of the project amounts to 109 million USD.
In 2019, MYTILINEOS S.A. also announced the agreement for the acquisition of the remaining stake (49.9%) that it does not already own in METKA EGN Ltd. Following the completion of the transaction, MYTILINEOS SA will become the sole shareholder (100%) of METKA EGN Ltd. This transaction takes place within the framework of MYTILINEOS' overall energy plan, which will now include a platform for the construction, operation, financing and resale of photovoltaic power generation and storage units in Greece, but mainly in the international market. The total acquisition of METKA EGN ensures obvious synergies: The exceptional know-how developed in recent years by METKA EGN will benefit from increased financial flexibility, an increased ability to secure optimal agreements with suppliers and customers and will especially benefit from its increased size in the context of MYTILINEOS' investment activity in BOT projects.
Finally, itshould be noted that the backlog for the Group's existing projects amountsto € 1,214 million. The table below shows the expected income for the main projects per country which contribute significantly to the total backlog. Regarding the Libya project, the Company stays vigilant and the works shall begin as soon as the conditions for the project's seamless completion arise.
| (Amounts in thousands €) | up to 1 year | 1-3 years | 3-5 years | Total |
|---|---|---|---|---|
| LIBYA | 83,353 | 259,555 | - | 342,908 |
| GREECE | 70,582 | 60,321 | 73,716 | 204,619 |
| SPAIN | 160,718 | 19,250 | - | 179,968 |
| GHANA | 86,156 | 17,519 | - | 103,675 |
| SLOVENIA | 54,023 | 61,165 | - | 115,189 |
| CHILE | 97,688 | - | - | 97,688 |
| OTHER | 144,018 | 25,666 | - | 169,684 |
| Total | 696,538 | 443,476 | 73,716 | 1,213,730 |
*The table above does not include the amount of € 420 mn., which is the Deir Azzur backlog. The Group has paused the site works, as announced.
The first half of the year was marked by an increase of 4.1% in electricity demand compared to the same period in 2018.
The combination of low gas prices and high CO2 prices resulted in a significantly increased production of NG units (by 25.7% compared to the corresponding period of 2018).
Increased demand, in combination with high CO2 prices, led to an increase in SMP which averaged € 66.75 / MWh, increased by 26.5% compared to the corresponding period in 2018.
Both of the above (increased demand & high CO2 price), in combination with the ability to supply NG at highly competitive prices through the purchase of LNG loads, and the high efficiency, availability and reliability of the Company's units, have resulted in increased production to 2.62 TWh (an increase of 29.2% compared to the first half of 2018).
The total production of thermal and renewable units of the Company amounted to 2.82 TWh, representing 10.9% of total demand in the interconnected system (including net imports).
In terms of supply activity, Protergia is steadily strengthening its presence by now representing 157,000 electricity customers and 9,100 NG customers versus 129,000 and 4,600 respectively in December 2018.
In April 2019, a new 15.3 MW Wind Park was put into operation, increasing the Company's production capacity from RES to 192 MW, while 3 additional Wind Parks of total capacity of 30.2 MW are being constructed.
The effects on the Group's sales as well as on the operating and net profitability during the first half of 2019, compared to the first half of 2018 are presented bellow:
| Amounts in mil. € | Metallurgy and Mining Sector | EPC & Infrastructure Sector |
Power & Gas Sector | Other | Discontinued Operations |
Total | |
|---|---|---|---|---|---|---|---|
| Continued Operations | Discontinued Operations |
||||||
| Turnover H1 2018 | 283.5 | 0.0 | 196.0 | 236.2 | 1.6 | (0.0) | 717.1 |
| Effect from: | |||||||
| Premia & Prices | (4.1) | 39.1 | 35.0 | ||||
| Organic \$/€ eff. | (3.1) | (3.1) | |||||
| LME | 17.6 | 17.6 | |||||
| EPC Contrancts | 41.2 | 41.2 | |||||
| Maintenance services | (1.5) | (1.5) | |||||
| Volumes | (3.2) | 111.1 | 107.9 | ||||
| CACs 1 | 5.7 | 5.7 | |||||
| Shut-Down income | 0.4 | 0.4 | |||||
| NG sales | 68.1 | 68.1 | |||||
| Other - One offs | 4.0 | 0.4 | (1.6) | (0.4) | 2.5 | ||
| Turnover H1 2019 | 294.6 | 0.4 | 235.7 | 460.6 | 0.0 | (0.4) | 990.8 |
1 CACs = Capacity Assurance Certificates
| Amounts in mil. € | Metallurgy and Mining Sector | EPC & Infrastructure Sector |
Power & Gas Sector | Other | Discontinued Operations |
Total | |
|---|---|---|---|---|---|---|---|
| Continued Operations | Discontinued Operations |
||||||
| EBITDA H1 2018 | 98.9 | 0.1 | 34.3 | 12.3 | (0.3) | (0.1) | 145.2 |
| Effect from: | |||||||
| Premia & Prices | (4.1) | 5.4 | 1.3 | ||||
| Organic \$/€ eff. | (4.2) | (4.2) | |||||
| LME | 17.6 | 17.6 | |||||
| Electricity | 0.5 | 0.5 | |||||
| Opex & R/M | (16.6) | (3.6) | (2.3) | (22.5) | |||
| EPC Contrancts | 1.2 | 1.2 | |||||
| Ο&M | (0.5) | (0.5) | |||||
| Volumes | (9.2) | 7.3 | (1.9) | ||||
| CACs (1) | 1.4 | 5.7 | 7.1 | ||||
| Clean spark spread (Price effect) | 10.5 | 10.5 | |||||
| Shut-Down income | 0.4 | 0.4 | |||||
| Energy cost / SMP (2) - ΝΟΜΕ | (8.2) | (8.2) | |||||
| LRUCRESSA (3) (Price effect) | 4.9 | 4.9 | |||||
| RES | 6.0 | 6.0 | |||||
| Trading | 2.3 | 2.3 | |||||
| NG sales | 5.0 | 5.0 | |||||
| Other - One offs | 8.3 | (1.1) | 2.4 | 1.1 | 10.7 | ||
| EBITDA H1 2019 | 92.6 | (1.0) | 35.1 | 50.3 | (2.6) | 1.0 | 175.3 |
1 CACs = Capacity Assurance Certificates
2 SMP = System Marginal Price
3 LRUCRESSA = Load Representative Uplift Charge for Renewable Energy Source Special Account
| Amounts in mil. € | Metallurgy and Mining Sector | EPC & Infrastructure Sector |
Power & Gas Sector | Other | Discontinued Operations |
Total | |
|---|---|---|---|---|---|---|---|
| Continued Operations | Discontinued Operations |
||||||
| Net Profit after Minorities H1 2018 | 83.9 | ||||||
| Effect from: | |||||||
| Earnings before interest and income tax (EBIT) | (6.4) | (1.0) | 8.2 | 30.8 | (9.7) | 1.0 | 23.0 |
| Net financial results | (0.9) | ||||||
| Minorities | (8.6) | ||||||
| Discontinued Operations | (0.7) | (0.7) | |||||
| Income tax expense | (15.0) | ||||||
| Net Profit after Minorities H1 2019 | 81.6 |
| (Amounts in thousands €) | Metallurgy | |||
|---|---|---|---|---|
| Sales | Alumina | Aluminium | Other | Total |
| 30/06/2019 | 79,585 | 214,730 | 613 | 294,928 |
| 30/06/2018 | 90,038 | 193,139 | 297 | 283,474 |
| EBITDA | ||||
| 30/06/2019 | 29,708 | 62,734 | (889) | 91,553 |
| 30/06/2018 | 41,688 | 56,915 | 346 | 98,949 |
| (Amounts in thousands €) | EPC & Infrastructure | ||||
|---|---|---|---|---|---|
| Sales | EPC & Infrastructure | Solar Parks | O&M & Other | Total | |
| 30/06/2019 | 154,955 72,393 |
8,336 | 235,684 | ||
| 30/06/2018 | 126,509 59,600 |
9,855 | 195,964 | ||
| EBITDA | |||||
| 30/06/2019 | 23,034 10,761 |
1,239 | 35,034 | ||
| 30/06/2018 | 22,133 10,427 |
1,724 | 34,284 |
| (Amounts in thousands €) | Power & Gas | ||||
|---|---|---|---|---|---|
| Sales | Energy Supply | Energy Production | Natural Gas Supply | RES | Total |
| 30/06/2019 | 183,867 | 162,919 | 94,769 | 19,024 | 460,579 |
| 30/06/2018 | 113,246 | 92,014 | 19,686 | 11,205 | 236,151 |
| EBITDA | |||||
| 30/06/2019 | 6,504 | 26,657 | 3,708 | 13,386 | 50,255 |
| 30/06/2018 | 1,142 | 4,054 | (215) | 7,303 | 12,284 |
*The Companies which are consolidated with equity method and own Renewable Energy Units with capacity of 16MW are not included in the amounts of RES.
| (Amounts in thousands €) Sales |
Other | Discontinuing Operations |
Total |
|---|---|---|---|
| 30/06/2019 | 0 | (354) | (354) |
| 30/06/2018 | 1,567 | (22) | 1,545 |
| EBITDA | |||
| 30/06/2019 | (2,589) | 1,013 | (1,576) |
| 30/06/2018 | (298) | (57) | (355) |
The Group's policy is to monitor its performance on a month to month basis thus tracking on time and effectively the deviations from its goals and undertaking necessary actions. The group evaluates its financial performance using the following generally accepted Key Performance Indicators (KPI's).
-EBITDA (Operating Earnings Before Interest, Taxes, Depreciation & Amortization): The Group defines the «Group EBITDA» quantity as profits/losses before tax, itemized for financial and investment results; for total depreciation (of tangible and intangible fixed assets) as well as for the influence of specific factors, i.e. shares in the operational results of liaised bodies where these are engaged in business in any of the business sectors of the Group, as well as the influence of write-offs made in transactions with the above mentioned liaised bodies.
- ROCE (Return on Capital Employed): This index is derived by dividing profit before interest, taxes, depreciation & amortization, to the total capital employed by the Group, these being the sum of the Net Position; Total Debt; and Long - term forecasts.
- ROE (Return on Equity): This index is derived by dividing profit after tax and minority interests by the Group's Net Position.
- EVA (Economic Value Added): This metric is derived by multiplying the total capital employed with the difference (ROCE – Capital Expenditure) and constitutes the amount by which the financial value if the company increases. To calculate the capital expenditure, the Group uses the WACC formula – « Weighted Cost of Capital».
The Weighted average cost of capital is calculated as, the quotient of Equity Capital to Total Capital Employed (Equity Capital and Debt) multiplied by the return on Equity* plus the quotient of Debt to Total Capital Employed (Equity Capital and Debt) multiplied by the return on Debt adjusted by the company tax rate (due to tax saving on interest paid).
$$
WACC = \frac{E}{E+D} r_E + \frac{D}{E+D} r_D (1- T c)
$$
Where E Equity Capital D Debt rE Return on equity rD Return on debt Tc Tax rate
The calculation of the indicator Weighted Average Cost of Capital (WACC) for the 1st half of 2019 sums to 9.25 %.
*Return on Equity is calculated by utilizing the "Capital Asset Pricing Model" (CAPM) and is equal to risk-free rate of return plus a risk premium multiplied by beta coefficient, which reveals the variability of the stock in relation to market fluctuations.
The above indicators for the presented period (on an annualized basis) as well as for the previous year, are as follows:
| 2019 | 2018 | |
|---|---|---|
| EBITDA | 313,667 | 283,559 |
| ROCE | 14.06% | 13.27% |
| ROE | 9.00% | 9.36% |
| EVA | 107,359 | 94,778 |
EBITDA & EVA in k€.
During the reporting period the company proceeded to the below decisions and actions:
normal permitting procedures, will be within the 1st half of this year. The amount of the contract equals € 118 mio.
commitments before the end of the period, in the event there is a change in the competitive conditions in the relevant markets.
In the Metallurgy and Mining sector, the growth rate of global aluminium demand is expected to be affected by the possible continuation of the commercial war between US and China. From the first months of H2 2019 the LME price of aluminium is between 1,750 – 1,850 \$/t, while API index for alumina is also low (300 – 310 \$/t).
Raw material prices are already in a downward trend, which is expected to be further strengthened and improve the production cost and as a result the operating results of the company.
The production rate and the sales volume are expected to increase as a result of the investments made under the program "THE BEST", and more specifically for the modernization of the production of plates with the use of recycled aluminium. Moreover, the subsidiary company EPALME will contribute its results throughout H2 2019.
For the EPC Sector, 2019 is expected to be a year of significant recovery, development and new opportunities. The Group is oriented towards the development of its activities in demanding countries, with its status and know-how giving it a special place in the global market. If there are investment opportunities, the Group shall utilize its significant financing capabilities to create bigger added value for its clients and shareholders.
Based on this strategy, the EPC Sector has increased the backlog of projects taken within 2019 and stays focused on a timely execution of the existing contracts and the undertaking of new projects and investments in targeted markets. It will continue to implement its plan for expansion and development of its presence in the markets of Asia and Africa. At the same time, it will seek photovoltaic construction and power storage projects through its subsidiary METKA EGN. Finally, the EPC Sector intends to expand in the development, construction and sale of photovoltaic parks worldwide.
Despite the relative progress achieved in the previous years, the energy market remains in a transitory state and serious regulative changes should be put under way in order to achieve the goals placed for enhancing competition and effectively open the market.
MYTILINEOS possesses today an installed power of ~1,4 GW from operational thermal power stations and RES projects which makes the Company the biggest private electricity company, having the necessary critical size needed in order to benefit as much as possible from the expected full deregulation of the local market of electric power.
In H2 2019, the financial results of the Electric Power & Gas Trading Sector are expected to improve due to:
The Company, after completing all required licensing procedures and with the assistance and experience of the EPC - METKA Project Division, will begin during autumn the construction of the new CCGT (826MW) power plant at the company's Energy Center in Ag. Nicholas. It is one of the largest CCGTs and the most efficient in Europe (with thermal efficiency greater than 63%). The commissioning date of the station is set in Q4 of 2021. With this station in its portfolio, MYTILINEOS will have more than 2000MW of electricity (plus the RES portfolio), contributing significantly in the country 's energy security but also with the capability of export to neighboring countries under the new European "target model". At the same time, MYTILINEOS contributes effectively to the production of "clean" energy, as the use of natural gas minimizes pollutant emissions and their impact. Burning gas emits less greenhouse gases than other conventional fuels, while a CCGT station is estimated to emit less than a quarter of the emissions of a thermal lignite unit.
Finally, on July 1, 2019, the Company successfully took part in the competitive procedure of RES projects announced by RAE for an additional 43.2 MW Wind Park.
The Group's activities give rise to multiple financial risks, including the current and interest rate related risks; the volatility in market prices; credit risks and liquidity risks. The Group's risk management program aims at containing potential negative influence to its financial results, as this may arise from the inability to predict financial markets and the volatility with respect to cost and sales variables.
The essential risk management policies are determined by the Group's Management. The risk management policy is applied by the Corporate Treasury Department. The latter acts as a service centre, operating under specific Management - approved lines.
The Group does not exhibit any considerable concentration of credit risk in any of the contracted parties. Credit risk originatesfrom available cash and cash equivalents, derivative financial instruments and deposits at banks and financial institutions; also from exposure to client derived credit risk.
Regarding commercial and other claims, the Group is not theoretically exposed to significant credit risks; as of the multifaceted nature of the Group's activities, there is no significant concentration of credit risk with respect to its commercial requirements, as this is allocated over a high number of clients. However, the atypical conditions that dominate the Greek market and several other markets in Europe are forcing the Group to constantly monitor its business claims and also to adopt policies and practices to ensure that such claims are collected. By way of example, such policies and practices include insuring credits where possible; pre-collection of the value of product sold to a considerable degree; safeguarding claims by collateral loans on customer reserves; and receiving letters of guarantee.
To minimize credit risk on cash reserves and cash equivalents; in financial derivate contracts; as well as other short term financial products, the Group specifies certain limits to its exposure on each individual financial institution and only engages in transactions with creditworthy financial institutions of high credit rating.
Liquidity risk is related with the Group's need for the sufficient financing of its operations and development. The relevant liquidity requirements are the subject of management through the meticulous monitoring of debts of long term financial liabilities and also of payments made on a daily basis.
The Group ensures that there is sufficient available credit facilities to be able to cover its short-term business needs, after the calculation of cash flows arising from the operation as well as cash and cash equivalents which are held. The funds for long-term liquidity needs ensured by a sufficient amount of loanable funds and the ability to sell long-term financial assets.
The Group's earnings are exposed to movements in the prices of commodities, which are determined by the international markets and the global demand and supply.
The Group faces price risk from fluctuations in the prices of variables that determine both the sales and the cost of sales of the group entities (i.e. products' prices (LME), raw materials, other cost elements etc.). The Group's activities expose it to the fluctuations of the prices of Aluminium (AL), Zinc (Zn), Lead (Pb) as well as to Fuel Oil as a production cost.
Regarding price fluctuation of metals, the Group's policy is to minimize risk by using financial derivative instruments.
The Group operates in a global level and consequently is exposed to foreign exchange risk emanating mainly from the US dollar. This kind of risk mainly results from commercial transactions in foreign currency as well as net investments in foreign entities. For managing this type of risk, the Group Treasury Department enters into derivative or nonderivative financial instruments with financial institutions on behalf and in the name of group companies.
At Group level, such financial instruments are considered to constitute compensation means for the exchange rate risk of specific assets, liabilities or future commercial transactions
The Group's assets that are exposed to interest rate fluctuation primarily concern cash and cash equivalents. The Group's policy as regards financial assets is to invest its cash in floated interest rates so as to maintain the necessary liquidity while achieving satisfactory return for its shareholders. In addition, for the totality of its bank borrowing, the Group uses floating interest rate instruments. Depending on the level of liabilities in floating interest rate, the Group proceeds to the assessment of interest rate risk and when necessary examines the necessity to use interest bearing financial derivative instruments. The Group's policy consists in minimizing its exposure to interest bearing cash flow risk as regards long-term funding.
3. Description of the main risks and management function of the Group in relation to the preparation of the financial statements
The reliability of the Group's and Company's Financial Statements is ensured by the application of Internal Control and Risk Management Processes. The Company has put in place separate procedures for the monthly, interim and annual Financial Reports.
More specifically, every month the Management Information Systems Department of the Company receives from the Finance Business Partners financial data and information, which it proceeds to check and then use to prepare reports for submission to the Management of the Group. This information is produced in accordance with the International Financial Reporting Standards. Every month, the Management of the Group is updated on the changes to the consolidated key financial indicators by means of relevant management reports. This monthly monitoring approach, coupled with the checking of the consolidated financial statements and the analyses performed on the latter are the key tools used in the quality and consistency control of the financial results.
Regarding the Interim and Annual consolidated Financial Statements, the Company employs an advanced software tool to consolidate the financial results and statements, as well as to generate reports for the Management as well as for investors and other interested parties. This software tool is automatically updated with data from the Group's accounting monitoring program and includes controls to ensure accurate transfer and accounting recognition of the input data. The Management Information Systems Department ensures the smooth operation of the software tool and checks the integrity and correctness of the consolidated Financial Statements and other reports, providing the Chief Finance Officer, the External Auditors and the Management of the Company with all necessary information.
The External Auditors examine the consolidated Interim and Annual Financial Reports and report to the Audit Committee on the progress and results of their audits for each reporting period. The Audit Committee is informed of the procedure and schedule for the preparation of the Financial Statements by the Group Chief Finance Officer and holds meetings with the Management / the responsible executives during the preparation of the financial reports. It obtains from the Chief Finance Officer the necessary information on the Group's performance and consolidated Financial Statements and reports to the Board of Directors accordingly. During these meetings, the Audit Committee is also informed about the management of financial risks and assesses the effectiveness of the risk management system. The Financial Statements (Individual and Consolidated) are approved by the Board of Directors, following a relevant report from the Audit Committee.
The Company has defined risk as a set of uncertain and unpredictable situations that may affect all its activities, its business operation and its financial performance, as well as the implementation of its strategy and the achievement of its goals.
In line with this approach, it has established a specific risk management approach in all its areas of activity where certain risks have been recognised. This approach consists of the following steps:
The Company has established specific and comprehensive Enterprise Risk Management (ERM) processes. All senior executives are involved in the identification and initial assessment of risks, so as to facilitate the work of the Executive Committees of each Business Unit, as well as of the Board of Directors of each legal person, in the planning and approval of specific actions in the context of the approved ERM processes.
With regard to Non-Financial Information, since 2010 the Company has introduced a specific Stakeholder engagement process for evaluating the materiality of the sustainability issues which are related to its activity sectors. This process, combined with the corresponding prioritisation of these issues by the Company's Business Units, is at the core of the accountability policy applied by the Company.
The process for determining the material sustainability issues is an ongoing exercise that is constantly developed and improved. The purpose of this process is to highlight the issues that reflect the Company's significant environmental and social impacts and influence substantially the decisions of its Stakeholders.
By identifying and understanding the material sustainability issues, the Company formulates and develops its uniform business strategy and its aims, targets and social and environmental initiatives.
Finally, the Company conducts regular internal audits to ensure the appropriate and effective implementation of the risk identification and assessment processes and of the management policies for such risks.
Moreover, the following are examined and analysed on a continuous basis:
The efficiency of the Company's accounting and financial systems, audit mechanisms, quality control systems, health & safety and environmental systems, and business risk management systems.
The drafting of the financial statements and of other important data and information intended for disclosure.
The reliability, the qualifications and the independence of the chartered auditors.
Cases of conflict between the private interests of the members of the Board or executives of the Company and the latter's interests.
Relations and transactions of the Company with affiliated companies as well as relations of the Company with companies in whose share capital members of the Company's Board of Directors participate with a percentage of at least 10% or shareholders of the Company participate with a percentage of at least 10%.
The legality of the fees and any kind of bonuses to the members of the management with regard to the decisions of the competent bodies of the Company.
The Board of Directors re-examines in a continuous and consistent way the corporate strategy and the principal business risks, especially in a constantly changing financial and business environment. Moreover, the Board receives at regular intervals from the Audit Committee reports on the activities of the audits carried out, based on the annual schedule of audits planned by the Company's Internal Audit Department. The above allow the Board to form a detailed opinion of the effectiveness of the systems, processes and regulations of the Company.
The external auditors do not offer to the Company and to the Group non-audit services which are prohibited, as per the provisions article 5 of Regulation (EU) 537/2014 of the European Parliament and of the Council and of law 4449/2017.
The commercial transactions of the Group and the Company with related parties during the first half of 2019, were realized under the common commercial terms. The Group or any of its related parties has not entered in any transactions that were not in an arm's length basis, and do not intent to participate in such transactions in the future. No transaction was under any special terms and conditions.
The tables bellow present the intercompany sales and transactions, among the Parent Company and its subsidiaries, associates and the key management personnel as at 30 June 2019.
| MYTILINEOS GROUP | MYTILINEOS S.A. | |||
|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 30/06/2018 | 30/06/2019 | 30/06/2018 |
| Short term employee benefits | ||||
| - Wages of Key Management and BOD Fees | 5,999 | 5,318 | 4,783 | 4,744 |
| - Insurance service cost | 164 | 175 | 8 2 |
8 3 |
| - Other remunerations | 3 3 |
3 1 |
- | - |
| Total | 6,196 | 5,525 | 4,865 | 4,826 |
| MYTILINEOS GROUP | MYTILINEOS S.A. | ||
|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 30/06/2019 | |
| Stock Sales | SERVISTEEL | - | 3 3 |
| Stock Sales | ELEMKA S.A. | - | 1 |
| Stock Sales | DELFI DISTOMON A.M.E | - | 318 |
| Stock Sales | RENEWABLE SOURCES KARYSTIA S.A. | - | 9 |
| Stock Sales | PROTERGIA THERMOILEKTRIKI S.A. | - | 3,500 |
| Stock Sales | KORINTHOS POWER S.A. | - | 55,681 |
| Stock Sales | POWER PROJECT SANAYI INSAAT TICARET LIMITED SIRKETI | - | 3,417 |
| Stock Sales | AIOLIKI ANDROU TSIROVLIDI S.A. | - | 8 |
| Stock Sales | AIOLIKI EVOIAS PIRGOS S.A. | - | 8 |
| Stock Sales | AIOLIKI SIDIROKASTROU S.A. | - | 1 5 |
| Stock Sales | HELLENIC SOLAR S.A. | - | 1 0 |
| Stock Sales | SPIDER ENERGY S.A. | - | 9 |
| Stock Sales | YDROXOOS .S.A. | - | 2 |
| Stock Sales | AIOLIKI TRIKORFA S.A. | - | 3 |
| Stock Sales | M&M GAS Co S.A. | - | 7,836 |
| Stock Sales | ELIA S.A. | 231 | 231 |
| Stock Sales | TATOI CLUB | 165 | 165 |
| Stock Purchases | DELFI DISTOMON A.M.E | - | 8,285 |
| Stock Purchases | PROTERGIA THERMOILEKTRIKI S.A. | - | 1,560 |
| Stock Purchases | M&M GAS Co S.A. | - | 822 |
| Services Sales | ELEMKA S.A. | - | 2 |
| Services Sales | ANEMOSKALA RENEWABLE ENERGY SOURCES S.A. | - | 2 |
| Services Sales | ANEMOSTRATA RENEWABLE ENERGY SOURCES S.A. | - | 2 |
| Services Sales | DELFI DISTOMON A.M.E | - | 9 |
| Services Sales | RENEWABLE SOURCES KARYSTIA S.A. | - | 5 3 |
| Services Sales | GENERAL INDUSTRY S.A. DEFENCE MATERIAL | - | 1 |
| Services Sales | KORINTHOS POWER S.A | - | 1,429 |
| Services Sales | OSTENITIS S.A. | - | 1 |
| Services Sales | AIOLIKI SAMOTHRAKIS S.A. | - | 321 |
| Services Sales | M&M GAS S.A. | - | 2 |
| Services Sales | DESFINA S.A. | - | 1 |
| Services Sales | MYTILINEOS FINANCIAL PARTNERS S.A. | - | 2,931 |
| Services Sales | St. Nikolaos S.A. | - | 2 7 |
| Services Sales | ΕLΙΑ S.A. | 1,925 | 1,925 |
| Other Sales | Osmanthus Holdings Co. | 0 | - |
| Services Purchases | SERVISTEEL | - | 511 |
| Services Purchases | ELEMKA S.A. | - | 1,982 |
| Services Purchases | DELFI DISTOMON A.M.E | - | 1 1 |
| Services Purchases | RENEWABLE SOURCES KARYSTIA S.A. | - | 4 |
| Services Purchases | ΚΟΡΙΝΘΟΣ POWER A.E. | - | 9 |
| Services Purchases | AIOLIKI ANDROU TSIROVLIDI S.A. | - | 6 |
| Services Purchases Services Purchases |
AIOLIKI SIDIROKASTROU S.A. HELLENIC SOLAR S.A. |
- - |
6 1 |
| Services Purchases | AIOLIKI TRIKORFA S.A. | - | 3 |
| Services Purchases | ΕLΙΑ S.A. | 3,756 | 3,607 |
| Services Purchases | ΤΑΤΟΙ CLUB | 3 5 |
3 5 |
| Services Purchases | M-MARITIME Corporation | 5,854 | 5,854 |
| MYTILINEOS GROUP | MYTILINEOS S.A. | ||
|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 30/06/2019 | |
| Receivables from Related Parties | ELEMKA S.A. | 0 | 683 |
| Receivables from Related Parties | STANMED TRADING LTD | 0 | 273 |
| Receivables from Related Parties | ANEMOSKALA RENEWABLE ENERGY SOURCES S.A. | 0 | 1 1 |
| Receivables from Related Parties | ANEMOSTRATA RENEWABLE ENERGY SOURCES S.A. | 0 | 8 |
| Receivables from Related Parties | METKA BRAZI SRL | 353 | |
| Receivables from Related Parties | DELFI DISTOMON A.M.E | 0 | 7 0 |
| Receivables from Related Parties | RENEWABLE SOURCES KARYSTIA S.A. | 0 | 482 |
| Receivables from Related Parties | MOVAL S.A. | 0 | 16,341 |
| Receivables from Related Parties | PROTERGIA THERMOILEKTRIKI S.A. | 0 | 4,333 |
| Receivables from Related Parties | GENERAL INDUSTRY S.A. DEFENCE MATERIAL | 0 | 5 1 |
| Receivables from Related Parties | KORINTHOS POWER S.A | 0 | 13,763 |
| Receivables from Related Parties | OSTENITIS S.A. | 0 | 572 |
| Receivables from Related Parties | POWER PROJECT | 0 | 9,032 |
| Receivables from Related Parties | NORTH AEGEAN RENEWABLES S.A. | 0 | 5 4 |
| Receivables from Related Parties | MYTILINEOS HELLENIC WIND POWER S.A. | 0 | 32,216 |
| Receivables from Related Parties | AIOLIKI ANDROU TSIROVLIDI S.A. | 0 | 188 |
| Receivables from Related Parties | AIOLIKI EVOIAS PIRGOS S.A. | 0 | 2 |
| Receivables from Related Parties | AIOLIKI EVOIAS HELONA S.A. | 0 | 2 5 |
| Receivables from Related Parties | AIOLIKI ANDROU RAHI XIROKOBI S.A. | 0 | 1 |
| Receivables from Related Parties | AIOLIKI SAMOTHRAKIS S.A. | 0 | 346 |
| Receivables from Related Parties | AIOLIKI EVOIAS DIAKOFTIS S.A. | 0 | 2 4 |
| Receivables from Related Parties | AIOLIKI SIDIROKASTROU S.A. | 0 | 194 |
| Receivables from Related Parties | HELLENIC SOLAR S.A. | 0 | 2,737 |
| Receivables from Related Parties | SPIDER ENERGY S.A. | 0 | 6,561 |
| Receivables from Related Parties | DELTA RENEWABLE ENERGY SOURCES S.A. | 0 | 1,546 |
| Receivables from Related Parties | GREEN ENERGY S.A. | 0 | 182 |
| Receivables from Related Parties | AIOLIKI TRIKORFA S.A. | 0 | 454 |
| Receivables from Related Parties | MAKRINOROS S.A. | 0 | 4 0 |
| Receivables from Related Parties | M&M GAS Co S.A. | 0 | 3,100 |
| Receivables from Related Parties | MYTILINEOS FINANCIAL PARTNERS S.A. | 0 | 161,411 |
| Receivables from Related Parties | Mytilineos International Trading Company AG (MIT Co) | 0 | 204 |
| Receivables from Related Parties | SOLIEN S.A. | 0 | 1 4 |
| Receivables from Related Parties | St. Nikolaos S.A. | 0 | 5 |
| Receivables from Related Parties | METKA-EGN Ltd Cyprus | 0 | 650 |
| Receivables from Related Parties | METKA-EGN Ltd UK | 0 | 1,050 |
| Receivables from Related Parties | METKA-EGN USA LLC | 0 | 547 |
| Receivables from Related Parties | METKA POWER WEST AFRICA LIMITED | 0 | 989 |
| Receivables from Related Parties | METKA RENEWABLE LTD CYPRUS | 0 | 212 |
| Receivables from Related Parties | METKA EGN Chile SpA | 0 | 1 3 |
| Receivables from Related Parties | METKA EGN KZ LLP | 0 | 4 0 |
| Receivables from Related Parties | METKA EGN FRANCE SRL | 0 | 2 |
| Receivables from Related Parties | METKA EGN SPAIN SLU | 0 | 254 |
| Receivables from Related Parties | METKA EGN AUSTRALIA PTY HOLDINGS LTD | 0 | 4 |
| Receivables from Related Parties | METKA EGN SINGAPORE PTE LTD | 0 | 1,713 |
| Receivables from Related Parties | EP.AL.ME. S.A. | 0 | 486 |
| Receivables from Related Parties | ΕLΙΑ S.A. | 4,752 | 4,701 |
| Receivables from Related Parties | ΤΑΤΟΙ CLUB | 3 1 |
3 1 |
| Receivables from Related Parties | M-MARITIME Corporation | 0 | 0 |
| Receivables from Related Parties | PLEASURE FINANCE COMPANY | 8,125 | - |
| Receivables from Related Parties | VICTORY PROPERTIES Co | 38,350 | - |
| Receivables from Related Parties | VACENTY SHIPTRADE Co | 15,701 | - |
| Receivables from Related Parties | VERA SHIPTRADE Co | 3,829 | - |
| Payables to Related Parties | SERVISTEEL | 0 | 719 |
| Payables to Related Parties | ELEMKA S.A. | 0 | 2,375 |
| Payables to Related Parties | STANMED TRADING LTD | 0 | 13,865 |
| Payables to Related Parties | RDA TRADING | 0 | 3 |
| Payables to Related Parties | METKA BRAZI SRL | 0 | 1 8 |
| Payables to Related Parties | DELFI DISTOMON A.M.E | 0 | 254 |
| Payables to Related Parties | PROTERGIA THERMOILEKTRIKI S.A. | 0 | 1,980 |
| Payables to Related Parties | KORINTHOS POWER S.A. | 0 | 2 6 |
| Payables to Related Parties | POWER PROJECT SANAYI INSAAT TICARET LIMITED SIRKETI | 0 | 137 |
| Payables to Related Parties | DELTA RENEWABLE ENERGY SOURCES S.A. | 0 | 300 |
| Payables to Related Parties | M&M GAS Co S.A. | 0 | 1,438 |
| Payables to Related Parties | MYTILINEOS FINANCIAL PARTNERS S.A. | 0 | 500 |
| Payables to Related Parties | METKA-EGN Ltd Cyprus | 0 | 1 |
| Payables to Related Parties | ΕLΙΑ S.A. | 567 | 505 |
| Payables to Related Parties | M-MARITIME Corporation | 1 6 |
1 6 |
| Payables to Related Parties | ΤΑΤΟΙ CLUB | 5 0 |
5 0 |
In July 2019, MYTILINEOS' subsidiary, METKA EGN, announces the signing of turnkey Engineering, Construction & Procurement contracts, with Total Eren, for two photovoltaic ("PV") projects in Kazakhstan, totaling a capacity of 128 MWp. Specifically, the first Project ("Nomad") is a 28 MWp PV power plant located close to the village of Zhalagash in the Kyzylorda region and the second Project ("MKAT") is a 100 MWp PV Power Plant located next to the village of Shu in the Zhambyl region. Both Projects will be the first PV power plants using single-axis trackers in Kazakhstan and are expected to enter operation by the end of 2019. Once completed, Nomad and M-KAT are expected to generate 225 GWh per year together, enough to supply the needs of about 40,000 Kazakh people while saving about 300,000 tons of CO2 per year. The total project cost for Nomad and M-Kat for Total Eren amounts to US\$ 157 million.
In addition, in July, the Company announced that one of the largest natural gas fired powered combined cycle (Combined Cycle Gas Turbine – CCGT) power stations in Europe is set to enter the construction phase. After completing all the required permitting procedures MYTILINEOS, leveraging off the expertise of its EPC Business Unit (under the brand name "METKA"), will begin construction within the fourth quarter of this year.
The 826MW new CCGT station will be constructed within the company's Energy Center in Aghios Nikolaos, in the Voiotia region of Central Greece. The station will be operated by a GE H-Class gas turbine with a thermal efficiency of more than 63%, rendering the plant as the most efficient across Europe. The projected investment cost will be €300m. The new job creation will be mainly covered by local regional residents, as per MYTILINEOS' standard practice. The commissioning of the new plant is estimated toward the 4th quarter of 2021.
Finally, in August 2019, MYTILINEOS S.A. announces that its subsidiary METKA EGN has recently signed a contract with Atacama Solar S.A., a subsidiary of the solar independent power producer Sonnedix, to undertake the EPC and O&M of the Atacama Solar II 170,65MWp PV project located in the municipality of Pica, Tarapaca Region, in Chile. The scope of the project includes the engineering, procurement and construction (EPC) of the Atacama Solar II plant, as well as a contract for the operation and maintenance (O&M) services for two years. The project is expected to be completed in December 2020 and the production is estimated to cover the needs of more than 100,000 households, while contributing in the avoidance of the emission of around 200,000 metric tons of CO2 per year. The total cost of the investment for Sonnedix is of US\$180 million (EUR 160milllion).
In August 2019 MYTILINEOS S.A. (the "Company") announces that the Annual General Meeting of the Company's Shareholders, held on June 24, 2019, resolved, among others, to change the Company's business name from "MYTILINEOS HOLDINGS S.A." to "MYTILINEOS S.A." with the distinctive title "MYTILINEOS". On 17.07.2019 the Ministry of Finance and Development by its decision approved the relevant amendment of the Company's articles of association. As of Tuesday, September 3rd, 2019 the Company's business name on the Athens Exchange will be changed to "MYTILINEOS S.A." with the distinctive title "MYTILINEOS".
In September 2019, MYTILINEOS S.A. announces that its subsidiary METKA EGN has recently has recently entered an agreement for a 10-year electricity supply contract (PPA) with Coles, Australia's second largest super market chain. The electricity will derive exclusively from renewable sources. Specifically, 220 GW/h will be produced annually to power Australia's electricity system through three privately owned by METKA EGN photovoltaic parks in the New South Wales Region. With the use of solar energy, carbon dioxide emissions will be reduced by 180,000 tonnes per year. Coles' wide network of stores will cover 10% of its energy needs by purchasing 70% of the power generated by the three METKA EGN projects with total capacity of 120MW.
Maroussi, 11 September 2019
Evangelos Mytilineos Chairman & Chief Executive Officer MYTILINEOS S.A.
To the Board of Directors of MYTILINEOS S.A.
We have reviewed the accompanying condensed separate and consolidated statement of financial position of MYTILINEOS S.A. as of 30 June 2019 and the related condensed separate and consolidated income statement and statement of comprehensive income, statements of changes in equity and cash flows for the six-month period then ended, and the selected explanatory notes that constitute the interim financial information, which forms an integral part of the six-month financial report under Law 3556/2007.
Management is responsible for the preparation and fair presentation of this interim financial information in accordance with the International Financial Reporting Standards as adopted by the European Union and apply for interim financial reporting (International Accounting Standard "IAS 34"). Our responsibility is to express a conclusion on this interim condensed financial information based on our review.
We conducted our review in accordance with International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Auditing Standards as incorporated into the Greek Law and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34.
Our review has not revealed any material inconsistency or misstatement in the statements of the members of the Board of Directors and the information of the six-month Board of Directors Report, as defined in articles 5 and 5a of Law 3556/2007, in relation to the accompanying condensed separate and consolidated financial information.
Athens, 11 September 2019
Certified Public Accountant
Manolis Michalios
I.C.P.A. Reg. No.: 25131
The attached Interim Financial Statements are those approved by the Board of Directors of "MYTILINEOS S.A." at 11 September 2019 and have been published to the website www.mytilineos.gr according to the International Financial Reporting Standards (IFRS).
| 1.A Interim Income Statement31 | |
|---|---|
| 1.B Interim Statement of Comprehensive Income 32 | |
| 2. Interim Statement of Financial Position33 | |
| 3. Interim Statement of changes in Equity (Group)34 | |
| 4. Interim Statement of changes in Equity (Company)35 | |
| 5. Interim Cash Flow Statement36 | |
| 6. Information about MYTILINEOS S.A37 | |
| 7. Additional Information38 | |
| 7.1 Basis for preparation of the financial statements38 | |
| 7.2 New Standards, Interpretations, Revisions and Amendments to existing Standards that are effective | |
| and have been adopted by the European Union39 | |
| 7.3 New Standards, Interpretations, Revisions and Amendments to existing Standards that have not | |
| been applied yet or have not been adopted by the European Union 40 | |
| 7.4 Changes in Accounting Policies42 | |
| 7.5 Pro forma figure "Operating Earnings before Financial & Investment results, Tax, Depreciation & | |
| Amortization" (Group EBITDA)44 | |
| 7.6 Group Structure and Consolidation method46 | |
| 7.7 Significant information50 | |
| 7.8 Segment reporting 53 | |
| 7.9 Stock56 | |
| 7.10 Cash and Cash equivalents56 | |
| 7.11 Loan liabilities57 | |
| 7.12 Discontinued operations57 | |
| 7.13 Encumbrances58 | |
| 7.14 Commitments58 | |
| 7.15 Contingent Assets & Contingent Liabilities58 | |
| 7.16 Other Contingent Assets & Liabilities62 | |
| 7.17 Provisions66 | |
| 7.18 Trade Receivables 66 | |
| 7.19 Other Long Term Receivables67 | |
| 7.20 Trade Creditors67 | |
| 7.21 Share Capital 67 | |
| 7.22 Dividends67 | |
| 7.23 Fair Value Measurements67 | |
| 7.24 Sales 69 | |
| 7.25 Earnings per Share 70 | |
| 7.26 Number of employees70 | |
| 7.27 Management remuneration and fringes70 | |
| 7.28 Cash Flows from Operating Activities71 | |
| 7.29 Related Party Transactions according to IAS 2471 |
| 7.30 Capital Expenditure72 | |
|---|---|
| 7.31 Post – Balance Sheet events72 |
| MYTILINEOS GROUP | MYTILINEOS S.A. | ||||
|---|---|---|---|---|---|
| (Amounts in thousands €) | 1/1-30/06/2019 | 1/1-30/06/2018 | 1/1-30/06/2019 | 1/1-30/06/2018 | |
| Sales 7.24 |
990,837 | 717,134 | 753,982 | 564,247 | |
| Cost of sales | (809,214) | (574,129) | (627,743) | (447,137) | |
| Gross profit | 181,623 | 143,006 | 126,239 | 117,110 | |
| Other operating income | 12,211 | 18,222 | 8,556 | 5,728 | |
| Distribution expenses | (3,044) | (2,396) | (2,082) | (1,866) | |
| Administrative expenses | (46,041) | (34,914) | (34,777) | (27,687) | |
| Research & Development expenses | (33) | (93) | - | - | |
| Other operating expenses | (13,790) | (15,862) | (7,942) | (5,659) | |
| Earnings before interest and income tax | 130,926 | 107,963 | 89,994 | 87,625 | |
| Financial income | 7,851 | 4,301 | 3,148 | 2,413 | |
| Financial expenses | (20,644) | (21,861) | (13,150) | (14,032) | |
| Other financial results | (7,957) | (2,297) | (5,454) | 6,038 | |
| Share of profit of associates | 775 | 452 | - | - | |
| Profit before income tax | 110,951 | 88,559 | 74,540 | 82,044 | |
| Income tax expense | (23,548) | (8,502) | (16,338) | (4,806) | |
| Profit for the period | 87,402 | 80,057 | 58,201 - |
77,238 | |
| Result from discontinuing operations 7.12 |
(1,036) | 8 | (19) | ||
| Profit for the period | 86,367 | 80,064 | 58,201 | 77,218 | |
| Attributable to: | |||||
| Equity holders of the parent 7.25 |
81,608 | 83,882 | 58,201 - |
77,218 - |
|
| Non controlling Interests | 4,759 | (3,818) | |||
| Basic earnings per share | 0.5711 | 0.5870 | 0.4073 | 0.5404 | |
| Earnings per share | 0.5711 Summury of Results from continuing operations |
0.5870 | 0.4073 | 0.5404 | |
| Oper.Earnings before income tax,financial results,depreciation | |||||
| and amortization (EBITDA) | 175,266 | 145,158 | 121,256 | 114,685 | |
| Earnings before interest and income tax | 130,926 | 107,963 | 89,994 | 87,625 | |
| Profit before income tax | 110,951 | 88,559 | 74,540 | 82,044 | |
| Profit for the period | 87,402 | 80,057 | 58,201 | 77,238 | |
| Definition of line item: OperEarnings before income tax,financ.res,depr&amort. (EBITDA) |
|||||
| Profit before income tax | 110,951 | 88,559 | 74,540 | 82,044 | |
| Plus: Financial results | 20,751 | 19,857 | 15,455 | 5,581 | |
| Plus: Capital results | (775) | (452) | - | - | |
| Plus: Depreciation | 44,240 | 36,668 | 31,262 | 27,060 | |
| Subtotal | 175,166 | 144,631 | 121,256 | 114,685 | |
| Plus: Other operating results (Ι) | - | - | - | - | |
| Plus: Other operating results (ΙΙ) | 100 | 527 | - | - | |
| Oper.Earnings before income tax,financial results,depreciation and amortization (EBITDA) |
175,266 | 145,158 | 121,256 | 114,685 |
The notes on pages 37 to 74 are an integral part of these financial statements.
(*) The Group defines the «Group EBITDA» quantity as profits/losses before tax, adjusted for financial and investment results; for total depreciation (of tangible and intangible fixed assets) ; for the effect of specific factors, i.e. shares in the operational results of associates when they are engaged in business in any of the business sectors of the Group; as well as for the effect of write-offs made in transactions with the aforementioned associates.
| MYTILINEOS GROUP | MYTILINEOS S.A. | |||||
|---|---|---|---|---|---|---|
| (Amounts in thousands €) | 1/1-30/06/2019 | 1/1-30/06/2018 | 1/1-30/06/2019 | 1/1-30/06/2018 | ||
| Other Comprehensive Income: | ||||||
| Net Profit/(Loss) For The Period | 86,367 | 80,064 | 58,201 | 77,218 | ||
| Items that will not be reclassified to profit or loss: | ||||||
| Revaluation Of Tangible Assets | - | - | - | - | ||
| Gain / (Loss) From Sale Of Treasury Stock | - | - | - | - | ||
| Items that may be reclassified subsequently to profit or loss: | ||||||
| Exchange Differences On Translation Of Foreign Operations | (401) | 1,000 | - | 780 | ||
| Other Financial Assets | 1,496 | - | - | - | ||
| Cash Flow Hedging Reserve | (591) | 32,378 | (645) | 32,378 | ||
| Deferred Tax From Cash Flow Hedging Reserve | 189 | (9,390) | 189 | (9,390) | ||
| Other Comprehensive Income: | 693 | 23,989 | (456) | 23,768 | ||
| Total Other Comprehensive Income | 87,060 | 104,053 | 57,745 | 100,986 | ||
| Total comprehensive income for the period attributable to: | ||||||
| Equity attributable to parent's shareholders | 81,634 | 107,272 | 57,745 | 100,986 | ||
| Non controlling Interests | 5,425 | (3,219) | - | - |
| MYTILINEOS GROUP | MYTILINEOS S.A. | |||
|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 31/12/2018 | 30/06/2019 | 31/12/2018 |
| Assets | ||||
| Non current assets | ||||
| Tangible Assets | 1,159,823 | 1,141,786 | 804,890 | 796,859 |
| Goodwill | 216,316 | 209,313 | - | - |
| Intangible Assets | 233,389 | 235,277 | 86,108 | 87,518 |
| Investments in Subsidiary Companies | - | - | 267,968 | 239,415 |
| Investments in Associates | 24,630 | 23,773 | 17,212 | 17,212 |
| Other Investments | - | - | - | - |
| Deferred Tax Receivables | 105,077 | 143,030 | 47,817 | 84,670 |
| Other Financial Assets 7.23 |
163 | 159 | 3 7 |
3 7 |
| Derivatives | - | - | - | - |
| Other Long-term Receivables 7.19 |
75,283 | 105,019 | 61,545 | 58,558 |
| Right-of-use Assets | 50,730 | - | 36,578 | - |
| 1,865,411 | 1,858,357 | 1,322,156 | 1,284,269 | |
| Current assets | ||||
| Total Stock 7.9 |
194,325 | 184,377 | 153,073 | 169,612 |
| Trade and other receivables 7.18 |
936,575 | 799,307 | 380,893 | 372,433 |
| Other receivables | 337,599 | 259,193 | 424,210 | 347,857 |
| Financial assets at fair value through profit or loss 7.23 |
6 3 |
6 3 |
6 3 |
6 3 |
| Derivatives 7.23 |
31,881 | 31,605 | 27,969 | 29,453 |
| Cash and cash equivalents 7.10 |
240,557 | 208,090 | 143,661 | 139,656 |
| 1,741,001 | 1,482,637 | 1,129,870 | 1,059,076 | |
| Assets | 3,606,412 | 3,340,994 | 2,452,026 | 2,343,345 |
| Liabilities & Equity | ||||
| Equity | ||||
| Share capital 7.21 |
138,839 | 138,839 | 138,604 | 138,604 |
| Share premium | 193,312 | 193,312 | 124,701 | 124,701 |
| Fair value reserves | 17,348 - |
17,804 - |
16,653 - |
17,109 - |
| Treasury Stock Reserve | ||||
| Other reserves | 131,954 | 130,758 | (136,454) | (136,454) |
| Translation reserves | (11,510) | (11,197) | 2,149 | 2,149 |
| Retained earnings | 1,068,470 | 1,038,862 | 909,675 | 902,914 |
| Equity attributable to parent's shareholders | 1,538,413 | 1,508,378 | 1,055,329 - |
1,049,025 - |
| Non controlling Interests | 57,080 | 52,671 | ||
| Equity | 1,595,492 | 1,561,048 | 1,055,329 | 1,049,025 |
| Non-Current Liabilities | ||||
| Long-term debt 7.11 |
548,497 | 534,028 | 361,407 | 369,323 |
| Lease liabilities 7.11 |
45,659 | - | 32,200 | - |
| Derivatives 7.23 |
17,795 | 2,787 | 17,795 | 2,787 |
| Deferred Tax Liability | 215,268 | 212,116 | 171,255 | 171,665 |
| Liabilities for pension plans | 16,703 | 16,273 | 13,892 | 13,874 |
| Other long-term liabilities | 118,912 | 129,666 | 84,743 | 97,100 |
| Provisions 7.17 |
13,285 | 14,130 | 12,325 | 13,069 |
| Non-Current Liabilities | 976,120 | 908,999 | 693,616 | 667,817 |
| Current Liabilities | ||||
| Trade and other payables 7.20 |
705,695 | 608,346 | 486,131 | 438,138 |
| Tax payable | 36,915 | 52,005 | 27,969 | 45,541 |
| Short-term debt 7.11 |
25,008 | 28,912 | 356 | 267 |
| Current portion of non-current debt 7.11 |
37,130 | 35,551 | 17,332 | 17,332 |
| Current portion of lease liabilities 7.11 |
5,904 | - | 4,953 | - |
| Derivatives 7.23 |
343 | 3,222 | - | 2,826 |
| Other payables | 223,754 | 142,903 | 166,339 | 122,397 |
| Current portion of non-current provisions 7.17 |
5 0 |
7 | - | - |
| Current Liabilities | 1,034,800 | 870,946 | 703,080 | 626,502 |
| Liabilities | 2,010,919 | 1,779,945 | 1,396,696 | 1,294,320 |
| Liabilities & Equity | 3,606,412 | 3,340,994 | 2,452,026 | 2,343,345 |
| MYTILINEOS GROUP | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (Amounts in thousands €) | Share capital | Share premium Fair value reserves Other reserves | Translation reserves |
Retained earnings | Total | Non controlling Interests |
Total | ||
| Adjusted Opening Balance 1st January 2018, according to IFRS - as published- | 138,839 | 193,311 | (32,692) | 109,767 | (10,414) | 978,058 | 1,376,871 | 54,122 | 1,430,992 |
| Adjustments due to IFRS 9 | - | - - |
- | - (17,223) |
(17,223) | - | (17,223) | ||
| Change In Equity | |||||||||
| Dividends Paid | - | - - |
- | - (45,725) |
(45,725) | - | (45,725) | ||
| Transfer To Reserves | - | - - |
13,920 | - (13,920) |
- | - | - | ||
| Treasury Stock Sales/Purchases | - | - - |
- | - - |
- | - | - | ||
| Impact From Acquisition Of Share In Subsidiaries | - | - - |
- | - 967 |
967 | (967) | - | ||
| Transactions With Owners | - | - - |
13,920 | - (75,902) |
(61,981) | (967) | (62,948) | ||
| Net Profit/(Loss) For The Period | - | - - |
- | - 83,882 |
83,882 | (3,818) | 80,064 | ||
| Other Comprehensive Income: | |||||||||
| Exchange Differences On Translation Of Foreign Operations | - | - - |
- | 402 | - | 402 | 598 | 1,000 | |
| Other Financial Assets | - | - - |
- | - - |
- | - | - | ||
| Cash Flow Hedging Reserve | - | - 32,378 |
- | - - |
32,378 | - | 32,378 | ||
| Dererred Tax From Cash Flow Hedging Reserve | - | - (9,390) |
- | - - |
(9,390) | - | (9,390) | ||
| Total Comprehensive Income For The Period | - | - 22,988 |
- | 402 | 83,882 | 107,272 | (3,219) | 104,053 | |
| Adjusted Closing Balance 30/06/2018 | 138,839 | 193,312 | (9,704) | 123,688 | (10,012) | 986,039 | 1,422,162 | 49,935 | 1,472,097 |
| Opening Balance 1st January 2019, according to IFRS - as published- | 138,839 | 193,312 | 17,804 | 130,758 | (11,197) | 1,038,862 | 1,508,378 | 52,671 | 1,561,048 |
| Change In Equity | |||||||||
| Dividends Paid | - | - - |
- | - (51,441) |
(51,441) | - | (51,441) | ||
| Transfer To Reserves | - | - - |
261 | - (272) |
(11) | - | (11) | ||
| Treasury Stock Sales/Purchases | - | - - |
- | - - |
- | - | - | ||
| Impact From Acquisition Of Share In Subsidiaries | - | - - |
- | - (147) |
(147) | (1,017) | (1,164) | ||
| Transactions With Owners | - | - - |
261 | - (51,860) |
(51,599) | (1,017) | (52,616) | ||
| Net Profit/(Loss) For The Period | - | - - |
- | - 81,608 |
81,608 | 4,759 | 86,367 | ||
| Other Comprehensive Income: | |||||||||
| Exchange Differences On Translation Of Foreign Operations | - | - - |
- | (49) | (140) | (189) | (212) | (401) | |
| Other Financial Assets | - | - - |
882 | (264) | - | 618 | 878 | 1,496 | |
| Cash Flow Hedging Reserve | - | - (645) |
5 3 |
- - |
(591) | - | (591) | ||
| Dererred Tax From Cash Flow Hedging Reserve | - | - 189 |
- | - - |
189 | - | 189 | ||
| Total Comprehensive Income For The Period | - | - (456) |
935 | (313) | 81,468 | 81,634 | 5,425 | 87,060 | |
| Closing Balance 30/06/2019 | 138,839 | 193,312 | 17,348 | 131,954 | (11,510) | 1,068,470 | 1,538,413 | 57,080 | 1,595,492 |
| MYTILINEOS S.A. | |||||||
|---|---|---|---|---|---|---|---|
| (Amounts in thousands €) | Share capital | Share premium | Fair value reserves | Other reserves | Translation reserves |
Retained earnings | Total |
| Opening Balance 1st January 2018, according to IFRS -as published- | 138,604 | 124,701 | (33,387) | (154,606) | 3,003 | 848,768 | 927,085 |
| Adjustments due to IFRS 9 | - | - - |
- | - | (17,223) | (17,223) | |
| Change In Equity | |||||||
| Dividends Paid | - | - - |
- | - | (45,725) | (45,725) | |
| Transfer To Reserves | - | - - |
13,425 | - | (13,425) | 0 | |
| Transactions With Owners | - | - - |
13,425 | - | (76,373) | (62,948) | |
| Net Profit/(Loss) For The Period | - | - - |
- | - | 77,218 | 77,218 | |
| Other Comprehensive Income: | |||||||
| Exchange Differences On Translation Of Foreign Operations | - | - - |
- | 780 | - | 780 | |
| Cash Flow Hedging Reserve | - | - 32,378 |
- | - | - | 32,378 | |
| Deferred Tax From Cash Flow Hedging Reserve | - | - (9,390) |
- | - | - | (9,390) | |
| Total Comprehensive Income For The Period | - | - 22,988 |
- | 780 | 77,218 | 100,986 | |
| Closing Balance 30/06/2018 | 138,604 | 124,701 | (10,398) | (141,181) | 3,783 | 849,613 | 965,123 |
| Opening Balance 1st January 2019, according to IFRS -as published- Change In Equity |
138,604 | 124,701 | 17,109 | (136,454) | 2,149 | 902,914 | 1,049,025 |
| Dividends Paid | - | - - |
- | - | (51,441) | (51,441) | |
| Transactions With Owners | - | - - |
- | - | (51,441) | (51,441) | |
| Net Profit/(Loss) For The Period | - | - - |
- | - | 58,201 | 58,201 | |
| Other Comprehensive Income: | |||||||
| Cash Flow Hedging Reserve | - | - (645) |
- | - | - | (645) | |
| Deferred Tax From Cash Flow Hedging Reserve | - | - 189 |
- | - | - | 189 | |
| Total Comprehensive Income For The Period | - | - (456) |
- | - | 58,201 | 57,745 | |
| Closing Balance 30/06/2019 | 138,604 | 124,701 | 16,653 | (136,454) | 2,149 | 909,675 | 1,055,329 |
| MYTILINEOS GROUP 1/1-30/06/2019 1/1-30/06/2018 1/1-30/06/2019 1/1-30/06/2018 (Amounts in thousands €) Cash flows from operating activities - Cash flows from operating activities 7.28 151,820 75,715 82,480 Interest paid (12,164) (16,101) (7,173) Taxes paid 2 6 (84) - Net Cash flows continuing operating activities 139,681 59,530 75,306 Net Cash flows discontinuing operating activities (537) 8 2 - Net Cash flows from continuing and discontinuing operating activities 139,145 59,612 75,306 Net Cash flow from continuing and discontinuing investing activities - Purchases of tangible assets (57,720) (42,996) (34,716) Purchases of intangible assets (5,368) (3,559) (2,817) Sale of tangible assets 157 478 1,799 Dividends received 200 157 200 Purchase of financial assets at fair value through profit and loss - (564) - |
MYTILINEOS S.A. | ||
|---|---|---|---|
| 40,247 | |||
| (10,543) | |||
| - | |||
| 29,704 | |||
| - | |||
| 29,704 | |||
| (17,280) | |||
| (1,628) | |||
| 145 | |||
| 6,284 | |||
| (564) | |||
| Acquisition /Sale of subsidiaries (less cash) (6,175) (175) (21,175) |
- | ||
| Sale of financial assets at fair value through profit and loss - 836 - |
832 | ||
| Interest received 8,079 301 134 |
1,286 | ||
| Grants received/(returns) 370 1,711 3 0 |
1,711 | ||
| Other cash flows from investing activities (38,088) (21) (507) |
- | ||
| Net Cash flow from continuing investing activities (98,545) (43,832) (57,052) |
(9,213) | ||
| Net Cash flow from discontinuing investing activities - - - |
- | ||
| Net Cash flow from continuing and discontinuing investing activities (98,545) (43,832) (57,052) |
(9,213) | ||
| Net Cash flow continuing and discontinuing financing activities - |
|||
| Dividends paid to shareholders (1) (43,259) (1) |
(41,372) | ||
| Proceeds from borrowings 131,609 260,314 - |
177,451 | ||
| Repayments of borrowings (133,288) (301,679) (8,584) |
(214,216) | ||
| Payment of finance lease liabilities (2,434) - (2,017) |
- | ||
| Other cash flows from financing activities (3,629) 81,954 (3,629) |
81,784 | ||
| Net Cash flow continuing financing activities (7,743) (2,670) (14,232) |
3,647 | ||
| Net Cash flow from discontinuing financing activities - - - |
- | ||
| Net Cash flow continuing and discontinuing financing activities (7,743) (2,670) (14,232) |
3,647 | ||
| Net (decrease)/increase in cash and cash equivalents 32,857 13,109 4,023 |
24,137 | ||
| Cash and cash equivalents at beginning of period 208,090 160,940 139,656 |
88,995 | ||
| Cash and cash equivalents at beginning of period (merged companies) - - - |
- | ||
| Exchange differences in cash and cash equivalents (390) (10) (18) |
- | ||
| Net cash at the end of the period 240,557 174,039 143,661 |
113,131 | ||
| Cash and cash equivalent 240,557 174,039 143,661 |
113,131 | ||
| Net cash at the end of the period 240,557 174,039 143,661 |
113,131 |
The notes on pages 37 to 74 are an integral part of these financial statements.
Cash flows from investing activities of the Group and specifically the line "Other", include credit payments from the disposal of financial assets whose settlement will be completed by the end of September 2019.
Cash flows from financing activities of the Group and the Company and specifically the line "Other", include repayments of financing under trade agreements.
MYTILINEOS S.A. is today one of the biggest industrial Groups internationally, activated in the sectors of Metallurgy, EPC & Infrastructure, Power & Gas. The Company, which was founded in 1990 as a metallurgical company of international trade and participations, is an evolution of an old metallurgical family business which began its activity in 1908.
During the last decade the Company's has gradually expenses its operations from traditional sectors of international metal's trading to metallurgy in the domains of Integrated Projects and Infrastructure and Electricity and Natural Gas. The Group's objective is to develop synergies between three different operation segments by assigning the role of management and strategy to Mytilineos Holdings S.A.
The group's headquarters is located in Athens – Maroussi (5-7 Patroklou Str., P.C. 151 25) and its shares were listed in the Athens Stock Exchange in 1995.
The financial statements for the period ended 30.06.2019 (along with the respective comparative information for 30.06.2018), were approved by the Board of directors on 11 September 2019.
During the last ten years the Company's activities have expanded from the traditional sector of international metal's trading to those of construction and energy. The aim is the development of synergies between the three different areas of activities.
The object of the Company is:
a. To participate in the capital of other undertakings;
b. To produce and manufacture alumina and aluminium in Greece and to trade in same in any country;
c. To manufacture metal structures of any type;
d. To perform the design, construction, operation, maintenance, management and exploitation of plants for the generation of electrical energy from any source in general;
e. To engage in power and heat generation, trading, supply, transmission and distribution, the import and export, acquisition and transfer of electricity, and heat;
f. To carry on all types of activities relevant to the building, repair and scrapping (breaking) of ships and, in general, defense material;
g. To engage in the production, extraction, acquisition, storage, gasification, transport, distribution and transfer (including by sale/supply) of natural gas;
h. To elaborate studies, undertake the construction of public and private technical projects and works of any nature, to perform assembly and installation activities for the structures and products produced by the Company in Greece and abroad;
i. To construct, operate and exploit hydraulic, sewerage and other similar installations to serve the purposes of the Company and/or other third parties whom the Company does business with;
j. To produce and sell steam, water (indicatively demineralized water, water for firefighting, etc.) as well as;
k. To provide various services to third parties with whom the Company does business with, including, indicatively, services for a) decontamination, b) firefighting, c) monitoring and recording air quality, d) collection, transportation, disposal and management of solid and liquid waste and wastewater, etc.;
l. To elaborate feasibility studies with respect to processes for the operation of power and heat generation plants of all types,
m. To purchase, erect, sell and resell real property, and to acquire, lease, rent, sublease, install, develop and exploit mines and quarries, industrial sites and shops;
n. To provide advice and services in the areas of business administration and management, administrative support, risk management, information systems, financial management;
o. To provide services in connection with market research, analysis of investment programmes, elaboration of studies and plans, the commissioning, supervision and management of the relevant work, risk management and strategic planning, development and organization;
p. To carry on any business act and undertake any activity or action directly or indirectly related to the above objects of the Company.
The accompanying consolidated financial statements that constitute the Group's consolidated financial statements for the period from 01.01 to 30.06.2019 have been prepared in accordance with International Financial Reporting Standards ("IFRS"), adopted by the European Union, and more specifically with the provisions of IAS 34 "Interim financial reporting". Moreover, the consolidated financial statements have been compiled on the basis of the historic cost principle as is amended by the readjustment of specific asset and liability items into market values, the going concern principle and are in accordance with the International Financial Reporting Standards (IFRS) that have been issued by the International Accounting Standards Board (IASB) and their interpretations that have been issued by the International Financial Reporting Interpretations Committee (IFRIC) of the IASB.
The reporting currency is Euro (currency of the country of the domicile of the parent Company) and all amounts are reported in thousands unless stated otherwise.
The Company Mytilineos S.A. which resulted from the merger of its subsidiaries METKA, ALUMINUM OF GREECE, PROTERGIA and PROTERGIA THERMO AGIOS NIKOLAOS presents separately the result from discontinued operations as described below.
In 2009, applying IFRS 5 "Non-current assets held for sale & discontinued operations", the assets and liabilities of the subsidiary company SOMETRA S.A. were presented separately, regarding which a decision was made on January 26, 2009 on temporary suspension of the production activity of the Zinc-Lead production plant in Romania, and presents also the amounts recognized in the income statement separately from continuing operations. Given the global economic recession, there were no feasible scenarios for the alternative utilization of the aforementioned financial assets.
Consequently, since 2011, by applying par. 13 of IFRS 5 "Non-current assets Held for Sale" Zinc-Lead («SOMETRA S.A.») production ceases to be an asset held for sale and is considered as an asset to be abandoned. The assets of its operations returned to continuing operations while at the same time, it continued to show separately the result of the discontinued operation in the income statement.
On 31/12/2015, SOMETRA S.A., contributed the Zinc-Lead activity, through a spin – off process, to its newly established subsidiary Reycom Recycling S.A. (REYCOM). The said spin - off is part of the "Mytilineos Group" restructuring process, regarding the Zinc-Lead discontinued operation, targeting on the production of Zn & Pb oxides through the development of a recycling operation of metallurgical residues. Within the same frame, on 29/11/2016 the crossborder merger of the subsidiary REYCOM and the subsidiary company ALUMINUM OF GREECE (ATE) was completed.
The following new Standards, Interpretations and amendments of IFRSs have been issued by the International Accounting Standards Board (IASB), are adopted by the European Union, and their application is mandatory from or after 01/01/2019.
In January 2016, the IASB issued a new Standard, IFRS 16. The objective of the project was to develop a new Leases Standard that sets out the principles that both parties to a contract, i.e. the customer ('lessee') and the supplier ('lessor'), apply to provide relevant information about leases in a manner that faithfully represents those transactions. To meet this objective, a lessee is required to recognise assets and liabilities arising from a lease. The effect of the new Standard in the consolidated and separate Financial Statements is analyzed in Note 7.4.
In June 2017, the IASB issued a new Interpretation, IFRIC 23. IAS 12 "Income Taxes" specifies how to account for current and deferred tax, but not how to reflect the effects of uncertainty. IFRIC 23 provides requirements that add to the requirements in IAS 12 by specifying how to reflect the effects of uncertainty in accounting for income taxes. The new Interpretation affects the calculation and accounting of income tax.
In October 2017, the IASB published narrow-scope amendments to IFRS 9. Under the existing requirements of IFRS 9, an entity would have measured a financial asset with negative compensation at fair value through profit or loss as the "negative compensation" feature would have been viewed as introducing potential cash flows that were not solely
payments of principal and interest. Under the amendments, companies are allowed to measure particular prepayable financial assets with so-called negative compensation at amortised cost or at fair value through other comprehensive income if a specified condition is met. The amendments do not affect the consolidated/ separate Financial Statements.
In October 2017, the IASB published narrow-scope amendments to IAS 28. The objective of the amendments is to clarify that companies account for long-term interests in an associate or joint venture – to which the equity method is not applied – using IFRS 9. The amendments do not affect the consolidated/ separate Financial Statements.
In December 2017, the IASB issued Annual Improvements to IFRSs – 2015-2017 Cycle, a collection of amendments to IFRSs, in response to several issues addressed during the 2015-2017 cycle. The issues included in this cycle are the following: IFRS 3 - IFRS 11: Previously held interest in a joint operation, IAS 12: Income tax consequences of payments on financial instruments classified as equity, IAS 23: Borrowing costs eligible for capitalization. The amendments are effective for annual periods beginning on or after 1 January 2019. The amendments do not affect the consolidated/ separate Financial Statements.
In February 2018, the IASB published narrow-scope amendments to IAS 19, under which an entity is required to use updated assumptions to determine current service cost and net interest for the remainder of the reporting period after an amendment, curtailment or settlement to a plan. The objective of the amendments is to enhance the understanding of the financial statements and provide useful information to the users. The amendments do not affect the consolidated/ separate Financial Statements.
The following new Standards, Interpretations and amendments of IFRSs have been issued by the International Accounting Standards Board (IASB), but their application has not started yet or they have not been adopted by the European Union.
In March 2018, the IASB issued the revised Conceptual Framework for Financial Reporting (Conceptual Framework), the objective of which was to incorporate some important issues that were not covered, as well as update and clarify some guidance that was unclear or out of date. The revised Conceptual Framework includes a new chapter on measurement, which analyzes the concept on measurement, including factors to be considered when selecting a measurement basis, concepts on presentation and disclosure, and guidance on derecognition of assets and liabilities from financial statements. In addition, the revised Conceptual Framework includes improved definitions of an asset and a liability, guidance supporting these definitions, update of recognition criteria for assets and liabilities, as well as
clarifications in important areas, such as the roles of stewardship, prudence and measurement uncertainty in financial reporting. The Group will examine the impact of the above on its Financial Statements. The above have not been adopted by the European Union.
In March 2018, the IASB issued Amendments to References to the Conceptual Framework, following its revision. Some Standards include explicit references to previous versions of the Conceptual Framework. The objective of these amendments is to update those references so that they refer to the revised Conceptual Framework and to support transition to the revised Conceptual Framework. The Group will examine the impact of the above on its Financial Statements. The above have not been adopted by the European Union.
In October 2018, the IASB issued narrow-scope amendments to IFRS 3 to improve the definition of a business. The amendments will help companies determine whether an acquisition made is of a business or a group of assets. The amended definition emphasizes that the output of a business is to provide goods and services to customers, whereas the previous definition focused on returns in the form of dividends, lower costs or other economic benefits to investors and others. In addition to amending the wording of the definition, the Board has provided supplementary guidance. The Group will examine the impact of the above on its Financial Statements. The above have not been adopted by the European Union.
In October 2018, the IASB issued amendments to its definition of material to make it easier for companies to make materiality judgements. The definition of material helps companies decide whether information should be included in their financial statements. The updated definition amends IAS 1 and IAS 8. The amendments clarify the definition of material and how it should be applied by including in the definition guidance that until now has featured elsewhere in IFRS Standards. The Group will examine the impact of the above on its Financial Statements. The above have not been adopted by the European Union.
In May 2017, the IASB issued a new Standard, IFRS 17, which replaces an interim Standard, IFRS 4. The aim of the project was to provide a single principle-based standard to account for all types of insurance contracts, including reinsurance contracts that an insurer holds. A single principle-based standard would enhance comparability of financial reporting among entities, jurisdictions and capital markets. IFRS 17 sets out the requirements that an entity should apply in reporting information about insurance contracts it issues and reinsurance contracts it holds. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.
The group and the company proceeded with the adoption of IFRS 16 "leases" from 1 January 2019. IFRS 16 introduces a single model for the recognition of leases in the financial statements. By adopting the standard, the Group as a lessee recognizes in the statement of financial position rights of use of assets and lease obligations, the date when the leased fixed assets are made available for use. The accounting treatment of leases for the lessor remains the same as in IAS 17.
The group and the company applied IFRS 16 using the simplified method of transition. According to this method, the standard is applied retroactively with the cumulative effect of its application being recognized on 1 January 2019. According to the above, the comparative information of 2018 has not been reworded and presented in accordance with IAS 17. Changes in accounting policies regarding leases are analyzed below.
The group and the company lease various assets such as plots, buildings, means of transport and machinery.
As a lessee, with the previous accounting policy, the group and the company classified leases as operating or financing based on the assessment if all risks and benefits related to ownership of a component of the Assets, irrespective of the final transfer or non-ownership of the title of the item. According to IFRS 16, the right to use assets and lease obligations is recognized for most of the leases to which it contracts as a tenant, except for small-value leases, the payments of which were registered with a fixed method in the statement of results throughout the duration of the lease.
The recognized rights to use assets are related to the following categories of assets and are presented in the "Right-ofuse Assets":
| ΜYTILINEOS GROUP | ΜYTILINEOS S.A. | ||||
|---|---|---|---|---|---|
| (Amounts in thousands €) | 30/6/2019 | 1/1/2019 | 30/6/2019 | 1/1/2019 | |
| Right-of-use Land plots | 12,374 | 12,299 | 14 | 16 | |
| Right-of-use Properties | 35,036 | 37,189 | 33,813 | 35,813 | |
| Right-of-use Vehicles | 3,192 | 3,202 | 2,751 | 2,784 | |
| Right-of-use Equipment | 128 | 153 | - | - | |
| Right-of-use Assets | 50,730 | 52,843 | 36,578 | 38,613 |
The group reflects the lease obligations on the "long term lease obligations" and "long term lease obligations payable to the next use" in the statement of financial position.
Leases are recognized in the statement of financial position as a right to use an asset and a lease obligation, the date on which the leased fixed asset becomes available for use. Each rent is divided between the rental obligation and interest, which is charged to the results throughout the lease, in order to obtain a fixed interest rate for the remainder of the financial liability in each period.
The rights to use assets are initially measured at their cost, and then reduced by the amount of accumulated depreciation and any impairment. The right to use is depreciated in the shortest period between the useful life of the component or its duration, with the fixed method. The initial measurement of the rights of use of assets consists of:
• The amount of the initial measurement of the lease liability,
• Lease payments made on or before the commencement date, reduced by the amount of discounts or other incentives offered,
Finally, they are adjusted to specific recalculations of the corresponding lease liability.
Lease liabilities are initially calculated at the present value of rents, which were not paid at the start of the lease. Discounted at the imputed rate of the lease or, if this interest rate cannot be determined by the contract, with the differential lending rate (IBR). The differential lending rate is the cost that the lessee would have to pay to borrow the necessary capital in order to obtain an item of similar value with the leased asset, in a similar economic environment and with similar terms and assumptions.
Lease liabilities include net present value of:
After their initial measurement, the lease obligations are increased by their financial cost and are reduced by the payment of rents. Finally, they are reassessed when there is a change: a) to rents due to a change of index, b) to the estimation of the amount of residual value, which is expected to be paid, or c) to the assessment of a choice of purchase or extension, which is relatively Certain that it will be exercised or a right of termination of the contract, which is relatively certain that it will not be practiced.
The group and the company during the transition made use of the following practical facilities provided by IFRS 16 for leases classified as functional, in accordance with IAS 17.
When tangible assets are leased by leasing, the present value of rents is registered as a requirement. The difference between the gross amount of the claim and the present value of the claim is recorded as deferred financial income. The revenue from the lease is recognized in the usage results during the lease using the net investment method, which represents a constant periodic return. The group and the company do not contract with the status of lessor.
| (Amounts in thousands €) | ΜYTILINEOS GROUP | ΜYTILINEOS S.A. |
|---|---|---|
| Operating lease commitments disclosed on December 31, 2018 | 77,911 | 51,699 |
| (Less): Leases outside the scope of IFRS 16 | (2,775) | (2,775) |
| (Less): Short-term leases | (1,556) | - |
| Plus/(Less): Other adjustments | (811) | 362 |
| Total | 72,769 | 49,286 |
| Weighted average differential interest rate on January 1, 2019 | 4.51% | 4.37% |
| Valuation at present value on 1 January 2019 | 52,481 | 38,614 |
| Plus: Leases from subsidiary acquisitions | 361 | - |
| Lease liabilities recognized on January 1, 2019 | 52,843 | 38,613 |
| Long-term lease obligations | 47,855 | 34,563 |
| Short-term lease obligations | 4,987 | 4,051 |
| Total lease liabilities on January 1, 2019 | 52,843 | 38,613 |
As a result of the first application of IFRS 16, in relation to leases previously classified as operational, the group recognized €50.7 m in 30/06/2019. Rights of use and €51.6 m Lease obligations while the company €36.6 m. and €37.1 m. respectively.
In addition, in relation to the above leases, the group acknowledged depreciation and financial expenses instead of leasing costs. For the six-month period ended on 30/06/2019, the group recognized €3.2 million. depreciation and €1.2 m. financial expenses while the company €2.6 m. and €0.8 m. respectively.
Pro forma figures (EBITDA, EBITDA margin, free cash flow, net debt) are not defined by the International Financial Reporting Standards (IFRS). Thus, these figures are calculated and presented by the Group in a way that provides a more fair view of the financial performance of its Business Sectors. The Group defines "Group EBITDA" as the Operating earnings before any interest income and expenses, investment results, depreciation, amortization and before the effects of any special factors. "Group EBITDA" is an important indicator used by Mytilineos Group to manage the Group's operating activities and to measure the performance of the individual segments.
The special factors that affect the Group's net profit / (losses) and EBITDA are the following:
a) the share in the EBITDA of associates when these are active in one of the Group's reported Business Sectors and
b) the effects of eliminations of any profit or loss from asset construction transactions of the Group with the associates.
It is noted that the Group financial statements, prepared according to IAS 1 and IAS 28, include the Group's profit realized in connection with the construction of fixed assets on account of subsidiaries and associates, when these are active in one of its reported Business Segments. Such profits are deducted from the Group's equity and fixed assets and released in the Group accounts over the same period as depreciation is charged. Consequently, for the calculation of EBITDA (operational results before depreciation), the Group does not eliminate the profit from the construction of fixed assets as its recovery through their use will effect only the profit after depreciation.
The Group states that the calculation of "Group EBITDA" may differ from the calculation method used by other companies/groups. However, "Group EBITDA" is calculated with consistency in each financial reporting period and any other financial analysis presented by the Group. Specifically financial results contain interest income/expense, while investment results contain gains/loss of financial assets at fair value through profit and loss, share of results in associates companies and gains/losses from the disposal of financial assets (such as subsidiaries and associates).
The companies of the Group, included in the consolidated financial statements, are as follows:
| NAME OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES |
COUNTRY OF INCORPORATION |
CONSOLIDATION METHOD | PERCENTAGE 30.06.2019 | ||
|---|---|---|---|---|---|
| Direct % | Indirect % | ||||
| 1 MYTILINEOS S.A. | Greece | - | - | - | |
| 2 SERVISTEEL | Greece | Full | 99.98% | 0.00% | |
| 3 RODAX ROMANIA SRL | Romania | Full | 0.00% | 100.00% | |
| 4 ELEMKA S.A. | Greece | Full | 83.50% | 0.00% | |
| 5 DROSCO HOLDINGS LIMITED | Cyprus | Full | 0.00% | 83.50% | |
| 6 BRIDGE ACCESSORIES & CONSTRUCTION SYSTEMS S.A. | Greece | Full | 0.00% | 62.63% | |
| 7 ΜΕΤΚΑ BRAZI SRL | Romania | Full | 100.00% | 0.00% | |
| 8 POWER PROJECT SANAYI INSAAT TICARET LIMITED SIRKETI | Turkey | Full | 100.00% | 0.00% | |
| 9 DELFI DISTOMON A.M.E. | Greece | Full | 100.00% | 0.00% | |
| 10 DESFINA SHIPPING COMPANY | Greece | Full | 100.00% | 0.00% | |
| 11 ST. NIKOLAOS SINGLE MEMBER P.C. | Greece | Full | 100.00% | 0.00% | |
| 12 RENEWABLE SOURCES OF KARYSTIA S.A. | Greece | Full | 3.05% | 96.95% | |
| 13 SOMETRA S.A. | Romania | Full | 92.79% | 0.00% | |
| 14 STANMED TRADING LTD | Cyprus | Full | 0.00% | 100.00% | |
| 15 MYTILINEOS FINANCE S.A. | Luxembourg | Full | 100.00% | 0.00% | |
| 16 RDA TRADING | Guernsey Islands | Full | 0.00% | 100.00% | |
| 17 MYTILINEOS BELGRADE D.O.O. | Serbia | Full | 0.00% | 100.00% | |
| 18 MYVEKT INTERNATIONAL SKOPJE | FYROM | Full | 0.00% | 100.00% | |
| 19 MYTILINEOS FINANCIAL PARTNERS S.A. | Luxembourg | Full | 100.00% | 0.00% | |
| 20 MYTILINEOS INTERNATIONAL COMPANY AG "MIT Co" | Switzerland | Full | 0.00% | 100.00% | |
| 21 GENIKI VIOMICHANIKI S.A. | Greece | Full | Joint Management |
Joint Management |
|
| 22 DELTA PROJECT CONSTRUCT SRL | Romania | Full | 95.01% | 0.00% | |
| 23 DELTA ENERGY S.A. | Greece | Full | 100.00% | 0.00% | |
| 24 FOIVOS ENERGY S.A. | Greece | Full | 0.00% | 100.00% | |
| 25 HYDROHOOS S.A. | Greece | Full | 0.00% | 100.00% | |
| 26 HYDRIA ENERGY S.A. | Greece | Full | 0.00% | 100.00% | |
| 27 EN.DY. S.A. | Greece | Full | 0.00% | 100.00% | |
| 28 THESSALIKI ENERGY S.A. | Greece | Full | 0.00% | 100.00% | |
| 29 NORTH AEGEAN RENEWABLES | Greece | Full | 100.00% | 0.00% | |
| 30 MYTILINEOS HELLENIC WIND POWER S.A. | Greece | Full | 80.00% | 0.00% | |
| 31 AIOLIKI ANDROU TSIROVLIDI S.A. | Greece | Full | 79.20% | 1.00% | |
| 32 MYTILINEOS AIOLIKI NEAPOLEOS S.A. | Greece | Full | 79.20% | 1.00% | |
| 33 AIOLIKI EVOIAS PIRGOS S.A. | Greece | Full | 79.20% | 1.00% | |
| 34 AIOLIKI EVOIAS POUNTA S.A. | Greece | Full | 79.20% | 1.00% | |
| 35 AIOLIKI EVOIAS HELONA S.A. | Greece | Full | 79.20% | 1.00% | |
| 36 AIOLIKI ANDROU RAHI XIROKOBI S.A. | Greece | Full | 79.20% | 1.00% | |
| 37 METKA AIOLIKA PLATANOU S.A. | Greece | Full | 79.20% | 1.00% | |
| 38 AIOLIKI SAMOTHRAKIS S.A. | Greece | Full | 100.00% | 0.00% | |
| 39 AIOLIKI EVOIAS DIAKOFTIS S.A. | Greece | Full | 79.20% | 1.00% | |
| 40 AIOLIKI SIDIROKASTROU S.A. | Greece | Full | 79.20% | 1.00% | |
| 41 HELLENIC SOLAR S.A. | Greece | Full | 100.00% | 0.00% | |
| 42 SPIDER S.A. | Greece | Full | 100.00% | 0.00% | |
| 43 GREEN ENERGY A.E. | Bulgaria | Full | 80.00% | 0.00% | |
| 44 MOVAL S.A. | Greece | Full | 100.00% | 0.00% | |
| PROTERGIA AGIOS NIKOLAOS POWER SOCIETE ANONYME OF | |||||
| 45 | GENERATION AND SUPPLY OF ELECTRICITY (ex ANEMOSKALA | Greece | Full | 100.00% | 0.00% |
| RENEWABLE ENERGY SOURCES S.A.) | |||||
| 46 METKA INDUSTRIAL - CONSTRUCTION S.A. (ex ANEMOSTRATA | Greece | Full | 100.00% | 0.00% | |
| RENEWABLE ENERGY SOURCES S.A.) | |||||
| 47 ANEMODRASI RENEWABLE ENERGY SOURCES S.A. 48 ANEMORAHI RENEWABLE ENERGY SOURCES S.A. |
Greece Greece |
Full Full |
0.00% 0.00% |
100.00% 100.00% |
|
| 49 HORTEROU S.A. | Greece | Full | 0.00% | 100.00% | |
| 50 KISSAVOS DROSERI RAHI S.A. | Greece | Full | 0.00% | 100.00% | |
| 51 KISSAVOS PLAKA TRANI S.A. | Greece | Full | 0.00% | 100.00% | |
| 52 KISSAVOS FOTINI S.A. | Greece | Full | 0.00% | 100.00% | |
| 53 AETOVOUNI S.A. 54 LOGGARIA S.A. |
Greece Greece |
Full Full |
0.00% 0.00% |
100.00% 100.00% |
|
| 55 IKAROS ANEMOS SA | Greece | Full | 0.00% | 100.00% | |
| 56 KERASOUDA SA | Greece | Full | 0.00% | 100.00% | |
| 57 AIOLIKH ARGOSTYLIAS A.E. | Greece | Full | 0.00% | 100.00% | |
| 58 MNG TRADING | Greece | Full | 100.00% | 0.00% | |
| 59 KORINTHOS POWER S.A. | Greece | Full | 0.00% | 65.00% | |
| 60 KILKIS PALEON TRIETHNES S.A. | Greece | Full | 0.00% | 100.00% | |
| 61 ANEMOROE S.A. | Greece | Full | 0.00% | 100.00% | |
| 62 PROTERGIA ENERGY S.A. | Greece | Full | 0.00% | 100.00% | |
| 63 SOLIEN ENERGY S.A. | Greece | Full | 0.00% | 100.00% | |
| 64 ALUMINIUM OF GREECE INDUSTRIAL AND COMMERCIAL SOCIETE ANONYME (EX OSTENITIS S.A.) |
Greece | Full | 100.00% | 0.00% | |
| 65 METKA RENEWABLES LIMITED | Cyprus | Full | 100.00% | 0.00% |
| NAME OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES |
COUNTRY OF INCORPORATION |
CONSOLIDATION METHOD | PERCENTAGE 30.06.2019 | |||
|---|---|---|---|---|---|---|
| Direct % | Indirect % | |||||
| 66 AIOLIKH TRIKORFON S.A. | Greece | Full | 0.00% | 100.00% | ||
| 67 MAKRYNOROS ENERGEIAKH S.A. | Greece | Full | 0.00% | 100.00% | ||
| 68 RIVERA DEL RIO | Panama | Full | 50.00% | 0.00% | ||
| 69 METKA-EGN LTD | Cyprus | Full | 50.10% | 0.00% | ||
| 70 METKA-EGN LTD | Cyprus | Full | 0.00% | 50.10% | ||
| 71 METKA-EGN SpA | Chile | Full | 0.00% | 50.10% | ||
| 72 METKA-EGN USA LLC | Puerto Rico | Full | 0.00% | 50.10% | ||
| 73 ΜΕΤΚΑ EGN KZ LLP | Kazakhstan | Full | 0.00% | 50.10% | ||
| 74 ΜΕΤΚΑ EGN MEXICO S. DE.R.L. C.V | Mexico | Full | 0.00% | 50.10% | ||
| 75 METKA-EGN UGANDA SMC LTD | Uganda | Full | 0.00% | 50.10% | ||
| 76 METKA-EGN JAPAN LTD | Japan | Full | 0.00% | 50.10% | ||
| 77 METKA POWER WEST AFRICA LIMITED | Nigeria | Full | 100.00% | 0.00% | ||
| 78 METKA INTERNATIONAL LTD | United Arab Emirates |
Full | 100.00% | 0.00% | ||
| 79 METKA POWER INVESTMENTS | Cyprus | Full | 100.00% | 0.00% | ||
| 80 AURORA VENTURES | Marshal Islands | Full | 100.00% | 0.00% | ||
| 81 UNIQUE SHIPTRADE S.A. | Marshal Islands | Full | 0.00% | 100.00% | ||
| 82 MELODIA VENTURES S.A. | Marshal Islands | Full | 0.00% | 100.00% | ||
| 83 NAVARA MARITIME INC | Marshal Islands | Full | 0.00% | 100.00% | ||
| 84 STALLENT NAVIGATION LTD | Marshal Islands | Full | 0.00% | 100.00% | ||
| 85 MIMOSA MARINE CO | Marshal Islands | Full | 0.00% | 100.00% | ||
| 86 INSIGHT MARITIME LIMITED | Marshal Islands | Full | 0.00% | 100.00% | ||
| 87 PICADO MARINE INC | Marshal Islands | Full | 0.00% | 100.00% | ||
| 88 DOMENICO MARINE CORP | Marshal Islands | Full | 0.00% | 100.00% | ||
| 89 PROTERGIA THERMOELEKTRIKI S.A. | Greece | Full | 100.00% | 0.00% | ||
| 90 MTRH Developmnet GmbH | Austria | Full | 0.00% | 100.00% | ||
| 91 Energy Ava Yarz LLC | Iran | Full | 0.00% | 100.00% | ||
| 92 MTH Services Stock | Austria | Full | 0.00% | 100.00% | ||
| 93 METKA EGN SARDINIA SRL | Sardinia | Full | 0.00% | 50.10% | ||
| 94 METKA EGN FRANCE SRL | France | Full | 0.00% | 50.10% | ||
| 95 METKA EGN SPAIN SLU | Spain | Full | 0.00% | 50.10% | ||
| 96 METKA EGN KOREA LTD 97 METKA GENERAL CONTRACTOR CO. LTD |
Korea Korea |
Full Full |
0.00% 0.00% |
50.10% 50.10% |
||
| 98 METKA EGN AUSTRALIA PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 99 METKA EGN SINGAPORE PTE LTD | Singapore | Full | 0.00% | 50.10% | ||
| 100 METKA EGN APULIA SRL | Italia | Full | 0.00% | 50.10% | ||
| 101 VIGA RENOVABLES SP1 SL | Spain | Full | 0.00% | 50.10% | ||
| 102 VIGA RENOVABLES SP2 SL | Spain | Full | 0.00% | 50.10% | ||
| 103 METKA EGN AUSTRALIA PTY HOLDINGS LTD | Australia | Full | 0.00% | 50.10% | ||
| 104 ZEOLOGIC Α.Β.Ε.Ε | Greece | Full | 60.00% | 0.00% | ||
| 105 EP.AL.ME. S.A. | Greece | Full | 97.87% | 0.00% | ||
| 106 TERRANOVA ASSETCO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 107 WAGGA-WAGGA OPERATIONS CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 108 WAGGA-WAGGA PROPERTY CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 109 JUNEE OPERATIONS CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 110 JUNEE PROPERTY CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 111 COROWA OPERATIONS CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 112 COROWA PROPERTY CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 113 MOAMA OPERATIONS CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 114 MOAMA PROPERTY CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 115 KINGAROY OPERATIONS CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 116 KINGAROY PROPERTY CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 117 GLENELLA OPERATIONS CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 118 GLENELLA PROPERTY CO PTY LTD | Australia | Full | 0.00% | 50.10% | ||
| 119 TAEAHN INCORPORATION CO. | Korea | Full | 0.00% | 50.10% | ||
| 120 J/V ΜΕΤΚΑ – ΤΕRΝΑ | Greece | Equity | 10.00% | 0.00% | ||
| 121 THERMOREMA S.A. | Greece | Equity | 40.00% | 0.00% | ||
| 122 FTHIOTIKI ENERGY S.A. | Greece | Equity | 0.00% | 35.00% | ||
| 123 IONIA ENERGY S.A. | Greece | Equity | 49.00% | 0.00% | ||
| 124 BUSINESS ENERGY AIOLIKH ENERGEIAKH TROIZINIAS S.A. | Greece | Equity | 0.00% | 49.00% | ||
| 125 METKA IPS LTD 126 INTERNATIONAL POWER SUPPLY AD |
Dubai Bulgaria |
Equity Equity |
50.00% 10.00% |
0.00% 0.00% |
||
| 127 ELEMKA SAUDI | Saudi Arabia | Equity | 0.00% | 34.24% | ||
In the consolidated financial statements of the six-month period ending June 30, 2019 included in addition to (a) the method of total consolidation the companies: i) ZEOLOGIC S.A. which is a acquired company and is consolidated wholly from 31/03/2019 with a percentage of 60%, ii) METKA EGN APULIA SRL which was established by the subsidiary of the Group, METKA-EGN LTD, and is consolidated in total from 03/04/2019 with a percentage of 50.10% and III) EP. AL. ME. which is an acquired company and is consolidated in total from 30/05/2019 with a percentage of 97.87% and (b) the equity method the company ELEMKA SAUDI, which was acquired on 19.02.2019 and is consolidated with a percentage of 34.24%.
The consolidated financial statements of the six-month period ended 30 June 2019 no longer include companies: (i) PLEASURE FINANCE COMPANY and its subsidiary CHARM SHIPTRADE CORP. Which were made available in February 2019 from 100 % subsidiary of the Group POWER PROJECTS, (ii) EXPEDITION ENTERPRISES LTD and its subsidiary SEALAND MARINE CORP., which were made available in April 2019 by the 100% subsidiary of the Group POWER PROJECTS.
In February 2019, the 50.10% subsidiary of the group, METKA-EGN AUSTRALIA PTY based in Australia, proceeded with the acquisition of 100% of the share capital of the company Terranova Assetco Pty LTD based in Australia. The company Terranova Assetco Pty LTD owns 100% of companies WAGGA-WAGGA OPERATIONS CO PTY LTD, WAGGA-WAGGA PROPERTY CO PTY LTD, JUNEE OPERATIONS CO PTY LTD, JUNEE PROPERTY CO PTY LTD, COROWA OPERATIONS CO PTY LTD, COROWA PROPERTY CO PTY LTD, MOAMA OPERATIONS CO PTY LTD, MOAMA PROPERTY CO PTY LTD, KINGAROY OPERATIONS CO PTY LTD, KINGAROY PROPERTY CO PTY LTD, GLENELLA OPERATIONS CO PTY LTD, GLENELLA PROPERTY CO PTY LTD and TAEAHN INCORPORATION CO based in Australia. The purpose of this acquisition is the design, supply and construction (EPC) of six power stations and the subsequent resale at the completion of their construction to buyers. The total price of the acquisition of the above companies amounted to an amount of \$3.4 million. Total assets of EUR €5.5 million were acquired from this transaction. When examining the requirements of IFRS 3, it was found that the assets acquired and the commitments undertaken by those companies did not constitute an ' undertaking ' in the definition of IFRS 3 and are therefore not included in the scope of the standard, but the specific transactions were accounted for as asset acquisition.
In May 2019, the 50.10% subsidiary of the group, METKA-EGN KOREA LTD, based in Korea, acquired the company TAEAHN INCORPORATION CO. Based in Korea. The purpose of this acquisition is the design, supply and construction (EPC) of a power plant of a total power of 35 MW and the subsequent resale at the completion of its construction. The total price amounted to \$0.35 million. Total assets of EUR €0.31 million were acquired from this transaction. When examining the requirements of IFRS 3, it was found that the assets acquired and the commitments undertaken by those companies did not constitute an ' undertaking ' in the definition of IFRS 3 and are therefore not included in the scope of the standard, but the specific transactions were accounted for as asset acquisition.
In October 2018 the company made a takeover agreement of 97.87% of the OP. S.A. ("EPALME") which was under the approval of the competition committee. In June 2019 the completion of the takeover was announced against Price €10.2 million. Upon receipt of the relevant approval with a date of entry into force on 30/05/2019.
EPALME is active in the industrial production, processing and trading of metals and especially of aluminium alloys and their products. It was founded in 1973 and is the largest independent producer of recycled (second-name) aluminium in Greece. The annual capacity of the unit is 35,000 tons of aluminum and employs 64 people. According to MYTILINEOS's design, through extensive investment in increased production and productivity, production is expected to reach 50,000 tons over a two-years horizon.
The incorporation of the newly acquired company into the consolidated financial statements was made by the total consolidation method and contributed to the consolidated results of the six month 2019 sales of €3.9 million. And profit after tax of €0.3 million.
The fair value of all assets acquired and the liabilities incurred by the group and the resulting goodwill shall be finalised within 12 months from the date of acquisition in accordance with IFRS 3.
Below are listed the provisional value of the assets acquired and the commitments made by the group at the date of redemption:
| (Amount in thousands $\epsilon$ ) | |
|---|---|
| Property, plant and equipment | 3,883 |
| Intangible assets | 144 |
| Deferred tax assets | 312 |
| Other long-term receivables | 25 |
| Inventory | 6,847 |
| Trade and other receivables | 11,949 |
| Cash and cash equivalent | 4,541 |
| Long-term loan liabilities | (4,829) |
| Deferred tax obligations | (65) |
| Other long -term liabilities | (458) |
| Suppliers and other short-term liabilities | (7, 985) |
| Short-term loan liabilities | (9,087) |
| Total acquired assets and undertaken liabilities | 5,277 |
| Acquisition coat of investment as at the date of obtaining control | 10,234 |
| Plus: Proportional percentage of non-controlling interests (2,13%) over the net assets fair | |
| value as at the acquisition date | 112 |
| Less: Fair value of net assets as at the date of obtaining control | (5.277) |
| Total provisional goodwill | 5.069 |
The goodwill emerged mainly from the perspectives related to the expected growth of the sector that operates the acquired company and the more efficient exploitation of its resources.
The measurement of non-controlling holdings in 30/06/2019 was based on the proportional share of the current property rights on the recognised amounts of the net assets of the acquired company.
In March 2019, MYTILINEOS acquired 60% of the company ZEOLOGIC S.A. ("ZEOLOGIC") against price €2 million. The incorporation of the newly acquired company into the consolidated financial statements was done by the method of total consolidation, without any substantial impact on them.
ZEOLOGIC is a newly established Greek company founded in 2014 with the aim of exploiting the international patented technology based on the geochemical process (Geochemical Active Clay Sedimentation-GACS) for the processing of liquids and solids Waste. ZEOLOGIC processes in its own facilities and supplies the waste treatment plants it installs, with the necessary chemical consumables for their long-term operation. Its strategic partnership with MYTILINEOS will allow ZEOLOGIC to penetrate new markets, internationally, and to develop its innovative technologies in new applications.
The fair value of all assets acquired and the liabilities incurred by the group as well as the resulting surplus value are listed below:
| (Amounts in thousands $\epsilon$ ) | |
|---|---|
| Property, plant, equipment | 243 |
| Other Long term Assets | 33 |
| Invetories | 54 |
| Receivables | 357 |
| Cash and cash equivalent | 46 |
| Long term Liabilities | (47) |
| Suppliers and short term Liabilities | (526) |
| Short term Borrowings | (50) |
| Total of assets acquired and liabilities assumed | |
| 110 | |
| Cost of acquisition at the date of acquisition of control | 2.000 |
| Plus: Proportional percentage of non-controlling interest (40%) on the fair value of the net | |
| assets at the date of acquisition | 44 |
| Minus: Fair value of net assets at the date of acquisition | (110) |
| Total temporary Goodwill | 1.934 |
In January 2019, MYTILINEOS acquired 50% of the subsidiary company M AND M SOCIETE anonyme of NATURAL GAS. The company now holds 100% of the subsidiary. The total purchase price amounted to €1.3 million. While the effect of the transaction was deleted directly in the group's own funds, as a result of an increase in the participation rate in an existing subsidiary.
During the reporting period the company proceeded to the below decisions and actions:
On 16.01.2019 , MYTILINEOS S.A announces that the acquisition of all the shares (50%) that MOTOL OIL (HELLAS) CORINTH REFINERIES SA held in the company M AND M NATURAL GAS SA has been completed. Henceforth, MYTILINEOS SA is the sole shareholder (100%) of M AND M NATURAL GAS SOCIETE ANONYME. On 08.03.2019 Greek Authorities approved the amendments of articles 1 & 10 of the Articles of Association of M AND M NATURAL GAS SA. The new company's name is "MYTILINEOS GAS SUPPLY AND TRADE OF NATURAL GAS S.A." with the distinctive title "M-NG TRADING".
On 21.02.2019, MYTILINEOS S.A announces the signing of the agreement for the acquisition of 60% in ZEOLOGIC SA, a company headquartered in Thessaloniki, that provides innovative solutions in solid and liquid waste treatment. ZEOLOGIC, is a Greek start-up company set-up in 2014, to take advantage of the internationally patented technology based on the geochemical processing (Geochemical Active Clay Sedimentation - GACS) for liquid and solid waste treatment. Treats in its own facilities and supplies the waste treatment units it executes, with the required chemical consumables to ensure their long-term operation. The strategic cooperation with MYTILINEOS will enable ZEOLOGIC to penetrate new international markets and further to develop its innovative technologies into new applications. MYTILINEOS EPC & Infrastructure Projects Business Unit will benefit from this participation by further extending its activity in the area of Environmental Projects and circular economy.
the GIS for ten (10) years, after the Provisional Acceptance of the project. The contract for the project was signed on May 16 and its duration will be 26 months from the date of signing. The value of the contract is 20,6 million euros.
On 24.06.2019 the General Meeting discussed and took the following decisions on the items of the agenda:
MYTILINEOS Group is active in three main operating business segments: a) Metallurgy and Mining, b) EPC & Infrastructure and c) Electric Power & Gas trading. In accordance with the requirements of IFRS 8, management generally follows the Group's service lines, which represent the main products and services provided by the Group, in identifying its operating segments.
Each of these operating segments is managed separately as each of these service lines requires different technologies and other resources as well as marketing approaches. The Group's service lines that do not fulfil the quantitative and qualitative thresholds of IFRS 8, in order to be considered as separate segments, are presented cumulatively under the category "Others".
The Group has applied IFRS 5 "Non-Current Assets Available for Sale & Discontinued Operations" and present separately the results of the discontinued operations of the subsidiary company SOMETRA S.A.
Income and results per operating segment are presented as follows:
| (Amounts in thousands €) | Metallurgy | Metallurgy EPC & Infrastructure | Power & Gas | Others | Discontinuing | Total | |
|---|---|---|---|---|---|---|---|
| 1/1-30/06/2019 | Operations | ||||||
| Continuing Operations |
Discontinuing Operations |
||||||
| Total Gross Sales | 302,870 | 354 | 242,376 | 531,874 | 7,790 | (354) | 1,084,910 |
| Intercompany sales | (8,296) | - | (6,692) | (71,296) | (7,790) | - | (94,074) |
| Inter-segment sales | - | ||||||
| Net Sales | 294,574 | 354 | 235,684 | 460,578 | - | (354) | 990,836 |
| Earnings before interest and income tax | 76,291 | (1,032) | 39,716 | 25,271 | (10,353) | 1,032 | 130,925 |
| Financial results | (20,751) | ||||||
| Investment Results | 775 | ||||||
| Profit before income tax | 110,952 | ||||||
| Assets depreciation | 16,596 | 2 0 |
2,997 | 24,647 | - | (20) | 44,240 |
| Other operating included in EBITDA | 100 | 100 | |||||
| Oper.Earnings before income tax,financial results,depreciation and amortization (EBITDA) |
92,566 | (1,013) | 35,034 | 50,255 | (2,589) | 1,013 | 175,266 |
| (Amounts in thousands €) | Discontinuing | ||||||
|---|---|---|---|---|---|---|---|
| 1/1-30/06/2018 | Metallurgy | Metallurgy EPC & Infrastructure | Power & Gas | Others | Operations | Total | |
| Continuing Operations |
Discontinuing Operations |
||||||
| Total Gross Sales | 291,157 | 2 2 |
206,879 | 288,712 | 1,567 | (22) | 788,315 |
| Intercompany sales | (7,705) | - | (10,915) | (52,561) | - | - | (71,181) |
| Inter-segment sales | - | ||||||
| Net Sales | 283,452 | 2 2 |
195,964 | 236,151 | 1,567 | (22) | 717,134 |
| Earnings before interest and income tax | 82,655 | 1 0 |
31,504 | (5,555) | (641) | (10) | 107,963 |
| Financial results | (19,857) | ||||||
| Investment Results | 452 | ||||||
| Profit before income tax | 88,558 | ||||||
| Assets depreciation | 16,237 | 4 7 |
2,252 | 17,836 | 343 | (47) | 36,668 |
| Other operating included in EBITDA | 527 | 527 | |||||
| Oper.Earnings before income tax,financial results,depreciation and amortization | 98,894 | 5 6 |
34,284 | 12,284 | (304) | (56) | 145,158 |
Assets and liabilities per operating segment are presented as follows:
| (Amounts in thousands €) | Metallurgy | EPC & Infrastructure | Power & Gas | Others | Total |
|---|---|---|---|---|---|
| 30/06/2019 | |||||
| Assets | 1,072,014 | 1,312,206 | 1,033,773 | 188,419 | 3,606,412 |
| Consolidated assets | 1,072,014 | 1,312,206 | 1,033,773 | 188,419 | 3,606,412 |
| Liabilities | 522,899 | 519,034 | 532,232 | 436,754 | 2,010,919 |
| Consolidated liabilities | 522,899 | 519,034 | 532,232 | 436,754 | 2,010,919 |
| (Amounts in thousands €) | Metallurgy | EPC & Infrastructure | Power & Gas | Others | Total |
| 31/12/2018 | |||||
| Assets | 961,586 | 1,180,901 | 962,100 | 236,407 | 3,340,994 |
| Consolidated assets | 961,586 | 1,180,901 | 962,100 | 236,407 | 3,340,994 |
| Liabilities | 486,845 | 428,848 | 485,883 | 378,369 | 1,779,945 |
| Consolidated liabilities | 486,845 | 428,848 | 485,883 | 378,369 | 1,779,945 |
The Group's Sales and its Non-current assets (other than financial instruments, investments, deferred tax assets and postemployment benefit plan assets) are divided into the following geographical areas:
| MYTILINEOS GROUP | ||||||
|---|---|---|---|---|---|---|
| (Amounts in thousands €) | Sales 30/06/2019 |
Sales 30/06/2018 |
Non current assets 30/06/2019 |
Non current assets 31/12/2018 |
||
| Hellas | 552,976 | 355,262 | 1,548,998 | 1,518,423 | ||
| European Union | 218,925 | 195,343 | 19,664 | 20,418 | ||
| Other Countries | 218,936 | 166,530 | 40,866 | 47,535 | ||
| Regional Analysis | 990,837 | 717,135 | 1,609,528 | 1,586,376 |
| (Amounts in thousands €) | Metallurgy | EPC & Infrastructure | Power & Gas | Other | Discontinuing Operations |
Total | |
|---|---|---|---|---|---|---|---|
| Continuing Operations Discontinuing Operations | |||||||
| 30/06/2019 | |||||||
| Hellas | 96,803 | - | 26,067 | 430,105 | - | - | 552,975 |
| European Union | 162,775 | 354 | 27,653 | 28,496 | - | (354) | 218,925 |
| Other Countries | 34,996 | - | 181,964 | 1,977 | - | - | 218,936 |
| Total | 294,574 | 354 | 235,684 | 460,578 | 0 | (354) | 990,836 |
| (Amounts in thousands €) | Metallurgy | EPC & Infrastructure | Power & Gas | Other | Discontinuing Operations |
Total | |
| Continuing Operations Discontinuing Operations | |||||||
| 30/06/2018 | |||||||
| Hellas | 74,883 | - | 48,131 | 232,248 | - | - | 355,262 |
| European Union | 171,408 | 2 2 |
20,238 | 3,696 | - | (22) | 195,343 |
| Other Countries | 37,161 | - | 127,595 | 207 | 1,567 | - | 166,530 |
| Total | 283,452 | 2 2 |
195,964 | 236,151 | 1,567 | (22) | 717,134 |
Group's sales per activity:
| MYTILINEOS GROUP | ||
|---|---|---|
| Sales | ||
| 30/06/2019 | 30/06/2018 | |
| (Amounts in thousands €) | ||
| Alumina | 79,585 | 90,038 |
| Aluminium | 214,730 | 193,139 |
| EPC & Infrastructure | 154,955 | 126,509 |
| Solar Parks | 72,393 | 59,600 |
| Energy Supply | 183,867 | 113,246 |
| Energy Production | 162,919 | 92,014 |
| Natural Gas Supply | 94,769 | 19,686 |
| RES | 19,024 | 11,205 |
| Discontinuing Operations | (354) | (22) |
| O&M & Other Sales | 8,949 | 11,719 |
| Sales | 990,837 | 717,134 |
It should be noted that the backlog of projects already undertaken for the group, amounts to € 1,214 mio and the expected revenue recognition is as presented above:
| (Amounts in thousands €) | up to 1 year | 1-3 years | 3-5 years | Total |
|---|---|---|---|---|
| Revenue expected to be recognized | 696,538 | 443,476 | 73,716 | 1,213,730 |
| Total | 696,538 | 443,476 | 73,716 | 1,213,730 |
*The amount of € 420 mio concerning the backlog of Deir Azzur project is not included in the above table. For the aforementioned project the Group has already announced the pause of the construction on site.
| MYTILINEOS GROUP | MYTILINEOS S.A. | |||
|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 31/12/2018 | 30/06/2019 | 31/12/2018 |
| Raw materials | 61,371 | 64,334 | 54,004 | 61,161 |
| Semi-finished products | 2,452 | 2,358 | 2,187 | 2,040 |
| Finished products | 23,104 | 28,355 | 23,104 | 28,355 |
| Work in Progress | 61,414 | 42,760 | 39,135 | 42,665 |
| Merchandise | 529 | 528 | 1 3 |
0 |
| Others | 47,887 | 48,475 | 36,933 | 37,694 |
| Total | 196,757 | 186,809 | 155,376 | 171,915 |
| (Less)Provisions for scrap, slow moving and/or destroyed | ||||
| inventories | (2,432) | (2,432) | (2,303) | (2,303) |
| Total Stock | 194,325 | 184,377 | 153,073 | 169,612 |
| MYTILINEOS GROUP | MYTILINEOS S.A. | |||
|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 31/12/2018 | 30/06/2019 | 31/12/2018 |
| Cash | 1,182 | 1,257 | 1,226 | 1,113 |
| Bank deposits | 136,990 | 118,508 | 43,535 | 50,797 |
| Time deposits & Repos | 102,385 | 88,326 | 98,900 | 87,747 |
| Total | 240,557 | 208,090 | 143,661 | 139,656 |
| The weighted average interest rate is as: | 30/06/2019 | 31/12/2018 | ||
| Deposits in Euro | 0.25% | 0.23% |
| MYTILINEOS GROUP | MYTILINEOS S.A. | |||
|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 31/12/2018 | 30/06/2019 | 31/12/2018 |
| Long-term debt | ||||
| Bank loans | 4,681 | 138,631 | - | - |
| Loans from related parties | (1) | - | - | - |
| Bonds | 543,817 | 395,396 | 361,407 | 369,323 |
| Total | 548,497 | 534,028 | 361,407 | 369,323 |
| Short-term debt | ||||
| Overdraft | 208 | 123 | 208 | 123 |
| Bank loans | 18,362 | 28,785 | 145 | 141 |
| Bonds | 6,438 | 4 | 4 | 4 |
| Total | 25,008 | 28,912 | 356 | 267 |
| Current portion of non-current liabilities | 37,130 | 35,551 | 17,332 | 17,332 |
| Total | 610,635 | 598,491 | 379,095 | 386,922 |
| (Amounts in thousands €) | 30/06/2019 | 31/12/2018 | 30/06/2019 | 31/12/2018 |
| Long-term debt | ||||
| Lease liabilities | 45,659 | - | 32,200 | - |
| Total | 45,659 | - | 32,200 | - |
| Short-term debt | ||||
| Current portion of lease liabilities | 5,904 | - | 4,953 | - |
| Total | 5,904 | - | 4,953 | - |
| Total | 662,198 | 598,491 | 416,248 | 386,922 |
The Group, since 2009, applies IFRS 5 "Non-current assets held for sale & discontinued operations", and presents separately the assets and liabilities of the subsidiary company SOMETRA S.A., following the suspension of the production activity of the Zinc-Lead production plant in Romania, and presents also the amounts recognized in the income statement separately from continuing operations. Given the global economic recession, there were no feasible scenarios for the alternative utilization of the aforementioned financial assets.
From 2011 and on, by applying par. 13 of IFRS 5 "Non-current assets Held for Sale", the Zinc-Lead production ceases to be an asset held for sale and is considered as an asset to be abandoned. The assets of the disposal group to be abandoned are presented within the continuing operations while the results as discontinued operations.
In December 2015, SOMETRA S.A., contributed the Zinc-Lead activity, through a spin – off process, to its newly established subsidiary Reycom Recycling S.A. (REYCOM). The said spin - off is part of the "Mytilineos Group" restructuring process, regarding the Zinc-Lead discontinued operation, targeting on the production of Zn & Pb oxides through the development of a recycling operation of metallurgical residues.
| MYTILINEOS GROUP | ||
|---|---|---|
| (Amounts in thousands €) | 1/1-30/06/2019 | 1/1-30/06/2018 |
| Sales | 354 | 2 2 |
| Cost of sales | (160) | (67) |
| Gross profit | 194 | (46) |
| Other operating income | 4 9 |
997 |
| Distribution expenses | (34) | (41) |
| Administrative expenses | (683) | (893) |
| Other operating expenses | (559) | (8) |
| Earnings before interest and income tax | (1,032) | 1 0 |
| Financial income | - | - |
| Financial expenses | (3) | (2) |
| Profit before income tax | (1,036) | 8 |
| Income tax expense | - | - |
| Profit for the period | (1,036) | 8 |
Group's assets' pledges and other encumbrances amount to € 300.1 mio.
Group's commitments due to construction contracts are as follows:
| MYTILINEOS GROUP | MYTILINEOS S.A. | ||||
|---|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 31/12/2018 | 30/06/2019 | 31/12/2018 | |
| Commitments from construction contracts | |||||
| Value of pending construction contracts | 1,633,684 | 1,403,898 | 811,163 | 573,251 | |
| Granted guarantees | 416,848 | 320,232 | 416,465 | 310,883 | |
| Total | 2,050,532 | 1,724,130 | 1,227,628 | 884,134 |
*The amount of € 420 mio concerning the backlog of Deir Azzur project is included in the above table. For the aforementioned project the Group has already announced the pause of the construction on site.
For the fiscal years from 2011 up to 2017, the Group's Companies operating in Greece fulfilling relevant criteria to be subject to tax audit by the statutory auditors, have received Tax Compliance Report, according to article 82 par. 5 of law 2238/1994 and article 65A par. 1 of law 4174/2013, having no significant differentiations. According to the circular CL. 1006/2016, companies that have been subject to foresaid tax audit, are not exempt from the regular tax audit held by the competent tax authorities.
For fiscal year 2018, the tax Compliance audit is already being performed by the Statutory auditors and is not expected to bring any significant differentiation on the tax liabilities incorporated in the Financial Statements.
Taking into consideration the above regarding the Tax Compliance Report (where applicable), the following table shows the Company's and resident (Greek) subsidiaries' financial years whose tax liabilities are not definitive:
| COMPANY | YEARS NOT INSPECTED BY TAX AUTHORITIES |
|
|---|---|---|
| 3 | 1 MYTILINEOS S.A. 2 METKA INDUSTRIAL - CONSTRUCTION S.A. (absorption by MYTILINEOS in 2018) ALUMINIUM OF GREECE INDUSTRIAL AND COMMERCIAL SOCIETE ANONYME (absorption by MYTILINEOS in 2018) |
- - 2010 |
| 4 PROTERGIA S.A. (absorption by MYTILINEOS in 2018) | 2010 | |
| 6 SERVISTEEL | 5 PROTERGIA THERMOELEKTRIKI S.A. (absorption by MYTILINEOS in 2018) | 2010 2010 |
| 7 ELEMKA S.A. | 2010 | |
| 1 1 1 1 1 1 1 1 1 8 EN.DY. S.A. 1 2 2 2 |
8 BRIDGE ACCESSORIES & CONSTRUCTION SYSTEMS S.A. 9 DELFI DISTOMON A.M.E. 0 DESFINA SHIPPING COMPANY 1 ST. NIKOLAOS SINGLE MEMBER P.C. 2 RENEWABLE SOURCES OF KARYSTIA S.A. 3 GENIKI VIOMICHANIKI S.A. 4 DELTA ENERGY S.A. 5 FOIVOS ENERGY S.A. 6 HYDROHOOS S.A. 7 HYDRIA ENERGY S.A. 9 THESSALIKI ENERGY S.A. 0 NORTH AEGEAN RENEWABLES 1 MYTILINEOS HELLENIC WIND POWER S.A. 2 AIOLIKI ANDROU TSIROVLIDI S.A. |
2010 & 2014-2018 2006-2010 2010-2018 2014-2018 2010 2014-2018 2010 & 2014-2018 2010 & 2014-2018 2010 & 2016-2018 2010 & 2014-2018 2010 & 2014-2018 2010 & 2014-2018 2010 & 2014-2018 2010 2010 & 2014-2015 |
| 2 | 3 MYTILINEOS AIOLIKI NEAPOLEOS S.A. | 2010 & 2014-2018* |
| 2 2 2 2 2 2 3 3 3 |
4 AIOLIKI EVOIAS PIRGOS S.A. 5 AIOLIKI EVOIAS POUNTA S.A. 6 AIOLIKI EVOIAS HELONA S.A. 7 AIOLIKI ANDROU RAHI XIROKOBI S.A. 8 METKA AIOLIKA PLATANOU S.A. 9 AIOLIKI SAMOTHRAKIS S.A. 0 AIOLIKI EVOIAS DIAKOFTIS S.A. 1 AIOLIKI SIDIROKASTROU S.A. 2 HELLENIC SOLAR S.A. |
2010 & 2014-2018 2010 & 2014-2018 2010 & 2014-2018 2010 & 2014-2018 2010 & 2014-2018 2010 & 2014-2018 2010 & 2014-2018* 2010 2010 |
| COMPANY | YEARS NOT INSPECTED BY TAX AUTHORITIES |
|---|---|
| 3 3 SPIDER S.A. |
2010 & 2014-2018* |
| 3 4 MOVAL S.A. |
1/7/2009-30/6/2010 & 2014-2018* |
| 3 5 PROTERGIA THERMOELEKTRIKI S.A. |
1/7/2009-30/6/2010 & 2014-2018* |
| 6 METKA INDUSTRIAL - CONSTRUCTION S.A. (ex ANEMOSTRATA RENEWABLE ENERGY 3 SOURCES S.A.) |
2009 - 2010 & 2014-2018* |
| 3 7 ANEMODRASI RENEWABLE ENERGY SOURCES S.A. |
2009 - 2010 & 2014-2018* |
| 3 8 ANEMORAHI RENEWABLE ENERGY SOURCES S.A. |
2009 - 2010 & 2014-2018* |
| 9 PROTERGIA AGIOS NIKOLAOS POWER S.A. OF GENERATION AND SUPPLY OF 3 ELECTRICITY (ex ANEMOSKALA RENEWABLE ENERGY SOURCES S.A.) |
2009 - 2010 & 2014-2018* |
| 4 0 HORTEROU S.A. |
2010 & 2014-2018* |
| 4 1 KISSAVOS DROSERI RAHI S.A. |
2010 & 2014-2018* |
| 4 2 KISSAVOS PLAKA TRANI S.A. |
2010 & 2014-2018* |
| 4 3 KISSAVOS FOTINI S.A. |
2010 & 2014-2018* |
| 4 4 AETOVOUNI S.A. |
2010 & 2014-2018* |
| 4 5 LOGGARIA S.A. |
2010 & 2014-2018* |
| 4 6 IKAROS ANEMOS SA |
2014-2018* |
| 4 7 KERASOUDA SA |
2014-2018* |
| 4 8 AIOLIKH ARGOSTYLIAS A.E. |
2014-2018* |
| 4 9 J/V ΜΕΤΚΑ – ΤΕRΝΑ |
2009-2018* |
| 5 0 KORINTHOS POWER S.A. |
2010 |
| 5 1 KILKIS PALEON TRIETHNES S.A. |
2010 & 2014-2018* |
| 5 2 ANEMOROE S.A. |
2010 & 2014-2018* |
| 5 3 PROTERGIA ENERGY S.A. |
2010 & 2014-2018* |
| 5 4 SOLIEN ENERGY S.A. |
2007-2011 & 2014-2018* |
| 5 ALUMINIUM OF GREECE INDUSTRIAL AND COMMERCIAL SOCIETE ANONYME (EX 5 OSTENITIS S.A.) |
2010 & 2014 |
| 5 6 THERMOREMA S.A. |
2007-2018 |
| 5 7 FTHIOTIKI ENERGY S.A. |
2003-2018 |
| 5 8 IONIA ENERGY S.A. |
2010-2011, 2013-2018 |
| 5 9 AIOLIKH TRIKORFON S.A. |
2008-2014 |
| 6 0 MAKRYNOROS ENERGEIAKH S.A. |
2008-2018 |
| 6 1 MNG TRADING |
- |
| 6 2 BUSINESS ENERGY TRIZINIA S.A. |
2008-2015 |
| 6 3 ZEOLOGIC Α.Β.Ε.Ε |
2014-2018 |
| 6 4 EP.AL.ME. S.A. |
- |
*said companies have received a Tax Compliance Report for the fiscal years 2011-2013 while from 2014 onwards, following the amendment of the provisions of Law 4174/2013 par. 1 article 65A, they no longer meet the control criteria.
The years of the Group's foreign subsidiaries whose tax liabilities are not definitive, are stated on following table:
| COMPANY | YEARS NOT INSPECTED BY TAX AUTHORITIES |
|---|---|
| 1 RODAX ROMANIA SRL, Romania | 2009-2018 |
| 2 DROSCO HOLDINGS LIMITED, Cyprus | 2003-2018 |
| 3 ΜΕΤΚΑ BRAZI SRL, Romania | 2008-2018 |
| 4 POWER PROJECTS, Turkey | 2010-2018 |
| 5 GREEN ENERGY S.A. | 2007-2018 |
| 6 METKA RENEWABLES LIMITED | 2015-2018 |
| 7 SOMETRA S.A., Romania | 2003-2018 |
| 8 STANMED TRADING LTD, Κύπρος | 2011-2018 |
| 9 MYTILINEOS FINANCE S.A., Luxemburg | 2007-2018 |
| 1 0 RDA TRADING, Guernsey Islands |
2007-2018 |
| 1 1 MYTILINEOS BELGRADE D.O.O., Serbia |
1999-2018 |
| 1 2 MYVEKT INTERNATIONAL SKOPJE |
1999-2018 |
| 1 3 MYTILINEOS FINANCIAL PARTNERS S.A. |
2011-2018 |
| 1 4 MYTILINEOS INTERNATIONAL COMPANY A.G. "MIT Co" |
2013-2018 |
| 1 5 DELTA PROJECT CONSTRUCT SRL, Romania |
2005-2018 |
| 1 6 RIVERA DEL RIO |
2015-2018 |
| 1 7 METKA-EGN LTD (CYPRUS) |
2015-2018 |
| 1 8 METKA-EGN LTD (ENGLAND) |
2015-2018 |
| 1 9 METKA -EGN SpA |
2015-2018 |
| 2 0 METKA-EGN USA LLC |
2015-2018 |
| 2 1 METKA POWER WEST AFRICA LIMITED |
2015-2018 |
| 2 2 METKA-EGN KZ |
2017-2018 |
| 2 3 METKA-EGN MEXICO |
2017-2018 |
| 2 4 METKA-EGN UGANDA SMC LTD |
2018 |
| 2 5 METKA-EGN JAPAN LTD |
2018 |
| 2 6 METKA INTERNATIONAL LTD |
2016-2018 |
| 2 7 METKA POWER INVESTMENTS |
2016-2018 |
| 2 8 METKA IPS LTD |
2018 |
| 2 9 INTERNATIONAL POWER SUPPLY AD |
2016-2018 |
| 3 0 MTRH Developmnet GmbH |
2016-2018 |
| COMPANY | YEARS NOT INSPECTED BY TAX |
| COMPANY | YEARS NOT INSPECTED BY TAX AUTHORITIES |
|
|---|---|---|
| 3 | 1 METKA EGN SARDINIA SRL, Sardinia | 2018 |
| 3 | 2 METKA EGN FRANCE SRL, France | 2018 |
| 3 | 3 METKA EGN SPAIN SLU, Spain | 2018 |
| 3 | 4 METKA EGN KOREA LTD, Korea | 2018 |
| 3 | 5 METKA EGN GENERAL CONTRACTOR CO. LTD, Korea | 2018 |
| 3 | 6 METKA EGN AUSTRALIA PTY LTD, Australia | 2018 |
| 3 | 7 METKA EGN SINGAPORE PTE LTD, Singapore | 2018 |
| 3 | 8 VIGA RENOVABLES SP1 SL, Spain | 2018 |
| 3 | 9 VIGA RENOVABLES SP2 SL, Spain | 2018 |
| 4 | 0 METKA EGN AUSTRALIA PTY HOLDINGS LTD | 2018 |
| 4 | 1 METKA EGN APULIA SRL, Ιταλία | new entity |
| 4 | 2 TERRANOVA ASSETCO PTY LTD | 2018 |
| 4 | 3 WAGGA-WAGGA OPERATIONS CO PTY LTD | 2017-2018 |
| 4 | 4 WAGGA-WAGGA PROPERTY CO PTY LTD | 2017-2018 |
| 4 | 5 JUNEE OPERATIONS CO PTY LTD | 2018 |
| 4 | 6 JUNEE PROPERTY CO PTY LTD | 2017-2018 |
| 4 | 7 COROWA OPERATIONS CO PTY LTD | 2018 |
| 4 | 8 COROWA PROPERTY CO PTY LTD | 2017-2018 |
| 4 | 9 MOAMA OPERATIONS CO PTY LTD | 2018 |
| 5 | 0 MOAMA PROPERTY CO PTY LTD | 2017-2018 |
| 5 | 1 KINGAROY OPERATIONS CO PTY LTD | 2018 |
| 5 | 2 KINGAROY PROPERTY CO PTY LTD | 2017-2018 |
| 5 | 3 GLENELLA OPERATIONS CO PTY LTD | 2018 |
| 5 | 4 GLENELLA PROPERTY CO PTY LTD | 2017-2018 |
| 5 | 5 TAEAHN INCORPORATION CO. | 2018 |
| 5 | 6 ELEMKA SAUDI | new entity |
On 17.12.2014, Independent Power Transmission Operator S.A. (IPTO or ADMIE) sent briefing notes to MYTILINEOS (henceforth the "Company") as universal successor of ALUMINIUM OF GREECE INDUSTRIAL AND COMMERCIAL SOCIETE ANONYME due to merger, requesting the issuance of a credit invoice for the amount of €17.4m relating to the Excise Tax (ET) on Gas consumed at the Combined Heat and Power (CHP) Plant for the period of 28/11/2012 until 31/10/2013 (henceforth the "Reference Period"). Said ET was invoiced to ADMIE during the aforementioned period, pursuant to its related debit notes.
In relation to the above, we note the following:
The CHP station is a dispatchable cogeneration unit, part of which qualifies as highly efficient (High-Efficiency Combined Heat and Power/ HE-CHP) under the Code's provisions, but also under the specific operational terms which were approved by way of RAE's Decision No. 700/2012 (as amended by Decision 341/2013).
According to Article 197(2) of Law 4001/2011, from 1/9/2011 onwards, all HE-CHP stations, regardless of their installed capacity, gain priority for the allocation of their loads. In particular, in accordance with Article 197(3) of the above Law, HE-CHP stations with an installed capacity over 35MW are to be compensated with the tariff which derives from the table displayed in Law 3468/2006, plus the Natural Gas Clause Coefficient (CC), which is calculated using the following formula: CC = 1+(AGP-26)/(100 x nel)
• AGP: the monthly mean average unitary selling price of natural gas to NG users in Greece who are also electricity customers, in €/MWh using the gross calorific value (GCV). This value is determined by the Ministry of Environment, Energy and Climate Change's Petroleum Policy Directorate and is communicated to Hellenic Transmission System Operator S.A. (HTSO or DESMIE) on a monthly basis.
• nel: the electrical efficiency of the provision for High-Efficiency CHP based on the gross calorific value (GCV) of natural gas, which is defined in accordance with the station's technical information, as reported by the relevant Operator.
The CC value cannot be lower than one (1) and is determined on a case-by-case basis by way of a decision made by the Minister of Environment, Energy and Climate Change (henceforth the "Ministerial Decision") following consultation by RAE. RAE's opinion must also take the plant's installed capacity into account, in a way so that the determined value generally decreases as the capacity increases.
Moreover, the AGP is displayed in €/MWh and includes the ET, as specified in the letter sent by the Ministry of Environment, Energy and Climate Change's Petroleum Policy Directorate on 2/11/2011.
The High-Efficiency CHP station owned by the Company has an installed capacity of 334MW, of which 134.6MW has priority in entering the system (HE-CHP) in accordance with the aforementioned decisions which approved the Specific Operational Terms. From 1/9/2011 until 31/10/2013 (which ADMIE set as the final date for settling the ET), the CC value, as defined above, had not been established because the relevant decision had not been issued by the Minister of Environment, Energy and Climate Change, despite the fact that the Regulatory Authority for Energy had issued two relevant opinions in accordance with the provisions of Article 197(2) of Law 4001/2011 (RAE 3/2012 and RAE 5/2013). Consequently, the Subsidiary's HE-CHP neither issued invoices nor received a tariff in accordance with the provisions of Law 4001/2011. Instead, following the signing of a Private Agreement between the Company and the Operator of Electricity Market (LAGIE) on 26.4.2013, HE-CHP issued temporary invoices, for the entire aforementioned period, at the minimum price which could have resulted from the application of the mathematical formula established by Law 4001/2011 (if the CC value was set at the unit price, i.e., if the AGP amounted to 26€/MWh). According to the Private Agreement, the final settlement was to take place following the establishment of the CC by way of the issuance of the relevant Ministerial Decision, so that dispatched HE-CHP energy would be compensated in accordance with the provisions of the "Supplementary Agreement for Transactions relating to Electricity from the Dispatchable High-Efficiency CHP Station" (Government Gazette B' 3108/23.11.2012) which was concluded between the Company and LAGIE on 28.11.2012.
The aforementioned provisions of Law 4001/2011, in conjunction with the provisions specified in the letter sent by the Ministry of Environment, Energy and Climate Change's Petroleum Policy Directorate, as well as the provisions of both the Company's Private Agreement with LAGIE and the "Supplementary Agreement for Transactions relating to Electricity from the Dispatchable High-Efficiency CHP Station" between the two parties, require that the Natural Gas ET is recovered to the extent that the natural gas was consumed in generating electricity. Therefore, the Company also recognized the part of the Natural Gas ET which corresponded to consumptions made in generating useful heat (steam for the Alumina production process) as a liability (deducted from ADMIE's receivables balance), the total value of which amounted to €9.1m.
Regarding the remaining balance of ADMIE's relevant briefing note, which amounts to €8.3m and relates to the Natural Gas ET which corresponded to consumptions for electricity generation (HE- CHP), it is noted that this does not constitute a liability for the Company. Specifically, in accordance with IAS 37, "a liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits". Based on the above and given that the Company has not received a final compensatory price for the Period (by way of the CC, see above), while, based on the Private Agreement between the Company and LAGIE, the final settlement will take place following the issuance of the relevant Ministerial Decision regarding the establishment of the CC (which has not been issued), the Company believes that it has no commitment which would legally constitute an obligation to return the amount of €8.3m. A relevant liability may arise once the aforementioned Ministerial Decision regarding the establishment of the CC is issued, in which case the Company estimates that the final compensation that it will receive for electricity dispatched to the system as High-Efficiency CHP will exceed the amount of €8.3m. Therefore, it is not expected that a loss will result for the Company .
Finally, in respect of the final settlement of the CHP pricing for 2013 it is noted that, on the 4th of June 2015 the Company, sent a letter to the Operator of the Electricity Market (LAGHE) asking the convene of the Dispute Settlement Committee as provided in the article 16 p. 2 of the "Supplementary Agreement for Transactions relating to Electricity from the Dispatchable High-Efficiency CHP Station" signed between the parties. The dispute in consideration concerns the imposition of a 10% special tax plus an extra 10% of one-off discount on tariffs, both regarding the financial year 2013.
Following negotiations, the parties have reached a mutually acceptable draft arbitration agreement, so as to jointly apply for the resolution of the dispute by the special arbitration of the Regulatory Authority for Energy (RAE), in accordance with article 37 of L.4001/2011. At 07.02.2018 the two parties signed an agreement to continue the dispute with the help of the arbitration of the Regulatory Authority for Energy. The procedure for resolving the matter has been initiated and the date of first meeting has been set for October 3, 2019.
According to IAS 37.14: A provision shall be recognised when:
(a) an entity has a present obligation (legal or constructive) as a result of a past event;
(b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
(c) a reliable estimate can be made of the amount of the obligation.
If these conditions are not met, no provision shall be recognised.
No provision has been made for this matter, since according to the relevant opinions of the Company's legal advisers and the management of the Company: (a) the existence of a commitment has not yet been finalized; and (b) there is no probability that there will be an outflow of financial resources.
According to the information provided in previous Financial Statements, the General Court of the European Union has turned down the Company's appeal with the decision dated 13.03.2018. The Company is going to institute proceedings against the above stated decision, before the competent courts of European Union which have the final judgment on the nature of the difference in the selling price of electricity as illegal or non-State aid to be discussed on 05.09.2019. As a result, the Company has recognized the amount of 17.4 € mio plus 4.2 € mio of interest expenses in the profit and loss statement of 2017.
DEPA S.A. demands:
Regarding charges that arose from the retrospective revision of the contract price due to the revision of the prices charged by DEPA's supplier, the Turkish company "BOTAS PETROLEUM PIPELINE CORPORATION":
• the amount of €6.26 Mio plus interest € 0.87 Mio by the Company (as universal successor of Protergia Thermoilektriki Agiou Nikolaou Power Generation and Supply S.A.);
The Company and Korinthos Power S.A. contested the existence of the said amounts. More specifically:
The Company (as universal successor of Protergia Thermoilektriki Agiou Nikolaou Power Generation and Supply S.A. due to merger) and Korinthos Power S.A. filed arbitration lawsuits against DEPA S.A., in order to resolve the aforementioned disputes. The arbitration limited DEPA S.A.'s claims to 24 months and it was decided that the Company as well as KORINTHOS POWER S.A. owe to DEPA S.A. a compensation only for the years 2012 and 2013, i.e. € 4.2 Mio the Company and € 3.2 Mio KORINTHOS POWER S.A., while the two companies do not owe DEPA S.A. any compensation for the years 2011, 2014 and 2015. Moreover, the Arbitration decided that the two companies do not owe DEPA S.A. the invoiced interest on the claimed amounts (for any year).
Moreover, the Company (as universal successor of ALUMINIUM OF GREECE INDUSTRIAL AND COMMERCIAL SOCIETE ANONYME) and DEPA S.A. are under arbitration for resolving disputes with regard to charges due to revision of gas supply cost. Within the frame of the arbitration procedure, arbitrators have been nominated and the nomination of the umpire is expected. It should be noted that the arguments of ALUMINIUM OF GREECE INDUSTRIAL AND COMMERCIAL SOCIETE ANONYME are considerably stronger than those of both Protergia and Korinthos Power, not only due to the terms of the agreement that were applicable for ALUMINIUM OF GREECE INDUSTRIAL AND COMMERCIAL SOCIETE ANONYME, but also due to the calculation method regarding the compensation for the CHP power, which was injected by ALUMINIUM OF GREECE INDUSTRIAL AND COMMERCIAL SOCIETE ANONYME to the system, during critical period. The aforementioned calculation method did not include the additional amount which was calculated by DEPA regarding the BOTAS agreement. Consequently, the Group's financial results experienced a negative effect of € 6.4 mio in previous periods, out of which € 3 mio have been recognized during 2018 as provisions for the case of ALUMINIUM OF GREECE INDUSTRIAL AND COMMERCIAL SOCIETE ANONYME.
There are other potential third party claims of € 4.4 Mio against the Company for which no provision has been made.
According to IAS 37.14: A provision shall be recognised when:
(a) an entity has a present obligation (legal or constructive) as a result of a past event;
(b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
(c) a reliable estimate can be made of the amount of the obligation.
If these conditions are not met, no provision shall be recognised.
No provision has been made for this matter, since according to the relevant opinions of the Company's legal advisers and the management of the Company: (a) the existence of a commitment has not yet been finalized; and (b) there is no probability that there will be an outflow of financial resources.
Moreover, there are claims of the Company against third parties, which totally amount to €12.8 Mio.
The Group's and the Company's recorded provisions as at 30.06.2019 are analyzed bellow:
| MYTILINEOS GROUP | ||||||
|---|---|---|---|---|---|---|
| (Amounts in thousands €) | Environmental Restoration |
Tax liabilities | Other | Total | ||
| 1/1/2018 | 1,930 | 897 | 10,737 | 13,564 | ||
| Additional Provisions For The Period | 500 | (44) | 2,188 | 2,644 | ||
| Unrealised Reversed Provisions | (1,500) | - | - | (1,500) | ||
| Exchange Rate Differences | - | - | 815 | 815 | ||
| Realised Provisions For The Period | (150) | (2) | (1,235) | (1,387) | ||
| 31/12/2018 | 781 | 851 | 12,505 | 14,137 | ||
| Long -Term | 781 | 895 | 12,454 | 14,130 | ||
| Short - Term | - | (44) | 5 1 |
7 | ||
| Additional Provisions For The Period | - | (4) | 1,000 | 996 | ||
| Unrealised Reversed Provisions | - | 4 8 |
(1,194) | (1,146) | ||
| Exchange Rate Differences | - | - | (1) | (1) | ||
| Realised Provisions For The Period | (100) | - | (550) | (651) | ||
| 30/06/2019 | 681 | 895 | 11,760 | 13,335 | ||
| Long -Term | 681 | 895 | 11,710 | 13,285 | ||
| Short - Term | - | - | 5 0 |
5 0 |
||
| MYTILINEOS S.A. | ||||
|---|---|---|---|---|
| (Amounts in thousands €) | Environmental Restoration |
Tax liabilities | Other | Total |
| 1/1/2018 | 1,000 | 615 | 10,737 | 12,352 |
| Additional Provisions For The Period | 500 | - | 2,138 | 2,638 |
| Unrealised Reversed Provisions | (1,500) | - | 0 | (1,500) |
| Exchange Rate Differences | - | - | 815 | 815 |
| Realised Provisions For The Period | - | - | (1,235) | (1,235) |
| 31/12/2018 | - | 615 | 12,454 | 13,069 |
| Long -Term | - | 615 | 12,454 | 13,069 |
| Short - Term | - | - | - | - |
| Additional Provisions For The Period | - | - | 1,000 | 1,000 |
| Unrealised Reversed Provisions | - | - | (1,194) | (1,194) |
| Exchange Rate Differences | - | - | - | - |
| Realised Provisions For The Period | - | - | (550) | (550) |
| 30/06/2019 | - | 615 | 11,710 | 12,325 |
| Long -Term | - | 615 | 11,710 | 12,325 |
| Short - Term | - | - | - | - |
Environmental Restoration. This provision represents the present value of the estimated costs to restore quarry sites
and other similar post-closure obligations.
Tax Liabilities. This provision relates to future obligations that may result from tax audits.
Other provisions. Comprise other provisions relating to other risks, none of which is individually material to the Group and to contingent liabilities arising from current commitments.
| MYTILINEOS GROUP | MYTILINEOS S.A. | |||||
|---|---|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 31/12/2018 | 30/06/2019 | 31/12/2018 | ||
| Customers | 665,588 | 619,299 | 307,415 | 298,798 | ||
| Checks receivable | 4,658 | 4,283 | 2,193 | 2,505 | ||
| Receivables from contracts | 237,290 | 158,538 | 66,510 | 60,528 | ||
| Less: Impairment Provisions | (27,352) | (24,439) | (23,167) | (22,276) | ||
| Net trade Receivables | 880,184 | 757,681 | 352,950 | 339,554 | ||
| Advances for inventory purchases | - | 9 6 |
- | - | ||
| Advances to trade creditors | 56,390 | 41,530 | 27,943 | 32,879 | ||
| Total | 936,575 | 799,307 | 380,893 | 372,433 |
| MYTILINEOS GROUP | MYTILINEOS S.A. | |||
|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 31/12/2018 | 30/06/2019 | 31/12/2018 |
| Customers - Withholding guarantees falling due after one year | 57,827 | 89,099 | 47,824 | 47,252 |
| Given guarantees | 7,424 | 5,551 | 6,979 | 5,071 |
| Other long term receivables | 10,032 | 10,369 | 6,742 | 6,235 |
| Other long term receivables | 75,283 | 105,019 | 61,545 | 58,558 |
| MYTILINEOS GROUP | MYTILINEOS S.A. | |||
|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 31/12/2018 | 30/06/2019 | 31/12/2018 |
| Suppliers | 293,550 | 262,066 | 149,397 | 132,892 |
| Notes Payable | 104 | 105 | - | - |
| Customers' Advances | 268,151 | 195,764 | 191,694 | 154,290 |
| Liabilities to customers | 143,890 | 150,410 | 145,040 | 150,956 |
| Total | 705,695 | 608,346 | 486,131 | 438,138 |
The Shares of Mytilineos Holding S.A. are freely traded on the Securities Market of the Athens Exchange. The share capital of Mytilineos Holding S.A amounts to one hundred thirty-eight millions six hundred four thousand four hundred twenty-six euros and seventeen cents (€ 138,604,426.17), divided into one hundred forty-two millions eight hundred ninety-one thousand one hundred sixty-one (142,891,161) registered shares with a nominal value of € 0.97 each.
The General Assembly of the Shareholders (GA) of 24 June 2019 has approved the distribution of dividend of gross amount € 51.4 mio or € 0.3600 per share. The payment of the dividend has been initiated on July 2, 2019. The amounts of dividends payable for the Group and the Company on 30 June 2019 are € 49 mio and € 48.6 mio respectively ( 31.12.2018 : € 3 mio and € 3 mio respectively).
The following table presents financial assets and liabilities measured at fair value in the statement of financial position in accordance with the fair value hierarchy. This hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has the following levels:
The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement.
The Group's financial assets and liabilities measured at fair value in the statement of financial position are grouped into the fair value hierarchy for 30/06/2019 and 31/12/2018 as follows:
| MYTILINEOS GROUP | ||||
|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | Level 1 | Level 2 | Level 3 |
| Financial Assets | ||||
| Financial assets at fair value through profit or loss | ||||
| Stock Shares | 1 0 |
1 0 |
- | - |
| Bank Bonds | 5 4 |
5 4 |
- | - |
| Other Financial Assets | 163 | 117 | 8 | 3 7 |
| Foreign Exchange Contracts For Cash Flow Hedging (Forward) | 6,078 | - | 6,078 | - |
| Commodity Futures | 25,803 | - | 25,803 | - |
| Foreign Exchange Contracts (Forward) | - | - | - | - |
| Financial Assets | 32,107 | 181 | 31,890 | 3 7 |
| Financial Liabilities | ||||
| Foreign Exchange Swap Contracts (Swaps) | 343 | - | 343 | - |
| Foreign Exchange Contracts (Forward) | 3,123 | - | 3,123 | - |
| Options | 1,651 | - | 1,651 | - |
| Commodity Options | 13,022 | - | 13,022 | - |
| Financial Liabilities | 18,138 | - | 18,138 | - |
| MYTILINEOS GROUP | ||||
| (Amounts in thousands €) | 31/12/2018 | Level 1 | Level 2 | Level 3 |
| MYTILINEOS GROUP | ||||
|---|---|---|---|---|
| (Amounts in thousands €) | 31/12/2018 | Level 1 | Level 2 | Level 3 |
| Financial Assets | ||||
| Financial assets at fair value through profit or loss | ||||
| Stock Shares | 1 0 |
1 0 |
- | - |
| Bank Bonds | 5 4 |
5 4 |
- | - |
| Financial assets of the investment portfolio | ||||
| Equity Securities Non - Listed Companies | - | - | - | - |
| Other Financial Assets | 159 | 113 | 8 | 3 7 |
| Foreign Exchange Contracts For Cash Flow Hedging (Forward) | 2,152 | - | - | 2,152 |
| Commodity Futures | 29,453 | - | 29,453 | - |
| Foreign Exchange Contracts (Forward) | - | - | - | - |
| Financial Assets | 31,827 | 177 | 29,462 | 2,188 |
| Financial Liabilities | ||||
| Foreign Exchange Swap Contracts (Swaps) | 396 | - | 396 | - |
| Foreign Exchange Contracts For Cash Flow Hedging (Forward) | - | - | - | - |
| Foreign Exchange Contracts (Forward) | 3,386 | - | 3,386 | - |
| Options | 2,227 | - | 2,227 | - |
| Financial Liabilities | 6,009 | - | 6,009 | - |
| MYTILINEOS S.A. | ||||
|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | Level 1 | Level 2 | Level 3 |
| Financial Assets | ||||
| Financial assets at fair value through profit or loss | ||||
| Stock Shares | 1 0 |
1 0 |
- | - |
| Bank Bonds | 5 4 |
5 4 |
- | - |
| Other Financial Assets | 3 7 |
- | - | 3 7 |
| Foreign Exchange Contracts For Cash Flow Hedging (Forward) | 2,166 | - | 2,166 | - |
| Commodity Futures | 25,803 | - | 25,803 | - |
| Financial Assets | 28,069 | 6 3 |
27,969 | 3 7 |
| Financial Liabilities | ||||
| Foreign Exchange Contracts (Forward) | 3,123 | - | 3,123 | - |
| Options | 1,651 | - | 1,651 | - |
| Commodity Options | 13,022 | - | 13,022 | - |
| Financial Liabilities | 17,795 | - | 17,795 | - |
| MYTILINEOS S.A. | ||||
|---|---|---|---|---|
| (Amounts in thousands €) | 31/12/2018 | Level 1 | Level 2 | Level 3 |
| Financial Assets | ||||
| Financial assets at fair value through profit or loss | ||||
| Stock Shares | 1 0 |
1 0 |
- | - |
| Bank Bonds | 5 4 |
5 4 |
- | - |
| Other Financial Assets | 3 7 |
- | - | 3 7 |
| Foreign Exchange Contracts For Cash Flow Hedging (Forward) | - | - | - | - |
| Commodity Futures | 29,453 | - | 29,453 | - |
| Foreign Exchange Contracts (Forward) | - | - | - | - |
| Financial Assets | 29,554 | 6 3 |
29,453 | 3 7 |
| Financial Liabilities | ||||
| Foreign Exchange Contracts For Cash Flow Hedging (Forward) | - | - | - | - |
| Foreign Exchange Contracts (Forward) | 3,386 | - | 3,386 | - |
| Options | 2,227 | - | 2,227 | - |
| Financial Liabilities | 5,613 | - | 5,613 | - |
Group Sales per Segment for the period of the first half of 2019 and the comparative period of 2018 is analysed at the table below:
| (Amounts in thousands €) | Metallurgy | EPC & Infrastructure | Power & Gas | Other | Discontinuing Operations |
||||
|---|---|---|---|---|---|---|---|---|---|
| Continuing Operations Discontinuing Operations | |||||||||
| 30/06/2019 | |||||||||
| Hellas | 96,803 | - | 26,067 | 430,105 | - | - | 552,975 | ||
| European Union | 162,775 | 354 | 27,653 | 28,496 | - | (354) | 218,925 | ||
| Other Countries | 34,996 | - | 181,964 | 1,977 | - | - | 218,936 | ||
| Total | 294,574 | 354 | 235,684 | 460,578 | 0 | (354) | 990,836 | ||
| Metallurgy | |||||||||
| (Amounts in thousands €) | EPC & Infrastructure | Power & Gas | Other | Discontinuing Operations |
Total | ||||
| Continuing Operations Discontinuing Operations | |||||||||
| 30/06/2018 | |||||||||
| Hellas | 74,883 | - | 48,131 | 232,248 | - | - | 355,262 | ||
| European Union | 171,408 | 2 2 |
20,238 | 3,696 | - | (22) | 195,343 | ||
| Other Countries | 37,161 | - | 127,595 | 207 | 1,567 | - | 166,530 | ||
| Total | 283,452 | 2 2 |
195,964 | 236,151 | 1,567 | (22) | 717,134 |
Earnings per share have been calculated on the total weighted average number of common and preference shares excluding the average number of treasury shares.
| MYTILINEOS GROUP | MYTILINEOS S.A. | |||
|---|---|---|---|---|
| (Amounts in thousands €) | 1/1-30/06/2019 | 1/1-30/06/2018 | 1/1-30/06/2019 | 1/1-30/06/2018 |
| Equity holders of the parent | 81,608 | 83,882 | 58,201 | 77,218 |
| Weighted average number of shares | 142,891 | 142,891 | 142,891 | 142,891 |
| Basic earnings per share | 0.5711 | 0.5870 | 0.4073 | 0.5404 |
| Continuing Operations (Total) | ||||
| Equity holders of the parent | 82,643 | 83,874 | 58,201 | 77,238 |
| Weighted average number of shares | 142,891 | 142,891 | 142,891 | 142,891 |
| Basic earnings per share | 0.5784 | 0.5870 | 0.4073 | 0.5405 |
| Discontinuing Operations (Total) | ||||
| Equity holders of the parent | (1,036) | 8 | - | (284) |
| Weighted average number of shares | 142,891 | 142,891 | 142,891 | 142,891 |
| Basic earnings per share | (0.0073) | 0.0001 | 0.0000 | (0.0020) |
The number of employees at the end of the current reporting period for the Group amounts to 2,343 and for the Company to 1,875. Accordingly, on 30/06/2018, the number of employees for the Group amounted to 2,139 and for the Company to 1,832.
Management remuneration and fringes for the Group and the Company are analysed at the table below:
| MYTILINEOS GROUP | MYTILINEOS S.A. | ||||
|---|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 30/06/2018 | 30/06/2019 | 30/06/2018 | |
| Short term employee benefits | |||||
| - Wages of Key Management and BOD Fees | 5,999 | 5,318 | 4,783 | 4,744 | |
| - Insurance service cost | 164 | 175 | 8 2 |
8 3 |
|
| - Other remunerations | 3 3 |
3 1 |
- | - | |
| Total | 6,196 | 5,525 | 4,865 | 4,826 |
No loans have been given to members of BoD or other management members of the Group (and their families).
| MYTILINEOS GROUP | MYTILINEOS S.A. | ||||
|---|---|---|---|---|---|
| (Amounts in thousands €) | 1/1-30/06/2019 | 1/1-30/06/2018 | 1/1-30/06/2019 | 1/1-30/06/2018 | |
| Cash flows from operating activities | |||||
| Profit for the period | 87,402 | 80,057 | 58,201 | 77,238 | |
| Adjustments for: | |||||
| Tax | 23,514 | 8,502 | 16,338 | 4,806 | |
| Depreciation of property,plant and equipment | 39,699 | 33,180 | 28,312 | 24,441 | |
| Depreciation of intangible assets | 6,343 | 4,150 | 3,473 | 2,471 | |
| Impairments | 2 3 |
- | - | - | |
| Provisions | 945 | 100 | 1,039 | 153 | |
| (Profit)/Loss from sale of tangible assets | (7) | - | (548) | - | |
| (Profit)/Loss from fair value valuation of financial assets at fair value through PnL | - | 246 | - | 246 | |
| Interest income | (7,851) | (4,301) | (3,148) | (2,413) | |
| Interest expenses | 18,807 | 21,838 | 11,740 | 14,032 | |
| Dividends | (400) | (157) | (400) | (6,284) | |
| Grants amortization | (1,713) | (1,266) | (547) | (556) | |
| Exchange differences | (1,102) | (1,298) | (1,455) | (34) | |
| Other differences | 891 | - | 4 | - | |
| 79,149 | 60,995 | 54,809 | 36,862 | ||
| Changes in Working Capital | |||||
| (Increase)/Decrease in stocks | (3,070) | (7,914) | 16,539 | (10,019) | |
| (Increase)/Decrease in trade receivables | (187,791) | (76,721) | (120,684) | (33,063) | |
| (Increase)/Decrease in other receivables | 154 | 6 1 |
494 | 8 5 |
|
| Increase / (Decrease) in liabilities | 175,880 | 19,769 | 73,117 | (30,313) | |
| Provisions | - | 5 | - | - | |
| Pension plans | 9 6 |
(542) | 3 | (543) | |
| Other | - | 5 | - | - | |
| (14,731) | (65,337) | (30,530) | (73,853) | ||
| Cash flows from operating activities | 151,820 | 75,715 | 82,480 | 40,247 |
Related Party Transactions according to IAS 24 are shown at the following table:
| MYTILINEOS GROUP | MYTILINEOS S.A. | |||
|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 30/06/2018 | 30/06/2019 | 30/06/2018 |
| Stock Sales | ||||
| Subsidiaries | - | - | 70,850 | 47,440 |
| Other Related parties | 396 | 261 | 396 | 261 |
| Total | 396 | 261 | 71,246 | 47,701 |
| Stock Purchases | ||||
| Subsidiaries | - | - | 10,667 | 15,309 |
| Total | - | - | 10,667 | 15,309 |
| Services Sales & Other Sales | ||||
| Subsidiaries | - | - | 4,780 | 2,826 |
| Other Related parties | 1,925 | 4,277 | 1,925 | 4,277 |
| Total | 1,925 | 4,277 | 6,705 | 7,103 |
| Services Purchases | ||||
| Subsidiaries | - | - | 2,533 | 2,119 |
| Management remuneration and fringes | 6,196 | 5,525 | 4,865 | 4,826 |
| Other Related parties | 9,645 | 5,455 | 9,496 | 5,225 |
| Total | 15,841 | 10,980 | 16,894 | 12,170 |
| MYTILINEOS GROUP | MYTILINEOS S.A. | ||||
|---|---|---|---|---|---|
| (Amounts in thousands €) | 30/06/2019 | 31/12/2018 | 30/06/2019 | 31/12/2018 | |
| Loans given to Related Parties | |||||
| Subsidiaries | - | - | 161,411 | 122,338 | |
| Other Related parties | - | - | - | - | |
| Total | - | - | 161,411 | 122,338 | |
| Loans received from Related Parties | |||||
| Subsidiaries | - | - | - | - | |
| Total | - | - | - | - | |
| Receivables from Related Parties | |||||
| Subsidiaries | - | - | 99,826 | 93,612 | |
| Management remuneration and fringes | - | - | - | - | |
| Other Related parties | 90,875 | 61,474 | 4,732 | 4,834 | |
| Total | 90,875 | 61,474 | 104,558 | 98,446 | |
| Guarantees granted for Related Parties | |||||
| Subsidiaries | 1,456,225 | 955,313 | 1,456,225 | 955,313 | |
| Total | 1,456,225 | 955,313 | 1,456,225 | 955,313 | |
| Payables to Related Parties | |||||
| Subsidiaries | - | - | 21,616 | 19,281 | |
| Management remuneration and fringes | - | - | 4,903 | 188 | |
| Other Related parties | 633 | 133 | 571 | 129 | |
| Total | 633 | 133 | 27,089 | 19,598 |
Out of the above mentioned parent company guarantees:
€ 179.8 Mio are parent company guarantees for bank loans of the Group's subsidiaries and other Financials and
€ 1,276.5 Mio are parent company guarantees on behalf of customers and suppliers of the Group's subsidiaries.
It is noted that the above amount of guarantees issued by the parent on behalf of customers and suppliers of its subsidiaries refers to the maximum amount of the guarantee and the respective risk undertaken by the parent regardless of the probability of realization of said risk.
The parent company assesses the price that shall be invoiced to its subsidiaries for guarantees issued by the parent on behalf of them based on generally accepted pricing methods. In cases where such pricing exceeds the amount of the already agreed and charged management fees, there will be an incremental charge to cover the difference.
The above mentioned related party transactions are on a pure commercial basis. The Group or any of its related parties has not entered in any transactions that were not in an arm's length basis, and do not intent to participate in such transactions in the future. No transaction from the above mentioned was under any special terms.
The Group realized capital expenditures for the six month period ended June 30, 2019 of € 63,088 thousands (€ 46,555 thousands for the six month period ended June 30, 2018).
In July 2019, MYTILINEOS' subsidiary, METKA EGN, announces the signing of turnkey Engineering, Construction & Procurement contracts, with Total Eren, for two photovoltaic ("PV") projects in Kazakhstan, totaling a capacity of 128 MWp. Specifically, the first Project ("Nomad") is a 28 MWp PV power plant located close to the village of Zhalagash in the Kyzylorda region and the second Project ("MKAT") is a 100 MWp PV Power Plant located next to the village of Shu in the Zhambyl region. Both Projects will be the first PV power plants using single-axis trackers in Kazakhstan and are expected to enter operation by the end of 2019. Once completed, Nomad and M-KAT are expected to generate 225 GWh per year together, enough to supply the needs of about 40,000 Kazakh people while saving about 300,000 tons of CO2 per year. The total project cost for Nomad and M-Kat for Total Eren amounts to US\$ 157 million.
In addition, in July, the Company announced that one of the largest natural gas fired powered combined cycle (Combined Cycle Gas Turbine – CCGT) power stations in Europe is set to enter the construction phase. After completing all the required permitting procedures MYTILINEOS, leveraging off the expertise of its EPC Business Unit (under the brand name "METKA"), will begin construction within the fourth quarter of this year.
The 826MW new CCGT station will be constructed within the company's Energy Center in Aghios Nikolaos, in the Voiotia region of Central Greece. The station will be operated by a GE H-Class gas turbine with a thermal efficiency of more than 63%, rendering the plant as the most efficient across Europe. The projected investment cost will be €300m. The new job creation will be mainly covered by local regional residents, as per MYTILINEOS' standard practice. The commissioning of the new plant is estimated toward the 4th quarter of 2021.
In August 2019, MYTILINEOS S.A. announces that its subsidiary METKA EGN has recently signed a contract with Atacama Solar S.A., a subsidiary of the solar independent power producer Sonnedix, to undertake the EPC and O&M of the Atacama Solar II 170,65MWp PV project located in the municipality of Pica, Tarapaca Region, in Chile. The scope of the project includes the engineering, procurement and construction (EPC) of the Atacama Solar II plant, as well as a contract for the operation and maintenance (O&M) services for two years. The project is expected to be completed in December 2020 and the production is estimated to cover the needs of more than 100,000 households, while contributing in the avoidance of the emission of around 200,000 metric tons of CO2 per year. The total cost of the investment for Sonnedix is of US\$180 million (EUR 160milllion).
In August 2019 MYTILINEOS S.A. (the "Company") announces that the Annual General Meeting of the Company's Shareholders, held on June 24, 2019, resolved, among others, to change the Company's business name from "MYTILINEOS HOLDINGS S.A." to "MYTILINEOS S.A." with the distinctive title "MYTILINEOS". On 17.07.2019 the Ministry of Finance and Development by its decision approved the relevant amendment of the Company's articles of association. As of Tuesday, September 3rd, 2019 the Company's business name on the Athens Exchange will be changed to "MYTILINEOS S.A." with the distinctive title "MYTILINEOS".
In September 2019, MYTILINEOS S.A. announces that its subsidiary METKA EGN has recently has recently entered an agreement for a 10-year electricity supply contract (PPA) with Coles, Australia's second largest super market chain. The electricity will derive exclusively from renewable sources. Specifically, 220 GW/h will be produced annually to power Australia's electricity system through three privately owned by METKA EGN photovoltaic parks in the New South Wales Region. With the use of solar energy, carbon dioxide emissions will be reduced by 180,000 tonnes per year.
Coles' wide network of stores will cover 10% of its energy needs by purchasing 70% of the power generated by the three METKA EGN projects with total capacity of 120MW.
Maroussi, 11 September 2019
THE PRESIDENT OF THE BOARD & CHIEF EXECUTIVE OFFICER
THE VICE-PRESIDENT A' OF THE BOARD
EVANGELOS MYTILINEOS SPYRIDON KASDAS
I.D. No ΑΝ 094179/2017 I.D. No ΑB 050826/2006
THE CHIEF FINANCE OFFICER THE FINANCIAL DIRECTOR
I.D. No ΑΖ 556040/2008 I.D. No AB 263393/2006
IOANNIS KALAFATAS SPYRIDON PETRATOS
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