Quarterly Report • Sep 21, 2023
Quarterly Report
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For the six-month period ended 30 June 2023
| Interim management report | 2 |
|---|---|
| Management Statement | 18 |
| Shareholder Information | 19 |
| Condensed Consolidated Interim Financial Statements20 | |
| Condensed Consolidated Statement of Financial Position | 21 |
| Condensed Consolidated Statement of Profit or Loss | 22 |
| Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | 23 |
| Condensed Consolidated Statement of Changes in Equity | 24 |
| Condensed Consolidated Statement of Cash Flows | 25 |
| Notes to the Condensed Consolidated Interim Financial Statements | 26 |
| Statutory auditor's report on review of condensed consolidated Interim Financial Statements for the period ended 30 June 2023 |
41 |
| Appendix – Alternative Performance Measures (APMs) | 42 |
This section focuses on Viohalco's business performance for the period ended 30 June 2023. Interim financial statements, prepared in accordance with IAS 34, are presented on pages 20 to 40.
Viohalco's financial performance remained strong during Η1 2023, driven by the strong production infrastructure, a diversified product portfolio and an extensive backlog of existing and newly awarded projects. The above supported performance despite the softened demand for the aluminium and steel products, the increased energy prices and inflationary pressures.
H1 2023 results have been driven largely by the increased demand in the cables and steel pipes segments, due to the progression of the existing energy-related projects and the securing of new ones. The aluminium and steel segments have shown continued resilience to the softened demand and adverse macro-economic conditions, being able to further gain market share in the period. The copper segment showed improved adjusted operational profitability, mainly attributable to the improvements in productivity and competitive positioning of the subsidiary Sofia Med. Finally, the real estate division has also recorded a positive performance, with Noval Property remaining on track with its Initial Public Offering (IPO) plan on the Athens Stock Exchange.
Despite the macroeconomic uncertainty, Viohalco companies continued to invest in their operations to realise continued performance improvements and maintained their focus on the health, safety, and well-being of their employees, as well as on delivering against their broader social and environmental goals.
Viohalco's financial reporting splits into two divisions, based on their distinct business characteristics and performance metrics:
| Industrial | Real Estate | ||||
|---|---|---|---|---|---|
| Aluminium | Copper | Cables | Steel Pipes | Steel |
The industrial division, including aluminium, copper, cables, steel pipes, steel, R&D&I and technology segments, and the real estate division comprising of Viohalco's property investments and real estate related entities.
| Key highlights | |||||
|---|---|---|---|---|---|
| € 3.3 bln. | € 260 mil. | € 55 mil. | € 42 mil. |
€ 122 mil. | 4.6x |
| Revenue (H1 2022: € 3.6 bln.) |
a-EBITDA (H1 2022: € 350 mil.) |
Profit before tax (H1 2022: € 294 mil.) |
Net Profit | CAPEX H1 2023 |
Net Debt / EBITDA |
| Amounts in EUR thousands | H1 2023 | H1 2022 |
|---|---|---|
| Revenue | 3,346,830 | 3,583,241 |
| Gross profit | 286,181 | 459,654 |
| EBITDA | 213,226 | 407,035 |
| a-EBITDA | 259,949 | 350,326 |
| EBIT | 140,793 | 341,110 |
| a-EBIT | 187,516 | 284,401 |
| Net finance cost | -86,087 | -48,150 |
| Profit before tax | 55,382 | 294,316 |
| Capex | 122,220 | 138,301 |
| Amounts in EUR thousands | 30/06/2023 | 31/12/2022 |
| Property, plant, and equipment (PP&E) | 2,141,731 | 2,230,385 |
| Net debt | 1,901,259 | 1,922,988 |
Τhe revenue of the industrial division amounted to EUR 3,347 million and the profit before tax to EUR 55 million showing a decrease of 81% compared to Η1 2022, while the operating profitability (a-EBITDA) of the industrial division amounted to EUR 260 million.
Viohalco's industrial division is composed of the following segments: aluminium, copper, cables, steel pipes and steel.
mechanical engineering sector, both of which are expected to continue into H2 2023. Sales in low-carbon plates increased, mainly in northern European markets, while SBQs and merchant bars maintained sales volumes with reinforcement steel and wire rod demand negatively affected in the European and Balkan markets. The Greek construction market proved to be a positive exception, with demand from both residential and infrastructure projects continuing to grow, albeit at a more moderate rate than in 2022.
| € 17.4 mil. | € 8.8 mil. | 469.000 sqm | 97% | € 7.9 mil. |
|---|---|---|---|---|
| Revenue | a-EBITDA | GBA* | Occupancy | Capex |
| (H1 2022: | (H1 2022: | rate** | ||
| € 13.8 mil.) | € 4.9 mil.) |
* Referring to the portfolio of real estate assets of Noval Property
** Referring to the income producing portfolio of Noval Property.
• Finally, in the real estate division, Noval Property recorded a strong set of results despite macro-economic and geopolitical challenges affecting the sector. This was achieved through continuous active management and the progression of its investment program, which saw the enhancement of both the fair value of its investment portfolio and the company's profit before tax. Of particular note was the increased footfall across Noval Property's retail assets, combined with increased revenue from these assets and higher rental adjustments in the rest of the portfolio. At the same time, progress in the company's captive pipeline development and construction continued on schedule, which will add more sustainable and environmentally certified assets to the portfolio.
It should be noted that Viohalco applies the historical cost model in investment property, while certain real estate division subsidiaries (such as Noval Property) follow the fair value model. Noval Property Η1 2023 profit before taxes, based on the fair value model, amounted to EUR 24.4 million, while GAV as of 30.6.2023 (including long term leases) amounted to EUR 524.5 million and NAV stood at EUR 386.8 million.
Viohalco companies reaffirm their unwavering commitment to addressing environmental, social and governance (ESG) risks and opportunities which have been fully incorporated in business operations, in order to account for any potential impacts to society and the environment. The companies' comprehensive framework extends across all subsidiaries and is focused on continuous improvement in energy efficiency, enhancing health and safety measures in their industrial operations and furthering responsible sourcing practices.
____
For further information, please contact:
Sofia Zairi, Chief Investor Relations Officer Tel: +30 210 6861111 Email: [email protected]
A conference call to discuss these results will be held on Friday, September 22nd, 2023, at 12:00 GMT / 14:00 EET.
To participate in the teleconference, please dial in approximately 5 minutes before the start of the call and use one of the following telephone numbers:
| Amounts in EUR thousands | H1 2023 | H1 2022 |
|---|---|---|
| Revenue | 3,364,227 | 3,596,996 |
| Gross profit | 294,399 | 463,120 |
| EBITDA | 224,879 | 411,966 |
| a-EBITDA | 268,748 | 355,257 |
| EBIT | 149,443 | 341,359 |
| a-EBIT | 193,311 | 284,650 |
| Net finance cost | -89,295 | -49,707 |
| Profit before tax | 60,513 | 292,695 |
| Profit for the period | 45,425 | 233,955 |
| Profit attributable to owners | 36,510 | 207,377 |
Consolidated revenue amounted at EUR 3.4 billion, down by 6.5% compared to H1 2022 (EUR 3.6 billion), primarily due to the weaker demand in the aluminium and steel segments and the downtrend in metal prices, partially offset by the strong performance of the cables segment, which continued its growth momentum, and the positive turnaround of the steel pipes segment.
The decrease in Consolidated a-EBITDA by 24% to EUR 269 million for H1 2023 (H1 2022: EUR 355 million), underlined the reduction in sales volumes in specific segments, as well as the intensifying inflationary pressures; consolidated EBITDA decreased by 45% to EUR 225 million.
Net finance cost increased to EUR 89 million (H1 2022: EUR 50 million), reflecting the increase in interest rates.
Consolidated profit before income tax for the period amounted to EUR 61 million, compared to EUR 293 million in H1 2022, mainly affected by the decline in metal prices, which rose in prior year period, and the increased interest cost.
Consolidated net profit after income tax and minority interests amounted to EUR 37 million, compared to EUR 207 million in H1 2022; while earnings per share amounted to EUR 0.141 (H1 2022: EUR 0.799).
| Amounts in EUR thousands | 30 June 2023 | 31 Decemeber 2022 |
|---|---|---|
| Fixed and intangible assets | 2,692,301 | 2,625,715 |
| Other non-current assets | 143,045 | 100,709 |
| Non-current assets | 2,835,346 | 2,726,424 |
| Inventory | 1,811,367 | 1,914,098 |
| Trade and other receivables (incl. contract assets) | 953,777 | 874,921 |
| Cash and cash equivalents | 445,945 | 412,644 |
| Other current assets | 40,739 | 102,109 |
| Current assets | 3,251,828 | 3,303,772 |
| Total assets | 6,087,174 | 6,030,196 |
| Equity | 1,947,510 | 1,955,895 |
| Loans and borrowings | 1,522,881 | 1,471,299 |
| Other non-current liabilities | 224,703 | 219,685 |
| Non-current liabilities | 1,747,585 | 1,690,985 |
| Amounts in EUR thousands | 30 June 2023 | 31 Decemeber 2022 |
|---|---|---|
| Loans and borrowings | 921,904 | 958,166 |
| Trade and other payables (incl. contract liabilities) | 1,393,206 | 1,304,828 |
| Other current liabilities | 76,969 | 120,322 |
| Current liabilities | 2,392,079 | 2,383,316 |
| Total equity and liabilities | 6,087,174 | 6,030,196 |
Capital expenditure for the period amounted to EUR 130 million (H1 2022: EUR 163 million), mainly attributable to the investment programme carried out in the aluminium segment, which included the advanced six-high cold rolling mill and the automated lacquering line, the implementation of the planned offshore cables capacity expansion in the submarine cables production plant of Hellenic Cables in Corinth, Greece, operational improvements in the copper plant of Sofia Med, Bulgaria, and the production capacity increase and equipment replacement in the steel segment plants.
Working capital decreased by 9% reaching EUR 1,346 million, compared to 31 December 2022 (EUR 1,477), mainly due to inflated metal prices during 2022.
Net debt decreased marginally to EUR 2,041 million (31 December 2022: EUR 2,057 million).
| Amounts in EUR Revenue thousands |
EBITDA | a-EBITDA | EBIT | EBT | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Segments | H1 2023 | H1 2022 | H1 2023 | H1 2022 | H1 2023 | H1 2022 | H1 2023 | H1 2022 | H1 2023 | H1 2022 | |
| Aluminium | 1,014,852 | 1,200,862 | 56,451 | 174,266 | 80,706 | 129,886 | 23,493 | 145,407 | 2,505 | 133,503 | |
| Copper | 957,581 | 978,110 | 53,513 | 54,123 | 59,019 | 46,837 | 44,351 | 45,882 | 32,096 | 37,400 | |
| Industrial Division | Cables | 460,214 | 426,651 | 52,036 | 45,796 | 58,901 | 47,854 | 42,248 | 36,929 | 20,348 | 25,948 |
| Steel pipes | 304,989 | 190,050 | 27,800 | 3,402 | 27,800 | 3,901 | 22,988 | -1,045 | 10,248 | -3,560 | |
| Steel | 573,051 | 743,854 | 25,665 | 124,623 | 35,886 | 117,153 | 11,722 | 111,158 | -5,143 | 98,900 | |
| Other activities |
36,144 | 43,714 | -2,239 | 4,825 | -2,363 | 4,695 | -4,008 | 2,779 | -4,672 | 2,126 | |
| Total | 3,346,830 | 3,583,241 | 213,226 | 407,035 | 259,949 | 350,326 | 140,793 | 341,110 | 55,382 | 294,316 | |
| Real Estate Division * |
17,397 | 13,755 | 11,653 | 4,931 | 8,799 | 4,931 | 8,650 | 249 | 5,130 | -1,622 | |
| Consolidated | 3,364,227 | 3,596,996 | 224,879 | 411,966 | 268,748 | 355,257 | 149,443 | 341,359 | 60,513 | 292,695 |
* In addition to Noval Property, the real estate segment of Viohalco includes other entities active in real estate operations. It should be noted that Viohalco applies the historical cost model in investment property, while certain real estate segment subsidiaries (such as Noval Property) follow the fair value model. In H1 2023, Noval Property's earnings before taxes amounted to EUR 24.4 million, based on the fair value model.
In H1 2023, the revenue of the aluminium segment decreased by 15% to EUR 1,015 million vs. EUR 1,201 million in H1 2022, mainly driven by unfavourable macroeconomics, soft market demand and lower average aluminium prices. Profit before income tax amounted to EUR 3 million (H1 2022: EUR 134 million).
The aluminium sector of ElvalHalcor, maintained a competitive edge in the market by focusing on product mix optimisation with diversification across sectors. This was conducted in parallel to prudent adjustments in capacity allocation and operational efficiency enhancements.
Spiking inflation and soft market conditions saw decreased consumer discretionary spending and an associated downward pressure on industrial activity creating business stagnation in the building and construction markets. Even resilient sectors, such as rigid and flexible packaging, have been trending unfavourably during the semester with no evident signs of a quick rebound, due to the slow normalization of customers' excess inventory.
Looking ahead to H2 2023, we expect the volatile business landscape and the negative macro sentiment to continue challenging business performance, posing further downside risks to the demand and price outlook. In the longer term, we anticipate flat rolled products FRP demand fundamentals to gradually regain balance, influenced by changing consumer considerations around lightweight, energyefficient, and recyclable product solutions, driven by global sustainability megatrends in climate neutrality, clean energy and the circular economy. The aluminium segment will continue to reshape its portfolio into faster-expanding product categories, added-value applications and new geographies, establishing solid customer collaborations to futureproof its business growth.
During H1 2023, Bridgnorth Aluminium continued to meet demand for high-quality aluminium products amongst global customers. The company underwent a comprehensive restructuring program, following the loss of one of its major customers in the lithographic sector in 2022-2023. While the demand for products manufactured at Bridgnorth Aluminium was subdued in H1 2023, the company is further optimising quality and operational efficiency through a focused investment program. This will allow Bridgnorth Aluminium to meet current and future customer demand and remain prepared to capture new market opportunities, such as battery foil production for the global EV industry.
For Etem Gestamp, H1 2023 has seen the continuation of challenging market dynamics from the last quarter of 2022, with lower demand for industrial products and further declines in conversion prices being brought about by increased market competition. The combination of the above, coupled with high interest rates has impacted bottom line profitability. Looking into H2 2023, the primary challenges remain the elevated costs of financing and a weak industrial market. On the upside the shift in the company's sales to automotive products, which already account for more than 45% of the total output, is a positive development, with automotive showing particular resilience and signs of further growth.
Copper segment revenue stood at EUR 958 million vs. EUR 978 million in H1 2022, negatively affected by the decline in metal prices and reduced volumes. Profit before income tax amounted to EUR 32 million (H1 2022: EUR 37 million).
The drop in demand, stemming from global macroeconomic dynamics beginning in H2 2022, continued throughout H1 2023, affecting most market segments and construction in particular. This had an impact primarily on sales volumes for extruded copper alloy products at ElvalHalcor,
which dropped by 43.1%, and secondarily on copper tubes volumes, which dropped by 13.9%. Additionally, the volume of sales amongst the smaller subsidiaries, Cablel Wires and Epirus Metalworks also declined.
Nevertheless, the copper segment recorded a strong operational performance, mainly due to ElvalHalcor's subsidiary Sofia Med which increased sales and profitability in both rolled copper and alloy products and copper bus bars, which grew by 6.4% and 5.3% respectively, taking advantage of firmer demand in key market segments, improvements in productivity and the company's competitive positioning.
Overall sales volumes for the segment fell by 7.8%, but operational profitability was boosted by a higher value-added mix and sturdy prices in most segments. Profitability was further supported by healthy scrap discounts and availability, the reduction in natural gas costs, and optimisation of both processes and the customer portfolio.
Metal prices in the period were much lower than the previous year, with copper averaging EUR 8,050/tn vs. EUR 8,926/tn for H1 2022. This affected revenue and metal results that turned to losses of EUR 5.6 million in H1 2023 from profits of EUR 7.5 million in H1 2022.
Market conditions are not expected to change within the year and demand is expected to remain subdued. As cost reductions and production optimisation initiatives are continuing to show increasing benefits throughout most subsidiaries, the outlook for the segment remains solid.
Revenue for the cables segment reached EUR 460 million (+8% y-o-y), with this growth being driven mainly by the projects business (+15% revenue growth y-o-y). Profit before income tax amounted to EUR 20 million (H1 2022: EUR 26 million).
The solid demand for cables products in all geographical regions (i.e. Central Europe, United Kingdom, Balkans, Southeast Mediterranean) helped the power and telecom business unit improve its profit margins per ton of products sold. This, along with a full production schedule, an
improved sales mix and steady high margins in projects, led to a 23% y-o-y growth in a-EBITDA (+EUR 11 million). During Η1 2023, the tendering activity of Hellenic Cables continued successfully with several new project awards in the offshore wind and interconnection markets. As a result, the order backlog of the segment reached EUR 1.85 billion by 30 June 2023, its highest level ever (EUR 1.35 billion on 31.12.2022). At the same time, several projects were successfully delivered either fully or partially throughout Η1 2023. Profit margins for the products business unit increased, due to solid demand in all main markets and a good product mix, with these factors further contributing to the segment's profitability. H1 2023 capital expenditure for the cables segment amounted to EUR 54.7 million and mainly concerned the planned expansion of offshore cables capacity at the Corinth, Greece plant.
The cables segment is confident in its continued growth momentum across both business units, with demand for products remaining strong and a growing projects backlog. The large set of secured project orders and high-capacity utilisation in all plants throughout 2023 persist as the two main profitability pillars for the segment. Electrification momentum in Europe and the increasing demand for grid connections are expected to further fuel the order book for land cables. Preparing for this, Hellenic Cables has already acquired an industrial area near its factory in Thiva, Greece for future expansion plans needed to serve this growing onshore demand. As for the offshore projects business unit, several awards were secured during the last months.
Hellenic Cables, through its two-year investment program in the Corinth, Greece plant, aims to strengthen further its role as a key enabler of the green energy transition. Such investments will allow the company to effectively execute a record high order backlog and serve the increasing expectations of customers and stakeholders. Lastly, and following previous announcements, discussions with Ørsted are continuing on a partnership for the construction of a submarine inter array cables factory in Maryland, USA.
The end of 2022 signalled a positive turnaround in the performance of the steel pipes segment. This was confirmed in the first six months of this year, as revenue increased by 60% compared to the same period last year (EUR 305 million vs. EUR 190 million). This along with high-capacity utilisation and a higher-margin projects mix led to a notable improvement in profitability. Profit before income tax amounted to EUR 10 million compared to a loss of EUR 4 million in H1 2022.
Fossil fuel demand drove a steel pipes market
turnaround from the second half of 2022, which continued strong within 2023, supported by high energy prices in combination with the increased significance of energy security in many European countries. Demand growth resulted in many pipeline projects being revived and hastily pushed into the execution phase. In this positive commercial environment, Corinth Pipeworks consolidated its position as a Tier1 pipe manufacturer and a leader in new gas transportation technologies, as well as highpressure pipelines for hydrogen and carbon capture and storage. Within the year, it successfully executed several pipeline projects and was awarded significant new contracts by Chevron Mediterranean Ltd., Equinor, ONE-Dyas B.V. and other major clients. As a result of these awards, the backlog at the end of H1 2023 reached EUR 0.63 billion, with a new intake of over EUR 220 million.
The steel pipes segment is building on its strengthened position based on high-capacity utilization throughout the rest of the year. Strong operations are expected to bring back down any seasonal peaks in working capital observed during the semester and normalize leverage to more sustainable levels. Looking ahead, Corinth Pipeworks expects the gas fuel industry to keep on evolving together with the other energy transition pillars. As market conditions improve, so does the order backlog, feeding into a positive outlook for 2024.
Revenue in the steel segment amounted to EUR 573 million in H1 2023 versus EUR 744 million in H1 2022. Loss before income tax amounted to EUR 5 million (H1 2022: profit EUR 99 million).
During H1 2023, Europe's construction market, the main steel-using sector, experienced a slowdown for the first-time post 2020. Additionally, elevated production and energy costs, together with the increase of imports from countries outside the EU replacing supply from Russia and Ukraine, led to volume and price pressures across all product lines.
In reinforcement steel, this was primarily due to a slowdown in demand within the residential construction sub-sector, with this occurring in almost all countries following rising interest rates and building material costs. Greece was an exception with demand continuing to grow in both residential and infrastructure projects, albeit at a more moderate rate than 2022. Sales of wire rod were also negatively affected in the period due its more international customer base, while merchant bars had stable sales volume, due to an increased focus on local and Central European markets and the company's strong market position in the Balkans and Cyprus.
A rise in sales of hot rolled plates occurred mostly in the Baltic countries and Finland, where their low carbon footprint provided an advantage over the competition. Special bar quality steels (SBQs) maintained sales volume due to the relatively strong performance of European mechanical engineering and heavy vehicles production sectors.
During H1 2023, several steel segment companies initiated projects driving the transition to a lowcarbon economy with process improvements made through utilizing scrap as the sole source material for steel production. Our EPD product portfolio expanded further, offering customers reliable and quantitative information regarding environmental impact over the whole product life cycle. Finally, Sidenor plant received the EPD for wire rod, SD concrete reinforcing steel in bars and coils.
Into H2 2023, uncertainty persists due to the recession in the European construction sector and a lack of dynamism in the mechanical engineering sector.
The revenue for the real estate division amounted to EUR 17.4 million in H1 2023 (H1 2022: EUR 13.8 million), and the profit before income tax amounted to EUR 5.1 million, compared to a loss of 1.6 million in H1 2022. It should be noted that Viohalco applies the historical cost model in investment property, while certain real estate segment subsidiaries (such as Noval Property) follow the fair value model.
Noval Property's H1 2023 profit before tax, based on the fair value model, amounted to EUR 24.4 million and the company recorded a 6% increase
in the fair value of its investment portfolio from EUR 486 million as at 31 December 2022 to EUR 516 million as at 30 June 2023 (as per the respective Investment Schedules). This was achieved in the context of several operating challenges, including increases in energy and product prices, heightened interest rates and ongoing geopolitical turbulence in the region. Part of this positive performance stems from the continuous active management of existing properties and the increasing trend for high-quality and sustainable buildings in Greece. In particular, the increased footfall recorded across Noval Property's retail assets was combined with increased revenue through higher rental adjustments across the rest of the portfolio. Following the successful issue of a EUR 120 million Green Bond (listed on Athens Stock Exchange) in December 2021, Noval Property's captive investment programme progressed as planned. Current works underway toward this includes the construction of one logistics and two office buildings, the renovation of an office building and the retrofitting of a mixed-use property.
Looking ahead to the remainder of 2023, Noval Property will continue with its investment plan, not only in relation to projects already in progress, but also with regard to new acquisitions. These will be in line with the company's strategic focus on sustainable development through modern, smart and environmentally accredited assets. Furthermore, Noval Property will progress with the preparations for its listing on the Athens Stock Exchange.
There are no subsequent events affecting the consolidated financial statements.
Looking to the second half of the year, the levels of macroeconomic uncertainty remain elevated, with energy prices still volatile, interest rates at high levels and demand fluctuations continuing to persist, thereby affecting demand.
Viohalco's diversified business model, its improved production efficiency and capacity, together with continued product portfolio and operational optimization, reaffirm the confidence in the Viohalco companies' ability to respond to macro-economic challenges with agility and resilience.
While there is a positive outlook around the long-term megatrends related to global sustainability and energy security, the shorter-term outlook remains cautious, due to the prolonged economic uncertainty.
| Date | Event |
|---|---|
| Friday, September 22nd, 2023 | Half yearly 2023 results conference call |
| Thursday, March 7th , 2024 |
Financial results 2023 press release |
| Tuesday, May 28th, 2024 | Ordinary General Meeting 2024 |
The Annual Financial Report for the period 1 January 2023 – 31 December 2023 will be published on Thursday, April 4th, 2024 and will be posted on the Company's website, www.viohalco.com, on the Euronext Brussels Exchange website www.euronext.com, as well as on the Athens Stock Exchange website www.athexgroup.gr.
Viohalco is the Belgium based holding company of leading metal processing companies in Europe. It is listed on Euronext Brussels (VIO) and the Athens Stock Exchange (BIO). Viohalco's subsidiaries specialise in the manufacture of aluminium, copper, cables, steel and steel pipes products, and are committed to the sustainable development of quality, innovative and value-added products and solutions for a dynamic global client base. With main production facilities in Greece, Bulgaria, Romania, the United Kingdom and North Macedonia, Viohalco companies generate a consolidated annual revenue of EUR 7 billion (2022). Viohalco's portfolio also includes an R&D&I and technology segment. In addition, Viohalco and its companies own real estate investment properties, mainly in Greece, which generate additional value through their commercial development. For more information, please visit our website at www.viohalco.com
Forfurther information, please contact: Sofia Zairi Chief Investor Relations Officer T +30 210 6861111, 6787773 E [email protected]
Ippokratis Ioannis Stassinopoulos, Xavier Bedoret, Jean-Charles Faulx, Efstratios Thomadakis, members of the Executive Management, certify, on behalf and for the account of the Company, that to their knowledge:
a) the condensed consolidated interim financial statements which have been prepared in accordance with IAS 34, "Interim Financial Reporting "as adopted by the European Union, give a true and fair view of the Equity, Financial position and Financial Performance of the Company, and its subsidiaries and associates;
b) the interim management report includes a fair overview of the information required under Article 13, §§ 5 and 6 of the Royal Decree of November 14, 2007 on the obligations of issuers of financial instruments admitted to trading on a regulated market.
Viohalco's share capital is set at EUR 141,893,811.46 divided into 259,189,761 shares without nominal value. The shares have been issued in registered and dematerialised form. All the shares are freely transferable and fully paid up. The Company has not issued any other category of shares, such as non-voting or preferential shares. All the shares representing the share capital have the same rights. In accordance with the articles of association of the company, each share entitles its holder to one vote.
Viohalco's shares are listed under the symbol "VIO" with ISIN code BE0974271034 on the regulated market of Euronext Brussels and on the main market of the Athens Exchange with the same ISIN code and with the symbol VIO (in Latin characters) and BIO (in Greek characters).
Condensed Consolidated Interim Financial Statements
| Amounts in EUR thousands | Note | 30 June 2023 | 31 December 2022 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | 12 | 2,293,025 | 2,231,036 |
| Right of use assets | 35,915 | 35,279 | |
| Intangible assets and goodwill | 12 | 42,275 | 43,376 |
| Investment property | 13 | 321,086 | 316,024 |
| Equity-accounted investees | 10 | 34,449 | 36,638 |
| Other investments | 17 | 37,480 | 8,405 |
| Deferred tax assets | 13,459 | 9,628 | |
| Derivatives | 17 | 20,739 | 38,922 |
| Trade and other receivables | 36,697 | 6,893 | |
| Contract costs | 222 | 222 | |
| 2,835,346 | 2,726,424 | ||
| Current assets | |||
| Inventories | 14 | 1,811,367 | 1,914,098 |
| Trade and other receivables Contract assets |
11 | 701,473 252,304 |
675,083 199,839 |
| Contract costs | - | 14 | |
| Derivatives | 17 | 26,732 | 27,149 |
| Income tax receivables | 13,667 | 7,081 | |
| Cash and cash equivalents | 445,945 | 412,644 | |
| Assets held for sale | 17 | 340 | 67,865 |
| 3,251,828 | 3,303,772 | ||
| Total assets | 6,087,174 | 6,030,196 | |
| EQUITY | |||
| Equity attributable to owners of the Company | |||
| Share capital | 141,894 | 141,894 | |
| Share premium | 457,571 | 457,571 | |
| Translation reserve | -29,859 | -30,802 | |
| Other reserves | 446,059 | 448,298 | |
| Retained earnings | 657,176 | 663,823 | |
| 1,672,841 | 1,680,784 | ||
| Non-controlling interests | 15 | 274,669 | 275,111 |
| Total equity | 1,947,510 | 1,955,895 | |
| Non-current liabilities | |||
| Loans and borrowings | 16 | 1,522,881 | 1,471,299 |
| Lease liabilities | 16 | 31,664 | 29,449 |
| Derivatives | 17 | 3,033 | 1,249 |
| Deferred tax liabilities | 102,539 | 103,489 | |
| Employee benefits | 25,154 | 24,357 | |
| Grants | 31,150 | 32,454 | |
| Provisions | 1,749 | 1,727 | |
| Trade and other payables | 19,525 | 17,073 | |
| Contract Iiabilities | 9,889 | 9,889 | |
| 1,747,585 | 1,690,985 | ||
| Current liabilities | |||
| Loans and borrowings | 16 | 921,904 | 958,166 |
| Lease liabilities | 16 | 9,999 | 10,932 |
| Trade and other payables | 1,191,557 | 1,180,881 | |
| Contract Iiabilities | 201,649 | 123,948 | |
| Current tax liabilities | 36,077 | 57,511 | |
| Derivatives | 17 | 15,723 | 18,455 |
| Provisions | 15,170 | 15,405 | |
| Liabilities directly associated with assets classified as held for sale | 17 | - | 18,020 |
| 2,392,079 | 2,383,316 | ||
| Total liabilities | 4,139,664 | 4,074,301 6,030,196 |
|
| Total equity and liabilities | 6,087,174 |
| For the six months ended 30 June | ||||
|---|---|---|---|---|
| Amounts in EUR thousands | Note | 2023 | 2022 | |
| Revenue | 6 | 3,364,227 | 3,596,996 | |
| Cost of sales | -3,069,828 | -3,133,876 | ||
| Gross profit | 294,399 | 463,120 | ||
| Other income | 7 | 19,748 | 7,644 | |
| Selling and distribution expenses | -48,939 | -42,398 | ||
| Administrative expenses | -98,086 | -76,310 | ||
| Impairment loss on trade and other receivables and contract assets | -6,392 | -1,482 | ||
| Other expenses | 7 | -11,288 | -9,214 | |
| Operating result | 149,443 | 341,359 | ||
| Finance income | 8 | 3,940 | 6,806 | |
| Finance cost | 8 | -93,235 | -56,513 | |
| Net finance income / cost (-) | -89,295 | -49,707 | ||
| Share of profit / loss (-) of equity-accounted investees | 10 | 365 | 1,042 | |
| Profit / Loss (-) before income tax | 60,513 | 292,695 | ||
| Income tax expense (-) | 9 | -15,088 | -58,739 | |
| Profit / Loss (-) | 45,425 | 233,955 | ||
| Profit / Loss (-) attributable to: | ||||
| Owners of the Company | 36,510 | 207,377 | ||
| Non-controlling interests | 8,915 | 26,578 | ||
| 45,425 | 233,955 | |||
| Earnings per share (in Euro per share) Basic and diluted |
0.141 | 0.799 | ||
| For the six months ended 30 June | ||||
|---|---|---|---|---|
| Amounts in EUR thousands | 2023 | 2022 | ||
| Profit/Loss (-) | 45,425 | 233,955 | ||
| Items that will never be reclassified to profit or loss: | ||||
| Equity investments in FVOCI - net change in fair value | -109 | -832 | ||
| Remeasurements of defined benefit liability | 1 | -11 | ||
| Related tax | -1 | 2 | ||
| Total | -109 | -840 | ||
| Items that are or may be reclassified to profit or loss: | ||||
| Foreign currency translation differences | 22 | 4,218 | ||
| Changes in fair value of cash flow hedges –effective portion | -11,011 | 76,190 | ||
| Changes in fair value of cash flow hedges - reclassified to profit or loss | -6,568 | -891 | ||
| Related tax | 3,911 | -16,827 | ||
| Total | -13,645 | 62,690 | ||
| Total other comprehensive income / expense (-) after tax | -13,754 | 61,850 | ||
| Total comprehensive income / expense (-) after tax | 31,671 | 295,805 | ||
| Total comprehensive income attributable to: | ||||
| Owners of the Company | 25,428 | 259,121 | ||
| Non-controlling interests | 6,243 | 36,684 | ||
| Total comprehensive income / expense (-) after tax | 31,671 | 295,805 |
| Amounts in EUR thousands | Note | Share capital |
Share premium |
Other reserves |
Translation reserve |
Retained earnings |
Total | Non controlling interests |
Total equity |
|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2023 | 141,894 | 457,571 | 448,298 | -30,802 | 663,823 | 1,680,784 | 275,111 | 1,955,895 | |
| Total comprehensive | |||||||||
| income | |||||||||
| Profit / loss (-) | - | - | - | - | 36,510 | 36,510 | 8,915 | 45,425 | |
| Other comprehensive income |
- | - | -11,899 | 818 | -1 | -11,082 | -2,672 | -13,754 | |
| Total comprehensive income |
- | - | -11,899 | 818 | 36,509 | 25,428 | 6,243 | 31,671 | |
| Transactions with owners of | |||||||||
| the Company | |||||||||
| Distribution of reserves | - | - | 9,671 | -31 | -9,640 | - | - | - | |
| Loss of Control/Disposal of subsidiary |
17 | - | - | -11 | 151 | -140 | - | - | - |
| Dividends | - | - | - | - | -31,103 | -31,103 | -6,126 | -37,228 | |
| Total | - | 9,660 | 121 | -40,883 | -31,103 | -6,126 | -37,228 | ||
| Changes in ownership | |||||||||
| interests: | |||||||||
| Other changes in ownership | |||||||||
| interests | - | - | 1 | 5 | -2,273 | -2,267 | -560 | -2,827 | |
| Balance as at 30 June 2023 | 141,894 | 457,571 | 446,059 | -29,859 | 657,176 | 1,672,842 | 274,669 | 1,947,510 |
| Amounts in EUR thousands | Note | Share capital |
Share premium |
Other reserves |
Translation reserve |
Retained earnings |
Total | Non controlling interests |
Total equity |
|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2022 | 141,894 | 457,571 | 440,437 | -24,450 | 399,175 | 1,414,626 | 240,969 | 1,655,594 | |
| Total comprehensive income | |||||||||
| Profit / loss (-) | - | - | - | - | 207,377 | 207,377 | 26,578 | 233,955 | |
| Other comprehensive income | 48,850 | 2,901 | -7 | 51,744 | 10,106 | 61,850 | |||
| Total comprehensive income | - | - | 48,850 | 2,901 | 207,370 | 259,121 | 36,684 | 295,805 | |
| Transactions with owners of | |||||||||
| the Company | |||||||||
| Capitalization of reserves | - | - | -14,566 | 71 | 14,495 | - | - | - | |
| Share capital increase of | - | - | - | - | - | - | 24,626 | 24,626 | |
| subsidiary | |||||||||
| Dividends | - | - | - | - | -23,327 | -23,327 | -3,024 | -26,351 | |
| Total | - | - | -14,566 | 71 | -8,832 | -23,327 | 21,602 | -1,725 | |
| Changes in ownership | |||||||||
| interests: | |||||||||
| Acquisition of NCI | 15 | - | - | 173 | -907 | 11,767 | 11,032 | -30,604 | -19,572 |
| Other changes in ownership interests |
- | - | -2 | 32 | -2,567 | -2,537 | 2,537 | - | |
| Balance as at 30 June 2022 | 141,894 | 457,571 | 474,892 | -22,354 | 606,913 | 1,658,916 | 271,187 | 1,930,102 |
| For the six months ended 30 June | |||
|---|---|---|---|
| Amounts in EUR thousands | Note | 2023 | 2022 |
| Cash flows from operating activities | |||
| Profit / loss (-) | 45,425 | 233,955 | |
| Adjustments for: | |||
| Income tax expense/ credit (-) | 9 | 15,088 | 58,739 |
| Depreciation of PP&E | 65,755 | 61,193 | |
| Depreciation of right of use assets | 4,946 | 4,106 | |
| Amortisation of intangible assets | 3,473 | 3,288 | |
| Depreciation of investment property | 2,616 | 3,904 | |
| Impairment / Reversal of impairment loss (-) and write off of PP&E and Investment | -1,763 | 991 | |
| Property | |||
| Profit (-) / loss from sale of PP&E and intangible assets | -942 | -87 | |
| Profit (-) / loss from sale of investment property | - | -340 | |
| Profit (-) / loss from derivatives valuation | 1,096 | -2,685 | |
| Gains (-) / losses from sales of subsidiaries | -4,462 | 1,343 | |
| Gains (-) / losses from financial assets valuation | -2,405 | - | |
| Amortisation of grants | -1,353 | -1,885 | |
| Finance cost | 8 | 93,235 | 56,513 |
| Finance income | 8 | -3,940 | -6,806 |
| Impairment loss on trade and other receivables, including contract assets | 6,392 | 1,482 | |
| Share of profit (-) / loss of equity-accounted investees | 10 | -365 | -1,042 |
| 222,795 | 412,669 | ||
| Changes | |||
| Decrease / increase (-) in inventories | 102,730 | -536,543 | |
| Decrease / increase (-) in receivables | 11 | -63,231 | -247,821 |
| Decrease / increase (-) in contract assets | 11 | -52,466 | -116,006 |
| Decrease / increase (-) in contract costs | 14 | 23 | |
| Decrease (-) / increase in liabilities | 16,712 | 195,159 | |
| Decrease (-) / increase in employee benefits liability | 797 | 985 | |
| Decrease (-) / increase in provisions | -213 | 611 | |
| Decrease (-) / increase in contract liabilities | 77,701 | 15,356 | |
| Cash generated from operating activities | 82,045 304,840 |
-688,235 -275,566 |
|
| Interest charges and related expenses paid | -86,977 | -51,687 | |
| Income tax paid | -13,766 | -4,256 | |
| Net cash flows from operating activities | 204,097 | -331,509 | |
| Cash flows from investing activities | |||
| Acquisition of PP&E and intangible assets | 12 | -133,544 | -120,345 |
| Acquisition of investment property | 13 | -7,707 | -21,517 |
| Proceeds from sale of PP&E and intangible assets | 1,488 | 1,136 | |
| Proceeds from sales of investment property | - | 1,100 | |
| Acquisition/ share capital increase of associates & joint ventures | 10 | -1,400 | -3,250 |
| Share of NCI in subsidiaries' share capital increase / decrease (-) | - | -301 | |
| Acquisition of other investments | -144 | -230 | |
| Proceeds from sales of subsidiaries and associates | - | 2,300 | |
| Interest received | 2,684 | 215 | |
| Dividends received | 94 | 262 | |
| Cash acquired from business combination | - | 84 | |
| Net cash flows from investing activities | -138,529 | -140,546 | |
| Cash flows from financing activities | |||
| Proceeds from borrowings | 16 | 294,035 | 428,296 |
| Repayment of borrowings | 16 | -284,462 | -120,777 |
| Principal elements of lease payments | 16 | -8,787 | -5,549 |
| Proceeds from collection of grants | 50 | 105 | |
| Acquisition of NCI | 15 | -5,696 | -9,228 |
| Dividends paid to shareholders | -21,772 | -23,327 | |
| Dividends paid to non-controlling interest | -5,372 | -2,417 | |
| Net cash flows from financing activities | -32,005 | 267,103 | |
| Net decrease (-)/ increase in cash and cash equivalents | 33,563 | -204,952 | |
| Cash and cash equivalents at beginning of period | 412,644 | 503,267 | |
| Foreign exchange effect on cash and cash equivalents | -263 | 155 | |
| Cash and cash equivalents at the end of period | 445,945 | 298,470 |
Viohalco S.A. (hereafter referred to as "the Company" or "Viohalco S.A.") is a Belgian Limited Liability Company. The Company's corporate registration number is 0534.941.439 and its registered office is located at 30 Avenue Marnix, 1000 Brussels, Belgium. The Company's Consolidated Interim Financial Statements include those of the Company and its subsidiaries (together referred to as"Viohalco"), and Viohalco's interest in associates accounted for using the equity method.
Viohalco S.A. is the holding company and holds participations in approximately 100 subsidiaries, two of which are listed, one on Euronext Brussels and the other on Athens Exchange. With production facilities in Greece, Bulgaria, Romania, North Macedonia and United Kingdom, Viohalco subsidiaries specialise in the manufacture of steel, copper and aluminium products. In addition, Viohalco owns substantial real estate properties in Greece. Its shares are traded on Euronext Brussels (trading ticker "VIO") and has since February 2014 its secondary listing on the Athens Stock exchange (trading ticker "ΒΙΟ").
These interim financial statements were authorised for issue by the Company's Board of Directors on 21 September 2023.
The Company's electronic address is www.viohalco.com, where the Condensed Consolidated Interim Financial Statements have been posted.
These Condensed Consolidated Interim Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union. They do not include all information and disclosures required for the annual Consolidated Financial Statements and should be read in conjuction with the annual Consolidated Financial Statements for the year ended 31 December 2022, which can be found on Viohalco's website. However, selected explanatory notes are included to explain events and transactions that are significant to the understanding of the changes in Viohalco's financial position and performance since the last annual Consolidated Financial Statements as at and for the year ended 31 December 2022.
The functional and presentation currency of the parent Company is Euro. All amounts in the Consolidated Interim Financial Statements are rounded to the nearest thousand, unless otherwise indicated. As such, due to rounding, figures shown as totals in certain tables may not be arithmetic aggregations of the figures that precede them.
Preparing Financial Statements in line with IFRS requires that Management takes decisions, makes assessments and assumptions and determines estimates which affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The actual results may differ from these estimates.
The significant judgements made by Management in applying accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Consolidated Financial Statements for the year ended 31 December 2022.
Except as described below, the accounting policies applied in these interim financial statements are the same as those applied in Viohalco' consolidated financial statements as at and for the year ended 31 December 2022.
The changes in accounting policies are also expected to be reflected in the annual consolidated financial statements as at and for the year ending 31 December 2023.
Certain new standards, amendments to standards and interpretations have been issued that are mandatory for periods beginning on or after 1 January 2023 and have been applied in preparing these consolidated financial statements. None of these had a significant effect on the consolidated financial statements.
The amendments aim to improve accounting policy disclosures and to help users of the financial statements to distinguish between changes in accounting estimates and changes in accounting policies. The IAS 1 amendment requires companies to disclose their material accounting policy information rather than their significant accounting policies. Further, the amendment to IAS 1 clarifies that immaterial accounting policy information need not be disclosed. To support this amendment, the Board also amended IFRS Practice Statement 2, 'Making Materiality Judgements', to provide guidance on how to apply the concept of materiality to accounting policy disclosures.
The amendment to IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors', clarifies how companies should distinguish changes in accounting policies from changes in accounting estimates.
The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The main change in the amendments is an exemption from the initial recognition exemption of IAS 12.15(b) and IAS 12.24. Accordingly, the initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition.
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2023 and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Group. There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.
The amendments affect only the presentation of liabilities in the statement of financial position — not the amount or timing of recognition of any asset, liability income or expenses, or the information that entities disclose about those items. They:
The amendments explain how an entity accounts for a sale and leaseback after the date of the transaction, specifically where some or all the lease payments are variable lease payments that do not depend on an index or rate. They state that, in subsequently measuring the lease liability, the seller-lessee determines 'lease payments' and 'revised lease payments' in a way that does not result in the seller-lessee recognising any amount of the gain or loss that relates to the right of use it retains. Any gains and losses relating to the full or partial termination of a lease continue to be recognised when they occur as these relate to the right of use terminated and not the right of use retained.
Amendments to IAS 7 'Statement of Cash Flows' and IFRS 7 'Financial Instruments: Disclosures': Supplier Finance Arrangements (effective for annual periods beginning on or after 1 January 2024)
The amendment describes the characteristics for which reporters will have to provide additional disclosures regarding the impact of supplier finance arrangements on liabilities, cash flows and exposure to liquidity risk.
IFRS 9 "Financial Instruments" replaces IAS 39 "Financial Instruments: Recognition and Measurement" and involves three phases: "Classification and Measurement of Financial Assets", "Impairment" and "Hedge Accounting". Group applied IAS 39 related to hedge accounting until December 31, 2022, as the standard provides this choice regarding the third phase «Hedge Accounting». On 1 January 2023, the Group applied the standard prospectively without restatement of the comparative information for prior years.
Within the second quarter of 2023, Viohalco and its subsidiaries signed a 10-year Power Purchase Agreement (PPA) for the purchase of electricity.
The PPA provides for the physical delivery of electricity during a certain fixed period starting on 28 April 2023 (Period A) and subsequently a virtual delivery of electricity with financial settlement for an agreed period expected to start on 1 January 2025 (Period B) as produced by specific photovoltaic facilities, and is subject to specific terms and conditions.
Viohalco and its subsidiaries assessed the PPA and determined:
a) that the requirements of IFRS 10, with respect to the existence of control over one or more assets that will result in future from the implementation of the PPA, are not applicable;
b) that the requirements of IFRS 16, for the recognition of a lease with respect to these future assets, are not applicable;
c) that each of the Periods stemming from the PPA should be accounted for separately as two different transactions in accordance with the specific terms and conditions that underline each of the Periods; and
d) that the specific terms and conditions for each of the Periods should be separately assessed in accordance with the requirements of IFRS 9.
With respect to Period A, it was determined that it is a contract for the delivery of non-financial assets in accordance with the expected future electricity purchases of Viohalco and its subsidiaries, and meets the criteria for exemption under IFRS 9 as own use/executory contracts. Therefore, Period A will not be accounted for as a derivative financial instrument. Period A will be accounted for from 28 April 2023 when Viohalco and its subsidiaries commence electricity purchases.
As regards Period B, the definition of a derivative under IFRS 9 is relevant as a virtual PPA is present and therefore, has to be accounted for as a derivative financial instrument when the rights and obligations with respect to Period B crystalise, as the criteria for the exemption from IFRS 9, as own use/executory contracts, are not met. Period B will be accounted for at the time when the rights and obligations with respect to Period B crystalise, which is expected to be in the fourth quarter of 2023.
There were no changes in Viohalco subsidiaries business and operational risk management objectives and policies during the first half of 2023. Viohalco companies follow continuously both international and domestic developments and timely adapt their business strategy and risk management policies in order to minimize the operational impact of macroeconomic conditions.
Considering the upward trend on interest rates, started in 2022, Viohalco companies continue to monitor the current conditions and are prepared to take actions, in order to reduce the impact from the higher cost of debt in the market.
Revenue and profitability per segment for the 6-month period ended 30 June 2023 were as follows:
| Industrial Division | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Amounts in EUR thousands | Aluminium | Copper | Cables | Steel pipes | Steel | Other activities |
Total Industrial |
Real estate |
Consolidated |
| Total revenue per segment | 1,519,673 | 1,248,057 | 834,875 | 395,129 | 968,636 | 88,467 | 5,054,835 | 23,444 | 5,078,279 |
| Inter-segment revenue | -504,821 | -290,476 | -374,661 | -90,139 | -395,585 | -52,323 | -1,708,005 | -6,047 | -1,714,052 |
| Revenue from external customers | 1,014,852 | 957,581 | 460,214 | 304,989 | 573,051 | 36,144 | 3,346,830 | 17,397 | 3,364,227 |
| Cost of sales | -948,791 | -883,649 | -399,556 | -272,747 | -528,137 | -27,770 | -3,060,650 | -9,178 | -3,069,828 |
| Gross profit | 66,061 | 73,932 | 60,658 | 32,242 | 44,914 | 8,373 | 286,181 | 8,218 | 294,399 |
| Other Income | 9,143 | 1,118 | 527 | 427 | 1,158 | 735 | 13,108 | 6,640 | 19,748 |
| Selling and distribution expenses | -15,015 | -11,241 | -7,031 | -2,802 | -8,403 | -3,491 | -47,984 | -955 | -48,939 |
| Administrative expenses | -30,777 | -15,577 | -11,505 | -5,331 | -23,057 | -9,332 | -95,579 | -2,506 | -98,086 |
| Impairment loss on trade and other receivables (incl. contract assets) |
-3,558 | -2,260 | -10 | -324 | -65 | -175 | -6,392 | - | -6,392 |
| Other expenses | -2,361 | -1,621 | -392 | -1,224 | -2,825 | -117 | -8,540 | -2,747 | -11,288 |
| Operating result | 23,493 | 44,351 | 42,248 | 22,988 | 11,722 | -4,008 | 140,793 | 8,650 | 149,443 |
| Finance income | 976 | 815 | 289 | 101 | 242 | 708 | 3,131 | 809 | 3,940 |
| Finance costs | -22,781 | -13,140 | -22,188 | -12,549 | -17,188 | -1,372 | -89,218 | -4,018 | -93,235 |
| Share of profit/ loss (-) of equity accounted investees, net of tax |
817 | 69 | - | -292 | 82 | - | 676 | -311 | 365 |
| Profit/Loss (-) before income tax expense | 2,505 | 32,096 | 20,348 | 10,248 | -5,143 | -4,672 | 55,382 | 5,130 | 60,513 |
| Income tax expense | -3,133 | -3,149 | -4,437 | -2,610 | 476 | -752 | -13,604 | -1,484 | -15,088 |
| Profit/Loss (-) | -628 | 28,947 | 15,911 | 7,638 | -4,667 | -5,424 | 41,778 | 3,647 | 45,425 |
Other information per segment for the 6-month period ended 30 June 2023 were as follows:
| Amounts in EUR thousands | Aluminium | Copper | Cables | Steel pipes | Steel | Other activities |
Total Industrial |
Real estate |
Consolidated |
|---|---|---|---|---|---|---|---|---|---|
| Equity-accounted investees | 9,952 | 177 | - | 12,511 | 1,354 | 714 | 24,708 | 9,740 | 34,449 |
| Other assets | 1,853,167 | 783,749 | 1,095,422 | 670,305 | 968,498 | 144,649 | 5,515,791 | 536,935 | 6,052,726 |
| Total assets | 1,863,119 | 783,926 | 1,095,422 | 682,816 | 969,852 | 145,363 | 5,540,499 | 546,675 | 6,087,174 |
| Liabilities | 1,079,101 | 568,973 | 925,629 | 544,424 | 710,622 | 73,118 | 3,901,866 | 237,798 | 4,139,664 |
| Capital expenditure | 34,603 | 13,123 | 54,655 | 3,680 | 15,142 | 1,017 | 122,220 | 7,883 | 130,103 |
| Depreciation and amortization | -33,614 | -9,307 | -10,099 | -4,836 | -14,140 | -1,789 | -73,786 | -3,004 | -76,790 |
| Amounts in EUR thousands | Aluminium | Copper | Cables | Steel pipes | Steel | Other activities |
Total Industrial |
Real estate |
Consolidated |
|---|---|---|---|---|---|---|---|---|---|
| Total revenue per segment | 1,837,382 | 1,377,036 | 883,921 | 269,571 | 1,329,272 | 158,260 | 5,855,442 | 18,355 | 5,873,797 |
| Inter-segment revenue | -636,520 | -398,926 | -457,271 | -79,520 | -585,418 | -114,546 | -2,272,201 | -4,601 | -2,276,801 |
| Revenue from external customers |
1,200,862 | 978,110 | 426,651 | 190,050 | 743,854 | 43,714 | 3,583,241 | 13,755 | 3,596,996 |
| Cost of sales | -1,018,028 | -907,140 | -374,410 | -184,598 | -605,364 | -34,046 | -3,123,587 | -10,289 | -3,133,876 |
| Gross profit | 182,834 | 70,970 | 52,240 | 5,452 | 138,490 | 9,668 | 459,654 | 3,466 | 463,120 |
| Other Income | 4,595 | 162 | 838 | 274 | 976 | 632 | 7,477 | 166 | 7,644 |
| Selling and distribution expenses |
-13,833 | -10,297 | -4,313 | -2,393 | -7,565 | -2,757 | -41,159 | -1,239 | -42,398 |
| Administrative expenses | -24,441 | -13,465 | -10,812 | -3,839 | -17,054 | -4,582 | -74,193 | -2,118 | -76,310 |
| Impairment loss on trade and other receivables (incl. contract assets) |
-69 | -1,009 | -55 | - | 3 | -352 | -1,482 | - | -1,482 |
| Other expenses | -3,679 | -480 | -968 | -538 | -3,692 | 170 | -9,188 | -26 | -9,214 |
| Operating result | 145,407 | 45,882 | 36,929 | -1,045 | 111,158 | 2,779 | 341,110 | 249 | 341,359 |
| Finance income | 2,887 | 246 | 713 | 8 | 308 | 438 | 4,601 | 2,205 | 6,806 |
| Finance cost | -15,461 | -8,093 | -11,695 | -3,718 | -12,693 | -1,091 | -52,751 | -3,762 | -56,513 |
| Share of profit/ loss (-) of equity-accounted investees, net of tax |
669 | -635 | - | 1,194 | 128 | - | 1,356 | -314 | 1,042 |
| Profit/Loss (-) before income tax expense |
133,503 | 37,400 | 25,948 | -3,560 | 98,900 | 2,126 | 294,316 | -1,622 | 292,695 |
| Income tax expense (-) | -29,942 | -5,232 | -5,594 | 2,602 | -18,182 | -1,975 | -58,323 | -417 | -58,739 |
| Net Profit / Loss (-) | 103,561 | 32,168 | 20,354 | -958 | 80,718 | 151 | 235,993 | -2,038 | 233,955 |
Other information per segment for the comparative period of 2022 were as follows:
| Amounts in EUR thousands | Aluminium | Copper | Cables | Steel pipes | Steel | Other activities |
Total Industrial |
Real estate |
Consolidated |
|---|---|---|---|---|---|---|---|---|---|
| For the year ended 31 December 2022 |
|||||||||
| Equity-accounted investees | 9,725 | 249 | - | 15,963 | 1,244 | 806 | 27,987 | 8,651 | 36,638 |
| Other assets | 1,920,193 | 767,245 | 1,032,034 | 596,115 | 988,932 | 151,474 | 5,455,992 | 537,565 | 5,993,557 |
| Total assets | 1,929,917 | 767,494 | 1,032,034 | 612,077 | 990,176 | 152,280 | 5,483,979 | 546,217 | 6,030,196 |
| Liabilities | 1,131,288 | 546,413 | 863,719 | 479,323 | 725,735 | 92,265 | 3,838,742 | 235,559 | 4,074,301 |
| For the 6-month period ended 30 June 2022 |
|||||||||
| Capital expenditure | 96,121 | 5,518 | 23,464 | 1,788 | 10,393 | 1,017 | 138,301 | 24,577 | 162,879 |
| Depreciation and amortization | -29,554 | -8,802 | -9,192 | -4,533 | -13,662 | -2,067 | -67,810 | -4,682 | -72,492 |
Viohalco's subsidiaries' operations and main revenue streams are those described in the last annual financial statements. Revenue is derived from contracts with customers and from investment property rental income.
| For the six months ended 30 June | |||
|---|---|---|---|
| Amounts in EUR thousands | 2023 | 2022 | |
| Rental income from investment property | 11,768 | 9,785 | |
| Revenue from contracts with customers | 3,352,459 | 3,587,211 | |
| Total | 3,364,227 | 3,596,996 |
In the following table revenue from contract with customers is disaggregated by primary geographical market and timing of revenue recognition. The table includes a reconciliation with the Viohalco's reportable segments (see Note 5).
| Industrial Division | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| for the 6 months ended 30 June 2023 | |||||||||
| Amounts in EUR thousands | Aluminium | Copper | Cables | Steel Pipes |
Steel | Other activities |
Total Indu strial |
Real estate |
Consolidated |
| Primary geographical markets | |||||||||
| Greece | 65,872 | 41,133 | 194,487 | 68,790 | 174,397 | 10,539 | 555,218 | 5,335 | 560,553 |
| Other EU countries | 707,268 | 754,805 | 201,948 | 102,729 | 314,888 | 11,150 | 2,092,788 | 294 | 2,093,081 |
| Other European countries | 112,111 | 61,641 | 5,294 | 13,683 | 81,459 | 535 | 274,723 | - | 274,723 |
| Asia | 27,013 | 40,945 | 47,874 | 6,090 | 271 | 13,555 | 135,749 | - | 135,749 |
| America | 93,347 | 40,359 | 7,531 | 113,089 | 180 | 105 | 254,609 | - | 254,609 |
| Africa | 9,287 | 15,721 | 3,080 | 57 | 1,856 | 39 | 30,041 | - | 30,041 |
| Oceania | -45 | 2,976 | - | 551 | - | 221 | 3,703 | - | 3,703 |
| Total | 1,014,852 | 957,581 | 460,214 | 304,989 | 573,051 | 36,144 | 3,346,830 | 5,629 | 3,352,459 |
| Timing of revenue recognition | |||||||||
| Revenue recognised at a point in time |
1,014,319 | 955,492 | 312,696 | 29,419 | 566,007 | 25,209 | 2,903,141 | 993 | 2,904,134 |
| Products transferred over time | - | - | 147,518 | 275,570 | - | 262 | 423,350 | 741 | 424,091 |
| Services transferred over time | 533 | 2,089 | - | - | 7,044 | 10,673 | 20,339 | 3,895 | 24,234 |
| Total | 1,014,852 | 957,581 | 460,214 | 304,989 | 573,051 | 36,144 | 3,346,830 | 5,629 | 3,352,459 |
| Industrial Division | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| for the 6 months ended 30 June 2022 | |||||||||
| Amounts in EUR thousands | Aluminium | Copper | Cables | Steel pipes |
Steel | Other activities |
Total Industrial |
Real estate |
Consolidated |
| Primary geographical markets | |||||||||
| Greece | 89,293 | 47,514 | 123,504 | 11,722 | 185,926 | 14,054 | 472,013 | 3,722 | 475,735 |
| Other EU countries | 762,707 | 643,566 | 176,637 | 82,867 | 461,612 | 15,690 | 2,143,078 | 248 | 2,143,326 |
| Other European countries | 159,292 | 158,221 | 59,024 | 12,729 | 93,646 | 2,925 | 485,838 | - | 485,838 |
| Asia | 40,909 | 55,007 | 57,633 | 5,736 | 338 | 10,768 | 170,391 | - | 170,391 |
| America | 140,744 | 51,492 | 6,348 | 73,463 | 539 | 78 | 272,663 | - | 272,663 |
| Africa | 7,681 | 19,053 | 3,315 | 219 | 1,793 | 20 | 32,082 | - | 32,082 |
| Oceania | 236 | 3,256 | 190 | 3,315 | - | 180 | 7,177 | - | 7,177 |
| Total | 1,200,862 | 978,110 | 426,651 | 190,050 | 743,854 | 43,714 | 3,583,241 | 3,970 | 3,587,211 |
| Timing of revenue recognition | |||||||||
| Revenue recognised at a point in time |
1,199,999 | 976,661 | 298,122 | 47,106 | 731,313 | 28,386 | 3,281,588 | 777 | 3,282,364 |
| Products transferred over time | - | - | 128,529 | 142,944 | 2,989 | 27 | 274,489 | 248 | 274,737 |
| Services transferred over time | 863 | 1,448 | - | - | 9,552 | 15,301 | 27,165 | 2,945 | 30,110 |
| Total | 1,200,862 | 978,110 | 426,651 | 190,050 | 743,854 | 43,714 | 3,583,241 | 3,970 | 3,587,211 |
Net other income/expenses amounted to a gain of EUR 8.5 million, compared to a loss of EUR 1.6 million in the previous period, mainly due to the following transaction:
During first half of 2023, the merger by absorption of the subsidiary of ElvalHalcor, Etem Commercial, from the joint-stock company Cosmos Aluminium SA was completed. As a result of this transaction, Viohalco recorded a gain of EUR 4.5 million at consolidated level (Note 17). Based on the purchase agreement, the shareholders of ElvalHalcor granted Cosmos Aluminium with a put option to purchase the remaining outstanding capital stock of Cosmos Aluminium. In addition, Cosmos Aluminium granted ElvalHalcor with a put option to sale the remaining outstanding capital stock of Cosmos Aluminium. The exercise period for both options commenced in 2028 and their term is for six months. Upon the exercise of the aforementioned options, the shareholders of Cosmos Aluminium will own 100% of outstanding capital stock of Cosmos Aluminium. These expire in case that the
shareholders do not exercise them during the exercise period. These options are recognized in the consolidated statement of financial position in their fair value and were included in the carrying amount of the investment in Cosmos Aluminium. The recognized gain from their measurement in the fair value, amounted EUR 2.4 million, recorded into "Other income".
Net finance costs amounted to EUR 89.3 million in the first half of 2023, compared with EUR 49.7 million during previous year. The increase is mainly attributed to the higher cost of net debt as interest rate increases intensified with monetary policies tightening all around the globe for H1 2023.
Income tax expense was calculated based on management's estimate of the average annual tax rate that is expected to apply for the full financial year.
| for the six months ended 30 June | ||||
|---|---|---|---|---|
| Amounts in EUR thousands | 2023 | 2022 | ||
| Current tax | -15,859 | -54,949 | ||
| Deferred tax | 771 | -3,791 | ||
| Total | -15,088 | -58,739 |
The corporate income tax rate in Belgium according to the applicable tax legislation is 25%. The profit is taxed at the applicable rate corresponding to the country in which each company is domiciled. According to the Greek law 4799/2021, enacted in May 2021, the corporate income tax rate for legal entities in Greece, where most of Viohalco subsidiaries are located, for the fiscal year 2021 and onwards is set at 22%.
The consolidated effective tax rate for the six-month period ended 30 June 2023 was 24.9%, compared with 20% at 30 June 2022.
Reconciliation of carrying amount of associates and joint ventures:
| Amounts in EUR thousands | 30 June 2023 | 31 December 2022 |
|---|---|---|
| Opening balance | 36,638 | 44,372 |
| Share of profit / loss (-) net of tax | 365 | -1,365 |
| OCI profit (loss) for the period | -1 | -2 |
| Dividends received | -723 | -655 |
| Effects on movement in exchange rates | -3,231 | 1,194 |
| Share capital increase | 1,400 | 7,500 |
| Disposals | - | -6,001 |
| Spin off | - | 856 |
| Impairment | - | -9,260 |
| Closing balance | 34,449 | 36,638 |
The contract assets primarily relate to the rights to consideration for work completed but not billed at the reporting date on customized products or energy projects. The contract assets are transferred to receivables when the rights become unconditional. This occurs when the Viohalco companies issue an invoice to the customer.
Contract assets increased by EUR 52.5 million compared to 31 December 2022 due to higher amounts of unbilled receivables, as for turnkey cables projects, customized steel pipes and cables, amounts are billed as work
progresses in accordance with agreed-upon contractual terms, either upon achievement of contractual milestones, or at the final delivery and acceptance of the products.
During the first half of 2023, Viohalco investments in capex projects amounted to EUR 123 million (H1 2022: EUR 119 million).
Aluminium segment investments amounted to EUR 34 million, mainly related to the cold rolling mill, the new lacquering line and other storage and infrastructure investments at Oinofyta aluminium rolling plant.
Additions of EUR 13 million in copper segment are related to the four new basesfor bell annealing and other maintenance and operational improvements at Sofiamed plant in Bulgaria.
Regarding cables segment, capital expenditure in the first half of 2023 amounted to EUR 54 million, mainly for the implementation of the planned offshore cables capacity expansion in Fulgor's plant in Corinth, selective investments in Hellenic Cables onshore cables plants in the area of Thiva and initial expenses of EUR 3.2 million to support the construction of a submarine cables factory in the USA.
Capital expenditure in steel pipes amounted to EUR 3.2 million (H1 2022: EUR 1.6 million), mostly related to operational improvements in the Thisvi CPW plant.
Steel segment investments, amounted to EUR 15.1 million, mainly concern maintenance capital expenditure and production capacity increase in Steel Plants in Greece. They also include equipment's replacement and improvements in Stomana plant in Bulgaria.
Depreciation of property, plant and equipment for the six-month period amounted to EUR 66 million (H1 2022: EUR 61 million).
Intangible assets of EUR 1.4 million acquired during the first half of 2023 (H1 2022: EUR 1.2 million), mainly related to software programmes of subsidiaries.
During the first half of 2023, Viohalco invested an amount of EUR 5 million (H1 2022: EUR 42 million) for the improvement of investment properties by Noval Property REIC, subsidiary of Viohalco in Real Estate segment.
During first half of 2023, Noval Property, the subsidiary of real estate segment conducted an operational efficiency review at all its properties and taking into account the frequent and consistent maintenance of the properties, resulted in changes in their expected useful life.
As a result, the expected useful life of the properties was extended by 10 years on average.
Upon the application of the changes described above, the ranges of useful lives as described in the relative accounting policy remained unaffected.
The effect of these changes on annual depreciation expense, included in 'Cost of sales', will be approximately EUR 3.4 million for 2023 and the period 2024-2027 on an annual basis.
The effect recorded for the six-month period ended on 30 June 2023 was EUR 1.8 million.
As at 30 June 2023, inventories amounted at EUR 1,811 million compared to EUR 1,914 million at 31 December 2022. During the six months ended 30 June 2023 Viohalco companies recorded an impairment of inventories of EUR 15.9 million, included in 'Cost of Sales' in the consolidated statement of profit or loss statement. Such impairment was recorded due to the decreasing trend of the LME metal prices compared to previous year.
Following the decision of the extraordinary General Meeting on February, 10th , 2023 of the subsidiary of ElvalHalcor, Epirus Metalworks SA, it was approved the increase in share capital by a) EUR 235,290.00 paid in cash with the issue of 23,529 new common registered voting shares and b) EUR 117,650.00 through the capitalization of share premium reserve. In the aforementioned share capital increase ElvalHalcor did not participate, so the result of the transaction is presented in line "Other changes in ownership interests" of the Statement of Changes in Equity.
According to the purchase agreement between the new shareholders of Epirus Metalworks and ElvalHalcor, ElvalHalcor granted two call options to the new shareholders of Epirus Metalworks to purchase their ownership interests in Epirus Metalworks, while the new shareholders granted ElvalHalcor two put options to sell their ownership interests in Epirus Metalworks. These options are presented in their fair value and are classified as level 3, while are remeasured at each reporting date. At consolidated level, according to IFRS 10, the present value of redemption amount of the aforementioned options was recognized in the statement of financial position as Non current - Trade and other payables.
| Amounts in EUR thousands | 30 June 2023 | 31 December 2022 |
|---|---|---|
| Non-current liabilities | ||
| Secured bank loans | 180,921 | 157,520 |
| Unsecured bank loans | 149,081 | 65,735 |
| Secured bond issues | 597,025 | 629,035 |
| Unsecured bond issues | 595,855 | 619,010 |
| Loans and borrowings – Long term | 1,522,881 | 1,471,299 |
| Lease Liabilities – Long term | 31,664 | 29,449 |
| Total Long-term debt | 1,554,545 | 1,500,748 |
| Current liabilities | ||
| Secured bank loans | 146,902 | 168,815 |
| Unsecured bank loans | 537,933 | 533,362 |
| Current portion of secured bank loans | 44,845 | 43,537 |
| Current portion of unsecured bank loans | 16,019 | 16,928 |
| Current portion of secured bond issues | 56,218 | 63,599 |
| Current portion of unsecured bond issues | 119,986 | 131,924 |
| Loans and borrowings – Short-term | 921,904 | 958,166 |
| Lease Liabilities – Short-term | 9,999 | 10,932 |
| Total Short-term debt | 931,903 | 969,097 |
| Total loans and borrowings | 2,486,449 | 2,469,845 |
| Total | 1,554,545 | 1,500,748 |
|---|---|---|
| Over 5 years | 836,293 | 789,801 |
| Between 2 and 5 years | 486,159 | 486,889 |
| Between 1 and 2 years | 232,093 | 224,059 |
| Amounts in EUR thousands | 30 June 2023 | 31 December 2022 |
| 30 June 2023 | ||
|---|---|---|
| Carrying amount | Interest rate | |
| Bank loans (non-current*) - EUR | 387,389 | 5.21% |
| Bank loans (current) - EUR | 640,746 | 6.18% |
| Bank loans (current) - GBP | 35,922 | 7.70% |
| Bond issues - EUR | 1,369,084 | 5.06% |
| 31 December 2022 | ||
| Carrying amount | Interest rate | |
| Bank loans (non-current*) - EUR | 278,133 | 3.78% |
| Bank loans (current)-EUR | 630,773 | 4.31% |
| Bank loans (current)-USD | 6,507 | 6.90% |
| Bank loans (current)-GBP | 57,010 | 6.12% |
| Bond issues-EUR | 1,443,568 | 3.99% |
*Including current portion
The majority of Viohalco companies' loans are Euro denominated.
During the first half of 2023, Viohalco subsidiaries obtained new bank loans amounting to EUR 294 million and repaid bank loans of EUR 284 million maturing within the year. The new loans were mainly bond loans and drawdowns from existing revolving credit facilities for project financing, or new loans with similar terms and conditions.
More specifically, during the first half of 2023 the main events relating to Viohalco companies' financing are the following:
▪ ElvalHalcor disbursed from EIB, EUR 40 million out of EUR 75 million loan, for the financing of the aluminum rolling plant investment program at Oinofyta.
▪ Corinth Pipeworks received a new 5-year bond loan of EUR 5 million from a Greek bank;
No other significant events, related with the financing of subsidiaries occurred during the period.
Reconciliation of movements of liabilities to cash flows arising from financing activities:
| Amounts in EUR thousands | Loans and Borrowings |
Lease Liabilities |
Total |
|---|---|---|---|
| Balance at 1 January 2023 | 2,429,465 | 40,380 | 2,469,845 |
| Changes from financing cash flows | |||
| Proceeds from loans and borrowings | 294,035 | - | 294,035 |
| Repayment of borrowings & lease liabilities | -284,462 | -8,787 | -293,249 |
| Total change from financing cash flows | 9,572 | -8,787 | 786 |
| Other changes |
| Amounts in EUR thousands | Loans and Borrowings |
Lease Liabilities |
Total |
|---|---|---|---|
| New leases | - | 10,293 | 10,293 |
| Interest expense | 65,210 | 1,036 | 66,247 |
| Interest paid* | -61,264 | -986 | -62,250 |
| Capitalised borrowing costs | 1,865 | - | 1,865 |
| Terminations/modifications | -1,907 | -287 | -2,194 |
| Effect of changes in foreign exchange rates | 1,844 | 13 | 1,857 |
| Total other changes | 5,748 | 10,070 | 15,818 |
| Balance at 30 June 2023 | 2,444,785 | 41,663 | 2,486,449 |
*Interest paid reported in Cash Flow Statement, includes bank charges and other finance costs.
| Amounts in EUR thousands | Loans and Borrowings |
Lease Liabilities |
Total |
|---|---|---|---|
| Balance at 1 January 2022 | 2,142,238 | 45,334 | 2,187,573 |
| Changes from financing cash flows | |||
| Proceeds from loans and borrowings | 856,508 | - | 856,508 |
| Repayment of borrowings & lease liabilities | -570,259 | -11,630 | -581,890 |
| Total change from financing cash flows | 286,248 | -11,630 | 274,618 |
| Other changes | |||
| New leases | - | 10,195 | 10,195 |
| Interest expense | 86,229 | 1,915 | 88,144 |
| Interest paid* | -79,500 | -1,846 | -81,347 |
| Capitalised borrowing costs | 600 | - | 600 |
| Terminations/modifications of lease contracts | 253 | -2,807 | -2,554 |
| Loss of Control/Disposal of subsidiary | -3,439 | -801 | -4,240 |
| Division spin off | 4 | - | 4 |
| Effect of changes in foreign exchange rate | -3,168 | 21 | -3,147 |
| Total other changes | 978 | 6,676 | 7,655 |
| Balance at 31 December 2022 | 2,429,465 | 40,380 | 2,469,845 |
*Interest paid reported in Cash Flow Statement, includes bank charges and other finance costs.
Short term facilities are predominately revolving credit facilities, which finance working capital needs and specific ongoing projects. Viohalco subsidiaries have never in the past experienced any issues in financing their activities, renewing their working capital lines or refinancing long-term loans and borrowings. Management expects that any mandatory repayment of banking facilities will be met with operating cash flows or from currently unutilized and committed credit lines.
Under the terms of the loan agreements, certain Viohalco subsidiaries must comply with conditions (including financial covenants) and such compliance is tested on semi-annual basis for the majority of the loans. Management has considered the measures that need to be taken to mitigate the risk relating to potential breaches and expects that in the event that these covenants are breached, waivers will be granted, which have been provided in the past when requested.
The average interest rate of the outstanding bank loans as 30 June 2023 was 5.4% (4.1% as at 31 December 2022). Property, plant and equipment and inventories of some subsidiaries carry mortgages and liens for a total amount of EUR 1,531 million, as collaterals for long term loans and syndicated loans. In addition, for certain Viohalco companies' loans, there are change of control clauses that provide lenders early redemption rights. The majority of Viohalco companies' loans are Euro denominated.
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including the levels in the fair value hierarchy.
| 30 June 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Carrying | ||||||||
| Amounts in EUR thousands | amount | Level 1 | Level 2 | Level 3 | Total | |||
| Other investments | 37,480 | 3,489 | 2 | 33,990 | 37,480 | |||
| Derivative financial assets | 47,471 | 3,206 | 44,265 | - | 47,471 | |||
| 84,951 | 6,695 | 44,267 | 33,990 | 84,951 | ||||
| Derivative financial liabilities | -18,756 | -4,645 | -14,111 | - | -18,756 | |||
| 66,195 | 2,050 | 30,156 | 33,990 | 66,195 |
| 31 December 2022 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Amounts in EUR thousands | Carrying amount |
Level 1 | Level 2 | Level 3 | Total | ||||
| Other investments | 8,405 | 3,597 | 2 | 4,806 | 8,405 | ||||
| Derivative financial assets | 66,071 | 2,380 | 63,691 | - | 66,071 | ||||
| 74,476 | 5,977 | 63,693 | 4,806 | 74,476 | |||||
| Derivative financial liabilities | -19,704 | -4,705 | -14,999 | - | -19,704 | ||||
| 54,772 | 1,273 | 48,693 | 4,806 | 54,772 |
The various levels are as follows:
The fair value of the following financial assets and liabilities measured at amortised cost approximates their carrying amount:
Specifically, the carrying amount of loans and borrowings is considered as a good approximation of their fair value, as 90% of consolidated Loans and borrowings concern floating-rate debt, which is a very good approximation of current market rates.
The following table shows reconciliation between opening and closing balances for Level 3 financial assets:
| Amounts in EUR thousands | Other investments | Derivative financial assets |
|---|---|---|
| Balance as at 1 January 2023 | 4,806 | - |
| Additions | 26,779 | - |
| Fair value through PnL | 2,405 | - |
| Balance as at 30 June 2023 | 33,990 | - |
| Balance as at 1 January 2022 | 3,915 | 944 |
| Additions | 942 | - |
| Disposals | - | -1,015 |
| Impairment loss (-) / Reversal of impairment loss | -50 | - |
| Foreign exchange differences | - | 71 |
| Balance as at 31 December 2022 | 4,806 | - |
On April, 07,2023, the merger by absorption of Etem Commercial SA, subsidiary of ElvalHalcor, by the company Cosmos Aluminium SA has been approved. As a result of the completion of the transaction, ElvalHalcor holds a minority stake of 15% in the share capital of Cosmos Aluminium SA and classified this investment to "Other investments", while assets and liabilities of ETEM had been classified as "Held for sale" at consolidated financial statements of 31 December 2022.
Other investments represent equity securities which Viohalco intends to hold for strategic purposes and therefore they have been classified as FVOCI investments.
The analysis of equity securities is presented below:
| Amounts in EUR thousands | 30 June 2023 | 31 December 2022 |
|---|---|---|
| Listed securities | ||
| -Greek equity instruments | 2,690 | 243 |
| -International equity instruments | 3,247 | 3,356 |
| Unlisted securities | ||
| -Greek equity instruments | 30,260 | 3,667 |
| -International equity instruments | 849 | 849 |
| -Mutual funds | 414 | 269 |
| -Other | 20 | 20 |
| Total | 37,480 | 8,405 |
The following table sets out the carrying amount of derivatives:
| Amounts in EUR thousands | 30 June 2023 | 31 December 2022 |
|---|---|---|
| Non-current assets | ||
| Interest rate swap contracts | 14,655 | 17,242 |
| Forwards | 1,162 | 3,624 |
| Commodity swaps | 4,921 | 18,056 |
| Total | 20,739 | 38,922 |
| Current assets | ||
| Interest rate swap contracts | 6,188 | 3,649 |
| Forwards | 12,632 | 10,427 |
| Future contracts | 3,206 | 2,380 |
| Commodity swaps | 4,706 | 10,692 |
| Total | 26,732 | 27,149 |
| Non-current liabilities | ||
| Forwards | - | 4 |
| Commodity swaps | 3,033 | 1,245 |
| Total | 3,033 | 1,249 |
| Current liabilities | ||
| Forwards | 6,355 | 10,155 |
| Future contracts | 4,645 | 4,628 |
| Commodity swaps | 4,722 | 3,672 |
| Total | 15,723 | 18,455 |
Viohalco's companies hold derivative financial instruments for cash flow and fair value hedges.
The abovementioned derivative financial instruments cover risks from:
The maturity and the nominal value of derivatives held by Viohalco's companies match the maturity and nominal value of the underlying assets / liabilities (hedged items).
Derivatives held by Viohalco companies concerns mainly:
Derivatives are recognized when Viohalco companies enter into the transaction in order either to hedge the fair value of receivables, liabilities or commitments (fair value hedges) or highly probable transactions (cash flow hedges).
The change in fair value recognized in equity under cash flow hedging as of 30 June 2023 will be recycled to the consolidated statement of profit or loss during the next years, as some of the hedged events are expected to occur (the forecasted transactions will take place or the hedged items will affect Profit or Loss statement) within 2023 and some others at a later stage.
(a) Valuation techniques and significant unobservable inputs
During the period there were no changes in valuation processes compared to those described in the last annual Consolidated Financial Statements.
Fair value for interest rate swaps is calculated on the basis of the present value of forecasted future cash flows. Interest rate swaps are categorized as Level 2, based on the inputs used in the valuation technique to determine their fair value.
(b) Transfers between Levels 1 and 2
There were no transfers from Level 2 to Level 1 or from Level 1 to Level 2 in first half of 2023 or in 2022.
Viohalco companies have provided guarantees in favor of customers and suppliers, mainly in order to secure that certain conditions of contracts will be fulfilled according to agreed terms, relating to products or services.
An analysis of guarantees is provided below:
| Amounts in EUR thousands | 30 June 2023 | 31 December 2022 |
|---|---|---|
| Guarantees to secure liabilities to suppliers | 33,020 | 46,276 |
| Guarantees for securing the good performance of contracts with customers | 600,850 | 505,164 |
| Guarantees for securing the good performance of contracts with suppliers | 2,534 | 3,129 |
| For the six months ended 30 June | ||||
|---|---|---|---|---|
| Amounts in EUR thousands | 2023 | 2022 | ||
| Sales of goods / services | ||||
| Associates | 57,991 | 66,356 | ||
| Joint ventures | 71,397 | 26,527 | ||
| 129,388 | 92,883 | |||
| Sale of fixed assets | ||||
| Joint ventures | 166 | - | ||
| 166 | - | |||
| Purchases of goods / services | ||||
| Associates | 4,267 | 7,669 | ||
| Joint ventures | 20,488 | 2,251 | ||
| 24,755 | 9,920 | |||
| Purchase of property, plant and equipment | ||||
| Associates | 885 | 70 | ||
| 885 | 70 | |||
| Amounts in EUR thousands | 30 June 2023 | 31 December 2022 | ||
| Receivables from related parties | ||||
| Associates | 39,963 | 35,452 | ||
| Joint ventures | 33,521 | 13,548 | ||
| 73,484 | 48,999 | |||
| Contract assets from related parties | ||||
| Associates | 56 | 96 | ||
| Joint ventures | - | 6 | ||
| 56 | 103 | |||
| Liabilities to related parties | ||||
| Associates | 3,714 | 3,102 | ||
| Joint ventures | 360 | 198 | ||
| 4,074 | 3,301 | |||
| Contract liabilities to related parties | ||||
| Associates | 35 | - | ||
| Joint ventures | 54 | 86 |
Key management remuneration for the six months period ended 30 June 2023 to the Board members and the executive management for the execution of their mandate amounted to EUR 2,901 thousand (H1 2022: EUR 2,767 thousand).
The fees to directors and executive management are fixed compensation. No variable compensation, postemployment benefits or share-based benefits were paid during the period.
There are no subsequent events affecting the consolidated financial information.
______________________________________________________________
We have reviewed the accompanying condensed consolidated interim financial statements, consisting of the condensed consolidated statement of financial position of Viohalco S.A. and its subsidiaries (jointly "the Group") as of 30 June 2023, and the related condensed consolidated statement of profit or loss, the condensed consolidated statement of profit or loss and other comprehensive income, the condensed consolidated statement of changes in equity and the condensed consolidated statement of cash flows for the six-month period then ended, as well as the explanatory notes to the condensed consolidated interim financial statements. The board of directors is responsible for the preparation and presentation of these condensed consolidated interim financial statements in accordance with IAS 34, as adopted by the European Union. Our responsibility is to express a conclusion on these condensed consolidated interim financial statements 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 Standards on Auditing 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 condensed consolidated interim financial statements are not prepared, in all material respects, in accordance with IAS 34, as adopted by the European Union.
Thursday, 21 September 2023
The statutory auditor PwC Réviseurs d'Entreprises SRL / Bedrijfsrevisoren BV Represented by
Marc Daelman Registered auditor
Viohalco management has adopted, monitors and reports internally and externally P&L alternative performance measures ('APMs'), namely EBITDA, EBIT, adjusted EBITDA (a-EBITDA) and adjusted EBIT (a-EBIT) on the basis that they are appropriate measures reflecting the underlying performance of the business. These APMs are also key performance metrics on which Viohalco prepares, monitors and assesses its annual budgets and long-term (5 year) plans. However, it must be noted that adjusted items should not be considered as non-operating or nonrecurring items.
Relating to balance sheet items, Viohalco management monitors and reports the net debt measure.
EBIT is defined as profit for the period before:
EBITDA is defined as profit for the period before:
a-EBITDA is defined as EBITDA excluding the same line items as a-EBIT.
Net Debt is defined as the total of:
Less:
• Cash and cash equivalents.
Metal price lag is the P&L effect resulting from fluctuations in the market prices of the underlying commodity metals (ferrous and non-ferrous) which Viohalco subsidiaries use as raw materials in their end-product production processes.
Metal price lag exists due to:
Most of Viohalco subsidiaries use back-to-back matching of purchases and sales, or derivative instruments in order to minimize the effect of the Metal Price Lag on their results. However, there will be always some impact (positive or negative) in the P&L, since inventory in the non-ferrous segments (i.e. aluminium, copper and cables) is treated as being held on a permanent basis (minimum operating stock), and not hedged, in the ferrous segments (i.e. steel and steel pipes), no commodities hedging occurs.
| H1 2023 | Other | Total | Real | Total | |||||
|---|---|---|---|---|---|---|---|---|---|
| Amounts in EUR thousands | Aluminium | Copper | Cables | Steel Pipes | Steel | activities | Industrial | Estate | Consolidated |
| EBT (as reported in Statement of Profit or Loss) |
2,505 | 32,096 | 20,348 | 10,248 | -5,143 | -4,672 | 55,382 | 5,130 | 60,513 |
| Adjustments for: | |||||||||
| Share of profit / loss (-) of equity-accounted investees |
-817 | -69 | - | 292 | -82 | - | -676 | 311 | -365 |
| Net Finance Cost | 21,804 | 12,324 | 21,899 | 12,448 | 16,947 | 664 | 86,087 | 3,208 | 89,295 |
| EBIT | 23,493 | 44,351 | 42,248 | 22,988 | 11,722 | -4,008 | 140,793 | 8,650 | 149,443 |
| Add back: | |||||||||
| Depreciation & Amortization | 32,958 | 9,162 | 9,789 | 4,812 | 13,943 | 1,769 | 72,433 | 3,004 | 75,437 |
| EBITDA | 56,451 | 53,513 | 52,036 | 27,800 | 25,665 | -2,239 | 213,226 | 11,653 | 224,879 |
| H1 2022 | Steel | Other | Total | Real | Total | ||||
|---|---|---|---|---|---|---|---|---|---|
| Amounts in EUR thousands | Aluminium | Copper | Cables | Pipes | Steel | activities | Industrial | Estate | Consolidated |
| EBT (as reported in Statement of Profit or Loss) |
133,503 | 37,400 | 25,948 | -3,560 | 98,900 | 2,126 | 294,316 | -1,622 | 292,695 |
| Adjustments for: | |||||||||
| Share of profit / loss (-) of equity-accounted investees |
-669 | 635 | - | -1,194 | -128 | - | -1,356 | 314 | -1,042 |
| Net Finance Cost | 12,574 | 7,846 | 10,982 | 3,710 | 12,385 | 653 | 48,150 | 1,557 | 49,707 |
| EBIT | 145,407 | 45,882 | 36,929 | -1,045 | 111,158 | 2,779 | 341,110 | 249 | 341,359 |
| Add back: | |||||||||
| Depreciation & Amortization | 28,858 | 8,241 | 8,866 | 4,447 | 13,465 | 2,046 | 65,925 | 4,682 | 70,607 |
| EBITDA | 174,266 | 54,123 | 45,796 | 3,402 | 124,623 | 4,825 | 407,035 | 4,931 | 411,966 |
| H1 2023 | Other | Total | Real | Total | |||||
|---|---|---|---|---|---|---|---|---|---|
| Amounts in EUR thousands | Aluminium | Copper | Cables | Steel Pipes | Steel | activities | Industrial | Estate | Consolidated |
| EBT | |||||||||
| (as reported in Statement of Profit or Loss) |
2,505 | 32,096 | 20,348 | 10,248 | -5,143 | -4,672 | 55,382 | 5,130 | 60,513 |
| Adjustments for: | |||||||||
| Net finance cost | 21,804 | 12,324 | 21,899 | 12,448 | 16,947 | 664 | 86,087 | 3,208 | 89,295 |
| Share of Profit (-) / Loss of Associates | -817 | -69 | - | 292 | -82 | - | -676 | 311 | -365 |
| Metal price lag | 28,919 | 5,618 | 6,864 | - | 10,866 | - | 52,267 | - | 52,267 |
| Impairment / Reversal of Impairment (-) on fixed assets |
64 | -59 | - | - | - | - | 4 | -834 | -830 |
| Impairment/ Reversal of Impairment (-) on investments |
- | - | - | - | - | - | - | -2,020 | -2,020 |
| Gains (-) / losses from sales of fixed assets and intangibles |
-121 | -53 | - | - | -645 | -124 | -942 | - | -942 |
| Gains (-) / losses from disposal of subsidiaries |
-4,462 | - | - | - | - | - | -4,462 | - | -4,462 |
| (Gains) / losses from financial assets valuation |
-2,405 | - | - | - | - | - | -2,405 | - | -2,405 |
| Reorganisation costs | 2,261 | - | - | - | - | - | 2,261 | - | 2,261 |
| a-EBIT | 47,748 | 49,857 | 49,112 | 22,988 | 21,943 | -4,132 | 187,516 | 5,795 | 193,311 |
| Add back: | |||||||||
| Depreciation & Amortization | 32,958 | 9,162 | 9,789 | 4,812 | 13,943 | 1,769 | 72,433 | 3,004 | 75,437 |
| a-EBITDA | 80,706 | 59,019 | 58,901 | 27,800 | 35,886 | -2,363 | 259,949 | 8,799 | 268,748 |
| H1 2022 | Aluminium | Copper | Cables | Steel Pipes | Steel | Other | Total | Real | Total |
|---|---|---|---|---|---|---|---|---|---|
| Amounts in EUR thousands | activities | Industrial | Estate | Consolidated | |||||
| EBT | |||||||||
| (as reported in Statement of Profit or Loss) |
133,503 | 37,400 | 25,948 | -3,560 | 98,900 | 2,126 | 294,317 | -1,622 | 292,695 |
| Adjustments for: | |||||||||
| Net finance cost | 12,574 | 7,846 | 10,982 | 3,710 | 12,385 | 653 | 48,150 | 1,557 | 49,707 |
| Share of Profit (-) / Loss of Associates | -669 | 635 | - | -1,194 | -128 | - | -1,356 | 314 | -1,042 |
| Metal price lag | -44,404 | -7,452 | 2,399 | - | -8,810 | - | -58,267 | - | -58,267 |
| Impairment / Reversal of Impairment (-) on fixed assets |
143 | - | - | - | - | - | 143 | - | 143 |
| Gains (-) / losses from sales of fixed assets and intangibles |
-119 | 166 | -340 | -1 | -4 | -130 | -427 | - | -427 |
| Gains (-) / losses from sales of investments |
- | - | - | - | 1,343 | - | 1,343 | - | 1,343 |
| Provision for indemnity to customer | - | - | - | 500 | - | - | 500 | - | 500 |
| a-EBIT | 101,028 | 38,596 | 38,988 | -546 | 103,687 | 2,648 | 284,401 | 249 | 284,650 |
| Add back: | |||||||||
| Depreciation & Amortization | 28,858 | 8,241 | 8,866 | 4,447 | 13,465 | 2,046 | 65,925 | 4,682 | 70,607 |
| a-EBITDA | 129,886 | 46,837 | 47,854 | 3,901 | 117,153 | 4,695 | 350,325 | 4,931 | 355,257 |
| H1 2023 | Steel | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Amounts in EUR thousands |
Aluminium | Copper | Cables | pipes | Steel | Other activities |
Total Industrial |
Real Estate | Total Consolidated |
| Revenue | 1,014,852 | 957,581 | 460,214 | 304,989 | 573,051 | 36,144 | 3,346,830 | 17,397 | 3,364,227 |
| Gross profit | 66,061 | 73,932 | 60,658 | 32,242 | 44,914 | 8,373 | 286,181 | 8,218 | 294,399 |
| Operating profit | 23,493 | 44,351 | 42,248 | 22,988 | 11,722 | -4,008 | 140,793 | 8,650 | 149,443 |
| Net finance cost | -21,804 | -12,324 | -21,899 | -12,448 | -16,947 | -664 | -86,087 | -3,208 | -89,295 |
| Share of profit/loss (-) of Associates |
817 | 69 | - | -292 | 82 | - | 676 | -311 | 365 |
| Profit/Loss (-) before tax |
2,505 | 32,096 | 20,348 | 10,248 | -5,143 | -4,672 | 55,382 | 5,130 | 60,513 |
| Income tax | -3,133 | -3,149 | -4,437 | -2,610 | 476 | -752 | -13,604 | -1,484 | -15,088 |
| Profit/Loss (-) | -628 | 28,947 | 15,911 | 7,638 | -4,667 | -5,424 | 41,778 | 3,647 | 45,425 |
| H1 2022 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Amounts in EUR thousands |
Aluminium | Copper | Cables | Steel pipes |
Steel | Other activities |
Total Industrial |
Real Estate | Total Consolidated |
| Revenue | 1,200,862 | 978,110 | 426,651 | 190,050 | 743,854 | 43,714 | 3,583,241 | 13,755 | 3,596,996 |
| Gross profit | 182,834 | 70,970 | 52,240 | 5,452 | 138,490 | 9,668 | 459,654 | 3,466 | 463,120 |
| Operating profit | 145,407 | 45,882 | 36,929 | -1,045 | 111,158 | 2,779 | 341,110 | 249 | 341,359 |
| Net finance cost | -12,574 | -7,846 | -10,982 | -3,710 | -12,385 | -653 | -48,150 | -1,557 | -49,707 |
| Share of profit/loss (-) of Associates |
669 | -635 | - | 1,194 | 128 | - | 1,356 | -314 | 1,042 |
| Profit/Loss (-) before tax |
133,503 | 37,400 | 25,948 | -3,560 | 98,900 | 2,126 | 294,316 | -1,622 | 292,695 |
| Income tax | -29,942 | -5,232 | -5,594 | 2,602 | -18,182 | -1,975 | -58,323 | -417 | -58,739 |
| Profit/Loss (-) | 103,561 | 32,168 | 20,354 | -958 | 80,718 | 151 | 235,993 | -2,038 | 233,955 |
| Amounts in EUR thousands | 30.06.2023 | 31.12.2022 |
|---|---|---|
| Long term | 1,554,545 | 1,500,748 |
| Loans & borrowings | 1,522,881 | 1,471,299 |
| Lease liabilities | 31,664 | 29,449 |
| Short term | 931,903 | 969,097 |
| Loans & borrowings | 921,904 | 958,166 |
| Lease liabilities | 9,999 | 10,932 |
| Total Debt | 2,486,449 | 2,469,845 |
| Less: | ||
| Cash and cash equivalents | -445,945 | -412,644 |
| Net Debt | 2,040,504 | 2,057,201 |
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