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Maire Tecnimont announces its 1Q 2018 Consolidated Financial Results

MAIRE TECNIMONT ANNOUNCES ITS 1Q 2018 CONSOLIDATED FINANCIAL RESULTS

  • Strong growth of the main KPIs:
    •  Revenues: €916.1 million (+21.1%)
    • EBITDA: €50.5 million (+11.0%)
  • Solid financial position
    • Net cash of €108.0 million
  • Backlog at €7.5 billion
  • New orders for €1.3 billion

 

Milan, 3 May 2018 - Maire Tecnimont S.p.A.’s Board of Directors has reviewed and approved the Interim Financial Report as at 31 March 2018, which reports a Net Income of €30.8 million.

 

(in Euro Millions) Q1 2018 Q1 2017 Change %
Revenues 916.1 756.5 21.1%
Business Profit (1) 70.0 62.7 11.6%
Business Margin 7.6% 8.3%  
EBITDA 50.5 45.5 11.0%
EBITDA Margin 5.5% 6.0%  
Pre-Tax Income 45.4 49.4 -7.8%
Tax Rate 32.1% 35.3%  
Consolidated Net Income 30.8 31.8 -3.3%

(1) "Business Profit" is the industrial margin before the allocation of general and administrative costs and research and development expenses.

 

(in Euro millions) 31.3.2018 31.12.2017 Change
Net Cash 108.0 108.0 0.0

 

Consolidated Financial Results as at 31 March 2018

Maire Tecnimont Group Revenues were €916.1 million, up 21.1%. This increase is related to the progress of projects in the backlog, mainly EPCs, that are in their construction phase.

Business Profit was 70.0 million, up 11.6%. The Business Margin was 7.6% versus 8.3%. The change in marginality is related to the progress of the projects in the Technology, Engineering & Construction BU, reflecting a different mix of projects under execution as at 31 March 2018, compared to the same period last year, but in line with the last quarters.

G&A costs were €18.4 million, up approx. €2.5 million as non-recurring savings were recorded in Q1 2017. These costs’ incidence over revenues has nevertheless decreased from 2.1% to 2%.

EBITDA was €50.5 million, up 11.0%. The margin was 5.5%, compared to 6.0%, for the same reasons explained above.

Amortization, Depreciation, Write-downs and Provisions were €1.8 million, slightlyup €0.3 million, due to the amortization of new assets related to the Group’s activity.

EBIT was €48.7 million, up 10.8%.

Net Financial Charges were €3.4 million, vs. a net financial income of €5.2 million, mainly due to the positive, non-recurring effect in Q1 2017 of the net valuation of certain derivatives.

Pre-tax Income was €45.4 million, down 7.8%, due to the non-recurring effect in Q1 2017, as explained in the paragraph above. Estimated taxes of €14.6 million have been provisioned. The effective tax rate was approx. 32.1%, improving when compared to the average tax rate reported for the preceding quarters, based on the various jurisdictions where operations have been carried out.

Consolidated Net Income was €30.8 million, down 3.3%, due to the effect of the Net Financial Charges that had been positively impacted by the non-recurring effect in Q1 2017, as explained above.

Net Cash at 31 March 2018 was €108.0 million, in line with the level on 31 December 2017, taking into account outflows of €22.8 million for the acquisition of Treasury Shares related to the share conversion of the equity-linked bond.

Consolidated Shareholders’ Equity was €333.6 million, up €49.8 million vs. December 31, 2017, thanks to the income for the period, the capital increase and the reduction of the Treasury Shares reserve following the share conversion of the equity-linked bond. This level also takes into account the negative change of the Cash Flow Hedge reserve generated by hedging derivatives, and an approx. €27.6 million negative adjustment due to the implementation of the new IFRS 9 and 15 accounting principles.

 

 

 

Performance by Business Unit

 

Technology, Engineering & Construction BU

Revenues were 871.0 million, up 18.3%, thanks to the progress of the projects in the backlog, EPCs in particular, that became fully operational and in continuity with the last few quarters in 2017. The Business Profit was €66.9 million, up 8.4%, leading to a Business Margin of 7.7% (vs. 8.4%), due to the same reasons outlined above. EBITDA was €49.0 million (5.6% margin), up 7.9%.

 

Infrastructure & Civil Engineering BU

Revenues were €45.1 million, up €24.7 million, due to the progress of the projects in the Backlog, including large-scale renewables. Business Profit was €3.1 million, up €2.1 million. The Business Margin was 6.8%. EBITDA was €1.5 million, up €1.4 million, thanks to a higher contribution of the renewable energy activities.

 

Order Intake and Backlog

 

Thanks to €1,301.9 million of new orders generated during the period, the Group’s Backlog at March 31, 2018 was €7,503.3 million, up €273.9 million on December 31, 2017.

 

In particular, the main projects awarded to the Group include the following:

 

  • The upgrade and revamping of the Haydar Aliyev Refinery based in Baku, Azerbaijan, on behalf of SOCAR (USD800 million)
  • The “Delayed Coking Unit (DCU)” project, inside the Omsl refinery, in the Russian Federation, on behalf of JSC Gazprom Neft – Omsk Refinery (USD215 million)
  • The implementation of a new High-Density Polyethilene unit and the upgrade of a Polypropylene unit, located in Batangas City, in the Philippines, on behalf of JG Summit Petrochemical Corporation (USD180 million)

Subsequent Events

On April 24, 2018, the public offering that was started on April 18, 2018 in Italy and Luxembourg of the Maire Tecnimont S.p.A. Senior Unsecured Notes due 30 April 2024 ended. The issue total amount is €165 million, the interest rate is 2.625% and the annual yield is 2.625%.

Today, 165,000 bonds have been issued at par. The minimum denomination is €1,000 (onethousand). Today also marks the settlement date as well as the date from which the Notes will be entitled to rights.

The notes have begun trading today on the Mercato Telematico delle Obbligazioni (MOT), organized and managed by Borsa Italiana S.p.A., as well as on the Regulated Market of the Luxembourg Stock Exchange.

The issue proceeds will be entirely used to partially repay Tecnimont S.p.A’s medium to long term bank debt.

 

On April 26th, Maire Tecnimont S.p.A.’s Shareholders’ ordinary Meeting approved the Financial Statements at 31 December 2017, a dividend distribution of €0.128 per share, and the First Section of the 2018 Remuneration Report.

 

 

Outlook

 

The Group is to maintain in 2018 the good industrial performance achieved in 2017 and in the first quarter of 2018, thanks to the significant backlog at the end of December 2017 and March 2018, thanks to the new contracts signed with international clients since the beginning of the year.

In spite of the on-going expansion of both the organizational structure and the geographic diversification, efficiency improvement targets will continue to be maintained, even if such improvements have already led to one of the lowest G&A-Revenues ratio in the industry.

Even though the market environment is expected to remain challenging, a high level of backlog is to be maintained, thanks to our well-recognized technological expertise, which is continuously being developed and expanded to include adjacent technologies in synergy with the existing ones, and to a flexible business model that can offer innovative products and services.

This outlook is supported by a significant commercial pipeline that is expected to generate new contracts in the upcoming quarters, which will contribute to an increasing geographical diversification.

 

***

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following information is provided upon a request by CONSOB:

 

Maire Tecnimont Group and Maire Tecnimont S.p.A. Net Financial Position

The Maire Tecnimont Group Net Financial Position is presented below:

NET FINANCIAL POSITION

 

31

March

2018

 

31 December 2017

Change

(in Euro thousands)

Short-term borrowings

153,797

103,943

49,854

Other current financial liabilities

330

79,911

(79,581)

Financial instruments - Current derivatives

10,333

9,876

457

Financial debt net of current portion

295,656

324,602

(28,946)

Financial instruments - Non-current derivatives

766

249

517

Other non-current financial liabilities

39,731

39,719

12

Total debt

500,612

558,299

(57,687)

Cash and cash equivalents

(581,569)

(630,868)

49,299

Other current financial assets

(5,259)

(5,356)

97

Financial instruments - Current derivatives

(10,089)

(19,976)

9,887

Financial instruments - Non-current derivatives

(1,867)

(1,222)

(645)

Other non-current financial assets

(9,878)

(8,920)

(958)

Total cash and cash equivalents

(608,662)

(666,341)

57,680

Other financial liabilities of assets for sale

0

0

0

Other financial assets of assets for sale

0

0

0

Net financial position (Net Cash)

(108,050)

(108,042)

(8)

 

 

The Net Financial Position of the Parent Company Maire Tecnimont S.p.A. is presented below:

 

NET FINANCIAL POSITION (MET S.p.A.)

31

March

2018

31 December 2017

 

 

 

Change

(in Euro thousands)

Short-term borrowings

1,033

1,964

 

(931)

Financial instruments - Current derivatives

246

0

 

246

Other current liabilities – Equity-Linked Bond

0

79,581

 

(79,581)

Other non-current fin. liabilities – non-convertible bonds

39,731

39,719

 

12

Other non-current financial liabilities

348,805

332,805

 

16,000

Total Debt

389,814

454,069

 

(64,255)

Cash and cash equivalents

(60)

(2,124)

 

2,064

Financial instruments - Current derivatives

0

(5,404)

 

5,404

Other current financial assets 

(3,200)

(3,200)

 

0

Other non-current financial assets 

(62,195)

(62,195)

 

0

Total Cash and Cash Equivalents

(65,455)

(72,923)

 

7,468

Net Financial Position

324,359

381,146

 

(56,787)

 

 

Related party transactions

With reference to the information on related party transactions, all transactions with related parties are settled at market conditions. The Company’s receivables/payables (including financial) and cost/revenue transactions with related parties at 31 March 2018 are presented in the tables below.

 

 

31/3/2018

(in Euro thousands)

Trade

Receivables

Trade

Payables

Costs

Revenues

G.L.V. Capital S.p.A.

0

(92)

(140)

0

Maire Investments Group.

1

(85)

(72)

0

Total

1

(177)

(212)

0

 

In particular, payable contracts refer to the lease of office buildings to Group companies, the use of the “Maire” trademark and other minor charges by parent company GLV Capital S.p.A. and to existing relations with Maire Investments Group, a company linked to Maire Tecnimont S.p.A.’s main shareholder for the lease of office buildings and other spaces assigned to “La Sapienza” University research center as a result of a cooperation agreement signed with them. The remaining payable and receivable contracts refer to administrative and facility management services respectively.

 

Transactions with other non-consolidated and/or associated Group companies are purely commercial and relate to specific activities linked to projects; in addition, certain consortia are in liquidation, having substantially concluded their operations:

 

 

 

 

31/3/2018

(in Euro thousands)

 

Trade Receivables

 

Trade Payables

 

Financial Receivables

Financial Payables

Costs

Revenues

MCM Servizi Roma S.c.a.r.l. in liquidazione

0

(95)

0

0

0

0

 

Studio Geotecnico Italiano

0

(110)

0

0

(108)

0

 

Villaggio Olimpico MOI S.c.a.r.l.  In liquidazione

0

(4)

69

0

0

0

 

Desimont Contracting

1.726

0

0

(371)

0

0

 

Biolevano S.r.l

577

0

0

0

0

785

 

Processi Innovativi S.r.l

97

(332)

0

0

(58)

18

 

BIO P S.r.l

8

(48)

18

0

(11)

2

 

TCM KTR LLP

7

0

198

0

0

2

 

Exportadora de Ingenieria y Servicios Tcm Spa

0

0

0

(67)

0

0

 

Volgafert LLc

1.725

0

0

0

0

0

 

Total

4.140

(589)

285

(438)

(177)

807

 

                             

 

 

***

 

 

 

Webcast Conference Call

 

The Q1 2018 financial results will be outlined today at 5:30pm CEST during an audio-webcast conference call held by the top management.

The conference call may be followed as a webcast by connecting to the website (www.mairetecnimont.com) and clicking on the “Q1 2018 Financial Results” banner on the Home Page or through the following url:

 

 

http://services.choruscall.eu/links/mairetecnimont180503.html

 

Alternatively, you may participate in the conference call by calling one of the following numbers:

 

Italy: +39 02 805-8811

UK: +44 121 281-8003

USA: +1 718 705-8794

 

The presentation given by the top management will be available at the start of the conference call in the “Investors/Documents&Presentations” section of Maire Tecnimont’s website

(http://www.mairetecnimont.com/en/investors/documents-presentations).

The presentation shall also be made available on the 1info storage mechanism (www.1info.it).

***

Dario Michelangeli, as Executive for Financial Reporting, declares - in accordance with paragraph 2, Article 154-bis of Legislative Decree No. 58/1998 (“Consolidated Finance Act”) - that the accounting information included in this press release corresponds to the underlying accounting records.

 

The Interim Financial Report as at 31 March 2018 is available to the public at the registered office in Rome, at the operative office in Milan, at Borsa Italiana S.p.A., on the Company website www.mairetecnimont.com at Investors/Documents & Presentations section (http://www.mairetecnimont.com/en/investors/documents-presentations), and on the authorized storage device “1info” (www.1info.it).

 

This press release, and in particular the “Outlook” section contains forecasts. The declarations are based on current estimates and projections of the Group concerning future events and, by their nature, are subject to risk and uncertainty. Actual results may differ significantly than the estimates made in such declarations due to a wide range of factors, including the continued volatility and further decline of the capital and finance markets, raw material price changes, altered economic conditions and growth trends and other changes in business conditions, in addition to other factors, the majority of which outside the control of the Group.

 

 

 

 

 

 

Maire Tecnimont S.p.A.

Maire Tecnimont S.p.A. is a company listed with the Milan stock exchange. It heads an industrial group (the Maire Tecnimont Group) that leads the international Engineering & Construction (E&C), Technology & Licensing and Energy Business Development & Ventures markets, with specific competences in plants, particularly in the hydrocarbons segment (Oil & Gas, Petrochemicals and Fertilisers), as well as in Power Generation and Infrastructures. The Maire Tecnimont Group operates in approximately 30 different countries, numbering around 45 operative companies and a workforce of about 5,500 employees, along with approximately 3,000 additional Electrical & Instrumentation professionals. For more information: www.mairetecnimont.com.

 

Institutional Relations and Communication

Carlo Nicolais, Tommaso Verani

public.affairs@mairetecnimont.it

 

 

Media Relations

Image Building

Simona Raffaelli, Alfredo Mele,
Ilaria Mastrogregori

Tel +39 02 89011300

mairetecnimont@imagebuilding.it

 

Investor Relations

Riccardo Guglielmetti

Tel +39 02 6313-7823

investor-relations@mairetecnimont.it