- EBITDA: €107.1 million (+6.8%)
- Commercial Pipeline equal to €44.5 billion
- The development in the Green Chemistry business continues
- Ramp up of the mechanical recycling and compounding plant
- 2019 Guidance is confirmed
Milan, 25 July 2019
Maire Tecnimont S.p.A.’s Board of Directors today has reviewed and approved the Interim Financial Report as at 31 June 2019 which reports a Net Income of €53.0 million.
ORDER INTAKE AND BACKLOG
FINANCIAL HIGHLIGHTS BY BUSINESS UNIT
ORDER INTAKE BY BUSINESS UNIT
BACKLOG BY BUSINESS UNIT
Consolidated Financial Results as at 30 June 2019
Maire Tecnimont Group Revenues were €1,682.6 million, down 8.1%. Volumes reflect the non-linear progress of projects in the backlog, depending on the planned schedules of activities for each project. In particular, this semester’s production, on one hand, shows that the main EPCs awarded over the past years are in an advanced phase, not yet compensated by new acquisitions that are still in their initial phases. On the other hand, it reflects the type of contracts that were recently acquired, mainly Engineering, Procurement, Construction Management and Commissioning, that generate lower volumes. Revenues in the following quarters are expected to increase in line with the projects’ planned schedules.
Restated Business Profit was €133.1 million, down 3.6%. The restated Business Margin was 7.9%, up versus 7.5%.
G&A costs were €37.3 million, representing 2.2% of revenues, slightly up, but substantially in line with December 2018.
Restated EBITDA was €92.9 million (reported was euro 107.1 million, up 6.8%), down 7.4%, due to lower volumes in the semester. The restated margin was 5.5%, in line with previous period.
Amortization, Depreciation, Write-downs and Provisions were €11.9 million, up compared to the same period of 2018, mainly due to the amortization of new assets related to the Group's activities, the amortization of plants and machineries following the acquisition of MyReplast Industries by NextChem in the First Semester 2019 and the provisions on receivables related to old real estate initiatives currently under disposal.
Restated EBIT was €80.9 million, down 15.7%, due to the increase of the previous item.
Restated Net Financial Charges were €2.9 million, improving by €4.7 million. The H1 2019 data is mainly impacted by the positive contribution of the net valuation of derivatives equal to €2.8 million, such valuation was negative for €1.7 million in H1 2018. Net financial charges, excluding the derivatives component, are in line with the previous quarters.
Restated pre-tax Income was €78.0 million, down 11.7%. Estimated taxes of €24.2 million have been provisioned.
The effective tax rate was approx. 31.0%, down compared to 32.2% and to the average normalized tax rate of the last few quarters, taking into account the various jurisdictions where Group operations have been carried out.
Restated Consolidated Net Income was €53.9 million, down 10.1%.
Net Debt (net of the above-mentioned value in the table footnote) at 30 June 2019 was €118.7 million, down compared to €93.8 million of Net Cash at 31 December 2018. This change is mainly due to the expected change in working capital as a result of the normal progress of the projects, in particular EPCs that are about to be completed, as well as the type of the recently acquired contracts. Operating cash flows are also impacted by a dividend payment of €39.1 million and cash taxes equal to €21.6 million.
Consolidated Shareholders’ Equity was €393.8 million, up €51.2 million vs. December 31, 2018, thanks to the income for the period, and to a positive change of the derivatives’ Cash Flow Hedge reserve related to the positive mark to market of the derivatives hedging the projects’ flows, net of the fiscal effect and of the translation of the financial statements stated in a foreign currency, and taking into account a dividend payment of €39.1 million related to 2018.
Performance by Business Unit
Revenues were €1,615.2 million, down 7.3%, due to the same reasons commented above.
Restated Business Profit was €128.6 million, down 4.5%, leading to a restated Business Margin of 8.0% (vs.7.7%). Restated EBITDA was €91.4 million, with a marginality in line with the same period last year.
Green Energy BU
Revenues were €67.5 million, down 22.8%, due to the end of a few contracts for large-scale plants in the renewable energy sector, not yet replaced by new acquisitions, and due to the final phase of a project in the hospital sector. At the same time, our subsidiary NextChem, active in the Circular Economy, started its operations after its first investment in the advanced mechanical plastic recycling plant.
Restated Business Profit was €4.5 million, up 28.6%. The restated Business Margin was 6.7% vs. 4.0%. Restated EBITDA was €1.5 million, up €1 million.
Order Intake and Backlog
Thanks to €1,472.6 million of new orders generated during the period, the Group’s Backlog at June 30, 2019 was €6,635.9 million.
In particular, the main projects awarded to the Group include the following:
• A reimbursable EP contract for Exxon Mobil for the implementation of new innovative process units in Baytown petrochemical complex
• An EPC contract awarded by a subsidiary of ENI to realize the upgrading of the Luanda refinery in Angola
• An EPC project from ANWIL, for the implementation of a new granulation unit in Poland to produce various types of fertilizers
• A licensing, Process Design Package (PDP) and Proprietary Equipment supply for a Urea plant for ShchekinoAzot in Russia
On 18 July 2019, Maire Tecnimont announced the acquisition of Protomation through its affiliate Stamicarbon, as part of the Group’s Digital Transformation raodmap. Protomation is a Dutch specialist IT company dedicated to developing software applications and state-of-the-art operator training simulators (OTS) for the chemical process industry, with an extensive track record of collaboration with fertilizer producers.
The Group continues to maintain a high backlog at the end of the first semester of 2019. Thanks to the contracts already signed with international clients since the beginning of the current year, the Group will experience an improved industrial performance in the following quarters, in line with the projects’ planned schedules. The forecast for the slightly higher revenues in 2019 and for a marginality in line with the one related to EPC projects is thus confirmed.
The market environment is expected to witness an increase of investments in the downstream sector, in particular in plants that transform oil and gas into petrochemicals, and in the revamping of existing refineries in order to adapt the type and quality of their final products to the new market requirements, which are strongly influenced by recent environmental laws.
In this context, the Group expects to maintain a high level of backlog thanks to the well-recognized technological expertise in the petrochemical and fertilizer sectors, and to its primary competencies in the refining and gas treatment sectors. These competitive advantages are continuously being developed and expanded to include adjacent technologies in synergy with the existing ones, leveraging a flexible business model that can offer even more innovative products and services.
This outlook is supported by a highest ever commercial pipeline that is expected to generate new contracts in the traditional areas where the Group operates, as well as in new geographies that are economically stable and rich in raw materials.
As for the Green Acceleration project, Maire Tecnimont is currently active in the Circular Economy sector, through its subsidiary NextChem, thanks to the investment made in the first half of 2019 in the most efficient and advanced plastic mechanical recycling plant in Europe. The plant is located in Italy, ready to be a reference plant with an industrial scale size to support important domestic and international market opportunities.
The circular economy is one of the three pillars of NextChem’s strategy, while the other two are “Greening the Brown” (mitigating the negative environmental consequences of the oil and gas transformation) and “Green-Green” (developing alternative fuel and plastic products using renewable sources), where NextChem owns proprietary technologies or exclusive agreements to develop third-party technologies, to be further commercially in the rest of 2019.
Webcast Conference Call
The H1 2019 financial results will be presented 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 “H1 2019 Financial Results” banner on the Home Page or through the following url:
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/Results and Presentations/Financial Results” section of Maire Tecnimont’s website
(https://www.mairetecnimont.com/en/investors/results-and-presentations/financial-results). 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 2019 Half Year Report will be 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’s website www.mairetecnimont.com (in the “Investors/Results and Presentations/Financial Results” section, and on the authorized storage device “1info” (www.1info.it), according to the timing allowed by law.
This press release, and the “Outlook” section in particular, 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., a company listed on the Milan Stock Exchange, is at the head of an international industrial group leader in the transformation of natural resources (plant engineering in downstream oil & gas, with technological and execution competences). Through its subsidiary NextChem it operates in the field of green chemistry and the technologies to support the energy transition. Maire Tecnimont Group operates in about 45 countries, numbering around 50 operative companies and a workforce of approximately 6,300 employees, along with approximately 3,000 professionals in the electro-instrumental division. For more information: www.mairetecnimont.com.
Institutional Relations and Communication
Carlo Nicolais, Tommaso Verani
Alfredo Mele, Alessandro Zambetti,
Tel +39 02 89011300
Tel +39 02 6313-7823
The Consolidated Income Statement, Balance Sheet and Cash Flow Statement are presented below