Groupe Eramet : ERAMET group H1 2015 results
(Thomson Reuters ONE) -
Paris, 29 July, 2015
PRESS RELEASE
ERAMET group H1 2015 results
* With a sharp and simultaneous downturn in nickel and manganese prices,
ERAMET stands strong with financial liquidity of nearly ?2 billion and a
moderate net debt-to-equity ratio of 30%.
* Current operating income came out at -?70 million and net income, Group
share totalled -?83 million in first-half 2015.
* ERAMET is committed to pursuing its 2014-2017 reduction and productivity
improvement plan with the objective of ?360 million annual impact on current
operating income at the end of the period compared to 2013.
* The policy on selective investments is strengthened.
* The Group passed a new milestone in the building of the first European
aerospace titanium supply chain.
* Ramp-up continues at the Moanda Metallurgical Complex in Gabon as well as
TiZir in Senegal.
* ERAMET remains strongly positioned in fundamentally high-potential markets.
ERAMET's Board of Directors met on 29 July, 2015 under the chairmanship of
Patrick Buffet to examine the financial statements for first-half 2015.
---------------------------------------------------------------
H1 2015 H2 2014 H1 2014
(? millions)( 1)
---------------------------------------------------------------
Sales 1,626 1,610 1,534
ERAMET Nickel 396 400 381
ERAMET Alloys 510 464 474
ERAMET Manganese 718 746 683
Holding company & eliminations 2 0 (4)
EBITDA 78 206 157
Current operating income (70) 61 14
Net income, Group share (83) (100) (59)
Net debt (805) (547) (473)
Net debt-to-equity ratio 30% 20% 16%
---------------------------------------------------------------
(1 )Adjusted data from Group reporting, in which joint ventures are accounted
for using proportionate consolidation. The reconciliation with the published
financial statements is presented in Appendix 4.
* Key figures for the ERAMET Group
Despite a difficult market environment, the ERAMET Group reported sales of
?1,626 million in H1 2015 compared with ?1,534 million in H1 2014.
Current operating income came out at -?70 million, affected by exceptional or
non-recurrent items and provisions for nickel inventories. Net income, Group
share totalled -?83 million in H1 2015.
Net financial debt stood at ?805 million with a net debt-to-equity ratio of 30%.
The Group forged ahead with its large-scale 2014-2017 plan to improve
productivity and reduce costs, with its objective of a ?360 million annual
impact on current operating income at the end of the period compared to 2013.
All the ERAMET teams are rallying to meet that target.
Industrial investments are to be reduced through a strict and rigorous policy of
capital expenditure. Investments in 2015 will be significantly below ?400
million.
* ERAMET Nickel: results impacted by sharp market downturn
The average LME nickel price in H1 2015 was USD 6.2/lb, down from USD 7.8/lb in
H2 2014 and USD 7.5/lb in H1 2014.
ERAMET Nickel posted current operating income of -?98 million in H1 2015,
compared with -?27 million in H1 2014.
The continued accumulation of nickel inventories in LME warehouses in 2014
weighed on nickel prices. The consensus opinion was that the law introduced by
the Indonesian government in early 2014 banning the export of unprocessed nickel
ore would have a positive impact on nickel prices in the short term. But owing
to the build-up of major ore inventories in China prior to the ban, and to major
and unrecorded transfers of inventories of Chinese metal to LME warehouses,
nickel prices trended sharply downwards in H1 2015. LME nickel metal inventories
reached record highs in early June, representing, together with producers
inventories, around 24 weeks of consumption. LME inventories have trended
downwards in recent weeks.
Experts agree on a coming LME nickel prices increase.
* ERAMET Alloys: considerable cost reductions and major gains in productivity
served to confirm growth in current operating income against a backdrop of
contrasted markets
ERAMET Alloys sales increased by 8% year-on-year in H1 2015. The aerospace
sector accounted for almost 60% of the sales of ERAMET Alloys.
ERAMET Alloys current operating income came to ?15 million in H1 2015 compared
with a break-even result in H1 2014.
Once again, ERAMET Alloys confirmed its strong base in the aerospace sector in
H1 2015 with the strengthening of Europe's number-one aerospace titanium
business through the creation of EcoTitanium[1], launched on 27 April, 2015, and
MKAD[2], a joint venture with Mecachrome announced in late June 2015.
* ERAMET Manganese: robust results despite the fall in manganese ore prices
thanks to the outstanding quality of its Moanda deposit
CRU CIF China spot prices for high-grade manganese ore fell by more than 30%
year-to-date to approximately USD 3/dmtu, largely due to the decrease of the
global carbon steel production (-2% in H1 2015 compared to H1 2014).
Despite this backdrop, ERAMET Manganese sales has moderately increased in
H1 2015 at ?718 million compared with ?683 million in H1 2014.
ERAMET Manganese ore production in Gabon totalled almost 1.9 million tons in
H1 2015, increasing steadily since H1 2014, a level never attained before in a
first semester. The Group is extremely well positioned on the cost curve of
manganese ore producers thanks to the intrinsic qualities of the Moanda deposit
in Gabon.
Manganese alloys prices remained stable as a whole and production increased by
over 4% on H1 2014.
Current operating income for ERAMET Manganese came out at ?32 million in H1
2015 compared with ?61 million in H1 2014.
H1 2015 was marked by the opening of the Moanda Metallurgical Complex in Gabon.
These new entities reaffirm ERAMET's global leadership position across the
entire spectrum of manganese alloys.
Lastly, in the mineral sands sector, the ramp-up at Grande Côte will continue
during the second half of this year. TiZir, a 50/50 joint-venture with the
Australian company Mineral Deposits Limited, aims to become a new leader in the
markets of ilmenite for titanium dioxide and zirconium for ceramics.
* ERAMET Group outlook
In a very difficult market backdrop impacting all mining and metallurgy
companies in the last semesters, nickel and manganese prices in simultaneous
downward trends weighed significantly on the Group's results in H1 2015.
Against this backdrop, the ERAMET Group pursues with determination its programme
to reduce costs and improve productivity in all Group entities and reinforces
its selective approach to capital expenditure.
The ramp-up in recent investments (The Moanda Metallurgical Complex, TiZir, .)
and future investments (EcoTitanium, MKAD, .) will strengthen the Group's
leadership positions.
ERAMET remains strongly positioned in fundamentally high-potential markets in
the long term.
- ooOoo -
WEBCAST OF PRESENTATION OF FIRST-HALF RESULTS
The presentation of the H1 2015 results will be webcast tomorrow, 30 July,
2015, at 10 am (Paris time) in French and with a simultaneous translation in
English.
To sign up, please click on the link on the Group's website: www.eramet.com
--------------------------------------------------------------------------------
ABOUT ERAMET
ERAMET is a leading global producer of:
* alloying metals, particularly manganese and nickel, used to improve the
properties of steel,
* high-performance special steels and alloys used in industries such as
aerospace, power generation and tooling.
ERAMET is also reviewing or developing major projects in new activities with
high growth potential, such as mineral sands (titanium dioxide and zirconium),
lithium and recycling.
The Group employs approximately 14,000 people in 20 countries. ERAMET is listed
on Euronext Paris Compartment A.
CONTACT
Vice President Strategy and Financial Communication
Philippe Gundermann
Tel: +33 (0)1 45 38 42 78
Investor Relations and Strategic Analyst
Hughes-Marie Aulanier
Tel: +33 (0)1 45 38 38 04
Strategic and Financial Communication Analyst
Ludovic Donati
Tel: +33 (0)1 45 38 42 88
For more information: www.eramet.com
--------------------------------------------------------------------------------
APPENDICES
Appendix 1: Sales
-------------------------------------------------------------------------------
Sales (M?) Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014
-------------------------------------------------------------------------------
ERAMET Nickel 204 192 183 217 215 166
-------------------------------------------------------------------------------
ERAMET Alloys 254 256 253 211 250 224
-------------------------------------------------------------------------------
ERAMET Manganese 389 329 388 358 357 326
-------------------------------------------------------------------------------
Holding company & eliminations 2 - (1) 1 (2) (2)
-------------------------------------------------------------------------------
ERAMET Group 849 777 823 787 820 714
Inc. joint-ventures
-------------------------------------------------------------------------------
Share in joint-ventures (26) (20) (21) (18) (16) (14)
-------------------------------------------------------------------------------
ERAMET Group
Published IFRS financial 823 757 802 769 804 700
statements (1)
-------------------------------------------------------------------------------
(1) Application of IFRS standard 11 "Joint Arrangements".
Appendix 2: Production and shipments
---------------------------------------------------------------------------
Metric tons H1 2015 H2 2014 H1 2014
---------------------------------------------------------------------------
Manganese ore and sinter production 1,877,200 1,836,800 1,644,100
---------------------------------------------------------------------------
Manganese alloys production 352,700 357,600 338,300
---------------------------------------------------------------------------
Manganese alloys sales 345,400 346,700 352,900
---------------------------------------------------------------------------
Nickel production(1) 26,279 27,933 27,078
---------------------------------------------------------------------------
Nickel sales(2) 28,250 25,989 27,627
---------------------------------------------------------------------------
(1) Ferronickel and matte
(2) Finished products
Appendix 3: Sectorial information
Segment reporting - by division
------------------------------------------------------------------------------------
(? million) Nickel Alloys Manganese Holding & Total Joint- Published
venture
eliminations contribution
------------------------------------------------------------------------------------
1st half
year 2015
------------------------------------------------------------------------------------
Sales 396 510 718 2 1 626 (46) 1 580
EBITDA (47) 40 101 (16) 78 1 79
Current
operating (98) 15 32 (19) (70) 9 (61)
profit
(loss)
Operating
profit (115) 9 (106)
(loss)
Net cash
generated by (24) 3 (62) (35) (118) 6 (112)
operating
activities
Industrial
capital
expenditure
(intangibles 37 16 77 2 132 (8) 124
assets,
property,
plant &
equipment)
(Net
financial (805) 158 (647)
debt)
position
------------------------------------------------------------------------------------
1st half
year 2014
------------------------------------------------------------------------------------
Sales 381 474 683 (4) 1 534 (30) 1 504
EBITDA 20 31 124 (18) 157 (3) 154
Current
operating (27) - 61 (20) 14 - 14
profit
(loss)
Operating
profit (29) - (29)
(loss)
Net cash
generated by (52) (17) 63 (62) (68) (21) (89)
operating
activities
Industrial
capital
expenditure
(intangibles 42 23 110 - 175 (33) 142
assets,
property,
plant &
equipment)
(Net
financial (473) 93 (380)
debt)
position
------------------------------------------------------------------------------------
Full year
2014
------------------------------------------------------------------------------------
Sales 781 938 1 429 (4) 3 144 (69) 3 075
EBITDA 42 81 266 (26) 363 - 363
Current
operating (52) 23 137 (33) 75 11 86
profit
(loss)
Operating
profit (54) 39 (15)
(loss)
Net cash
generated by (18) 18 140 (97) 43 7 50
operating
activities
Industrial
capital
expenditure
(intangibles 97 48 199 2 346 (41) 305
assets,
property,
plant &
equipment)
(Net
financial (547) 136 (411)
debt)
position
------------------------------------------------------------------------------------
Segment reporting - by geographic region
----------------------------------------------------------------------------------------------------
(? million) France Europe North Asia Oceania Africa South Total Joint- Published
venture
America America contribution
----------------------------------------------------------------------------------------------------
Sales
(destination
of sales)
----------------------------------------------------------------------------------------------------
1st half 194 493 380 478 21 43 17 1 626 (46) 1 580
year 2015
1st half 204 521 312 428 10 40 19 1 534 (30) 1 504
year 2014
Full year 407 986 664 947 16 81 43 3 144 (69) 3 075
2014
----------------------------------------------------------------------------------------------------
Capital
expenditure
(intangibles
and
property,
plant &
equipment)
----------------------------------------------------------------------------------------------------
1st half 18 19 6 12 25 51 1 132 (8) 124
year 2015
1st half 26 14 5 10 30 89 1 175 (33) 142
year 2014
Full year 56 28 19 20 73 149 1 346 (41) 305
2014
----------------------------------------------------------------------------------------------------
Performance indicators by period - profit and loss
---------------------------------------+-------------+-----------------------
| |
| |
(? million) |1st half year|1st half yeay Full year
| |
| 2015| 2014 2014
| |
| |
| |
| |
---------------------------------------+-------------+-----------------------
| |
| |
Sales | 1 626 | 1 534 3 144
| |
| |
---------------------------------------+-------------+-----------------------
| |
| |
EBITDA | 78 | 157 363
| |
| |
---------------------------------------+-------------+-----------------------
| |
| |
Current operating profit (loss) | (70)| 14 75
| |
| |
---------------------------------------+-------------+-----------------------
| |
| |
Operating profit (loss) before | (115)| (29) (27)
impairment | |
| |
| |
---------------------------------------+-------------+-----------------------
| |
| |
Operating profit (loss) | (115)| (29) (54)
| |
| |
---------------------------------------+-------------+-----------------------
| |
| |
Net borrowing cost | (26)| (16) (40)
| |
Other financial income and expenses | (8)| (9) (28)
| |
Share in profit of associates | - | (1) -
| |
Income tax | 23 | (3) (49)
| |
| |
---------------------------------------+-------------+-----------------------
| |
| |
Profit (loss) for the period | (126)| (58) (171)
| |
| |
---------------------------------------+-------------+-----------------------
| |
| |
- attributable to non-controlling | (43)| 1 (12)
interests | |
| |
- attributable to equity holders of | (83)| (59) (159)
the parent | |
| |
| |
---------------------------------------+-------------+-----------------------
| |
| |
Basic earnings per share (EUR) | (3,13)| (2,25) (6,06)
| |
Diluted earnings per share (EUR) | (3,13)| (2,25) (6,06)
| |
| |
---------------------------------------+-------------+-----------------------
Performance indicators by period - net financial debt variation
-----------------------------------------+-------------+-----------------------
| |
| |
(? million) |1st half year|1st half yeay Full year
| |
| 2015| 2014 2014
| |
| |
| |
| |
-----------------------------------------+-------------+-----------------------
| |
| |
Operating activities | |
| |
| |
| |
EBITDA | 78 | 157 363
| |
Cash impact of items below EBITDA | (89)| (80) (238)
| |
| |
+-------------+-----------------------
| |
| |
Cash generated from operations | (11)| 77 125
| |
| |
| |
Net change in current operating assets | (107)| (145) (82)
and liabilities | |
| |
| |
-----------------------------------------+-------------+-----------------------
| |
| |
Net cash generated by operating | (118)| (68) 43
activities | |
| |
| |
-----------------------------------------+-------------+-----------------------
| |
| |
Investing activities | |
| |
| |
| |
Industrial capital expenditure | (132)| (175) (346)
| |
Other investing activities flows | 10 | (12) 26
| |
| |
-----------------------------------------+-------------+-----------------------
| |
| |
Net cash used in investing activities | (122)| (187) (320)
| |
| |
-----------------------------------------+-------------+-----------------------
| |
| |
Net cash used in financing activities | - | (1) (25)
| |
| |
-----------------------------------------+-------------+-----------------------
| |
| |
Exchange-rate impact | (18)| 1 (27)
| |
| |
-----------------------------------------+-------------+-----------------------
| |
| |
(Increase) / decrease in net financial | (258)| (255) (329)
debt position | |
| |
| |
-----------------------------------------+-------------+-----------------------
| |
| |
Opening (net financial debt) position | (547)| (218) (218)
| |
Closing (net financial debt) position | (805)| (473) (547)
| |
| |
-----------------------------------------+-------------+-----------------------
Performance indicators by period - balance sheet
---------------------------------------------------------+----------+----------
| |
| |
(? million) |30/06/2015|31/12/2014
| |
| |
| |
| |
---------------------------------------------------------+----------+----------
| |
| |
Non-current assets | 3 482 | 3 407
| |
| |
---------------------------------------------------------+----------+----------
| |
| |
Inventories | 1 071 | 1 058
| |
Trade receivables | 427 | 387
| |
Trade payables | 408 | 435
---------------------------------------------------------+----------+----------
Simplified Working Capital | 1 090 | 1 010
| |
Other operating Working Capital items | (147)| (162)
| |
| |
---------------------------------------------------------+----------+----------
| |
| |
Total Working Capital | 943 | 848
| |
| |
---------------------------------------------------------+----------+----------
| |
| |
Derivatives | - | -
| |
| |
---------------------------------------------------------+----------+----------
| |
---------------------------------------------------------+----------+----------
| |
| |
TOTAL | 4 425 | 4 255
| |
| |
---------------------------------------------------------+----------+----------
---------------------------------------------------------+----------+----------
| |
| |
(? million) |30/06/2015|31/12/2014
| |
| |
| |
| |
---------------------------------------------------------+----------+----------
| |
| |
Shareholders' equity - Attributable to equity holders of| 2 278 | 2 322
the parent | |
| |
| |
---------------------------------------------------------+----------+----------
| |
| |
Shareholders' equity - Attributable to non-controlling | 388 | 432
interests | |
| |
| |
---------------------------------------------------------+----------+----------
| |
| |
Cash and cash equivalents and other current financial | | 938
assets | 760 |
| |
Borrowings | 1 565 | 1 485
| |
| |
---------------------------------------------------------+----------+----------
| |
| |
Net financial debt | 805 | 547
| |
| |
---------------------------------------------------------+----------+----------
| |
| |
Provisions and employee-related liabilities | 752 | 732
| |
| |
---------------------------------------------------------+----------+----------
| |
| |
Net deferred tax | 95 | 130
| |
| |
---------------------------------------------------------+----------+----------
| |
| |
Derivatives | 107 | 92
| |
| |
---------------------------------------------------------+----------+----------
| |
---------------------------------------------------------+----------+----------
| |
| |
TOTAL | 4 425 | 4 255
| |
| |
---------------------------------------------------------+----------+----------
Appendix 4: Reconciliation Group reporting and published accounts
--------------- -----------------------+--------+ -----------------------+--------+ -----------------------+--------+
| | | | | |
| | | | | |
(? million) 1sr half Joint-|1st half| 1sr half Joint-|1st half| Full year Joint-| Full|
year venture| year| year venture| year| venture| year|
| | | | | |
2015 contribution| 2015| 2014 contribution| 2014| 2014 contribution| 2014|
| | | | | |
Published |Adjusted| Published |Adjusted| Published |Adjusted|
((1)) | ((2))| ((1)) | ((2))| ((1)) | ((2))|
| | | | | |
| | | | | |
--------------- -----------------------+--------+ -----------------------+--------+ -----------------------+--------+
| | | | | |
| | | | | |
Sales 1 580 46 | 1 626 | 1 504 30 | 1 534 | 3 075 69 | 3 144 |
| | | | | |
| | | | | |
| | | | | |
EBITDA 79 (1)| 78 | 154 3 | 157 | 363 - | 363 |
| | | | | |
| | | | | |
| | | | | |
Current | | | | | |
operating (61) (9)| (70)| 14 - | 14 | 86 (11)| 75 |
profit (loss) | | | | | |
| | | | | |
| | | | | |
| | | | | |
Operating (106) (9)| (115)| (29) - | (29)| (15) (39)| (54)|
profit (loss) | | | | | |
| | | | | |
| | | | | |
| | | | | |
Profit (loss) | | | | | |
for the | | | | | |
period - | | | | | |
attributable (83) - | (83)| (59) - | (59)| (159) - | (159)|
to equity | | | | | |
holders of | | | | | |
the parent | | | | | |
| | | | | |
| | | | | |
| | | | | |
Net cash | | | | | |
generated by (112) (6)| (118)| (89) 21 | (68)| 50 (7)| 43 |
operating | | | | | |
activities | | | | | |
| | | | | |
| | | | | |
| | | | | |
Industrial | | | | | |
capital (124) (8)| (132)| (142) (33)| (175)| (305) (41)| (346)|
expenditure | | | | | |
| | | | | |
| | | | | |
| | | | | |
(Net | | | | | |
financial (647) (158)| (805)| (380) (93)| (473)| (411) (136)| (547)|
debt) | | | | | |
position | | | | | |
| | | | | |
| | | | | |
| | | | | |
Shareholders' | | | | | |
equity - | | | | | |
attributable 2 278 - | 2 278 | 2 473 - | 2 473 | 2 322 - | 2 322 |
to equity | | | | | |
holders of | | | | | |
the parent | | | | | |
--------------- -----------------------+--------+ -----------------------+--------+ -----------------------+--------+
(1) Financial statements prepared under applicable IFRS, with joint ventures are
accounted for using equity method. See 2015 condensed interim consolidated
financial statements.
(2) Group reporting, in which joint ventures are accounted for using
proportionate consolidation.
--------------------------------------------------------------------------------
[1] Entity producing aerospace quality ingots starting from recycled titanium.
[2] Entity dedicated to aerospace titanium parts machining.
Eramet press release PDF:
http://hugin.info/143395/R/1942205/702472.pdf
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Source: Groupe Eramet via GlobeNewswire
[HUG#1942205]
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