AMG Advanced Metallurgical Group N.V. Reports Third Quarter 2016 Results
(Thomson Reuters ONE) -
Key Highlights
* AMG ended the third quarter 2016 net debt free, with net cash of $1.9
million
* EBITDA((2)) was $23.4 million in the third quarter 2016, a 15% increase over
the same period in 2015
* Net income attributable to shareholders increased by 5% to $5.2 million in
the third quarter 2016 from $4.9 million in the third quarter 2015
* EPS, on a fully diluted basis, was $0.18 in the third quarter 2016,
unchanged from third quarter 2015
* Annualized return on capital employed increased to 18.0% in the third
quarter 2016, as compared to 14.7% in the third quarter 2015
Amsterdam, 3 November 2016 (Regulated Information) --- AMG Advanced
Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") reported third
quarter 2016 revenue of $247.5 million, a 2% increase from $241.9 million in the
third quarter 2015. EBITDA for the third quarter 2016 was $23.4 million, a 15%
increase from $20.4 million in the third quarter 2015. Net income attributable
to shareholders increased to $5.2 million in the third quarter 2016 from $4.9
million in the third quarter 2015. On a year to date basis, EBITDA increased by
7% to $70.6 million, from $65.9 million in the prior year, despite an increase
in AMG's Performance Share Unit ("PSU") plan costs of $8.7 million, compared to
the same period in 2015, driven by AMG's strong share price performance.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, "AMG's
focus on operational excellence and price risk management resulted in solid
financial results in the third quarter 2016. We are particularly pleased with
the impact new innovations have had on the results of AMG Engineering, such as:
our industry leading SyncroTherm® heat treatment furnaces; powder metallurgy
furnaces related to additive manufacturing; titanium re-melting furnaces; and
turbine blade coating plants. These innovative product offerings drove a
significant portion of third quarter 2016 sales.
AMG Engineering achieved EBITDA of $8.9 million during the third quarter 2016,
an 83% increase from $4.9 million in the third quarter of 2015. AMG Engineering
signed $68.1 million in new orders during the third quarter of 2016,
representing a 0.97x book to bill ratio. The Engineering division continues to
experience strong demand for plasma remelting and induction furnaces for the
aerospace market and heat treatment furnaces for the automotive market. Order
backlog was $158.1 million as of September 30, 2016, consistent with June
30, 2016.
AMG Critical Materials generated EBITDA of $14.5 million during the third
quarter 2016. Year-over-year double-digit declines in average quarterly prices
of Chrome, Graphite, and Silicon negatively affected revenue in the third
quarter of 2016 compared to the third quarter of 2015.
On a year to date basis, AMG generated cash flows from operating activities of
$40.7 million, a decrease of 5% from $42.8 million in the same period in 2015.
The year to date operating cash flows of $40.7 million includes voluntary cash
contributions to the Company's pension plans of $20.6 million made in the second
quarter of 2016. This strong cash flow generation enabled AMG to end the third
quarter net debt free, with net cash of $1.9 million."
Key Figures
In 000's US Dollar
Q3 '16 Q3 '15 Change
Revenue $247,526 $241,867 2%
-------------------------------------------------------------------------
Gross profit 46,532 39,660 17%
Gross margin 18.8% 16.4%
-------------------------------------------------------------------------
Operating profit 16,110 8,297 94%
Operating margin 6.5% 3.4%
Net income attributable to shareholders 5,181 4,933 5%
-------------------------------------------------------------------------
EPS - Fully diluted 0.18 0.18 -
EBIT ((1)) 16,231 12,751 27%
EBITDA ((2)) 23,403 20,416 15%
EBITDA margin 9.5% 8.4%
Cash flows from operating activities 20,677 27,697 (25%)
-------------------------------------------------------------------------
Note:
1. EBIT is defined as earnings before interest and income taxes. EBIT excludes
restructuring and equity-settled share-based payments and includes foreign
currency gains or losses.
2. EBITDA is defined as EBIT adjusted for depreciation and amortization.
Operational Review
AMG Critical Materials
Q3 '16 Q3 '15 Change
--------------------------------------------------
Revenue $177,490 $187,741 (5%)
Gross profit 32,025 * 27,102 18%
Operating profit 9,106 6,143 48%
EBITDA 14,467 15,531 (7%)
* Includes $2.1 million non-cash expense related to vanadium, nickel and
molybdenum inventory adjustments in the third quarter 2015
AMG Critical Materials continues to be impacted by weak metal prices, and as a
result, revenue decreased by 5%, to $177.5 million.
Double-digit declines in average quarterly prices of Chrome, Graphite and
Silicon negatively affected revenue in the third quarter of 2016 compared to the
third quarter of 2015.
Gross profit in the third quarter increased by $4.9 million, or 18%, to $32.0
million, due to the strong performance of Aluminum Master Alloys and Tantalum.
In addition, AMG Vanadium incurred a non-cash inventory adjustment expense of
$2.1 million in the prior year due to rapidly falling vanadium, nickel and
molybdenum prices.
SG&A expenses increased by $4.4 million, or 23%, compared to the prior year due
to higher PSU plan costs.
Third quarter 2016 EBITDA margin remained steady at 8% compared to the third
quarter 2015.
AMG Engineering
Q3 '16 Q3 '15 Change
------------------------------------------------
Revenue $70,036 $54,126 29%
Gross profit 14,507 12,558 16%
Operating profit 7,004 2,154 225%
EBITDA 8,936 4,885 83%
AMG Engineering signed $68.1 million in new orders during the third quarter of
2016, representing a 0.97x book to bill ratio. Order backlog was $158.1 million
as of September 30, 2016, consistent with June 30, 2016. Year to date, AMG
Engineering signed $211.4 million in new orders, representing a 1.07x book to
bill ratio.
AMG Engineering's third quarter 2016 revenue increased $15.9 million, or 29%, to
$70.0 million, due to strong sales of plasma remelting and induction furnaces
for the aerospace market.
Third quarter 2016 gross profit increased by $1.9 million, or 16%, to $14.5
million, due to higher revenues. Gross Margin decreased slightly to 21% from
23% in the third quarter of 2015 due to product mix effects.
SG&A expenses increased by $1.4 million, or 14%, compared to the prior year, due
to higher PSU plan costs.
EBITDA increased by $4.1 million to $8.9 million in the third quarter of 2016,
the highest quarterly EBITDA in nineteen quarters. The increase in EBITDA was
driven by higher gross profit and the sale of an unused production facility in
Berlin, which contributed $4.3 million to EBITDA during the quarter, offset by
higher SG&A expenses.
Financial Review
Tax
AMG recorded an income tax expense of $4.1 million in the third quarter of 2016
as compared to a tax expense of $4.7 million in the same period in 2015. AMG
paid taxes of $1.1 million in the third quarter of 2016 as compared to tax
payments of $1.5 million in the same period in 2015. For the third quarter of
2016, AMG's effective cash tax rate was 12%, compared to 15% in the same period
in 2015.
Liquidity
September 30, 2016 December 31, 2015 Change
------------------------------------------------------------------------------
Total debt $172,222 $126,743 36%
Cash and cash equivalents 174,077 127,778 36%
------------------------------------------------------------------------------
Net debt (cash) (1,855) (1,035) 79%
AMG had a net cash position of $1.9 million as of September 30, 2016. Net debt
decreased by $0.8 million from December 31, 2015, while gross debt increased by
$45.5 million, driven by the increased term loan associated with the new debt
facility.
Cash flows from operating activities decreased to $20.7 million in the third
quarter 2016 from $27.7 million in the third quarter 2015.
Capital expenditures increased to $8.3 million in the third quarter of 2016
compared to $5.2 million in the same period in 2015. Capital spending in the
third quarter of 2016 included $4.2 million of maintenance capital. The largest
expansion capital project was for AMG's Ancuabe graphite mine project.
Including the $174 million of cash, AMG had $350 million of total liquidity as
of September 30, 2016. AMG successfully enlarged and extended its syndicated
credit facility during the quarter. AMG incurred additional one-time financing
costs of $4.0 million related to the new facility.
Net Finance Costs
AMG's third quarter 2016 net finance costs were $6.8 million compared to net
finance income of $1.5 million in the third quarter of 2015. The increase was
primarily due to the write-off of $4.0 million of costs associated with the
previous credit facility, following the refinancing exercise completed in July
2016. Furthermore, in the third quarter 2015, net finance expenses benefited
from the reversal of $2.1 million of accrued finance expenses.
SG&A
AMG's third quarter 2016 SG&A expenses were $34.7 million compared to $28.9
million in the third quarter of 2015, an increase of 20%. This increase was
primarily due to higher costs associated with the PSU plan as a result of recent
increases in the Company's share price compared to the defined peer group.
On a year to date basis, the PSU plan costs increased by $8.7 million, compared
to the same period in 2015.
Outlook
Without exception, throughout 2016, AMG has delivered quarter-over-quarter
improvements in EBITDA relative to the prior year. We expect to continue this
performance in the fourth quarter 2016.
In 2017, AMG expects to continue its strong financial performance.
While we remain focused on operating cash flow and return on capital employed,
management's priority in 2017 is to execute our transformational lithium
project.
AMG Advanced Metallurgical Group N.V.
Condensed interim consolidated income statement
For the quarter ended September 30
In thousands of US Dollars 2016 2015
Unaudited Unaudited
------------------------
Continuing operations
Revenue 247,526 241,867
Cost of sales 200,994 202,207
Gross profit 46,532 39,660
Selling, general and administrative expenses 34,701 28,925
Restructuring expense 234 2,455
Environmental 45 -
Other income, net (4,558) (17)
Operating profit 16,110 8,297
Finance income (165) (70)
Finance expense 6,293 52
Foreign exchange loss (gain) 708 (1,460)
Net finance costs 6,836 (1,478)
Share of profit of associates and joint ventures 368 53
Profit before income tax 9,642 9,828
Income tax expense 4,132 4,679
Profit for the period 5,510 5,149
Attributable to:
Shareholders of the Company 5,181 4,933
Non-controlling interests 329 216
Profit for the period 5,510 5,149
Earnings per share
Basic earnings per share 0.19 0.18
Diluted earnings per share 0.18 0.18
AMG Advanced Metallurgical Group N.V.
Condensed interim consolidated income statement
For the nine months ended September 30
In thousands of US Dollars 2016 2015
Unaudited Unaudited
------------------------
Continuing operations
Revenue 733,274 756,301
Cost of sales 588,695 628,726
Gross profit 144,579 127,575
Selling, general and administrative expenses 100,761 91,931
Restructuring expense 756 6,114
Environmental 45 (2,286)
Other income, net (4,993) (156)
Operating profit 48,010 31,972
Finance income (459) (542)
Finance expense 10,806 9,048
Foreign exchange loss (gain) 1,644 (2,577)
Net finance costs 11,991 5,929
Share of profit of associates and joint ventures 1,804 250
Profit before income tax 37,823 26,293
Income tax expense 7,217 14,235
Profit for the period 30,606 12,058
Attributable to:
Shareholders of the Company 30,602 11,417
Non-controlling interests 4 641
Profit for the period 30,606 12,058
Earnings per share
Basic earnings per share 1.10 0.41
Diluted earnings per share 1.04 0.41
AMG Advanced Metallurgical Group
N.V.
Condensed interim consolidated
statement of financial position
In thousands of US Dollars September 30, 2016 December 31, 2015
Unaudited
----------------------------------------------
Assets
Property, plant and equipment 213,444 215,833
Goodwill 23,723 18,676
Intangible assets 10,260 10,246
Investments in associates and
joint ventures - 2,230
Other investments 15,000 14,000
Deferred tax assets 31,212 31,551
Restricted cash 2,474 2,527
Other assets 20,750 19,883
Total non-current assets 316,863 314,946
Inventories 144,541 126,389
Trade and other receivables 137,084 124,270
Derivative financial instruments 1,972 978
Other assets 32,509 27,648
Assets held for sale - 673
Cash and cash equivalents 174,077 127,778
Total current assets 490,183 407,736
Total assets 807,046 722,682
AMG Advanced Metallurgical Group
N.V.
Condensed interim consolidated
statement of financial position
(continued)
In thousands of US Dollars September 30, 2016 December 31, 2015
Unaudited
----------------------------------------------
Equity
Issued capital 760 745
Share premium 389,466 382,978
Treasury shares (1,612) -
Other reserves (66,545) (49,500)
Retained earnings (deficit) (184,554) (205,662)
Equity attributable to 137,515 128,561
shareholders of the Company
Non-controlling interests 22,015 25,006
Total equity 159,530 153,567
Liabilities
Loans and borrowings 160,542 112,217
Employee benefits 141,024 137,853
Provisions 29,985 29,617
Deferred revenue 4,615 13,539
Government grants 449 536
Other liabilities 20,167 8,821
Derivative financial instruments 890 5,642
Deferred tax liabilities 12,327 11,691
Total non-current liabilities 369,999 319,916
Loans and borrowings 2,566 3,222
Short term bank debt 9,114 11,304
Government grants 101 99
Liabilities associated with
assets held for sale - 423
Other liabilities 48,412 42,872
Trade and other payables 137,762 108,019
Derivative financial instruments 3,841 8,379
Advance payments 40,546 44,184
Deferred revenue 11,915 16,124
Current taxes payable 7,942 3,093
Provisions 15,318 11,480
Total current liabilities 277,517 249,199
Total liabilities 647,516 569,115
Total equity and liabilities 807,046 722,682
AMG Advanced Metallurgical Group N.V.
Condensed interim consolidated statement of cash flows
For the nine months ended September 30
In thousands of US Dollars 2016 2015
Unaudited Unaudited
--------------------
Cash flows from operating activities
Profit for the year 30,606 12,058
Adjustments to reconcile net profit to net cash flows:
Non-cash:
Income tax expense 7,217 14,235
Depreciation and amortization 22,010 21,957
Net finance costs 11,991 5,929
Share of profit of associates and joint ventures (1,804) (250)
Gain on sale or disposal of property, plant and equipment (4,193) (179)
Equity-settled share-based payment transactions 1,509 3,326
Movement in provisions, pensions and government grants (14,834) 1,340
Working capital and deferred revenue adjustments (2,043) (2,049)
Cash flows from operating activities 50,459 56,367
Finance costs paid, net (4,994) (9,935)
Income tax paid, net (4,793) (3,674)
Net cash flows from operating activities 40,672 42,758
Cash flows used in investing activities
Proceeds from sale of property, plant and equipment 522 951
Proceeds from sale of subsidiaries (net of cash divested
of $1,820 and $1,347, respectively) 6,512 (1,567)
Acquisition of property, plant and equipment and (22,738) (12,260)
intangibles
Acquisition of subsidiaries (net of cash acquired of $35 (4,961) -
in 2016)
Acquisition of other non-current investments (1,000) -
Change in restricted cash 116 4,861
Other (46) (10)
Net cash flows used in investing activities (21,595) (8,025)
AMG Advanced Metallurgical Group N.V.
Condensed interim consolidated statement of cash flows
(continued)
For the nine months ended September 30
In thousands of US Dollars 2016 2015
Unaudited Unaudited
--------------------
Cash flows from (used in) financing activities
Proceeds from issuance of debt 163,755 177,205
Payment of transaction costs related to debt issuance (3,267) (5,199)
Repayment of borrowings (121,640) (230,780)
Change in non-controlling interests (2,695) 37,530
Repurchase of common stock (1,705) -
Dividends paid (7,558) (2,669)
Other (68) (167)
Net cash flows from (used in) financing activities 26,822 (24,080)
Net increase in cash and cash equivalents 45,899 10,653
Cash and cash equivalents at January 1 127,778 108,029
Effect of exchange rate fluctuations on cash held 400 (4,612)
Cash and cash equivalents at September 30 174,077 114,070
This press release contains inside information within the meaning of Article
7(1) of the EU Market Abuse Regulation.
This press release contains regulated information as defined in the Dutch
Financial Markets Supervision Act (Wet op het financieel toezicht).
About AMG
AMG is a global critical materials company at the forefront of CO(2) reduction
trends. AMG produces highly engineered specialty metals and mineral products and
provides related vacuum furnace systems and services to the transportation,
infrastructure, energy, and specialty metals & chemicals end markets.
AMG Critical Materials produces aluminum master alloys and powders, titanium
alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony,
tantalum, niobium and silicon metal. AMG Engineering designs, engineers, and
produces advanced vacuum furnace systems and operates vacuum heat treatment
facilities, primarily for the transportation and energy industries.
With approximately 3,000 employees, AMG operates globally with production
facilities in Germany, the United Kingdom, France, Czech Republic, the United
States, China, Mexico, Brazil and Sri Lanka, and has sales and customer service
offices in Russia and Japan (www.amg-nv.com).
For further information, please contact:
AMG Advanced Metallurgical Group N.V. +1 610 293 5804
Steve Daniels
Senior Vice President
sdaniels(at)amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are
"forward looking." Forward looking statements include statements concerning
AMG's plans, expectations, projections, objectives, targets, goals, strategies,
future events, future revenues or performance, capital expenditures, financing
needs, plans and intentions relating to acquisitions, AMG's competitive
strengths and weaknesses, plans or goals relating to forecasted production,
reserves, financial position and future operations and development, AMG's
business strategy and the trends AMG anticipates in the industries and the
political and legal environment in which it operates and other information that
is not historical information. When used in this press release, the words
"expects," "believes," "anticipates," "plans," "may," "will," "should," and
similar expressions, and the negatives thereof, are intended to identify forward
looking statements. By their very nature, forward-looking statements involve
inherent risks and uncertainties, both general and specific, and risks exist
that the predictions, forecasts, projections and other forward-looking
statements will not be achieved. These forward-looking statements speak only as
of the date of this press release. AMG expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statement contained herein to reflect any change in AMG's expectations with
regard thereto or any change in events, conditions, or circumstances on which
any forward-looking statement is based.
November 3 2016:
http://hugin.info/138060/R/2053832/768743.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: AMG Advanced Metallurgical Group N.V. via GlobeNewswire
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Datum: 03.11.2016 - 07:00 Uhr
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