Regulatory News:
Heurtey Petrochem (Paris:ALHPC) announces its consolidated results for 2017.
The Board of Directors of Heurtey Petrochem met on 13 March 2018 and approved the Group's 2017 financial statements. The consolidated financial statements have been audited.
A certification report is being prepared.
Audited figures, in million (IFRS) | 2017 | 2016 | Change | |||
Revenues | 235.5 | 319.1 | -26% | |||
Cost of sales | (237.9) | (284.2) | -21% | |||
Gross margin % of revenues | (2.3) (1)% | 34.9 10.9% | ||||
Administrative and commercial expenses | (32.6) | (35.2) | -7% | |||
EBITDA* | (27.6) | 3.8 | ||||
Current operating income % of revenues | (34.9) (14.8)% | (0.3) (0.1)% | ||||
Other operating income and expenses | (4.4) | (6.6) | ||||
Operating income | (39.3) | (6.9) | ||||
Share of equity-accounted companies Financial profit Tax | (0.1) (3.5) 0 | 0.0 (2.2) 2.0 | ||||
Consolidated net income | (42.9) | (7.1) | ||||
Net income, Group share | (42.9) | (7.2) |
* EBITDA: Current operating income before amortisation, depreciation and provisions.
2017 revenues: €235,5 million
Heurtey Petrochem generated consolidated revenues of €235.5 million in 2017, down 26% compared to 2016. The Gas branch accounted for 31% of revenues, while the Furnaces branch represented 69% (31% refining, 16% petrochemicals, 22% hydrogen). The activity has been realized at 26% from the Americas, 37% from Asia/Oceania, 30% from Middle East/Africa and 7% from Europe/Russia.
A significant decrease of current operating profit in the two businesses
The Group's gross margin, which came out at -€2,3 million, represents -1% of the Group's revenues, with the results shown below of the two branches.
€ million | Furnaces | Gas processing | ||||||
2017 | 2016 | 2017 | 2016 | |||||
Revenues | 162.8 | 246.7 | 72.7 | 72.4 | ||||
Gross margin % of revenues | 0 0% | 32.5 13.2% | (2.3) (3.2)% | 2.5 3.4% | ||||
Current operating income % of revenues | (23.4) (14.4)% | 7.4 3.0% | (11.5) (15.8)% | (7.7) (10.6)% |
The Furnaces branch is strongly hit by the fall in business volume, coming from the low level of order intake over the year along with some cost overruns on contracts during construction phase and warranty. The Gas branch recorded steady revenues compared to 2016 considering the opening backlog, however the gross margin shows a significant decrease due to difficulties encountered in some projects during completion phase.
The administrative and commercial costs at €32,6 million dropped by 7% taking into account the savings made by the Group.
The Group's current operating income came out at -€34.9 million (-14,8%) of consolidated revenues with a current operating loss of -14,4% in the Furnaces branch and -15.8% in the Gas branch.
After taking into account a non-recurring operating expense of €4.4 million, mainly stemming from €1.2 million costs of workforce reduction and €2,7 million costs related to the relocation of Prosernat and Heurtey head offices, the Group recorded an operating loss of €39.3 million.
The Group registered a financial loss of -€3.5 million, of which -€0.9 million in interest expenses, stable compared to 2016, and -€2.6 million in exchange losses.
As a precaution, the Group did not record any deferred tax asset for the fiscal losses generated over the period, therefore, the net consolidated result amounted to -€42.9 million.
Strong decrease of order intakes
In a persistently difficult market environment, the Group recorded €144 million of order intakes in 2017, 56% less than in 2016. The Furnaces segment accounted for 75% of these orders (24% in refining, 39% in hydrogen and 12% in petrochemicals), while the Gas segment represented 25%. This can be broken down as follows: 21% from the Americas, 54% from Asia/Oceania, 17% from Middle East/Africa and 8% from Europe/Russia.
Financial status
As of 31 December 2017, the Group has €26.5 million of financial debt (including €15 million overdrafts), down €13.5 million compared to 2016. Further to the repayment of its syndicated loan mid-term debt and revolving credit the Group is now mainly financed by Axens through current account advances. As of 31December 2017, these advances amounted to €56 million. The marketable securities, cash and cash equivalents amounted to +€38.5 million.
The cash consumed in operating activities is €38.7 million due to operating losses over the period.
The closing net cash amount to €23.5 million compared to €13.3 million in 2016.
Outlook 2017
The backlog as of 31December 2017 was €177 million. In 2017, the Group has decided to adjust the backlog by deducting €107 million related to the contracts signed with Venezuelans clients, on hold for several years and for which the re-start is not anticipated considering the economic and political situation of this country.
The backlog of €177 million is down compared to €304 million as at 31 December 2016 after adjustment of Venezuelan contracts.
The Gas branch accounted for 48% of backlog, and the Furnaces branch for 52% (26% refining, 15% hydrogen and 11% petrochemicals). The Americas accounted for 57% of the backlog, Asia/Oceania 21%, Middle East/Africa 18%, and Europe/Russia 4%.
The Group has now completed the merger of its commercial and operational activities of project execution in France for its Furnaces and Gas businesses in a joint management and a full merge of its technical disciplines (engineering, purchasing, inspection, documentation control) and its support services.
The Group has now, in 2018, a safer project execution base and more efficient and better-coordinated resources for the execution of its turnkey projects.
In 2018, the Group will continue the merge with its shareholder Axens with the objective of securing its recovery and implementing the commercial synergies.
For 2018, the Group is expecting the market environment to remain difficult, and has set its target revenues between €250 million and €280 million.
Next press release: Q1 2018 revenues, 17 May 2018 after market close
About Heurtey Petrochem (www.heurtey.com
Heurtey Petrochem is a global oil and gas engineering group operating across two market segments:
- Process furnaces for refining, petrochemicals and hydrogen production. Petrochem is one of the global leaders in this segment.
- Natural gas processing via its Prosernat subsidiary. In this sector, the Group operates in both EPC engineering and as a technology licensor.
Heurtey Petrochem operates via a large international subsidiary network, with a presence in Brazil, China, South Korea, the United States, India, Malaysia, Romania and Russia. The group generated revenues of €235 million in 2017. Heurtey Petrochem is tracked on the Euronext Paris Alternext market. (ISIN: FR0010343186, Mnemo: ALHPC).
Forward-looking statements and information concerning the activities of Heurtey Petrochem are included in the press release above. They notably include information relative to the financial situation, results and activities of Heurtey Petrochem. They are based on the expectations and estimates of the management of Heurtey Petrochem.
These forward-looking statements and information are associated with a certain degree of risk and uncertainty and are likely to be affected by known or unknown factors which, for many of them, cannot be controlled by Heurtey Petrochem and are not easily anticipated. They may yield results that are substantially different from those expected or suggested by these statements. These risks include: uncertainty about changes in relationships with the clientele, suppliers and strategic partners; and generally any unfavourable change in the economic situation, the intensification of competition or modification of the regulatory environment which could affect the activities of Heurtey Petrochem. This list of factors should not be considered as exhaustive.
Contacts
Heurtey Petrochem
89, Boulevard Franklin Roosevelt
92 500 Rueil-Malmaison- France
Jean Sentenac, Chairman
Jacques Moulin, CEO
Gregory Matouskoff, Group CFO
+33(0)1 47 14 80 73
invest@heurtey.com
ANNEXES
Income statement (IFRS)
(in thousands) | 2017 | 2016 | ||
Revenues | 235,548 | 319,103 | ||
Cost of sales | (237,895) | (284,168) | ||
Gross margin | (2,348) | 34,935 | ||
Administrative and commercial expenses | (32,563) | (35,236) | ||
Current operating income | (34,911) | (300) | ||
Other operating income and expenses | (4,392) | (6,574) | ||
Operating income | (39,303) | (6,874 | ||
Share of net income from equity-accounted joint ventures | (96) | (19) | ||
Operating income including the share of net income from equity-accounted joint ventures | (39,399) | (6,893) | ||
Income from cash and cash equivalents | 543 | 355 | ||
Cost of gross financial debt | (1,448) | (1,206)) | ||
Cost of net financial debt | (905) | (851) | ||
Other financial income and expenses | (2,552) | (1,363 | ||
Other financial income and expenses | (2,552) | (1,363) | ||
Income before tax | (42,856) | (9,107) | ||
Tax on income | (42) | 2,039 | ||
Consolidated net income | (42,898) | (7,068) | ||
Net income attributable to non-controlling interests (minority interests) | 46 | 89 | ||
Net income, Group share | (42,944) | (7,157) |
Balance sheet (IFRS) Assets
(in thousands) | 31 December 2017 | 31 December 2016 | ||
Non-current assets | ||||
Goodwill | 64,183 | 68,152 | ||
Intangible assets | 8,791 | 9,883 | ||
Tangible assets | 8,760 | 10,812 | ||
Financial assets | 2,516 | 1,587 | ||
Other non-current assets | 816 | 819 | ||
Interests in equity-accounted joint ventures | 6 | 338 | ||
Derivative financial instruments | 0 | 11 | ||
Deferred tax assets | 9,079 | 11,090 | ||
94,151 | 102,691 | |||
Current assets | ||||
Inventories | 1,662 | 1,902 | ||
Existing construction contracts (assets) | 87,793 | 105,193 | ||
Trade receivables and related accounts | 93,234 | 108,294 | ||
Current taxes (assets) | 9,018 | 5,643 | ||
Other current assets | 42,022 | 37,284 | ||
Derivative financial instruments | 147 | 603 | ||
Cash and cash equivalents | 38,553 | 39,861 | ||
272,429 | 298,779 | |||
TOTAL ASSETS | 366,580 | 401,470 |
Balance sheet (IFRS) Liabilities
(in thousands) | 31 December 2017 | 31 December 2016 | ||
Shareholders' equity and liabilities | ||||
Equity capital | 16,415 | 16,415 | ||
Issue premiums | 35,538 | 35,538 | ||
Consolidated reserves Group share | 31,543 | 38,418 | ||
Profit for the year Group share | (42,944) | (7,157) | ||
Translation reserves | (553) | 5,988 | ||
Shareholders' equity (Group share) | 39,999 | 89,204 | ||
Non-controlling interests (minority interests) | 380 | 328 | ||
Total shareholders' equity | 40,379 | 89,532 | ||
Non-current liabilities | ||||
Financial debt | 8,241 | 4,741 | ||
Provisions | 141 | 500 | ||
Provisions for pension liabilities and similar | 1,892 | 1,871 | ||
Deferred tax liabilities | 4,300 | 5,894 | ||
Other non-current liabilities | 1,644 | 1,866 | ||
16,218 | 14,872 | |||
Current liabilities | ||||
Financial debt | 18,233 | 35,270 | ||
Provisions | 9,776 | 8,395 | ||
Existing construction contracts (liabilities) | 45,598 | 38,373 | ||
Trade payables and related accounts | 166,039 | 190,323 | ||
Current tax liabilities | 2,723 | 3,086 | ||
Derivative financial instruments | 98 | 432 | ||
Other current liabilities | 72,515 | 21,186 | ||
309,982 | 297,066 | |||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 366,580 | 401,470 |
Cash flow statement (IFRS)
(in thousands) | 2017 | 2016 | ||
Consolidated net income | (42,898) | (7,068) | ||
Elimination of net income from equity-accounted joint ventures | 96 | 19 | ||
Elimination of amortisation, depreciation and provisions | 7,352 | 4,091 | ||
Elimination of revaluation gains/losses (fair value) | 474 | (674) | ||
Elimination of the discounting effect | 24 | 25 | ||
Elimination of other items without cash impact | ||||
Elimination of income from transfers and dilution losses and profits | (26) | 122 | ||
Income and expenses in connection with share-based payments | ||||
Self-financing capacity after the cost of net financial debt and tax | (34,977) | (3,485) | ||
Elimination of tax expenses (income) | 42 | (2,039) | ||
Elimination of the cost of net financial debt | 905 | 851 | ||
Self-financing capacity before the cost of net financial debt and tax | (34,030) | (4,673) | ||
Impact of changes in WCR | (2,501) | (10,400) | ||
Taxes paid | (2,205) | (1,496) | ||
Cash flow from operating activities | (38,737) | (16,569) | ||
Impact of changes in scope | (316) | (3) | ||
Acquisition of tangible and intangible fixed assets | (1,919) | (2,849) | ||
Changes in loans and advances granted | 8 | (481) | ||
Disposal of tangible and intangible fixed assets | 21 | (12) | ||
Other flows from investment | 14 | (14) | ||
Cash flow from investing activities | (2,192) | (3,359) | ||
Capital increase other | ||||
Loan issues | 8, 102 | 8,571 | ||
Loan repayments | (10,412) | (9,990) | ||
Shareholder transactions: partial disposals acquisitions | ||||
Net financial interests paid | (459) | (706) | ||
Dividends paid to Group shareholders | ||||
Axens current account | 56,000 | 0 | ||
Other flows from financing operations | 0 | (26) | ||
Cash flow from financing activities | 53,231 | (2,152) | ||
Impact of changes in foreign exchange rates | (2,062) | 1,434 | ||
Change in cash position | 10,239 | (20,646) | ||
Opening cash position | 13,327 | 33,973 | ||
Closing cash position | 23,566 | 13,327 | ||
Change in cash position | 10,239 | (20,646) |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180313006345/en/
Contacts:
Heurtey Petrochem
Jean Sentenac, Chairman
Jacques Moulin, CEO
Gregory Matouskoff, Group CFO
+33(0)1 47 14 80 73
invest@heurtey.com