SAPEC Compared to the first half of 2015, the Group's consolidated results increased considerably at the end of June 2016, thanks to the great improvement of the crop nutrition sector of Agro Business.
The Group's consolidated turnover dropped from 216,378 k€ in the first half of 2015 to 169,909 k€ in the first half of 2016, down 21%, solely due to agro commodities distribution, following the concentration of activities in a single product, soybean meal.
Results after tax in the first half of 2016 amounted to 5,611 k€ compared to 1,213 k€ in the first half of 2015.
In general, Agro Business rose sharply (despite a less favourable first year-half in the crop protection sector), supported by the good performance of its crop nutrition sector.
In terms of crop protection in particular, the spring crops in Europe were affected by adverse weather conditions. Planting started late, placing severe pressure on gross margins, driven mainly by the sale of a less differentiated product mix.
As regards crop nutrition, all international regions and the Iberian Peninsula met our expectations. The sector showed strong recurring results, following a generalised increase in gross margin and the recovery of the Brazilian subsidiary.
Following the refocusing of its soybean meal business, the agro commodities distribution registered a significant decrease in sales, further complicated by the decision of the Argentinean producer not to position itself in the "forward" markets in the first quarter of the year, but rather focus on "spot" sales.
As regards industrial chemicals, despite a still unfavourable environment in Portugal, the measures implemented by the new management have led to further progress in the results of this business.
Lower volumes have affected the port logistics results in the first half of 2016 and the results of land logistics have made no progress compared to 2015. Although the activity of two terminals increased, the Lisbon terminal was affected by social conflicts and a drop in Portuguese exports.
The environment sector (see below) is included under discontinued activities.
KEY FIGURES BY BUSINESS SECTOR(in k€ ) | 30-06-2016 | 30-06-2015 | YoY% |
Crop protection (1) | |||
Revenue | 77,941 | 78,964 | -1% |
Sales to third parties | 77,941 | 78,964 | -1% |
EBITDA | 12,398 | 13,883 | -11% |
of which: recurrent | 12,722 | 13,883 | -8% |
Operating profit after disposal of non-current assets and investments | 9,323 | 11,533 | -19% |
of which: recurrent | 9,648 | 11,533 | -16% |
Profit (loss) before tax | 6,298 | 8,324 | -24% |
Crop nutrition (2) | |||
Revenue | 42,120 | 38,643 | 9% |
Sales to third parties | 42,120 | 38,643 | 9% |
EBITDA | 7,597 | 1,315 | 478% |
of which: recurrent | 9,189 | 3,780 | 143% |
Operating profit after disposal of non-current assets and investments | 6,162 | 155 | - |
of which: recurrent | 7,754 | 2,620 | 196% |
Profit (loss) before tax | 4,850 | -1,631 | - |
Agro Business (1) and (2) | |||
Revenue | 120,061 | 117,607 | 2% |
Sales to third parties | 120,061 | 117,607 | 2% |
EBITDA | 19,995 | 15,198 | 32% |
of which: recurrent | 21,911 | 17,663 | 24% |
Operating profit after disposal of non-current assets and investments | 15,485 | 11,688 | 32% |
of which: recurrent | 17,402 | 14,153 | 23% |
Profit (loss) before tax | 11,148 | 6,694 | 67% |
Chemical products and environment | |||
Revenue | 13,028 | 15,845 | -18% |
Sales to third parties | 12,312 | 14,897 | -17% |
EBITDA | 496 | -345 | - |
of which: recurrent | 496 | 366 | 36% |
Operating profit after disposal of non-current assets and investments | 183 | -1,248 | - |
of which: recurrent | 183 | -537 | - |
Profit (loss) before tax | -15 | -1,384 | - |
Agro commodities distribution | |||
Revenue | 29,242 | 74,937 | -61% |
Sales to third parties | 29,242 | 74,937 | -61% |
EBITDA | 242 | 1,044 | -77% |
of which: recurrent | 242 | 1,044 | -77% |
Operating profit after disposal of non-current assets and investments | 227 | 1,030 | -78% |
of which: recurrent | 227 | 1,030 | -78% |
Profit (loss) before tax | 279 | 1,019 | - |
Logistics | |||
Revenue | 8,597 | 9,330 | -8% |
Sales to third parties | 8,013 | 9,111 | -12% |
EBITDA | 478 | 838 | -43% |
of which: recurrent | 475 | 838 | -43% |
Operating profit after disposal of non-current assets and investments | -300 | 54 | - |
of which: recurrent | -303 | 54 | - |
Profit (loss) before tax | -534 | -187 | -186% |
Unallocated and eliminations (*) | |||
Revenue | -1,019 | -1,341 | - |
EBITDA | -1,264 | -943 | - |
of which: recurrent | -1,477 | -981 | - |
Operating profit after disposal of non-current assets and investments | -1,518 | -1,211 | - |
of which: recurrent | -1,732 | -1,249 | - |
Profit (loss) before tax | -2,385 | -2,474 | - |
Consolidated | |||
Revenue | 169,909 | 216,378 | -21% |
EBITDA | 19,947 | 15,793 | 26% |
of which: recurrent | 21,647 | 18,930 | 14% |
Operating profit after disposal of non-current assets and investments | 14,077 | 10,314 | 36% |
of which: recurrent | 15,777 | 13,451 | 17% |
Profit (loss) before tax | 8,493 | 3,668 | 132% |
(*)Includes: holdings, immovable property, consolidation adjustments and eliminations.
GLOSSARY:
Gross Margin: difference between sales price (excluding tax) and cost price (excluding tax). Net Margin: industrial value added less costs of commercial structures.
EBITDA: operating result plus depreciation.
REBITDA: operating result plus depreciation, before non-recurring items. CASH FLOW: consolidated net result plus depreciation.
Net debt: financial debt less cash and cash equivalents
AGRO BUSINESS.Record-breaking consolidated recurring results in the first year-half for Agro business.
Although crop protection experienced a challenging first year-half because of weather conditions and a general delay in harvest, crop nutrition recorded a strong growth enabling Agro Business to achieve a REBITDA of 21,911 k€ in the first half of 2016 compared to 17,663 k€ at the end of June 2015 (i.e., an increase of 24%). The business's EBITDA, which totalled 19,995 k€ (an increase of 32%), was affected by an inventory impairment in the amount of 1,917 k€.
Turnover (120,061 k€) grew by 2% compared to the first half of 2015, with crop nutrition growing by 9%.
The REBITDA margin at the end of June 2016 was 18.2%, i.e., an increase in 3.2 points compared to June 2015.
The net debt of the business at the end of the first half remained at the same level as in June 2015. The business thus improved its DebtREBITDA ratio from 3.7 to 3 at the end of June 2016.
CROP PROTECTIONThe weather conditions affected the normal course of crops in Europe.
The dry, long winter in the south and continuing rains in northern and central Europe significantly delayed crops. This, together with the concentration of market consumption in a short space of time affected turnover and gross margins due to the demand of a less differentiated product mix.
In spite of this, the net results of the business in the first half of 2016 were in line with objectives. The difference in gross margin, given the economic outlook, was offset by the positive results from the streamlining of overhead costs and the good performance of the industry.
A) The Portuguese market:
No growth was recorded in the first year-half and the crops only started in early April after the first rains.
SAPEC Agro in Portugal: Although sales were slightly lower than in the first half of 2015 and the level of the average gross margin was the same, the subsidiary increased its EBITDA compared to 2015 by 26%, by streamlining distribution costs, overhead costs and industrial costs.
Client receivables are in line with the defined objectives and factoring without recourse is already implemented among some important clients. The veterinary business fell short of its objectives and was penalised in Portugal by the late implementation of the new directives on veterinary medicines.
SELECTIS: the subsidiary recorded a drop in sales in Portugal of about 10%. On the other hand, the effective management of its sales mix and the launch of new products have helped improve the gross margin. However, it was not enough to avoid an EBITDA level less than that of the first half of 2015.
Sapec SA published this content on 21 September 2016 and is solely responsible for the information contained herein.
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