COMUNICADO | 1Q 2017
1
PRESS RELEASE 1Q 2017(Non-Audited accounts)
28 June 2017
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EXECUTIVE SUMMARY
Sociedade Comercial Orey Antunes, S.A. ("SCOA", "Orey" or "Grupo Orey") reached in 1Q17 a positive net income amounting to Euro 49 thousand.
This result, when compared to the same period of the previous year, already reflects the results of the profound reorganization carried out in 2016 with the objectives of (i) de-leveraging the balance sheet by selling non-core assets and reducing debt and debt costs and (ii) improve operational results through a strong cost reduction on the one hand and increase operating revenues on the other. The operating result and EBITDA of the Orey Group in 1Q17 were Euro 1.77 million and Euro 1.40 million, respectively.
The accounts now presented, similar to the end of 2016, have a different consolidation perimeter. For comparison purposes, the accounts for the 1Q16 were adjusted.
The initial results of the restructuring and transformation process have already start to be felt in 1Q17. This process impacted the revenue performance and its drivers as well as the operating and financial costs. In effect, the operating revenues of Orey Group, including the full consolidation of the non- financial companies, reached Euro 21.26 million in 1Q17, having increased 3.3% y.o.y. This performance was based on the sales and service revenues of the non-financial companies: +19.0% y.o.y in 1Q17 to Euro 20.08 million. It should be noted that the contribution of the net financial margin and commissions generated by Orey Financial to the consolidated revenues reached Euro 0.48 million in 1Q17, having declined 29.0% y.o.y. Notwithstanding being a relevant decline, this was the best performance registered since 1Q16. It should be underlined that the Orey Group is confident that the commission trend will continue to improve throughout the upcoming quarters.
During 2016 and early 2017 Orey implemented a reorganizational plan (1) to significantly reduce costs to rebalance the P&L; (2) reposition its commercial offering and (3) implemented new balance sheet structure to the through asset sales and renegotiated terms and conditions of the most important debt facilities, including bonds and bank debt, aimed at increasing maturities and reducing cost of debt. The reorganisation plan also covered other areas, namely extensive contact with Orey Financial customers aimed at re-establishing the commercial relationship and a special focus on initiatives to rejuvenate the commercial team and increase its motivation. Whereas this cost cutting and reorganisation plan is now mostly executed, the focus is now investing on organic growth.
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BUSINESS REVIEW
At Orey Financial level, it should be noted that assets under management and custody reached Euro
144.36 million (-7.7% y.o.y.), having grown 2.2% when compared to 31 December 2016. The growth in assets under management and custody was mainly driven by the growth of online brokerage AuM's, which reached Euro 50.63 million (+ 5% in 1Q17 compared to Euro 48.17 million at the end of 2016). Also relevant was the growth in the customer base, both in Portugal (+ 3.5% in 1Q17 versus 1Q16 for 4,321 customers) and in Spain (+ 7.1% in 1Q17 compared to 1Q16 for 3,230 clients) demonstrating Orey Financial's ability to retain its customer base while simultaneously attracting new customers. This performance also shows that the strategy of to further invest in the development of the financial activity in Spain is being succeeded. The Group continues to consider this a market with high growth potential.
In terms of Orey Financial's perimeter, net commissions in the 1Q17 reached Euro 0.51 million (-31.0% y.o.y.). This decrease in revenues was mainly due to the activity in Portugal, which continued to decline in 1Q17, as a result of the decline in customer base during 2016. However, it should be noted that activity in Spain already showed a significant growth during the 1Q17.
Total Orey Financial
31.Mar.2017
31.Mar.2016
17 vs 16
Assets under Management / Custody
31.Mar.2017
31.Mar.2016
17 vs 16
Euro Thousand
Assets under Management / Custody
144 363
156 478
-7,7%
Orey Financial Net Commissions*
506
734
-31,0%
Online brokerage
50 625
46 219
9,5%
Investment consulting and discretionary management
58 657
58 763
-0,2%
Real estate investment funds
10 879
12 208
-10,9%
Private equity funds
24 202
24 672
-1,9%
Liability management
0
14 617
-100,0%
Total
144 363
156 478
-7,7%
Assets under Custody
16 246
17 811
-8,8%
Transaction volumes - CFD e FX
957 126
1 133 667
-15,6%
Net commissions
168
336
-50,0%
# clients
4 321
4 175
3,5%
Assets under Custody
34 380
28 408
21,0%
Transaction volumes - CFD e FX
1 185 615
420 212
182,1%
Net commissions
204
163
25,2%
# clients
3 230
3 017
7,1%
Online brokerage PT
31.Mar.2017
31.Mar.2016
17 vs 16
Online brokerage SP
31.Mar.2017
31.Mar.2016
17 vs 16
* Total commissions, including those no directly linked to assets under management / custody
- FINANCIAL REVIEW
The performance of Orey Group during the year 2016 was marked by the following factors:
The contribution of Orey Financial to consolidated revenues in the 1Q17 reached Euro 0.48 million (Euro 0.45 million in terms of net commissions and net interest margin), and the operating revenues achieved Euro 21.27 million in the first quarter, including sales and services rendered of non- financial companies;
The gross margin and operational result achieved in 1Q17 Euro 6.13 million and Euro 4.36 million, respectively and the operational result benefited from the reduction of operational costs;
Operational costs declined 30,9% y.o.y. in the 1Q17 to Euro 4.36 million, reflecting the reorganisation program implemented at the financial segment and corporate centre and at the non- financial companies;
In 1Q17 Orey registered approximately Euro 283 thousand of reorganisational and restructuring operating costs, mainly related with staff and assets depreciation;
EBITDA achieved in the 1Q17 Euro 1.40 million, and
Net Interest were significantly reduced in result of debt reduction in 2016 and of the change in the terms and conditions of several financial instruments of the Group, namely Best Of, Araras and OTLI bonds.
Sociedade Comercial Orey Antunes SA published this content on 29 June 2017 and is solely responsible for the information contained herein.
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