Results for 1st half 2007

Transcription

1 Press release Paris, 30 August 2007 Eramet Results for 1st half 2007 Very strong growth in income in 1 st half 2007: Current operating income increased by 123.5%, to EUR 581m Group net income increased by 124.0%, to EUR 271m Group current operating income and Group net income more than doubled in the 1 st half 2007 compared with the performance seen in the 1 st half 2006 Positive outlook for the full year 2007 : Current operating income for the full-year 2007 is expected to be substantially higher than that of 2006, despite the sharp decline in the nickel market seen since the start of the 2 nd half The Board of Directors of Eramet met on 29 August 2007, chaired by Patrick Buffet. Eur m 1 st H st H 2006 Change 2 nd H Turnover % Current operating income % Current operating margin 32% 17 % + 88% 22% 20 % Net income (group share) % Earnings per share ( ) % Operating cash flows % Net cash & cash equivalents % In a context of strong markets for all three of its divisions and exceptionally high nickel prices, the current operating income of the Eramet group rose by 123.5% in the 1 st half 2007 compared with the 1 st half 2006, to EUR 581m. The group s current operating margin increased substantially to 32% of turnover from 17% in the 1 st half Group net income grew by 124% in the 1 st half 2007 compared with the 1 st half 2006, to EUR 271m, or EUR/share.

2 2 Stronger results across all three divisions Eramet Nickel: current operating income 2.6 times greater, at EUR 437m The current operating income of Eramet Nickel increased 2.6 times in the 1 st half 2007 compared with the 1 st half 2006, to EUR 437m. The current operating margin came to 61% of turnover (34% in the 1 st half 2006). The main reason for this increase was exceptionally high nickel prices in the context of a strong physical nickel market in the 1 st half Nickel prices on the LME hit a record high in May 2007 with an average of 23.7 USD/lb (52,187 USD/tonne). However, a sharp correction began in June and nickel prices had fallen to 16.3 USD/lb (35,935 USD/tonne) by the end of that month. Metallurgical production of nickel fell by 10.1% in the 1 st half 2007 compared with the 1 st half 2006, to 30,144 tonnes, mainly due to the decline in nickel content in the ore used, a consequence of the strike at the end of Nickel deliveries by Eramet Nickel fell by 19% in the 1 st half 2007 compared with the 1 st half 2006, to 28,386 tonnes, due to reduced output and the need to replenish inventories, which had been run down excessively during the strike. Turnover in the 1 st half 2007 included the effect of nickel hedging carried out previously, which applied to 14,300 tonnes at an average price of about 18,300 USD/t (8.3 USD/lb). Eramet Manganese: current operating income rises 75%, to EUR 117 m The current operating income of Eramet Manganese increased by 75% in the 1 st half 2007 compared with the 1 st half The current operating margin came in at 20% in the 1 st half 2007 (12% in the 1 st half 2006). Demand for manganese was very strong in the 1 st half 2007, thanks to sustained growth in global carbon steel production. Eramet Manganese benefited from higher prices for its core products (manganese ore and alloys) in the 1 st half 2007 compared with the 1 st half This increase accelerated rapidly towards the end of the 1 st half. Deliveries of manganese alloys by Eramet Manganese increased by 2% in the 1 st half 2007 compared with the 1 st half 2006, while manganese ore deliveries declined compared with the 1 st half 2006 due to inventory effects and technical incidents at the port of Owendo. Eramet Alloys: current operating income rises 6 %, to EUR 34m Eramet Alloys continued to benefit from strong demand in the aeronautics and energy markets. Current operating income rose by 6%, to EUR 34m, compared with the 1 st half Increases in raw materials prices were passed on to selling prices on the various markets served by Eramet Alloys in the 1 st half Furthermore, the new closed-die forging plant at Pamiers began industrial operation in the 1 st half 2007.

3 3 An even stronger balance sheet Net cash flows from operating activities reached EUR 305m, financing the major programme of industrial investment (EUR 142m) and the dividend payout of EUR 108m. Net cash increased to EUR 419m at 30 June 2007, up from EUR 353m at 31 December Positive outlook for the full-year 2007: group current operating income for the full-year 2007 should be substantially greater than in the full-year The global stainless steel market is currently undergoing a phase of very pronounced inventory reduction, whose duration it is hard to predict, which is affecting demand for nickel. The steep drop in nickel prices on the LME since the start of June has accelerated a phase of inventory reduction on the physical market, after a probably excessive production of stainless steel by China in the 1 st half. In order to limit their exposure and to benefit later on from more favourable prices, buyers of stainless steel and nickel are reducing their purchases and using up their stocks. Furthermore, global nickel production should increase in 2007 compared with 2006 due to growth in Chinese nickel pig iron production. In this context, nickel prices should continue to be extremely volatile. Metallurgical output at the Doniambo plant should be about 62,000 tonnes in Forecast deliveries by Eramet Nickel for the full-year 2007 will fall short of the 55,000 tonnes predicted in July due to the current sharp drop in nickel demand. In the 2 nd half 2007 the nickel hedging programme will apply to 13,600 tonnes at an average price of about 20,500 USD/tonne. Furthermore, nickel put options protected about 5,000 tonnes in the 2 nd half 2007 at an average price of 31,000 USD/tonne. Since the start of the 2 nd half 2007, Eramet Manganese has benefited from much higher alloy and ore prices than in the 2 nd half Eramet Alloys continues to benefit from markets in strong growth, particularly in the aeronautics and energy sectors, as well as the ramp-up of its new closed-die forging plant at Pamiers, with its 40,000- tonne press, which is pursuing its certification programme for new parts. Growth strategy reaffirmed The group aims to pursue strong growth in its main businesses to take full advantage of the opportunities presented by its various, long-term growth markets, whilst relying on its substantial potential for technological innovation. The main investment programmes include the following: - in nickel, modernisation of the industrial facilities of Société Le Nickel (SLN) and the ramp-up of its production to 75,000 tonnes in New Caledonia, development of the very important Weda Bay project in Indonesia, - in manganese, the ramp-up to 3.5 million tonnes of manganese ore and sinter for Comilog in Gabon, industrial development of the Chinese platform in Chongzuo for manganese chemical derivatives, construction of the new oil catalyst recycling plant in Canada,

4 - in alloys, the ramp-up of the 40,000-t press and the expansion in capacity under way at several sites. This growth will come about through strengthening the international dimension of the group (China, Indonesia, Canada, etc.) and expanding its portfolio of mining and metallurgical activities, in a global context that favours its various business lines, particularly in Asia. 4 - ooooo - Head of Financial Communications: Philippe Joly, Eramet (Paris): tel: +33(0) Shareholder information:

5 5 ERAMET 1st HALF 2007 CONSOLIDATED FINANCIAL STATEMENTS Income statement (millions of euros) 06/30/ /30/ /31/2006 Half year Half year Full year Sales Other income 22 (6) 10 Cost of products sold (1 104) (1 095) (2 171) Administrative & selling costs (60) (52) (102) Research & development expenditure (15) (17) (35) EBITDA Depreciation, amortisation & impairment of non-current assets (79) (73) (144) Impairment losses and provisions (9) (11) (7) Current operating income Other operating income and expenses 4 (2) 23 Operating income Net cost of debt Other finance income and expenses 4 (11) (4) Share in earnings of affiliates Income tax (197) (76) (174) Net income minority part Group part Basic earnings per share (EUR) 10,50 4,73 12,38 Diluted earnings per share (EUR) 10,43 4,70 12,28

6 6 ERAMET Balance sheet Assets (millions of euros) 06/30/ /30/ /31/2006 Goodwill Intangible assets Property, plant & equipment Companies accounted for using the equity method Other financial assets Deferred tax Other non-current assets Non-current assets Inventories Trade receivables and other current assets Tax receivables Financial derivatives Cash and cash equivalents Current assets Total assets Shareholders' equity and liabilities (millions of euros) 06/30/ /30/ /31/2006 Share capital Share premiums Reserves Translation adjustments (6) 9 (5) Net income (loss) Minority interests Shareholders' equity Employee benefits Provisions Deferred tax Borrowings - due in more than one year Other non-current liabilities Non-current liabilities Provisions - due in less than one year Borrowings - due in less than one year Trade payables and other current liabilities Tax payables Financial derivatives Current liabilities Total shareholders' equity and liabilities

7 7 ERAMET Statement of changes in net cash / borrowing position (millions of euros) 06/30/ /30/ /31/2006 Half year Half year Full year Opertating activities EBITDA Elimination of non-cash or non-business items: (206) (97) (164) Operating cash flow before changes in working capital Changes in operating working capital requirement (158) 6 (51) Net cash flows from operating activities Investing activities Capital expenditure (142) (139) (309) Non-current financial assets 1 (185) (192) Disposals of non-current assets Investment subsidies received Net change in non-current asset receivables / liabilities (5) 12 (4) Changes in scope of consolidation and loans Dividends from equity accounted affiliates Net cash flows from investing activities (137) (295) (462) Financing activities Dividends paid (108) (96) (98) Share capital increases Changes in working capital requirement related to financing activities 1-2 Net cash flows from financing activities (107) (93) (93) Impact of translation adjustments 5 (6) 1 Decrease (increase) in net cash (borrowing) position 66 (141) (11) Opening net cash (borrowing) position Closing net cash (borrowing) position

8 8 ERAMET Segment reporting by division (millions of euros) Nickel Manganèse Alloys Holding & Total eliminations Half year 2007 Non-Group sales Intra-Group sales (2) - Sales (1) Cash flows from operating activities (9) 463 EBITDA (7) 669 Current operating income (7) 581 Other operating income and expenses Operating income Cost of borrowed capital Other finance income and expenses Share of income from equity accounted companies Income tax (197) Minority interests (127) Group net income (loss) Non-cash expenses (20) (30) (19) 4 (65) - depreciation & amortisation (27) (31) (21) (1) (80) - provisions 7 12 (5) impairment losses Capital expenditure (intangibles and property, plant & equipment) Total balance sheet assets (current and non-current) (193) Total balance sheet liabilities (current and non-current excluding sareholders) (84) Half year 2006 Non-Group sales Intra-Group sales (2) - Sales Cash flows from operating activities EBITDA (3) 344 Current operating income (8) 260 Other operating income and expenses (2) Operating income Cost of borrowed capital Other finance income and expenses (11) Share of income from equity accounted companies Income tax (76) Minority interests (53) Group net income (loss) Non-cash expenses (16) (14) (29) (14) (73) - depreciation & amortisation (26) (28) (19) (1) (74) - provisions (1) 10 (2) (4) 3 - impairment losses Capital expenditure (intangibles and property, plant & equipment) Total balance sheet assets (current and non-current) (204) Total balance sheet liabilities (current and non-current excluding sareholders) (191) 1 691

9 9 ERAMET Segment reporting by division (millions of euros) Nickel Manganèse Alloys Holding & Total eliminations Year 2006 Non-Group sales Intra-Group sales (4) - Sales (2) Cash flows from operating activities (2) 594 EBITDA (10) 758 Current operating income (13) 607 Other operating income and expenses Operating income Cost of borrowed capital Other finance income and expenses (4) Share of income from equity accounted companies Income tax (174) Minority interests (141) Group net income (loss) Non-cash expenses (49) (26) (49) (10) (134) - depreciation & amortisation (53) (54) (37) (1) (145) - provisions (9) 24 3 (1) 17 - impairment losses - 1 (2) - (1) Capital expenditure (intangibles and property, plant & equipment) Total balance sheet assets (current and non-current) (177) Total balance sheet liabilities (current and non-current excluding sareholders) (28) Segment reporting by geographic region (millions of euros) Europe North Asia Oceania Africa South Total America America Sales (destination of sales) Half year Half year Capital expenditure (intangibles and property, plant & equipment) Half year Half year Total balance sheet assets (current and non-current) Half year Half year