The Group achieved Revenues of S/. 2,799.0 MM during 2Q2016, a 25.6% decrease compared to 2Q2015

Transcription

1 Consolidated Results Report Second Quarter 2016 July 25, 2016

2 Executive Summary The Group achieved Revenues of S/. 2,799.0 MM during 2Q2016, a 25.6% decrease compared to 2Q2015 Gross Profit amounted to S/ MM in 2Q2016, decreasing 12.9% compared to 2Q2015 EBITDA was S/ MM in 2Q2016, higher by 6.2% than the result obtained in 2Q2015 Net Income registered an increase of 162.2%, reaching S/ MM in 2Q2016 Backlog amounted to US$ 4,155.1 MM and the recurrent businesses amounted to US$ MM, reaching a total of US$ 4,648.0 MM, equivalent to 2.37x the annual revenues CONSOLIDATED QUARTERLY REVENUES (S/. MM) CONSOLIDATED QUARTERLY EBITDA (S/. MM) CONSOLIDATED QUARTERLY NET INCOME (S/. MM) The graphs above, show the Revenues, EBITDA and Net Income by quarter REVENUES BY SEGMENT EBITDA BY SEGMENT NET INCOME BY SEGMENT Note: The Consolidated Results Report presents the accumulated figures as of the first quarter of 2Q2015 and 2Q2016. References made to 2Q2015, 2Q2016 and Second Quarter are made to the period of six months from January 2 nd to June 30 th of the corresponding year. Page 2

3 Consolidated Results Revenues. Consolidated revenues reached S/. 2,799.1 MM during 2Q2016, a decrease of 25.6% compared to 2Q2015. In terms of Business Segments, revenues in the Engineering and Construction segment decreased 36.0% in 2Q2016, contributing with 62.0% of the Group s revenues. The Infrastructure Segment increased in 5.8%, due mainly to lower revenues in GMP and Survial; while the Real Estate Area registered an increase of 110.7% mainly explained by the sale of a piece of land from Almonte. Finally, the Technical Services Segment registered an increase of 6.2% Gross Profit. Consolidated Gross Profit decreased from S/ MM to S/ MM, equivalent to a decrease of 12.9% and a Gross Margin of 11.0% in 2Q2016, which is higher to the gross margin of 2Q2015. This is mainly explained by the improved results in the Real Estate Business Area, and more stable margins in the Engineering and Construction Area. In the Infrastructure Area, the Gross Profit increased from 18.9% to 19.8%. Operating Income. In the Other Operational Expenses line of 2Q2016, reflects the profit from the sale of machinery and equipment. In the Profit from sale of investments in subsidiaries line, the profit from the sale of our stake in Transportadora de gas del Perú (TgP) is registered, which also has an impact in the Income tax due to the reversal of the deferred Income Tax. The increase in Financial expenses is a consequence of the increase in the debt of the Gaseoducto del Sur contribution financing. The Participation in Associates account registers the profit generated in projects where subsidiaries have a minority stake and are not consolidated. This number includes mainly the Southern Gas Pipeline stake and the Guyana Project, as well as other minority investments such as COGA, Chavimochic and Adexus. Exchange rate difference. During the first semester of 2016, the Nuevo Sol appreciated against the US Dollar, from S/ per dollar as of December 31, 2015, to S/ per dollar as of June 30, 2016 generating a positive impact. Net Income. Consolidated Net Income was S/ MM in 2Q2016, equivalent to a 162.2% increase compared to 2Q2015. Net margin increases in 2Q2016 mainly due to the sale of TgP in the first quarter of 2016, the currency appreciation and the profit from our participation in Gasoducto del Sur Peruano, as well as to better results both in the Engineering and Construction and Real Estate Areas. EBITDA. Consolidated EBITDA was S/ MM in 2Q2016, which represents an increase of 6.2% compared to 2Q2015, explained by the operating results in several Areas, as well as by the sale of TgP. EBITDA Margin in 2Q2016 was 13.3%, higher than the one reported in 2Q2015. A further detail of the results is described in the each of the business segments sections. Stable Cash Flows. Regarding stable long term cash flows, during 2Q2016, 62.5% of the consolidated EBITDA was originated from Stable Cash Flows businesses. The EBITDA generated from these businesses allows us to cover the Interest Expenses and General Expenses of the company businesses that not generate cash flows in 1.0 times. Page 3

4 Consolidated Results Backlog. Consolidated Backlog (US$ 4,155.1 MM) and recurrent businesses (US$ MM) reached a total amount of US$ 4,648.0 MM in the first semester of 2016 slightly higher than the backlog registered in the first quarter of 2016, reaching a Backlog plus Revenues Ratio of 2.37 times. Consolidated Backlog (US$ MM) From the total Backlog of 2Q2016, US$ MM will be executed during 2016, US$ 1,518.2 MM in 2017, and US$ 1,898.4 MM in 2018 and the following years. From the recurrent businesses, US$ MM will be executed during 2016, US$ MM in 2017 and the remainder in the following years. The recurrent businesses are the Oil and Gas segment and the Norvial toll road are businesses. For further detail of the backlog, please go to the appendix page. Backlog by Business Segment 2Q2015 vs. 2Q2016 Backlog by Sector 2Q2015 vs. 2Q2016 Backlog by Type of Client 2Q2015 vs. 2Q2016 Backlog by Geography 2Q2015 vs. 2Q2016 Capital Expenditures. Capital Expenditures (CAPEX) in 2Q2016 amounted to S/ MM (US$ MM). The CAPEX distribution per Business Segment is as follows: Infrastructure represents 18%, Engineering and Construction represents 10%, followed by Technical Services with 7% and finally Real Estate with 0.3%. The remaining of investment corresponds to the contributions made to the Southern Gas Pipeline. Page 4

5 Composition of Indebtedness. Consolidated Financial Gross Debt for 2Q2016 amounted to S/. 2,721.2 MM (US$ MM). From the total debt, S/. 1,273.5 MM (US$ MM) correspond to working capital associated to the clients accounts receivables and leasing's for the acquisition of machinery and equipment, S/. 1,064.3 MM (US$ MM) correspond to the debt of infrastructure projects and S/ MM (US$ MM) correspond to financing the contributions of the Southern Gas Pipepline (GSP). By the end of 2Q2016, the reduction in working capital debt was of US$ 41.0 MM compared to 1Q2016. On the other hand, the project debt related to infrastructure businesses is a structured non-recourse debt, with guarantees and cash flows from the project itself. The Debt/ Ebitda ratio for this debt is 5.33x. As consequence, Debt/Ebitda ratio for this debt is 3.58x. Maturity of Financial Debt Currency Debt Page 5

6 Engineering and Construction The Engineering & Construction Area registered a decrease of 36.0% in 2Q2016, compared to the amount reported in 2Q2015, mainly due the fewer projects under execution in GyM, Vial y Vives-DSD and Morelco, as well as to lower revenues in Stracon GyM. Gross Profit decreased 30.6% in 2Q2016 in line with the reduction in revenues, while the margin increased from 7.1% to 7.7% mainly explained by positive results in GyM compared to the losses reported in 2Q2016, and in spite of lower results registered in Vial y Vives DSD and Morelco. The increase in financial expenses is the result of the increase in working capital in the Area. Moreover, the Engineering and Construction segment registers the profit for the minority participation of GyM in the Guyana project in the line Participation in Associates. The appreciation of the period has generated a profit in exchange rate differences due to net liabilities in dollars of S/. 6.5 MM. The net result of the area was a profit of S/ MM in 2Q2016 which represents a Net Margin of 1.0%, higher than the amount registered in 2Q2015. EBITDA was S/ MM in 2Q2016, reaching an EBITDA Margin of 5.6% which is higher than the one registered in 2Q2015. Capital Expenditures. Capital expenditures (CAPEX) for 2Q2016 amounted to S/ MM (US$ 10.0 MM), corresponding to machinery for construction as well as to the purchase of mining equipment for the mining services contracts. Revenues (Million of S/.) Ebitda (Million of S/.) Net Income (Million of S/.) Backlog. The Engineering and Construction segment reported a Backlog of US$ 3,061.9 MM, amount that is equivalent to a growth of 36.5% compared to the amount registered in 2Q2015 explained by the Southern Gas Pipeline construction contract, construction contract for the expansion of Line 1 Lima Metro, as well as the awarding of the construction of schools in Colombia. The total Backlog will be executed as follows: US$ MM in 2016, US$ 1,105.4 MM in 2017 and US$ 1,486.1 MM in the following years. Backlog (Million of US$) Backlog by Type of Contract Page 6

7 Infrastructure The Infrastructure Area reached revenues of S/ MM in 2Q2016, lower by 5.8% compared to 2Q2016 in spite of an increase in revenues of Line 1 of the Lima Metro. The reduction is mainly due to lower revenues in GMP. The reduction in revenues in GMP is explained by the decline in oil price, going from an average price per basket of US$ in 2Q2015 to US$ per basket in 2Q2016., which was partially offset by an increase in the level of daily barrels produced which increased from 2,493 BPD in 2Q2015 to 2,729 BPD in 2Q2016, due to the production of Blocks III and IV. On the other hand, the processing levels at the Pariñas Gas Plant increased from an average of 30.9 MMCF (million cubic feet) in 2Q2015 to 31.9 MMCF in 2Q2016. Additionally, the revenues in the first semester of 2016 decreased due to lower maintenance works in Survial road. Gross Profit was impacted by the decrease in oil price, and by the lower results in Survial due to a lower quantity of maintenance works. Financial expenses reported in 2Q2016, were lower than the ones reported in 2Q2015. The impact in exchange differences was lower than 2Q2015, due to the currency appreciation. Net Income was S/ million, which represents a decrease of 5.2% compared to 2Q2015, explained by the results described above, reaching a Net Margin of 7.3% which was similar to the one registered in 2Q2015. EBITDA for 2Q2016 reached S/ MM, representing an EBITDA margin of 29.3% which was similar to the one registered in 2Q2015. Revenues (Million of S/.) Ebitda (Million of S/.) Net Income (Million of S/.) Capital Expenditures. Capital expenditures (CAPEX) for 2Q2016 amounted to a S/ MM (US$ 19.0 MM) corresponding mainly to the construction of the extension of the Norvial toll road. Backlog. The Infrastructure Area reported a Backlog of US$ MM, and a total of US$ MM of recurrent businesses. Backlog (Million of US$) The total Backlog of the Infrastructure Segment will be executed as follows: US$ 38.8 MM in 2016, US$ 83.7 MM in 2017 and US$ MM in the following years. On the other hand, the recurrent businesses will be executed as follows: US$ MM in 2016, US$ MM in 2017 and the remaining amount from 2018 and forward. Page 7

8 Real Estate Revenues in the Real Estate Area increased in 110.7%, mainly due to the sale of land from Almonte, as well as from a higher quantity of delivered housing units in 2Q2016 which were 236 compared to 225 housing units delivered in 2Q2015. There are a total of 14 projects under development, within which the main ones in housing segment are: Parques del Callao, Parque Comas, Parques del Mar, Nuevo Chimbote, Pezet building, El Rancho Project, and a building named Klimt in San Isidro. In the office segment, Real Dos offices and Panorama are also under execution. A total of 79% of the projects are been executed in Lima, whilst 21% of them are been executed in other provinces of Peru. The increase in Gross Margin is mainly explained by the profit generated from the sale of land from Almonte, reaching a Gross Margin of 30.3%, which is higher than the one registered in 2Q2015. The impact in exchange rate difference was lower than last year, due to the currency appreciation. The Net Income increased in comparison to 2Q2015, and registered S/.3.2 MM in 2Q2016 with a net margin of 3.2%. EBITDA was S/ MM in 2Q2016, which was higher by 163.1% compared to 2Q2015 reaching an EBITDA Margin of 54.5% which is higher than the one registered in 2Q2015. Revenues (Million of S/.) Ebitda (Million of S/.) Net Income (Million of S/.) Capital Expenditures. Capital Expenditures (CAPEX) in the first semester of 2016 amounted to S/. 1.1 MM (US$ 347 thousand). Backlog. The Real Estate Segment reported a Backlog of US$ MM. The main projects included in the Backlog are El Rancho, Klimt building in San Isidro, Parque Comas, Real 2 Offices, within others. Backlog (Million of US$) The total Backlog of the Real Estate Segment will be executed as follows: US$ 77.9 MM in 2016, US$ 63.2 MM in 2017 and the rest in the remaining years. Page 8

9 Technical Services Revenues for the Technical Services Segment in 2Q2016 were S/ which is higher by 6.2% than the ones registered in 2Q2015. Gross Profit reduced by 5.2% reaching a Gross Margin of 13.6% as a consequence of lower results in the operations of CAM. In addition, the Other Operational Expenses account, includes the reversion of liabilities related to the acquisition of CAM. The Financial Expenses increased by 8.2% in comparison to 2Q2015 as a consequence of the increase in debt of the period. The Operational Income increased from S/ MM to S/ MM reaching an Operating Margin of 5.7%, which is higher than the one registered in 2Q2015 as a result of a reduction in General Expenses in the Area. The minority participation of CAM in projects that are not consolidated are reported in the line Participation in Associates. The impact in exchange rate difference reflects a profit of S/. 2.2 MM due to the currency appreciation. Net income for the first semester of 2016 was S/ MM, higher compared to 2Q2015 mainly due to a recovery in GMD and CAM. EBITDA in 2Q2016 was S/ MM, with an EBITDA Margin of 8.7%. Revenues (Million of S/.) Ebitda (Million of S/.) Net Income (Million of S/.) Capital Expenditures. Capital Expenditures (CAPEX) in 2Q2016 amounted to S/ MM (US$ 7.9 MM), which mainly corresponds to the electric services and information technology businesses. Backlog. The Technical Segment reported a Backlog of US$ MM. The main contracts awarded during the first semester of 2016 were for the services of comprehensive operations for Edelnor for US$ 48.0 MM, as well as an electrical services contract for Electricaribe for US$ 63.0 MM and finally the contract for the service management and road maintenance of Chuqibambilla and Chinchaypuijio for US$ 99.6 MM. Backlog (Million of US$) The total Backlog of the Technical Services Segment will be executed as follows: US$ MM in 2016, US$ MM in 2017 and the remaining in the following years. Page 9

10 Appendix: Profits & Losses Statement per Company Figures in Thousands of S/. Appendix: Balance Sheet per Company Figures in Thousands of S/. Page 10

11 Appendix: Backlog Report to June 2016 Figures in Thousands of US$ Appendix: Recurrent Businesses Report to June 2016 Figures in Thousands of US$ Page 11

12 Appendix: Corporate Structure (1) 36.10% of the share capital in Viva GyM is held by our subsidiary GyM. Page 12

13 Annex: Notes to the Consolidated Results i) EBITDA As of the information reported in the prospectus regarding the shares issuance registered before the SEC, the international market practice for the EBITDA calculation has been adopted. The EBITDA calculation will start from the net income, figure to which the taxes, exchange rate differences and interests expenses will be returned to, whilst the depreciation and amortization will be added. We previously reported the EBITDA calculated as operational income plus depreciation and amortization. As mentioned on the Consolidated Results Report for the third quarter of 2013, we will report EBITDA calculated as follows: Real Estate EBITDA: the proportional part of the land component of the units delivered during the period, will be added; Metro de Lima : the financial expenses considered, as well as the capital amortization applied to the corresponding long-term account receivable during the period, will be added. ii) Backlog As of the information reported in the prospectus regarding the shares issuance registered before the SEC, the reporting method of the company s Backlog will have modifications in the Infrastructure and Real Estate segments according to what is following described. Engineering and Construction and Technical Services will continue to report their backlog according to the local market, therefore the total signed contracts will be reported. Infrastructure: the Oil & Gas business and the Norvial toll road are not included as backlog Real Estate: only the sold units which are pending of delivery are reported as backlog iii) ROE For the ROE calculation in the intermediate quarters, the net profit considered is the one for the last twelve months (LTM) (LTM Net Profit divided by Total Equity) iv) Gross Debt / EBITDA ratio For the Gross Debt/Ebitda ratio calculation, the EBITDA considered is the one for the last twelve months (LTM) (Gross Debt divided by LTM EBITDA) v) Net Debt / EBITDA ratio For the Net Debt/Ebitda ratio calculation, the EBITDA considered is the one for the last twelve months (LTM) (Net debt, equal to Gross Debt minus Cash, divided by LTM EBITDA) Page 13

14 Contacts: Mónica Miloslavich Hart Chief Financial Officer (511) Samantha Ratcliffe Leiva Head of Investor Relations (511)