Earnings Release: ELSEWEDY ELECTRIC Reports Consolidated Results for Full Year 2015 ended December 31 st, 2015.

Transcription

1 Earnings Release: ELSEWEDY ELECTRIC Reports Consolidated Results for Full Year 2015 ended December 31 st, March 15 th, 2016 Cairo- Egypt. ELSEWEDY ELECTRIC announces a record year for FY 2015 with Revenues reaching an all time high of EGP 20.6 billion, achieving a Net Profit after Minority of EGP billion. ELSEWEDY ELECTRIC (SWDY.CA on the Egyptian stock exchange), the leading Wire & Cable and Integrated Energy Solution Provider in the Middle East and Africa, announced its consolidated financial results for Full year 2015 ended December 31 st, Q versus Q Consolidated revenues in Q increased by 20% to reach EGP 5.1 billion versus EGP 4.2 million in Q Gross profit in Q increased by 34% to reach EGP 799 million versus EGP 598 million in Q EBITDA in Q increased by 14% to reach EGP 524 million versus EGP 460 million in Q Net profit after Minority reached EGP 283 million during Q versus EGP 93 million during Q FY 2015 versus FY 2014 Consolidated revenues increased by 21% to reach EGP 20.6 billion for FY 2015, versus EGP 17.0 billion in FY Gross profit increased by 28% to reach EGP billion during FY 2015, versus EGP billion in FY EBITDA surged by 67% to reach EGP billion in FY 2015, versus EGP billion in FY Net profit after Minority Interest increased by 209% reaching EGP billion in FY 2015 versus EGP 403 million for FY

2 Consolidated Results Highlights LE (000) s Q Q % Change FY-2015 FY-2014 % Change Revenue 5,050,915 4,201,916 20% 20,571,704 17,014,814 21% Gross Profit 799, ,059 34% 3,310,294 2,583,062 28% Gross Profit Margin 16% 14% 16% 15% EBITDA 523, ,607 14% 2,303,913 1,377,534 67% EBITDA Margin 10% 11% 11% 8% Net Income After Minority 282,798 92, % 1,245, , % Net Income After Minority Margin 6% 2% 6% 2% Segment Analysis Q versus Q Revenues in Q increased by 20% to reach EGP 5,051 million versus EGP 4,202 million in Q The Wire and Cable segment achieved revenues of EGP 3,369 million in Q4 2015, 4% higher than Q Turnkey revenues in Q were 98% higher than Q reaching EGP 1,173 million. Meters revenues increased by 60% reaching EGP 210 million, while transformers revenues increased by 88% reaching EGP 227 million. Electrical Products revenues decreased by 33% to reach EGP 72 million. Gross Profit increased by 34% to reach EGP 799 million in Q versus EGP 598 million in Q The gross profit in the Wire and Cable segment increased by 12% in Q versus Q4 2014, (EGP 413 million versus EGP 369 million). Turnkey gross profit increased by 128% in Q to reach EGP 259 million versus EGP 113 million in Q The Meters division gross profit increased by 90% in Q to reach EGP 62 million whilst the transformers division gross profit increased by 46% in Q to reach EGP 46 million. Electrical products gross profit stood at EGP 20 million in Q4 2015,61% lower yoy. Segment Analysis FY 2015 versus FY 2014 Revenue during FY 2015 increased by 21% versus FY 2014 reaching EGP 20,572 million. The Wire and Cables revenue decreased by 2% to reach EGP 12,507 million. Turnkey revenues surged by 137% during FY 2015 reaching EGP 6,437 million. Transformers revenue remains flat during FY 2015 reaching EGP 591 million, whilst Meters revenues increased by 16% to reach EGP 730 million. Electrical products revenues decreased by 7% to reach EGP 308 million. Gross profit during FY 2015 increased by 28% to reach EGP 3,310 million. The Wire and Cables gross profit decreased by 9% to reach EGP 1,611 million. Turnkey gross profit was 195% higher during 9M 2015 reaching EGP 1,178 million. Transformers gross profit increased by 41% reaching EGP 166 million whilst meters gross profit decreased by 3% to reach EGP 205 million. Electrical products gross profit increased by 63% to reach EGP 150 million 2

3 Summary of Revenues by Segment LE (000) s Q Q % Change FY-2015 FY-2014 % Change Wire & Cables 3,368,782 3,249,412 4% 12,506,794 12,757,467-2% Turn Key Projects 1,172, ,209 98% 6,436,646 2,712, % Meters 209, ,736 60% 729, ,925 16% Transformers 226, ,828 88% 590, ,732 1% Other electrical products 72, ,731-33% 307, ,990-7% Total 5,050,915 4,201,916 20% 20,571,704 17,014,814 21% FY 2015 Revenue by Segment FY 2014 Revenue by Segment 4% 3% 1% 31% 61% Wire and cables Turnkey Meters Transformers 16% 4% 3% 2% 75% Wire and cables Turnkey Meters Transformers Electrical products Electrical products Summary of Gross Profit by Segment LE (000) s Q Q % Change FY-2015 FY-2014 % Change Wire & Cables 412, ,465 12% 1,611,406 1,763,395-9% Turn Key Projects 259, , % 1,178, , % Meters 62,359 32,803 90% 204, ,284-3% Transformers 45,520 31,207 46% 165, ,609 41% Other electrical products 19,887 51,167-61% 150,161 92,243 63% Total 799, ,059 34% 3,310,294 2,583,062 28% 3

4 FY 2015 Gross Profit by Segment FY 2014 Gross Profit by Segment 6% 5% 5% 49% Wire and cables Turnkey Meters 15% 5% 4% 8% Wire and cables Turnkey Meters 36% Transformers 68% Transformers Electrical products Electrical products Wires & Cables Segment Wires & Cables segment revenues decreased by 2% to reach EGP 12,507 million in FY 2015 versus EGP 12,757 million in FY Gross profit in FY 2015 decreased by 9% to reach EGP 1,611 million versus EGP 1,763 million in FY Gross profit margin reached 12.9% in FY 2015 versus 13.8 % in FY In terms of volumes, the segment sold 205,305 tons of cables in FY 2015 versus 178,710 tons in FY 2014, an increase of 15%. Gross profit per ton averaged EGP 6,469 in FY 2015 versus EGP 8,457 in FY Volumes in the Egyptian operations were 3% higher in FY 2015 versus FY 2014, with the main increase in volumes coming from the local market. Whilst overall exports from Egypt were lower in 2015 due to zero exports to Libya and negligible exports to Iraq, exports to the GCC remained strong and were higher yoy. Volumes in the Qatar operations increased by 79% yoy, whilst all the other operations also saw a pickup in volumes with the exception of Algeria in which volumes were lower yoy by 10%. The drop in gross profit per ton in Q to reach EGP 5,488 per ton is mainly due to a provision taken for slow moving inventory in KSA. Overall gross profit per ton in FY 2015 was 24% lower than FY 2014 due to a drop of the profitability in Egyptian operations as a result of lower exports to high margin markets, in addition to a reduction in gross profit per ton in Algeria and KSA. On a positive note in Q gross profit per ton in Algeria improved significantly. 4

5 Wire & Cables Segment Financial Highlights Revenues After Intercompany Sales LE (000) s Q Q % Change FY-2015 FY-2014 % Change 3,368,782 3,249,412 4% 12,506,794 12,757,467-2% Gross Profit LE (000) s 412, ,465 12% 1,611,406 1,763,395-9% Cables Sales Volumes ( Tons) 61,077 44,614 37% 205, ,710 15% Cables Sales Volumes ( Tons) proportionate 53,344 40,781 31% 179, ,340 9% Cables Gross Profit per ton LE 5,488 7,390-26% 6,469 8,457-24% Gross Profit Margin After Intercompany Sales 12.2% 11.4% 12.9% 13.8% *includes the proportionate tonnage for Doha Cables Turnkey Projects Turnkey revenues witnessed a 137% increase, reaching EGP 6.4 billion in FY 2015 versus EGP 2.7 billion during FY Gross profit increased by 195% to reach EGP 1,178 million in FY 2015 versus EGP 400 million in FY 2014, whilst gross profit margin increased from 15% in FY 2014 to 18% in FY We are continuing to make good progress in all our projects, locally and internationally (mainly in the GCC and sub-saharan Africa.) Regarding the USD 706 million contract in Egypt for Attaqa and Mahmoudia (980MW) we have made excellent progress and are close to achieving final completion of the project. As for the Beni Suef, 4,800 MW combined cycle power plant, construction on site is in full force and we are committed to meeting the targeted dates for producing energy, which will be in phases starting from the end of 2016 with final project completion expected before the end of We are also moving very quickly with the development of our 50 MW solar power plant and are targeting financial closure before the end of this year with construction completion expected before year-end We have also announced recently the signing of an MOU in Japan for a 4,000 MW coal fired power plant in Egypt in a consortium with Marubeni, in addition to an MOU signed in Korea for four projects of 500KV substations also in Egypt in a consortium with Hyundai Heavy Industries Corporation and Daewoo International. We continue to focus on our international markets, having recently announced on February 3 rd 2016, the signing of a USD million contract in Angola with the Ministry of Electricity and Water to build three power plants, using GE gas turbines. The contract value includes the Engineering, Procurement and Construction plus Finance (EPC+F) and will be executed during

6 Our backlog continues to reach record levels, with total backlog as of December 31 st, 2015 reaching EGP 15.2 billion (excluding Angola). The increase in the backlog is mainly from new projects signed in Kuwait and Qatar. Of the backlog Egypt now represents 75%, and the GCC and Middle East 25%. Meters Segment Revenues from the meters segment increased by 16% in FY 2015 versus FY 2014 to reach EGP 730 million versus EGP 627 million in FY Gross profit decreased by 3% to reach EGP 205 million in FY 2015 versus 210 million in FY The increase in revenues during FY 2015 was mainly driven by local sales in Egypt. In 2016 we have signed contracts in Austria and Germany for the supply of residential meters, in addition to signing in KSA with SEC for the supply of industrial meters. Regarding the tender that was issued in Egypt for the 3 million smart meters tender, it was unfortunately cancelled however we are expecting them to reissue it again this year. Our meters backlog as of December 31 st, 2015 stands at Euros 162 million. Meters Segment Financial Highlights Revenues Before Intercompany Sales LE (000) s Revenues After Intercompany Sales LE (000) s Q Q % Change FY-2015 FY-2014 % Change 253, ,681 54% 868, ,083 7% 209, ,736 60% 729, ,925 16% Gross Profit LE (000) s 62,359 34,320 82% 204, ,284-3% Sales Volumes ( Meters) 986, , % 2,866,725 2,082,053 38% Gross Profit per meter LE % % Gross Profit Margin Before Intercompany Sales 24.6% 20.8% 23.5% 25.9% Gross Profit Margin After Intercompany Sales 29.7% 26.3% 28.0% 33.5% Transformers Segment Revenues from the transformers segment remains flat in FY 2015 versus FY 2014 to reach EGP 591 million. Before intercompany sales revenues were actually 12% higher. Gross profit reached EGP 166 million in FY 2015 compared to EGP 118 million in 2014, up 41% yoy. Whilst revenues in the Egyptian operations remained flat in FY 2015 versus FY 2014 there was a marked improvement in profitability given that there was a substantial increase yoy in local power transformers sales. Exports from Egypt were lower given that there were no exports of oil distribution transformers to Iraq in

7 Revenues in Zambia and Sudan were higher in FY 2015 increasing 82% and 9% respectively. As at December 31 st, 2015 the backlog in the transformers segment stood at USD 46 million. Transformers Segment Financial Highlights Revenues Before Intercompany Sales LE (000) s Revenues After Intercompany Sales LE (000) s Q Q % Change FY-2015 FY-2014 % Change 224, ,592 67% 697, ,908 12% 226, ,828 88% 590, ,732 1% Gross Profit LE (000) s 45,520 31,207 46% 165, ,609 41% Sales Volumes ( MVA) 1, % 4,311 4,800-10% Gross Profit per MVA LE 35,315 37,947-7% 38,449 24,502 57% Gross Profit Margin Before Intercompany Sales 20.3% 23.2% 23.8% 18.9% Gross Profit Margin After Intercompany Sales 20.1% 25.8% 28.1% 20.1% Other Electrical Products Revenues from the Electrical products segment decreased by 7% in FY 2015 versus FY 2014, to reach EGP 308 million, while gross profit increased by 63% to reach EGP 150 million. Selling General and Administrative Expenses SG&A as a % of sales improved to reach 4.6% in FY 2015 versus 6.2% in FY Other Operating Expenses Other operating expenses in Q includes additional provisioning in KSA related to accounts receivable. Total provisioning incurred during 2015 for accounts receivable stood at EGP 469 million mainly related to a new policy that was implemented on the group level in which a 50% provision was implemented on receivables 6 months overdue and 100% provision on receivables 1 year overdue. Net Interest Expense Net Interest expense declined by approximately 73% in FY 2015, reaching EGP 54 million versus EGP 203 million in FY The main decline in net interest expense is due to a substantial increase in interest income, which increased from EGP 60.6 million in FY 2014 to reach 211 million in FY 2015 (including EGP 53 million gain from early settlement of loans). Net interest expense remained relatively flat at EGP 265 million in FY

8 Taxes The overall tax rate for FY 2015 stands at 28%. Q effective tax rate is exceptionally high due to the adjustments made regarding both the income tax and the deferred tax that were not fully taken into account in the previous quarters given the change in the tax regulations that took place during the third quarter. Net Debt Net debt as of December 31 st, 2015 increased by 29% to reach EGP 2,440 million versus EGP 1,899 million as of December 31 st, Inventory decreased by 2% to reach EGP 3.3 billion as of December 31 st, 2015 (70 DOH) versus EGP 3.4 billion as of September 30 th, 2015 (75 DOH). Account receivables increased by 4% to reached EGP 7.6 billion as of December 31 st, 2015 (135 DOH) versus EGP 7.3 billion as of September 30 th, 2015 (136 DOH). Payables decreased by 2% to reach EGP 2 billion as of December 31 st, 2015 (42 DOH) versus EGP 2 billion as of September 30 th, 2015 (44 DOH). Total cash conversion cycle decreased to 164 DOH as of December 31 st, 2015 versus 166 DOH as of September 30 th, Forward-looking Statements This document may contain certain forward-looking statements relating to the company s business. These may be identified in part through the use of forward-looking terminology such as will, planned, expected and forecast. Any such statements reflect the current views of the company with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance, decisions or achievements of the company to be materially different from any future results that may be expressed or implied by such forward-looking statements. Investor Relations contact Information: Mr. Tarek Yehia, Investor Relations Manager tarek.yehia@elsewedy.com Address: Plot 27, 1 st district, 5 th settlement, New Cairo. Tel Fax

9 El Sewedy Electric Consolidated Financial Statements Income Statement L.E Q Q FY-2015 FY-2014 Sales Wires & Cables 3,368,781,757 3,249,412,437 12,506,793,656 12,757,466,760 Electrical Products 509,151, ,294,907 1,628,264,493 1,544,647,324 Turnkey Projects 1,172,981, ,208,595 6,436,645,585 2,712,700,291 Total Sales 5,050,914,608 4,201,915,939 20,571,703,734 17,014,814,372 COGS (4,251,459,000) (3,603,856,574) (17,261,410,195) (14,431,752,278) Gross Profit 799,455, ,059,365 3,310,293,539 2,583,062,094 Gross Profit Margin 15.8% 14.2% 16.1% 15.2% SG & A (262,452,862) (276,573,589) (952,528,867) (1,052,201,982) Other Operating Income (3,429,578) 68,994, ,200, ,204,045 Other Operating Expense (102,674,274) (36,114,585) (657,660,958) (673,749,220) Other Operating Income/ (Expenses) (106,103,852) 32,879,716 (417,460,108) (539,545,175) EBITDA 523,854, ,607,274 2,303,913,281 1,377,534,372 EBITDA Margin 10.4% 10.9% 11.2% 8.1% Depreciation & Amortization (92,955,853) (105,241,781) (363,608,716) (386,219,435) Fx Gain / ( Loss) (3,547,878) (108,108,887) (11,145,830) (75,993,003) EBIT 427,351, ,256,605 1,929,158, ,321,934 Interest Expense (48,771,162) (73,259,620) (265,488,766) (264,094,008) Interest Income 92,552,041 25,106, ,210,497 60,597,627 Interest Income / (Expenses) 43,780,879 (48,153,033) (54,278,269) (203,496,381) EBT 471,131, ,103,572 1,874,880, ,825,553 Tax (224,122,221) (86,869,341) (523,834,777) (266,713,645) Net Income 247,009, ,234,230 1,351,045, ,111,908 Minority Interest 35,788,590 (18,319,859) (105,908,075) (41,811,418) Net Income After Minority Interest 282,798,264 92,914,372 1,245,137, ,300,490 9

10 El Sewedy Electric Consolidated Financial Statements Balance Sheet L.E Assets Fixed Assets 3,121,801,039 3,147,627,501 3,152,171,847 3,193,178,501 Investments 43,715,623 26,748,772 26,786,131 27,207,656 Other long term Assets & Good will 173,361, ,445, ,581, ,985,657 Total Long term Assets 3,338,878,342 3,287,821,829 3,339,539,472 3,416,371,814 Inventories 3,343,933,055 3,311,233,349 3,398,391,710 3,321,729,077 Receivables 3,988,300,921 7,623,261,298 7,347,400,310 7,635,272,168 Other Debt balance 1,284,075,643 1,793,646,593 1,771,724,658 1,714,917,832 Due from Related Parties 358,402, ,247, ,880, ,906,725 Cash & Cash Equivalents 1,597,610,616 3,113,568,215 3,975,979,249 3,822,485,581 Total Current Assets 10,572,322,716 16,347,956,528 17,318,376,108 17,358,311,382 Bank Overdraft & Short Term loans 4,278,293,304 5,087,395,962 5,654,607,996 6,095,557,461 Accounts Payable 1,427,475,437 2,848,179,244 2,012,159,530 1,979,477,915 Other Credit balance 1,467,213,989 4,325,650,570 5,551,636,065 5,161,056,475 Due to Affiliates 163,193, ,780, ,997, ,301,422 Provisions 310,917, ,116, ,912, ,807,606 Total Current Liabilities 7,647,093,694 12,814,122,669 13,753,313,302 13,747,200,876 Working Capital 2,925,229,022 3,533,833,859 3,565,062,806 3,611,110,507 Total Investments 6,264,107,364 6,821,655,688 6,904,602,278 7,027,482,319 Issued and Paid Capital 2,234,180,000 2,234,180,000 2,234,180,000 2,234,180,000 Retained Earnings 1,982,749,739 2,026,477,759 2,023,878,215 1,911,476,097 Net Profit of the year 403,300, ,764, ,339,350 1,245,137,614 Others 1,113,834,105 1,352,404,276 1,187,161,031 1,144,233,064 Total Equity 5,734,064,334 6,290,826,367 6,407,558,595 6,535,026,774 Long Term Loans 285,199, ,289, ,686, ,876,642 Other long term Liabilities 244,843, ,540, ,357, ,578,902 Total long term Liabilities 530,043, ,829, ,043, ,455,545 Total long term Liabilities & Equity 6,264,107,364 6,821,655,688 6,904,602,273 7,027,482,318 10