Duro Felguera increases EBITDA by 21.6% in first half of year

EBITDA at 15.9 million Euros, with a margin of 4.8% (as compared to 3.3% for the same period in 2015)

EBIT at 12.4 million Euros, in comparison to losses of 2.6 million in first half of 2015

Invoicing at 334 million, 14.8% less than the previous year, mainly because the Roy Hill project in Australia came to an end

As of 30 June 2016, the backlog stood at 2,175.6 million Euros

The company maintains the annual target of 700 to 800 million Euros in order intake

Gijón, 30 September 2016. Duro Felguera finished the first half of 2016 with figures of 334 million Euros in sales, 14.8% less than in the previous year mainly because of the fall in invoicing in Mining & Handling as the Roy Hill project in Australia came to an end.

By business division we could highlight the positive evolution in Energy, which increased sales by 5.5% thanks to new projects started up in recent quarters, in particular Aconcagua (Chile) and Empalme II (Mexico). Income was also up in Manufacturing (20.6%), helped along by increased order intake in pressure vessels. As for the Oil & Gas and Services divisions, income was down by 31.9% and 7.5% respectively.

The gross operating result (EBITDA) was up by 21.6% to 15.9 million Euros. We should highlight the fact that the EBITDA margin in June 2016 was at 4.8%, which is an increase of 0.15% in comparison to the margin in the previous year. The higher margin is related to operational improvements in the Mining & Handling and Oil & Gas divisions, whose growth in EBITDA was 5.4% and 38.6% respectively.

The EBIT reached 12.4 million Euros, which compares very favourably to the losses of 2.6 million recorded in the first six months of 2015, further proof of the companys operational improvement.

The net financial loss was 10.7 million Euros, as compared to a profit of 10.2 million in the first half of the previous year. The worsening of the result is mainly due to lower financial income, and local debt in Argentina, which has a high financial cost. This local debt will be cancelled in the second half of this year. Furthermore, negative exchange differences up to June 2016 were 0.5 million Euros, compared to a positive figure of 12.2 million in the first half of 2015.

The net loss for the first half of 2016 was 1.8 million Euros.

Backlog and Projects

The backlog amounts to 2,176 million Euros, maintaining the visibility of 2.6X, taking annual sales of 850 million Euros as a reference. In this regard, based on the projects already signed together with the pipeline of projects underway, DF maintains its annual target of 700 to 800 million Euros in order intake. In the first half of the year order intake was 218 million Euros (mostly in the Mining & Handling and Services divisions), and so a significant improvement is expected in the second half of the year.

With regard to the Vuelta de Obligado project (Argentina), the company is still negotiating the payment of extra costs with the client, and in the month of September the company started the arbitration process. The total amount of the claim is almost 137 million Euros, of which 38 million has already been considered as a higher sales price in the project accounting.

The outstanding balance of payment for the Termocentro project (Venezuela) stood at 101 million Euros as of 30 June 2016.

Our client on the Roy Hill project (Australia), which has finished, called on bonds for a value of 88 million Euros. The company has started an arbitration process in Singapore and made various claims related to the project in Australia. Most of these claims have been sentenced in DF's favour and so expectations for the sentence in arbitration are favourable.

Duro Felguera SA published this content on 30 September 2016 and is solely responsible for the information contained herein.
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