Last checked at 29 Apr 2013 11:55
April 26, 2013
HMS Hydraulic Machines & Systems Group plc
(the “Company”, and together with its subsidiaries, the “HMS Group”)
HMS Group full year 2012 IFRS financial results
Moscow, Russia – April 29, 2013 – HMS Group plc (the “Group”) (LSE: HMSG), the leading pump and compressor manufacturer and provider of flow control solutions and related services in Russia and the CIS, today announces its audited IFRS financial results for the twelve months ended December 31, 2012.
FULL YEAR HIGHLIGHTS
(Figures in brackets are for the twelve months ended December 31, 2011)
Order backlog grew by 21% year-on-year to RUB 21.5 billion and was driven by continued steady demand for pumps, equipment and EPC services for infrastructure projects Revenues up 22.4% year-on-year to RUB 33.7 billion (RUB 27.5 billion) Adjusted EBITDA1 up 13.1% year-on-year to RUB 6.2 billion (RUB 5.5 billion), with an adjusted EBITDA margin of 18.5% versus 20% in the previous year Profit for the year contracted by 31.8% to RUB 2. 3 billion from RUB 3.4 billion Total debt grew by 109.3% from RUB 6.4 billion to RUB 13.4 billion Net debt grew by 150.8% to RUB 12.1 billion as of December 31, 2012 (RUB 4.8 billion)Artem Molchanov, CEO of HMS Group commented:
“In 2012, HMS Group has continued to make good progress with underlying revenue growth across all its businesses. Though overall pace of economic recovery is still lackluster, we managed to achieve a solid 22.4% revenue growth driven by infrastructure investments in the oil and gas sector, water and nuclear industries. Importantly, the full year results were within our guidance range, both revenue and EBITDA, though they were unevenly distributed within the year, which is a peculiarity of the Group’s business model. That’s why we stick to long-term orientation rather than focusing on short-term performance.
Outstanding execution of the several flagship projects allowed us to become a winner of new tenders held in 2012, and maintain a strong level of the backlog during the whole year. This reflects strength of the diversified business model and we are pleased with the record-high order flow of Rub 33.1 bn, which we managed to secure during the year. We keep our efforts and currently we’re focusing on a number of large infrastructure projects that can happen in late 2013-early 2014.
We’ve been also trying to expand our positions on growing markets where we expect strong demand in the foreseeable future. In 2012, we completed two acquisitions: Kazankompressormash (KKM) and Apollo Goessnitz (Apollo). Being the leading Russian compressor manufacturer, KKM will allow us to diversify our product portfolio for existing customers and penetrate into new promising market of gas projects, while the worldwide operating manufacturer of specialized pumps and pump systems, Apollo will strengthen our positions in Russia on the market of pumps for oil refineries, power generation and off-shore applications and provide opportunities to leverage our export potential. Both deals have strategic importance, and I believe we will further strengthen HMS Group capabilities to service our customers, as well as provide earnings growth for our shareholders.”
KEY DEVELOPMENTS IN 2012
Operating activities
Several landmark projects in Russia have been successfully completed. Among them was the delivery of trunk line pump systems to the East Siberia – Pacific Ocean (ESPO) pipeline by Transneft. The project has strategic importance for the country’s oil industry infrastructure and features a total pipeline length of more than 4,100 km. Another flagship project completed in 2012 was the second stage of the Vankor oilfield development, where HMS provided an integrated solution on delivery of a broad range of equipment and commissioning of water processing units as part of a produced water treatment system which was previously designed by HMS. The Vankor oilfield was launched in 2009 and is now one of the largest high-quality oil suppliers to the ESPO pipeline. The Group secured several large infrastructure contracts across all business segments for different economic sectors, including: the follow-up contract for ESPO - production and delivery of 12 trunk pipeline pump units for 3 pump stations, projects for the production and delivery of specialist pumps for the nuclear industry in Russia and China, construction of 3 main water pumping stations located in Turkmenistan, the turn-key project for delivery and installation of a compressor station. Two acquisitions completed during 2012: Kazankompressormash (KKM), one of the leading manufacturers of centrifugal and screw compressors in Russia, located in Kazan, Tatarstan. HMS acquired 77.8% of voting shares (74.35% of share capital) Apollo Goessnitz (Apollo), a worldwide operating manufacturer of centrifugal pumps and system equipment, located in Goessnitz (Thuringia), Germany. HMS Group acquired 75% of share capital of Apollo Goessnitz GmbH. The stake was acquired proportionally from the management, who has remained as part of the integrated team.R&D activities
HMS Group was included in the short list of finalists of Pump Industry Awards, established by the British Pump Manufacturers’ Association. The Group was recognized finalist in the “Technical innovation of the year - Projects” nomination for its turnkey project of a pump station construction in Turkmenistan Continued working on new models of pumps (high efficiency D type pump, high tech feed pump PA 1840-80, modernized feed pump PTA 3750-75) and equipment (control and protection system - HMS Control L3, innovative measuring equipment Mera MFR) Automated multifunctional measuring and computing complex ACIS-6 was purchased for subsurface laboratory for analysis of subsoils for the project and design facilityOperational improvements
Ongoing implementation of unified IT infrastructure for accounting and reporting purposes, development of the head office IT security system Ongoing development of an ERP project based on software by Infor-LN integrated with PDM systems that focuses on capturing and maintaining information on products and services through its useful life, maintaining an engineering and technological database, planning and coordinating of all transactional operations for R&D supportFINANCIAL SUMMARY
| (Rub million) | FY2012 | FY 2011 | Year-on-Year Change | ||||
| Order intake | 36,110 | 23,221 | 55.5% | ||||
| Backlog | 21,513 | 17,777 | 21.0% | ||||
| Revenue | 33,656 | 27,496 | 22.4% | ||||
| Adjusted EBITDA | 6,231 | 5,509 | 13.1% | ||||
| Operating profit | 4,237 | 4,547 | -6.8% | ||||
| Profit for the period | 2,301 | 3,377 | -31.8% | ||||
| Basic and diluted earnings per share (Rub per share) | 17.89 | 27.88 | n/a | ||||
| ROCE (LTM)2 | 18.7% | 36.2% | n/a |
OPERATING REVIEW
Group
Total order backlog reached Rub 21.5 billion, driven by several large contracts secured during the first three quarters of 2012. As a result the total backlog was 21.0% higher than the RUB 17.8 billion level in 2011, with stronger backlog diversification.
HMS Group’s consolidated revenues increased by 22.4% year-on-year for the full year in 2012, mainly driven by a gradual execution of the infrastructure projects implemented by the main oil and gas majors. Strong activity in oilfield development, oil transportation and the water and energy markets in 2012 was a core driver of revenue growth. During 2012, HMS executed projects for the main oil and gas majors, including providing pump-based integrated solutions for Transneft in the midstream, delivery of oil and gas equipment, and providing EPC works for Rosneft, TNK-BP, Surgutneftegaz, Lukoil and Gazprom Neft, Taas-Yuriakh Neftegazodobycha, in the up- and downstream as well as in gas processing for Gazprom and Novatek. Revenue growth in 2012 was mainly driven by strong performance in the oil and gas equipment and EPC business units, primarily due to large-scale projects with Rosneft and several major projects for engineering and construction services. The industrial pumps business unit accounted for approximately 50.7% of Group’s total consolidated revenue in 2012 versus 56.9% in 2011. The oil and gas equipment business unit accounted for 23.3% compared to 21.5%, while the EPC business unit share of revenue was flat, accounting for 21.8% in 2012 versus 21.6% in the previous year. Newly-established in July 2012, the Compressors business segment accounted for 4.2%.
HMS Group’s cost of sales grew in line with the revenue and increased by 23.6% year-on-year to RUB 23,645 million in 2012, compared to RUB 19,131 million in 2011, mainly due costs growth driven by consolidation of the acquired companies. As a result, gross margin was 29.7% versus 30.4% in the previous year.
Sales, general and administrative expenses increased by 45.1% year-on-year to RUB 5,217 million for the full year 2012 while its share of total revenue accounted for 15.5%, up from 13.1% in the previous year. In 2013, the Group intends to maintain SG&A growth in line with revenue expansion.
The Group’s adjusted EBITDA increased by 13.1% year-on-year from RUB 5,509 million to RUB 6,231 million, driven by the execution of several large-scale infrastructure contracts in oil upstream and oil transportation segments. The Group’s adjusted EBITDA margin was 18.5% in 2012, compared to 20.0% in 2011.
Due to the growth of other operating expenses largely driven by fines under contracts, social expenditures, provision for legal claims and expenses related to acquisitions, the Group’s EBIT contracted by 6.8% year-on-year in 2012. The EBIT margin stood at 12.6% in the reporting period from 16.5% in 2011.
Due to debt growth driven by acquisitions completed in 2012, interest expenses grew to Rub 1,220 mln, compared to Rub 486 mln, and comprised 3.6% of revenue versus 1.8% in the previous year. As a result, the Group’s profit for the year declined by 31.8% year-on-year and amounted to RUB 2,301 million in 2012 versus 3,377 million in 2011. Lower operating profit compared to the last year and higher interest expenses were among the key factors contributing to the full year profit performance.
Industrial Pumps Business Unit
The industrial pumps business unit designs, engineers, manufactures and supplies a diverse range of pumps and integrated solutions to customers in the oil and gas, power generation and water utility sectors in Russia, the CIS and internationally. The business unit’s principal products include ready-made pumps built to standard specifications, customized pumps and integrated solutions. It also provides aftermarket sales, maintenance and repair services and other support for its products.
The industrial pumps business unit demonstrated 9.1% year-on-year external revenue growth in the reporting period, generating RUB 17,066 million. This revenue growth largely stemmed from an ongoing flow of small and medium orders and a number of large-scale projects with major customers mainly in oil transportation, oil refineries and upstream segments.
Generally, total sales of pumps to the oil industry was flat in 2012 with 32% year-on-year growth in oil upstream pumps and 16% growth in pumps for oil refineries on the back of 5% year-on-year contraction of revenue from the oil transportation industry. Despite a high-base effect in oil transportation pumps in 2011, caused by participation in the ESPO project, the Group successfully managed to replace the revenue from the project over 2012, which led to just 5% contraction.
Sales of pumps for power generation applications grew by 43% year-on-year. The growth was driven by modernization and construction of nuclear power plants in Russia. Sales of pumps for nuclear applications surged by 180% driven by the contracts signed in 2010-2011 with a long-term cycle of nuclear pumps production. At the same time, sales of pumps for thermal power generation also grew by 16% year-on-year.
Sales in the water utilities segment declined by 18% year-on-year, mainly due to revenue contraction both in submersible water-well pumps and pumps for water treatment systems. Sales of household pumps continued to decline on the back of high competition and the purchasing power of end consumers.
The industrial pumps business unit’s adjusted EBITDA declined by 2.7% year-on-year to RUB 4,278 million in 2012, compared to RUB 4,399 million in 2011, due to changes in the project mix and lower revenue share of high-margin contracts. The adjusted EBITDA margin stood at 25.1% in 2012 versus 28.1% in 2011.
Oil and Gas Equipment Business Unit
The oil and gas equipment business unit manufactures and installs modular pumping stations, automated metering equipment, oil, gas and water processing and preparation units and other equipment and systems for use primarily in oil extraction and transportation, as well as for the water utility sector. The unit’s products are equipment packages and systems installed inside a self-contained, free-standing structure which can be transported on trailers and delivered to and installed on a customer’s site as a modular but fully integrated part of the customer’s operations.
External revenues for the segment were up 32.7% year-on-year and totaled RUB 7,828 in 2012, compared to RUB 5,900 in 2011. The increase was primarily driven by the large-scale project on the Vankor oilfield under which the Group equipped oilfield facilities over the second stage of the project development, and consolidation of oil and gas equipment producer acquired in 2011.
Sales of water injection pumping stations and other large technological units increased by 8.3% as a result of increased sales to large-scale projects, including the Rosneft’s Vankor oilfield. Sales of automated group metering units (AGMU) and other modular equipment for gas transportation surged by 88%, mainly due to government regulations effected last year requiring oil companies to install metering devices to measure volumes of gas flared.
The unit’s adjusted EBITDA doubled year-on-year to RUB 1,397 million in 2012, compared to RUB 697 million in 2011. The adjusted EBITDA margin was 17.8% in the reporting period, up from 11.8% in 2011.
Compressors Business Segment
The compressors business segment designs, engineers, manufactures and supplies a diverse range of compressors and compressor-based solutions, including compressor units and compressor stations, to customers in the oil and gas, metals and mining and other basic industries in Russia. The business segment’s principal products include customized compressors, series-produced compressors built to standard specifications, and compressor-based integrated solutions.
In July 2012, HMS acquired Kazankompressormash (KKM), one of the leading compressor producers in Russia, which was consolidated into the IFRS reporting of the Group starting from July 01, 2012. Previously, KKM didn’t apply IFRS accounting principles for its financial reporting which makes it therefore impossible to provide a year-on-year comparison for the key financial indicators.
HMS applied IFRS accounting principles for KKM reporting starting from the third quarter of 2012 and reports the results under the Compressors business segment.
In the second half of 2012, revenue of the business segment was RUB 1,426 million and EBITDA was RUB 85.6 million. As a result, EBITDA margin stood at 6%.
Engineering, Procurement and Construction (EPC) Business Unit
The engineering, procurement and construction (EPC) business unit provides design and engineering services, project management and construction works for projects, including on a turn-key basis, for customers in the upstream oil and gas, oil transportation and water utility sectors.
The EPC’s external revenues grew by 23.4% year-on-year to RUB 7,336 million in 2012, compared to RUB 5,946 million in 2011, mainly driven by contracts for oilfields infrastructure construction.
EBITDA in the EPC business segment contracted by 15.6% year-on-year to RUB 475 million in 2012 with EBITDA margin of 6.5% versus 9.5% in the corresponding period of the previous year. The segment’s margin contraction resulted from the challenges that appeared during implementation of one of the two EPC contracts at Srednebotuobinskoye oilfield. Due to insufficient quality of design documentation under one of the contracts, resulting in a number of uncertainties, the project required additional investment. Over the course of the negotiations with the customer, HMS continued to incur expenses related to the project implementation that damaged the expected profitability of the project. However, HMS didn’t break off relations with the customer and has continued to work successfully under the second contract in line with the budgeted performance.
Lower than expected margin in the project and design area has also contributed to the segment’s performance since the Group continued to execute several innovative projects as well as temporarily applying an aggressive pricing policy to penetrate promising new market segments. However, the average margin for these projects is expected to be recovered as a result of synergies between the different business segments, as the Group intends to participate in the later stages of these projects.
FINANCIAL REVIEW
Cashflow generated from operations before changes in working capital increased to RUB 5,725 million, compared to RUB 5,186 million. Despite material growth of interest expenses, net operating cashflow was positive and amounted to RUB 3,184 million versus net cash outflow from operating activities of RUB (1,595) million in 2011.
Net cash used for investing activities totaled RUB 8,303 in 2012, compared to 2,193 million in 2011. The Group spent RUB 1,623 million in 2012 for capital expenditures, compared to RUB 1,194 million in 2011. Payments for acquisitions of KKM and Apollo Goessnitz, completed in 2012 and final payment for DGHM, acquired in 2011, net of cash acquired, totaled RUB 6,690 million.
Dividend payment for the FY 2011 results, effected in the second quarter of 2012, amounted to RUB 1,500 million. Subject to reviewing its capital position against its current and expected future capital requirements, the Group intends to pay dividends in the future with a payout ratio not less than 25% of profit for the year.
Thus, the Group’s free cash flow (before acquisitions of subsidiaries, net of cash acquired) amounted to RUB 1,561 million.
Total debt grew by 109% year-on-year to RUB 13,410 million in the reporting period, compared to RUB 6,408 million in 2011, mainly driven by M&A activities of the Group. Apart from the acquisitions, the debt expansion was used for working capital needs under the execution of current projects. By the end of the year, 84% of total debt was represented by long-term credit facilities with maturity of more than 1 year.
The net debt to EBITDA (taken for the last 12 months) ratio amounted to 1.94, much lower than banks’ and internal covenants. As a result, the Group created room for possible additional fund raising for business development and expansion. The Group’s cash balances stood at RUB 1,346 million by the end of 2012, compared to RUB 1,598 million by the end of the last year. The ability of the Group to meet its debt obligation remained comfortable with the interest coverage ratio of 3.5.
As of 31.12.2012, the Group’s net working capital was within the targeted range of 20-25% and amounted to 20.2% of total revenue taken for the last 12 months, compared to 21.9% in 2011.
During 2012, the Company acquired 224,385 GDRs (2011: no GDRs) from the market for a cost of RR 31,507 thousand (31 December 2011: nil) representing 0.21% of its issued share capital (2011: nil). The voting and dividend rights of these GDRs are suspended.
M&A Activity
In the third quarter of 2012 the Group successfully completed two acquisitions. In July 2012, HMS acquired 74.35% of a share capital of Kazankompressormash, a leading compressor producer in Russia, for RUB 5,525 million funded from available debt facilities of the Group. Later in August 2012, HMS completed the acquisition of 75% of a share capital of Apollo Goessnitz, a German manufacturer of specialized pumps for power, oil refineries and offshore application, for EUR 25 million.
Significant events after the reporting date
In February 2013, the Group issued RR 3.0 billion of bonds. The maturity of the bonds is 5 years with a 3-year put option and semi-annual coupon periods. Coupon rate of 10.10% is set for the first six coupon periods. Subsequent coupon rates are to be determined in February 2015. The raised funds have been utilised to refinance existing credit facilities and for working capital financing.
In January – March 2013, 485,500 GDRs of the Company representing 0.41% of its issued share capital were bought back by the wholly-owned subsidiary of the Group for a total consideration of RR 54,457. During April 2013, the subsidiary continued to acquire GDRs from the market.
Conference call information
HMS Group’s management will host a conference call today at 9 am (New York) / 2 pm (London time) / 3 pm (CEST) / 5 pm (Moscow Time) to present and discuss the full year results.
| UK Local : | 44 (0) 20 7190 15 96 | |
| UK Toll Free: | 0800 358 52 71 | |
| Russia Local: | 7 (495) 580 95 32 | |
| US Local: | 1 480 629 98 22 | |
| US Toll Free: | 1 877 941 60 13 |
Title: HMS Group FY 2012 IFRS Results
Conference ID: 4614021
Webcast link:
http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=1970
Please, join in 5-10 minutes prior to the scheduled start time.
| Russia Toll Free: | 8 800 500 9312 | |
| US Local: | 1 646 254 3362 | |
| US Toll Free: | 1 877 249 9037 |
Confirmation Code: 4330827
The management’s slide presentation will be posted at HMS Group’s website in the Management Presentations section today.
| HMS Hydraulic Machines & Systems Group plc Consolidated Statement of Financial Position at 31 December 2012 (in thousands of Russian Roubles, unless otherwise stated) |
|
| Note | 31 December 2012 | 31 December 2011 | ||||
| ASSETS | |||||||
| Non-current assets: | |||||||
| Property, plant and equipment | 6 | 14,415,505 | 8,225,805 | ||||
| Other intangible assets | 7 | 685,866 | 497,871 | ||||
| Goodwill | 8 | 5,335,785 | 2,359,726 | ||||
| Investments in associates | 10 | 124,963 | 129,805 | ||||
| Deferred income tax assets | 26 | 252,772 | 207,383 | ||||
| Other long-term receivables | 14 | 155,234 | 62,873 | ||||
| Total non-current assets | 20,970,125 | 11,483,463 | |||||
| Current assets: | |||||||
| Inventories | 12 | 6,858,605 | 4,677,514 | ||||
| Trade and other receivables and other financial assets | 13 | 10,313,235 | 10,147,963 | ||||
| Current income tax receivable | 126,782 | 33,556 | |||||
| Cash and cash equivalents | 11 | 1,346,082 | 1,598,463 | ||||
| Restricted cash | 11 | 56,385 | 25,313 | ||||
| 18,701,089 | 16,482,809 | ||||||
| Non-current assets held for sale | 15 | 47,850 | 49,402 | ||||
| Total current assets | 18,748,939 | 16,532,211 | |||||
| TOTAL ASSETS | 39,719,064 | 28,015,674 | |||||
| EQUITY AND LIABILITIES EQUITY | |||||||
| Share capital | 24 | 48,329 | 48,329 | ||||
| Share premium | 24 | 3,523,535 | 3,523,535 | ||||
| Treasury shares | 24 | (31,507) | - | ||||
| Other reserves | (191,463) | 122,852 | |||||
| Currency translation reserve | (347,264) | (228,760) | |||||
| Retained earnings | 6,704,590 | 6,116,729 | |||||
| Equity attributable to the shareholders of the Company | 9,706,220 | 9,582,685 | |||||
| Non-controlling interest | 3,826,729 | 2,477,177 | |||||
| TOTAL EQUITY | 13,532,949 | 12,059,862 | |||||
| LIABILITIES | |||||||
| Non-current liabilities: | |||||||
| Long-term borrowings | 16 | 11,219,833 | 4,433,984 | ||||
| Finance lease liability | 17 | 10,072 | - | ||||
| Deferred income tax liability | 26 | 1,866,684 | 1,091,372 | ||||
| Pension liability | 18 | 447,484 | 334,267 | ||||
| Provisions for liabilities and charges | 23 | 46,663 | 31,352 | ||||
| Other long-term payables | 22 | 325,835 | 20,971 | ||||
| Total non-current liabilities | 13,916,571 | 5,911,946 | |||||
| Current liabilities: | |||||||
| Trade and other payables | 20 | 8,795,207 | 6,937,737 | ||||
| Short-term borrowings | 16 | 2,190,520 | 1,973,886 | ||||
| Provisions for liabilities and charges | 23 | 299,407 | 161,524 | ||||
| Finance lease liability | 17 | 7,568 | 9 | ||||
| Pension liability | 18 | 51,385 | 32,333 | ||||
| Current income tax payable | 26,349 | 293,640 | |||||
| Other taxes payable | 21 | 899,108 | 644,737 | ||||
| Total current liabilities | 12,269,544 | 10,043,866 | |||||
| TOTAL LIABILITIES | 26,186,115 | 15,955,812 | |||||
| TOTAL EQUITY AND LIABILITIES | 39,719,064 | 28,015,674 |
| HMS Hydraulic Machines & Systems Group plc Consolidated Statement of Comprehensive Income for the year ended 31 December 2012 (in thousands of Russian Roubles, unless otherwise stated) |
| Note |
2012 |
2011 | |||||
| Revenue | 27 | 33,655,644 | 27,495,553 | ||||
| Cost of sales | 28 | (23,645,228) | (19,131,496) | ||||
| Gross profit | 10,010,416 | 8,364,057 | |||||
| Distribution and transportation expenses | 29 | (1,240,649) | (1,070,407) | ||||
| General and administrative expenses | 30 | (3,976,804) | (2,524,655) | ||||
| Other operating expenses, net | 31 | (555,872) | (297,843) | ||||
| Excess of fair value of net assets acquired over the cost of acquisition | 9 | - | 21,304 | ||||
| Gain on revaluation of investment in associate upon acquisition of controlling share | 9, 10 | - | 54,948 | ||||
| Operating profit | 4,237,091 | 4,547,404 | |||||
| Finance income | 32 | 83,263 | 120,131 | ||||
| Finance costs | 33 | (1,246,382) | (493,909) | ||||
| Share of results of associates | 10 | 443 | 93,341 | ||||
| Profit before income tax | 3,074,415 | 4,266,967 | |||||
| Income tax expense | 26 | (772,920) | (890,434) | ||||
| Profit for the year | 2,301,495 | 3,376,533 | |||||
| Profit attributable to: | |||||||
| Shareholders of the Company | 2,094,951 | 3,224,719 | |||||
| Non-controlling interest | 206,544 | 151,814 | |||||
| Profit for the year | 2,301,495 | 3,376,533 | |||||
| Currency translation differences | (129,227) | (25,251) | |||||
| Currency translation differences of associates | 10 | (5,285) | 5,092 | ||||
| Other comprehensive loss for the year | (134,512) | (20,159) | |||||
| Total comprehensive income for the year | 2,166,983 | 3,356,374 | |||||
| Total comprehensive income attributable to: | |||||||
| Shareholders of the Company | 1,976,447 | 3,230,744 | |||||
| Non-controlling interest | 190,536 | 125,630 | |||||
| Total comprehensive income for the year | 2,166,983 | 3,356,374 | |||||
| Basic and diluted earnings per ordinary share for profit attributable tothe ordinary shareholders (RR per share) | 24 | 17.89 | 27.88 |
| HMS Hydraulic Machines & Systems Group plc Consolidated Statement of Cash Flows for the year ended 31 December 2012 (in thousands of Russian Roubles, unless otherwise stated) |
| Note | 2012 | 2011 | |||||
| Cash flows from operating activities | |||||||
| Profit before income tax | 3,074,415 | 4,266,967 | |||||
| Adjustments for: | |||||||
| Depreciation and amortisation | 6, 7 | 1,026,295 | 614,398 | ||||
| Loss from disposal of property, plant and equipment and intangible assets | 31 | 29,182 | 8,432 | ||||
| Finance income | 32 | (83,263) | (120,131) | ||||
| Finance costs | 33 | 1,246,382 | 493,909 | ||||
| Pension expenses | 18 | 106,549 | 27,555 | ||||
| Warranty provision | 28 | 13,617 | 31,855 | ||||
| Write-off of receivables | 12,073 | 2,236 | |||||
| Provision for impairment of accounts receivable | 30 | 65,620 | (23,012) | ||||
| Impairment of taxes receivable | 31 | 11,741 | - | ||||
| Provision for obsolete inventories | 28 | 111,093 | 28,354 | ||||
| Provision for VAT receivable | 30 | 3,178 | (9,185) | ||||
| Provisions for legal claims | 31 | 112,262 | (21,852) | ||||
| Excess of fair value of net assets acquired over the cost of acquisition | 9 | - | (21,304) | ||||
| Foreign exchange (income)/loss, net | 31 | (11,303) | 45,291 | ||||
| Gain on revaluation of investment in associate upon acquisition of controlling share | 9, 10 | - | (54,948) | ||||
| Net monetary effect on non-operating items | 10,777 | 10,371 | |||||
| Provision for tax risks | 30 | (2,882) | - | ||||
| Share of results of associates | 10 | (443) | (93,341) | ||||
| Operating cash flows before working capital changes | 5,725,293 | 5,185,595 | |||||
| Increase in inventories | (1,538,658) | (1,330,185) | |||||
| Decrease in trade and other receivables | 204,064 | 1,007,012 | |||||
| Increase/(decrease) in taxes payable | 208,211 | (518,016) | |||||
| Increase/(decrease) in accounts payable and accrued liabilities | 983,644 | (4,772,053) | |||||
| Restricted cash | (31,072) | (20,335) | |||||
| Cash from/(used in) operations | 5,551,482 | (447,982) | |||||
| Income tax paid | (1,296,273) | (653,314) | |||||
| Interest paid | (1,071,294) | (493,899) | |||||
| Net cash from/(used in) operating activities | 3,183,915 | (1,595,195) | |||||
| Cash flows from investing activities | |||||||
| Repayment of loans advanced | 27,866 | 4,174 | |||||
| Loans advanced | (32,784) | (3,317) | |||||
| Proceeds from sale of property, plant and equipment and intangible assets | 13,248 | 14,473 | |||||
| Interest received | 17 | 20,124 | |||||
| Dividends received | 976 | 14,670 | |||||
| Purchase of property, plant and equipment | (1,548,160) | (1,139,198) | |||||
| Acquisition of intangible assets | (74,616) | (55,080) | |||||
| Acquisitions of subsidiaries, net of cash acquired | 9, 10 | (6,689,967) | (1,049,184) | ||||
| Net cash used in investing activities | (8,303,420) | (2,193,338) | |||||
| Cash flows from financing activities | |||||||
| Repayments of borrowings | (15,750,153) | (10,905,256) | |||||
| Proceeds from borrowings | 22,200,957 | 12,616,367 | |||||
| Payment for finance lease | (2,960) | (8,457) | |||||
| Acquisition of non-controlling interest in subsidiaries | 9 | (445) | - | ||||
| Proceeds from share issue | - | 3,517,161 | |||||
| Expenses related to share issue | - | (153,636) | |||||
| Buy back of issued shares | 24 | (31,507) | - | ||||
| Dividends paid to the shareholders of the Company | 24 | (1,499,692) | - | ||||
| Dividends paid to non-controlling shareholders of subsidiaries | (51,856) | (16,513) | |||||
| Net cash from financing activities | 4,864,344 | 5,049,666 | |||||
| Net (decrease)/increase in cash and cash equivalents | (255,161) | 1,261,133 | |||||
| Inflation effect on cash | (277) | (10,770) | |||||
| Effect of exchange rate changes on cash and cash equivalents and effect of translation to presentation currency | 3,057 | (2,986) | |||||
| Cash and cash equivalents at the beginning of the year | 1,598,463 | 351,086 | |||||
| Cash and cash equivalents at the end of the year | 1,346,082 | 1,598,463 |
Equity attributable to the shareholders of the Company
| Note | Share capital | Share premium |
Treasury shares | Other reserves | Cumulative currency translation reserve | Retained earnings | Total | Non- controllinginterest | Totalequity | |||||||||||||||||
| Balance at 1 January 2011 | 42,510 | 210,862 | - | 38,987 | (234,785) | 2,892,010 | 2,949,584 | 1,503,075 | 4,452,659 | |||||||||||||||||
| Profit for the year | - | - | - | - | - | 3,224,719 | 3,224,719 | 151,814 | - | |||||||||||||||||
| Other comprehensive income/(loss) | ||||||||||||||||||||||||||
| Change in cumulative currency translation reserve | - | - | - | - | 933 | - | 933 | (26,184) | (25,251) | |||||||||||||||||
| Share of comprehensive income from associates | - | - | - | - | 5,092 | - | 5,092 | - | 5,092 | |||||||||||||||||
| Total comprehensive income for the year | - | - | - | - | 6,025 | 3,224,719 | 3,230,744 | 125,630 | 3,356,374 | |||||||||||||||||
| Share issue | 24 | 5,819 | 3,524,358 | - | - | - | - | 3,530,177 | - | 3,530,177 | ||||||||||||||||
| Expenses related to share issue, incurred subsequent to 31 December 2010 | 24 | - | (127,820) | - | - | - | - | (127,820) | - | (127,820) | ||||||||||||||||
| Reclassification of expenses related to share issue, incurred prior to 31 December 2010, upon completion of IPO | 24 | - | (83,865) |
- | 83,865 | - | - | - | - | - | ||||||||||||||||
| Dividends declared by the Group’s subsidiaries | - | - | - | - | - | - | - | (16,513) | (16,513) | |||||||||||||||||
| Total contributions by and distributions to owners of the Company | 5,819 | 3,312,673 | - | 83,865 | - | - | 3,402,357 | (16,513) | 3,385,844 | |||||||||||||||||
| Business combinations | 9 | - | - | - | - | - | - | - | 864,985 | 864,985 | ||||||||||||||||
| Total transactions with owners of the Company, recognised directly in equity | 5,819 | 3,312,673 | - | 83,865 | - | - | 3,402,357 | 848,472 | 4,250,829 | |||||||||||||||||
| Balance at 31 December 2011 | 48,329 | 3,523,535 | - | 122,852 | (228,760) | 6,116,729 | 9,582,685 | 2,477,177 | 12,059,862 | |||||||||||||||||
| Effect of hyperinflation on opening retained earnings | - | - | - | - | - | (7,438) | (7,438) | (7,517) | (14,955) | |||||||||||||||||
| Balance at 1 January 2012 | 48,329 | 3,523,535 | - | 122,852 | (228,760) | 6,109,291 | 9,575,247 | 2,469,660 | 12,044,907 | |||||||||||||||||
| Profit for the year | - | - | - | - | - | 2,094,951 | 2,094,951 | 206,544 | 2,301,495 | |||||||||||||||||
| Other comprehensive loss | ||||||||||||||||||||||||||
| Change in cumulative currency translation reserve | - | - | - | - | (113,219) | - | (113,219) | (16,008) | (129,227) | |||||||||||||||||
| Share of comprehensive loss from associates | - | - | - | - | (5,285) | - | (5,285) | - | (5,285) | |||||||||||||||||
| Total comprehensive income/(loss) for the year | - | - | - | - | (118,504) | 2,094,951 | 1,976,447 | 190,536 | 2,166,983 | |||||||||||||||||
| Buy back of issued shares | 24 | - | - | (31,507) | - | - | - | (31,507) | - | (31,507) | ||||||||||||||||
| Dividends declared by the Group’s subsidiaries | - | - | - | - | - | - | - | (51,856) | (51,856) | |||||||||||||||||
| Dividends declared to the shareholders of the Company | 24 | - | - | - | - | - | (1,499,692) | (1,499,692) | - | (1,499,692) | ||||||||||||||||
| Total distributions to owners of the Company | - | - | (31,507) | - | - | (1,499,692) | (1,531,199) | (51,856) | (1,583,055) | |||||||||||||||||
| Business combinations | 9 | |||||||||||||||||||||||||
| Recognition of redemption liability, related to acquisition of share in subsidiary | 9 | - | - | - | - | - | - | - | 1,218,874 | 1,218,874 | ||||||||||||||||
| Acquisition of non-controlling interest in subsidiaries | 9 | - | - | - | (314,315) | - | - | (314,315) | - | (314,315) | ||||||||||||||||
| Total transactions with owners of the Company, recognised directly in equity | - | - | - | - | - | 40 | 40 | (485) | (445) | |||||||||||||||||
| Balance at 31 December 2012 | - | - | (31,507) | (314,315) | - | (1,499,652) | (1,845,474) | 1,166,533 | (678,941) | |||||||||||||||||
1 EBITDA is defined as operating profit/loss adjusted for other income/expenses, depreciation and amortization, impairment of assets, provision for obsolete inventory, provision for impairment of accounts receivable, unused vacation allowance, defined benefits scheme expense, warranty provision, provision for legal claims, provision for VAT and other taxes receivable, other provisions, excess of fair value of net assets acquired over the cost of acquisition. This measurement basis excludes the effects of non-recurring income and expenses on the results of the operating segments.
2 - ROCE is calculated as EBIT (last twelve months) divided by average total debt plus average equity.
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