UTRECHT, The Netherlands, August 19, 2014 /PRNewswire/ --
Performance first half year confirms recovery
Summary HY 2014
- Healthy order book at €1,280 million (HY 2013: €1,130 million). Major long term maintenance contracts and plant modification projects in the global Oil & Gas sector awarded.
- Revenue increase of 2.2% to €685m (HY 2013: €670 million). Organic growth being 4%.
- Strong revenue growth particularly in the Oil & Gas sector in the Benelux, Colombia and Australia.
- Improved EBITDA of €34.8 million (HY 2013: €27.4 million on a comparable basis).
- Non-recurring items limited to €3.3 million relating to the implementation of the indirect cost-restructuring programme (HY 2013: €18.4 million, which included €7.3 million of project losses).
- Operating result showed solid recovery of € 23.9 million to €11.1 million (HY 2013: negative €12.8 million).
- Working capital and capex control limited the seasonal cash outflow.
- Net debt increased €28 million YoY to €330 million (HY 2013: €302 million).
Arnold Steenbakker, CEO Stork, comments:
"Our performance in the first half year of 2014 was solid and confirms the upward development that started in the second half of last year. Organic revenue growth was driven by a strong performance in Colombia, the Benelux, and Australia, where our customers in the Oil & Gas sector continue to invest in new and existing production assets. In the Industrial Services division, where it is our core business to provide asset integrity management services in each phase of the lifecycle, we have been awarded a number of key long term maintenance contracts and plant modification projects. The prospects for the remainder of the year are promising. Despite challenging market conditions, the performance of our Power Services division is stabilising. Revenue decline is bottoming out, resulting in solid EBITDA recovery.
We have seen the first results of the improvement initiatives that were initiated last year. Targeted cost savings are ahead of plan. Our project management and risk control processes have been strengthened. A companywide sales improvement program has been launched in the Benelux and Colombia with other regions to follow."
Revenue increased by 2.2% to €685.0 million. The share of revenue in the Oil & Gas sector increased to 65% (FY 2013: 62%). Organic growth (revenue growth excluding the effect of movement in foreign currency rates, investments and divestments) was 4.0%; foreign exchange had a negative effect on revenues of 1.8%. Divestment of the Subsea activities impacted revenue by €14.6 million.
Total EBITDA increased by €7.4 million, 27%, to €34.8 million (HY 2013: €27.4 million) driven by volume growth in Continental Europe, Colombia and Australia, well controlled overhead costs and benefits of restructuring programs initiated in 2013. In the division Industrial Services, EBITDA increased 6.7% to €39.7 million. Margin improved with 30bps to 6.6%. Power Services' margin recovery continued from a very low 2.9% in FY 2013 and 4.0% in Q1 2014 to 8.4% in Q2 2014.
Cash flow from operations of (€23.9) million in the first half of this year (HY 2013: €1.3 million) was influenced by good debtor collections and increased creditor days at year end 2013. The underlying working capital outflow was in line with last year. Net operating working capital as percentage of revenue was 5.5%, compared to 4.8% last year. Debtor days decreased from 51 to 44 days due to collection of overdue debtors and strict debtors control procedures. Creditors reduced €16 million to €97 million (HY 2013: €113 million) partly due to strong growth in regions with creditor terms below group average. Timing of projects and tight control of capital expenditures reduced net cash used in investing activities to €9.2 million in the first half year compared to €12.3 million in 2013.
Net debt and liquidity
Net debt increased from €280 million in December 2013 to €330 million in June 2014 (HY 2013: €302 million). The company operated well within the bank covenants. The debt cover ratio (net debt/last twelve months EBITDA) of 4.3x was below the threshold of 6.0x. Available credit facilities and cash at hand provide sufficient liquidity going forward. Available liquidity is €99 million of which €30 million is related to stand alone facilities for our operations in Colombia.
For comparison reasons all 2013 figures are restated for the Subsea disposal. This release therefore includes figures from continuing operations only. Revenue growth excluding the effect of movement in foreign currency rates and investments and divestments. All references to EBITDA reflect operational result before depreciation, amortisation and non-recurring items. For more the full consolidated financial statements information, please visit http://www.stork.com/investors on August 19th from 12.00 CET onwards.
Stork is a global provider of knowledge-based asset integrity management services focusing Oil & Gas, Chemical and Power sectors. From concept through to execution - Stork aims to reduce risk, assure safety and improve asset performance for our customers to enhance their profits.
With more than 185 years of experience and 13,500 employees worldwide (UK & Africa, North and South America, Continental Europe, Caspian, Middle East, Asia-Pacific), Stork provides innovative solutions and integrated thinking and doing in the areas of asset integrity, consultancy, maintenance concepts, inspections, repair, renovations, modifications, relocations and other related complex projects.
This press release has been prepared by Stork solely for informational purposes. Stork has included non-IFRS financial measures in this press release. These measurements may not be comparable to those of other companies. Reference to these non-IFRS financial measures should be considered in addition to IFRS financial measures, but should not be considered a substitute for results that are presented in accordance with IFRS. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and outside of the control of the management of Stork. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.
For more information, please visit http://www.stork.com.