AMAG AUSTRIA METALL AG FINANCIAL REPORT | 1 |
H1/2020
AMAG AUSTRIA METALL AG
KEY FIGURES FOR THE AMAG GROUP
FINANCIAL REPORT | 2 |
H1/2020
KEY FIGURES FOR THE GROUP IN EUR MILLION | Q2/2020 | Q2/2019 | Change in % | H1/2020 | H1/2019 | Change in % | |||||||||||
Shipments total in tons | 103,600 | 114,500 | -9.5 % | 203,200 | 226,000 | -10.1 % | |||||||||||
External shipments in tons | 94,500 | 105,200 | -10.2 % | 188,100 | 208,200 | -9.7 % | |||||||||||
Revenue Group | 217.5 | 280.1 | -22.4 % | 463.8 | 554.6 | -16.4 % | |||||||||||
EBITDA | 22.9 | 38.9 | -41.2 % | 59.3 | 72.0 | -17.5 % | |||||||||||
EBITDA margin | 10.5 % | 13.9 % | 12.8 % | 13.0 % | |||||||||||||
Operating result (EBIT) | 2.1 | 18.5 | -88.5 % | 17.6 | 31.3 | -43.7 % | |||||||||||
EBIT margin | 1.0 % | 6.6 % | 3.8 % | 5.6 % | |||||||||||||
Earnings before taxes (EBT) | 0.2 | 15.7 | -98.9 % | 14.8 | 26.0 | -43.1 % | |||||||||||
Net income after taxes | 0.9 | 11.3 | -91.6 % | 12.4 | 18.9 | -34.3 % | |||||||||||
Cash flow from operating activities | 55.7 | 56.4 | -1.2 % | 70.6 | 63.7 | 10.8 % | |||||||||||
Cash flow from investing activities | -9.8 | -17.1 | 42.9 % | -24.8 | -39.0 | 36.5 % | |||||||||||
Employees 1) | 1,967 | 1,991 | -1.2 % | 1,980 | 1,983 | -0.2 % | |||||||||||
1) Average number of employees (full-time equivalents), including temporary help workers and excluding apprentices. The figure includes a 20 % pro rata share of the labour force at the Alouette smelter, in line with the equity interest.
BALANCE KEY FIGURES FOR THE GROUP IN EUR MILLION
Total assets
Equity
Equity ratio
Working capital employed
Net financial debt
Gearing
June 30, 2020 | December 31, 2019 | Change in % | |||||
1,641.5 | 1,501.7 | 9.3 % | |||||
641.9 | 619.3 | 3.6 % | |||||
39.1 % | 41.2 % | ||||||
311.1 | 309.0 | 0.7 % | |||||
248.4 | 292.9 | -15.2 % | |||||
38.7 % | 47.3 % | ||||||
The totalling of rounded amounts and percentages can create rounding differences.
AMAG AUSTRIA METALL AG
HIGHLIGHTS AND CONTENTS
HIGHLIGHTS OF H1/2020
- COVID-19has a significant impact on customer demand, especially in the aircraft, automotive and distribution sectors
- Revenue of EUR 463.8 million down 16 % year-on-year due to vol- ume and price factors
- Fixed and structural costs largely adjusted to lower capacity utilisa- tion due to COVID-19
- EBITDA of EUR 59.3 million compared with previous year's EUR 72.0 million
- Net income after taxes positive in both H1 and Q2 despite COVID influence
- Operating cash flow up year-on-year to EUR 70.6 million (H1/2019: EUR 63.7 million)
- Outlook for 2020: After a solid H1 and based on the AMAG Group's current order book position, an EBITDA range of EUR 80 million to EUR 100 million in FY 2020 is considered probable according to current estimates.
FINANCIAL REPORT | 3 |
H1/2020
CONTENTS
Key figures for the AMAG Group | 2 |
Highlights and contents | 3 |
Interim Group operating and financial review | 4 |
Interim consolidated financial statements according to IAS 34 | 21 |
Notes to the consolidated interim financial statements | 27 |
The AMAG share | 39 |
AMAG AUSTRIA METALL AG
INTERIM GROUP OPERATING AND FINANCIAL REVIEW
ECONOMIC ENVIRONMENT
ECONOMIC TRENDS
Global economic growth in the first half of 2020 was significantly influenced by the COVID-19 pan- demic. The rapid spread of the virus and the measures government have taken to contain it had a considerable bearing on economic activity across all sectors. Key economic and confidence indicators collapsed very rapidly.1 Compared to 2019, purchasing manager indices for the manufacturing sector declined in all of AMAG's major sales markets.2
COVID-19 is also the central influencing variable in the assessment published by the International Monetary Fund (IMF) in June 2020. The IMF3 expects a pandemic-related global economic slump of -4.9 % in 2020 as a whole. This setback exceeds the negative GDP impact of the 2008/2009 financial crisis. The main reason for this sharp decrease is the trend of the pandemic, which exerted a massive impact on economic growth in the first half of the year through worldwide "lockdowns". The second half of 2020 is characterised by global uncertainty about the further course of the pandemic and associated low visibility. In this respect, the International Monetary Fund explicitly points to the particularly high uncertainty pertaining to its economic forecast - among other factors, the IMF in its scenario assumes that social distancing, hygiene measures, and the securing of adequate health care systems and so on, will continue to be pursued.
The revival of economic activity is expected to vary widely around the world in some cases. Accord- ingly, the economic growth forecast for 2020 must be considered on a country-specific basis:
For the Eurozone, the IMF forecasts a -10.2 % decrease in 2020, compared with an increase of
1.3 % in the previous year. While a decrease in economic output of -7.8 % is forecast for Germany, Italy (-12.8 %), Spain (-12.8 %) and France (-12.5 %) will be hit hardest due to COVID-19. In Aus- tria, too, the COVID-19 pandemic and associated measures to contain the spread of the virus have led to significant supply restrictions and a slump in demand. According to the European Commis- sion's4 forecast, an economic downturn of -7.1 % is also likely to occur in Austria in 2020 as a whole.
FINANCIAL REPORT | 4 |
H1/2020
The Austrian Institute of Economic Research (Wifo)5 arrives at a similar assessment; it assumes a decrease in GDP of -7.0 % for 2020 due to the measures taken to contain the COVID-19 pandemic.
For the USA, the IMF forecasts a decrease of -8.0 %, compared with growth of 2.3 % in the previous year.
According to current IMF estimates, emerging and developing economies are least affected by the COVID-19 pandemic, with a decline of -3.0 %. GDP in these economies expanded by 3.7 % in the previous year. Growth in economic output is expected only for China, at +1.0 % compared with +6.1 % in the previous year.
1 | See WIFO June 2020 economic forecast | 4 | See European Commission, News - EU Economic Forecast, June 2020 |
2 | See Bloomberg | 5 | See WIFO Economic Forecast, June 2020 |
- See IMF, World Economic Outlook, June 2020
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 5 |
H1/2020
DEMAND FOR ALUMINIUM PRODUCTS
The Metal Division is active worldwide, as a consequence of which global primary aluminium demand trends represent a significant indicator for AMAG. Around 70 % of revenues in the Rolling Division are generated within Europe. The remaining volumes of rolled products are delivered to AMAG customers worldwide, with global demand trends for aluminium rolled products also being of great sig- nificance.
Global demand for primary aluminium in millions of tonnes6
2018 65.2
2019 64.2
2020e 58.5
0 | 20 | 40 | 60 |
Global demand for aluminium rolled products in millions of tonnes7
2018 27.6
2019 28.1
2020e 25.5
0 | 10 | 20 |
- See CRU Aluminium Aluminium Market Outlook, April 2020
-
See CRU Aluminium Rolled Products Market Outlook, May 2020
8 See CRU Aluminium Rolled Products Market Outlook, May 2020
Aluminium is a material that is utilised and processed in various sectors thanks to its numerous positive properties (weight, stability, formability etc.). The measures and restrictions relating to COVID-19 are leading to significant changes in supply and demand trends across all sectors, which is also expected to reduce demand in the aluminium sector.
Examining the situation in greater detail, the Commodity Research Unit (CRU) forecasts that global demand for aluminium rolled products will reduce to 25.5 million tonnes, approximately the same level as in 2016/2017. The main application areas for rolled products are in the transport, packaging, construction and engineering industries. The CRU expects a decrease in demand in the transport sector of 23 %, or of around -1 million tonnes. The packaging sector has been least affected by the COVID-19 pandemic, with a reduction of -3.6 %, or of -0.5 million tonnes. The construction sector is expected to contract by -9 % (-0.3 million tonnes) and the engineering industry by -12 % (-0.3 million tonnes). On average across all application areas, the forecast decrease is of around -9 %, or -2.7 million tonnes.8
In AMAG's Casting Division, the foundry alloy business features as a regional business with a focus on Western and Central Europe. In this context, the automotive industry ranks as the most important client sector, to which this division delivers more than 50 % of its shipment volumes, whether directly or indirectly. European automotive industry trends are the main drivers of the Casting Division. In turn, this sector was confronted with significant volume losses in the second quarter owing to the pandemic. A total of 35 % fewer new passenger cars were registered in Germany from January to June 2020 inclusive compared with the same period in 2019, according to the German Association of the Automotive Industry (VDA).9 In China, where COVID-19 was already present a few weeks before the rest of the world, a positive trend is already evident in the automotive sector. Compared to April 2019, May 2020 reported a 6.3 % increase in new registrations.10
New passenger car registrations in the European market reduced by around 39 % in the first half of 2020. The losses in China were somewhat less, with a decrease of 22.5 %. In relation to the trend in new registrations in June 2020, a positive deviation of 1.4 % is evident in China, reflecting a year- on-year increase in new registrations. New registrations in the USA decreased by 23 % in the first six months of 2020.11
- See VDA, press release of July 3, 2020
- See VDA, press release of June 17, 2020
- See VDA, press release of July 16, 2020
AMAG AUSTRIA METALL AG
PRICE TRENDS OF ALUMINIUM AND RAW MATERIALS
In the primary aluminium area, the AMAG Group is exposed to aluminium price fluctuations in the context of its direct 20 % interest in the Canadian smelter Aluminerie Alouette (Metal Division). In order to ensure stable net income flows from the Group's interest in the Alouette smelter, the selling price for a portion of output is hedged on the stock exchange, in some cases for several years, deploying forwards and options. For the Casting and Rolling divisions at the Ranshofen site, aluminium price fluctuations are almost fully hedged. In these two divisions, fluctuations in the aluminium price are reflected in both revenue and the cost of sales, with a largely neutral effect on profit and loss.
The price of aluminium (3-month LME) in the first half of 2020 reported a relatively wide trading range by historical standards. It traded in a range between 1,460 USD/t (April 8, 2020) and 1,827 USD/t (January 7, 2020). The average for the first half of 2020 was 1,622 USD/t, 12.3 % lower than the comparable figure for the previous year of 1,850 USD/t. At the end of the first half of the year, the price of aluminium stood at USD 1,622 per tonne (June 28, 2019: USD 1,794 per tonne).
In the case of premiums applied to the aluminium price, a price decline of just under 40 % for deliveries to the USA is evident in a year-on-year comparison. This is due to the lifting of customs duties on US imports of aluminium from Canada in May 2019 and the COVID-19-related deterioration in the economic situation. Premiums have also decreased in the European region.
Market prices for alumina, petroleum coke and pitch diminished significantly in the course of the first half of 2020. The prices for aluminium scrap, adjusted for the aluminium price component, reduced compared with the previous year.
FINANCIAL REPORT | 6 |
H1/2020
USD/CAD exchange rate in the first half of 2020 was 1.36 compared with 1.33 in the previous year. As of June 30, 2020, the rate was 1.37 (December 31, 2019: 1.30).
Aluminium price trend in USD/tonne
2,600
2,400
2,200
2,000
1,800
1,600
CURRENCY MARKET TRENDS
Aluminium is traded in US dollars on the London Metal Exchange (LME). US dollars are also the transaction currency to purchase raw materials required for primary metal production. Moreover, trends in the Canadian dollar are important due to the production site in Canada.
1,400 | |||||
Jan 2018 | Jun 2018 | Dec 2018 | Jun 2019 | Dec 2019 | Jun 2020 |
During the first half of 2020, the US dollar (USD) was somewhat stronger against the euro than in the same period of the previous year. The EUR/USD exchange rate reduced from 1.13 to 1.10 in the first half of the year. Compared to the end of 2019 (December 31, 2019: 1.12), the EUR/USD exchange rate at the end of June 2020 was almost unchanged at 1.12 (rounded to two decimal places). The Canadian dollar (CAD) was weaker against the US dollar on average over the two half years. The
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 7 |
H1/2020
BUSINESS PERFORMANCE
REVENUE AND EARNINGS TRENDS
Half-year comparison
While the AMAG Group hardly felt the effects of the COVID-19 pandemic in its results in the first quarter of 2020, the second quarter was affected by a decrease in demand, above all from the aircraft and automobile industries as well as the distribution sector. A half-year comparison shows a decrease in shipment volume from 226,000 tonnes in the previous year to 203,200 tonnes in the current half- year. With regard to AMAG's external shipments volumes, a reduction of 9.7 % to 188,100 tonnes is also evident.
This decrease in volumes and lower average aluminium price explains the reduction in revenues. AMAG's revenue in the first half of the year amounted to EUR 463.8 million (2019 equivalent period: EUR 554.6 million).
Shipments in thousands of tonnes
H1/2018 | ||||||||||
194.8 | 9.9 | 204.7 | ||||||||
H1/2019 | ||||||||||
208.2 | 17.8 | 226.0 | ||||||||
H1/2020 | 203.2 | |||||||||
188.1 | 15.1 | |||||||||
0 | 150 | |||||||||
external shipments | internal shipments | |||||||||
Group revenue by division in %
1% 7%
Service Division
20%
Casting Division | 72% | |
Metal Division | Rolling Division | |
Rolling Division |
Group revenue by division in %
5% | ||||
Western Europe (without Austria) | ||||
27% | ||||
Austria | ||||
42% | ||||
Rest of Europe | ||||
Western Europe | ||||
North America | ||||
(without Austria) |
Asia, Oceania and other
9%
17%
The cost of sales decreased from EUR 470.9 million to EUR 395.6 million, mainly due to lower shipment volumes and the lower aluminium price, as well as lower raw material costs. Selling and distribution expenses also diminished by 11.5 % to EUR 29.6 million in the first half of the year due to the decline in volumes. Administrative expenses rose from EUR 13.9 million to EUR 15.3 million, primarily due to higher IT expenses. Research and development expenses decreased slightly to EUR 7.4 million, compared with EUR 7.7 million in the previous year.
AMAG AUSTRIA METALL AG
In the first half of 2020, AMAG recorded earnings before interest, taxes, depreciation and amortisa- tion (EBITDA) of EUR 59.3 million (H1/2019: EUR 72.0 million). The decrease is mainly due to the economic slowdown caused by COVID-19, and led to a noticeable reduction in shipments and price levels. In particular, the shipments figures in the aircraft, automotive, and distribution sectors de- creased. In the Metal Division, good production at the Canadian "Alouette" subsidiary and diminishing raw material costs bolstered the earnings trend in the first half of 2020.
With regard to the supply of input materials at the Ranshofen site and in Canada, rapid and successful precautions were implemented in order to secure supply chains.
EBITDA in EUR million
H1/2018 86.2
H1/2019 72.0
H1/2020 59.3
0 | 50 |
Depreciation and amortisation of EUR 41.7 million during the first the half of 2020 was above the previous year's level (EUR 40.7 million).
Consolidated earnings before interest and taxes (EBIT) stood at EUR 17.6 million during the first half of 2020, EUR 13.7 million below the EUR 31.3 million result in the previous year's comparable period.
The net financial result in the first half of the year amounted to EUR -2.8 million, compared with EUR -5.2 million in the previous year. This divergence especially reflects valuation effects. Further- more, one-off interest income had a positive effect on the net financial result in the first half of 2020.
Earnings before taxes (EBT) in the first half of 2020 amounted to EUR 14.8 million (2019 comparable period: EUR 26.0 million). Income taxes amounted to EUR 2.4 million, compared with EUR 7.1 million in the previous year's equivalent period. Net income after income taxes in the first
FINANCIAL REPORT | 8 |
H1/2020
half of 2020 was posted at EUR 12.4 million, 34.3 % below the result of EUR 18.9 million in the comparable period of 2019.
Earnings per share during the first half of 2020 stood at EUR 0.35 (2019 comparable period: EUR 0.54 ).
Quarterly comparison
At 94,500 tonnes, external shipment volumes were 10.2 lower than in the second quarter of 2019. Production at the Canadian subsidiary was very solid. In addition, a snowstorm at the end of March led to delays in deliveries, which had a positive impact on shipment volumes in the second quarter of 2020 reflecting factors relating to the reporting date. In the Rolling and Casting divisions, the COVID-19 pandemic led to a tangible drop in shipment volumes. The AMAG Group's total shipment volume decreased from 114,500 tonnes to 103,600 tonnes.
The revenue of the AMAG Group amounted to EUR 217.5 million in the second quarter of 2019,
22.4 % below the previous year's level (Q2/2019: EUR 280.1 million). Here, too, significantly lower shipment volumes and lower aluminium prices comprised the main factors.
The cost of sales of EUR 189.0 million lay significantly below the previous year's level (Q2/2019: EUR 234.8 million). Selling and distribution expenses decreased by 17.7 % to EUR 14.8 million, primarily reflecting lower shipment volumes. Administrative expenses of EUR 7.1 million in the second quarter were below the previous year's level of EUR 7.3 million. Research and development expenses amounted to EUR 3.4 million in the second quarter of 2020, compared with EUR 3.9 million in the previous year's corresponding quarter.
At EUR 22.9 million, EBITDA was below the comparable figure for the previous year of EUR 38.9 million. The main reasons for this deviation were COVID-19-related reductions in shipment trends in the Rolling and Casting divisions as well as lower prices. Valuation effects also had a negative impact on the quarterly result.
Depreciation and amortisation of EUR 20.8 million in the second quarter of 2020 was EUR 0.3 million above the level in the comparable period of 2019.
Consolidated earnings before interest and tax (EBIT) stood at EUR 2.1 million during the second quarter of the current year, EUR 16.4 million below the EUR 18.5 million result in the previous year's comparable period.
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 9 |
H1/2020
Net income after tax stood at EUR 0.9 million, thereby 91.6 % below the result of EUR 11.3 million achieved in the previous year's second quarter. Earnings per share during the second quarter of 2020 stood at EUR 0.03 (2019 comparable period: EUR 0.32 ).
FINANCIAL POSITION AND NET DEBT
Equity
Primarily owing to higher retained earnings and valuation effects, the AMAG Group's equity stood at EUR 641.9 million at the end of June 2020, slightly above the 2019 year-end level of EUR 619.3 million. The equity ratio was stable at 39.1 % as of the current balance sheet date (December 31, 2019: 41.2 %).
EMPLOYEES
As a consequence of the COVID-19 pandemic, various measures (hygiene regulations, distribution of masks, changes to shift schedules, etc.) were implemented at an early stage at AMAG in order to protect employees. The short-time working introduced on April 1 also enables us to react flexibly to fluctuations in capacity utilisation. The number of employees remained virtually unchanged compared with the first half of the previous year. The AMAG Group employed an average of 1,980 employees (full-time equivalents) in the 1st half-year of 2020, compared with 1,983 in the equivalent period of 2019.
Cash flow
Cash flow from operating activities performed very positively, expanding by 10.8 % % in the first six months to EUR 70.6 million. Cash flow from investing activities reports a considerable decrease to EUR -24.8 million compared with EUR -39.0 million in the same period of the previous year. Free cash flow thereby increased significantly in the first half of 2020 to EUR 45.8 million (2019 comparable period: 24.7 million).
Net financial debt
The liquid assets of the AMAG Group stood at EUR 401.8 million at the end of June 2020, compared with EUR 267.3 million at the end of the previous year. This increase reflects the weaker aluminium price and consequently the positive working capital change, as well as the COVID-19-related liquidity provision in the form of drawings on KRR loans.
Net debt decreased tangibly from EUR 292.9 million at the end of 2019 to EUR 248.4 million at the end of June 2020. Gearing amounted to 38.7 % (December 31, 2019: 47.3 %).
INVESTMENTS
The AMAG Group's investments in the first six months 2020 amounted to EUR 19.5 million (2019 comparable period: EUR 35.3 million).
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 10 |
H1/2020
METAL DIVISION
ECONOMIC ENVIRONMENT
The COVID-19 pandemic and related countermeasures are also exerting a significant impact on demand for primary aluminium products. According to estimates by market research institute CRU12, demand for primary aluminium is expected to diminish by around 9 % in 2020. This corresponds to a global demand of 58.5 million tonnes for 2020. The largest buyer country is China, which accounts for more than 55 % of global demand. Demand in China is expected to decrease by 7.4 % in 2020. In the rest of the world, demand is expected to diminish even more significantly to 24.9 million tonnes compared to the previous year (2019: 28.4 million tonnes).
Contrary to the downtrend in demand, global production is not expected to suffer any major setbacks in 2020, especially thanks to stable profitability arising from lower raw material costs and additional capacities. Worldwide, growth of as much as 1.0 % compared with 2019 to around 63.8 million tonnes of primary aluminium is expected. Production would thereby lie significantly above global demand (by around 5.3 million tonnes), which would lead to an accumulation of primary aluminium stocks worldwide. For 2020, the CRU expects an increase in worldwide stocks from 10.9 million tonnes as of the end of 2019 to 16.2 million tonnes at the end of 2020. Stocks of primary aluminium in LME-registered warehouses rose from 1.5 to 1.6 million tonnes during the first half of 2020 compared to the 2019 year-end.
The average aluminium price during the 1st half-year of 2020 stood at 1,622 USD/t, 12.3 % below the level in the previous year's comparable period of 1,850 USD/t. The aluminium price in euros quoted at 1,472 EUR/t on average in the first half of 2020, 10.1 % below the average for the previous year's equivalent period.
The premiums added to the price of aluminium for deliveries to the USA were significantly lower than in the previous year. This is due to the lifting of customs duties on US imports of aluminium from Canada in May 2019 and the COVID-19-related deterioration in the economic situation, which led to marked price reductions. Premiums have also decreased in the European region.
EARNINGS TRENDS
Compared with the first half of 2019, the Metal Division's shipment volume increased from 57,700 tonnes to 59,200 tonnes, which is mainly attributable to solid production at the "Alouette" interest. Shipments in Q2/2020 were significantly higher at 36,800 tonnes than in the previous year (Q2/2019: 29,700 tonnes), reflecting weather-related delivery fluctuations at the end of March 2020.
As a consequence of the lower aluminium price, revenue declined by 18.2 %, from EUR 381.7 million to EUR 312.3 million in the first half of 2020. Revenue of EUR 151.0 million was achieved during the second quarter of 2020 (Q1/2019: EUR 190.9 million).
EBITDA during the first half of 2020 amounted to EUR 20.1 million, compared with EUR 5.6 million in the previous year's equivalent period. With aluminium prices significantly lower, earnings increased particularly thanks to lower raw material prices for alumina and petroleum coke, lower electricity costs and positive currency effects. EBITDA of EUR 6.7 million was achieved in the second quarter of 2020 (Q2/2019: EUR 5.6 million).
EMPLOYEES
In the first half, the average number of employees in the Metal Division stood at 179 individuals compared with 183 in the previous year.
INVESTMENTS
In the Metal Division, capital expenditure during the first six months of the year of EUR 2.7 million was well below the previous year's comparable amount of EUR 14.8 million. The decrease reflects the high level of pot relining activities in the first half of 2019, and government-ordered investment reductions due to COVID-19. A government investment grant was also capitalised in the second quar- ter. This leads to additions to assets of EUR -0.9 million in the second quarter, compared with EUR 7.1 million in the same period of the previous year. Adjusted for the investment grant, additions to assets in the second quarter amounted to EUR 2.0 million.
12 See CRU Aluminium Market Outlook, April 2020 and CRU Aluminium Products Monitor Data, July 2020
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 11 |
H1/2020
KEY FIGURES FOR THE METAL DIVISION IN EUR MILLION | Q2/2020 | Q2/2019 | Change in % | H1/2020 | H1/2019 | Change in % | |||||||||||
Shipments in tonnes 1) | 36,800 | 29,700 | 23.9 % | 59,200 | 57,700 | 2.6 % | |||||||||||
of which internal shipments | 0 | 700 | -100.0 % | 0 | 1,200 | -100.0 % | |||||||||||
Revenue | 151.0 | 190.9 | -20.9 % | 312.3 | 381.7 | -18.2 % | |||||||||||
of which internal revenue | 94.9 | 140.9 | -32.7 % | 218.0 | 284.7 | -23.4 % | |||||||||||
EBITDA | 6.7 | 5.6 | 20.9 % | 20.1 | 5.6 | 257.5 % | |||||||||||
EBIT | 0.6 | -0.5 | 223.2 % | 7.9 | -6.5 | 221.2 % | |||||||||||
Employees FTE (excluding apprentices) | 179 | 188 | -4.6 % | 179 | 183 | -2.6 % | |||||||||||
1) Shipment volumes and internal shipment relate exclusively to the AMAG interest in the smelter Alouette
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 12 |
H1/2020
CASTING DIVISION
ECONOMIC ENVIRONMENT
The Casting Division's key geographical markets comprise Western and Central Europe. The automotive sector (including the supply industry) is the largest customer for the division, accounting for more than 50 % of shipments. Consequently, the health of the European automotive industry has a strong bearing on divisional performance.
Demand for cars in the European Union was significantly affected by the COVID-19 pandemic. This is particularly reflected in key figures for new car registrations. While around 8.2 million new cars were registered in the first half of 2019, only 4.3 million units were registered in the first six months of 2020 (-38.1 %). In the USA, the volume of the light vehicle market reduced by 22.9 % compared with the first half of the previous year. With 7.7 million cars, the new car market in China reported a decrease of -22.5 % compared to the first half of 2019. However, China recorded significant increases again in May and June 2020. While the number of new registrations in Europe in May stood at around 0.6 million, approximately 57 % down on the same month of the previous year, the Chinese car market recorded an increase of around 6.0 % to 1.6 million units. In June, new car registrations continued to rise by 1.4 % year-on-year to 1.7 million units. In Europe, around EUR 1.1 million vehicles were newly registered in June, corresponding to a decrease of 24.1 % compared to June 2019.13
The worldwide reduction in demand is also reflected to a considerable extent in production figures; car production in Germany in the first half of 2020 diminished by 40 % year-on-year.14
EARNINGS TRENDS
The economic environment is also reflected in the overall trend in shipments. At 38,200 tonnes, significantly fewer tonnes were shipped in the first half of 2020 than in the first half of 2019 (48,000
tonnes). Total shipment volumes amounted to 17,000 tonnes in the second quarter of 2020, compared with 23,700 tonnes in the previous year.
The lower shipment volumes also had an impact on the Casting Division's revenue. After EUR 53.6 million in the first half of 2019, only EUR 38.3 million was achieved from January to June 2020. Owing to the coronavirus, the second quarter of 2020 was especially affected, with revenue of EUR 14.4 million being achieved (Q2/2019: EUR 24.9 million).
EBITDA of EUR 3.1 million also lay below the level of the previous year (H1/2019: EUR 4.1 million). In addition to the main causes described above, COVID-19-related measures for the variabilisation of material and structural costs made a positive contribution to earnings. In a quarterly comparison, EBITDA stood at EUR 1.7 million, compared with EUR 2.2 million in the previous year.
The operating result (EBIT) amounted to EUR 1.8 million in the first six months of the current year (previous year: EUR 2.9 million). In the second quarter, the company generated EUR 1.1 million of EBIT, compared with EUR 1.6 million in the previous year.
EMPLOYEES
The average number of employees of 124 in the 1st half-year of 2020 was somewhat below the previous year's level.
INVESTMENTS
Capital expenditures on property, plant and equipment amounted to EUR 0.5 million between Janu- ary and June of the current year (1st half-year of 2019: EUR 1.4 million). The main reason for this was an investment in the Recycling Center Ranshofen in the previous year.
13 See VDA, press releases of July 16, 2020 and June 17, 2020 | 14) See VDA, press release of July 3, 2020 |
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 13 |
H1/2020
KEY FIGURES FOR THE CASTING DIVISION IN EUR MILLION | Q2/2020 | Q2/2019 | Change in % | H1/2020 | H1/2019 | Change in % | |||||||||||
Shipments in tonnes | 17,000 | 23,700 | -28.3 % | 38,200 | 48,000 | -20.4 % | |||||||||||
of which internal shipments | 9,000 | 8,500 | 5.9 % | 15,100 | 16,600 | -9.0 % | |||||||||||
Revenue | 14.4 | 24.9 | -42.3 % | 38.3 | 53.6 | -28.5 % | |||||||||||
of which internal revenues | 3.4 | 3.1 | 10.9 % | 5.7 | 6.0 | -5.2 % | |||||||||||
EBITDA | 1.7 | 2.2 | -25.7 % | 3.1 | 4.1 | -26.4 % | |||||||||||
EBIT | 1.1 | 1.6 | -34.8 % | 1.8 | 2.9 | -36.9 % | |||||||||||
Employees FTE (excluding apprentices) | 123 | 125 | -1.4 % | 124 | 125 | -1.4 % | |||||||||||
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 14 |
H1/2020
ROLLING DIVISION
ECONOMIC ENVIRONMENT
Demand for aluminium rolled products decreased significantly due to the COVID-19 pandemic and associated production cutbacks in relevant areas (especially transportation). According to the CRU market research institute15, global demand is expected to decrease by more than 9 % in 2020 and reach a level of 25.5 million tonnes (2019: 28.1 million tonnes).
Analysed by individual sectors, it is clear that the transport sector will be most strongly influenced by COVID-19, with an expected reduction of over 23 % to 3.6 million tonnes. This primarily affects the aircraft and automotive sectors. Trends in the mechanical engineering sector and in the other consumer durables sector are also affected. CRU forecasts a decrease of around 13 % to 1.9 and 1.3 million tonnes respectively. In the construction industry, a reduction of approximately 9 % is expected, which corresponds to consumption of almost 3.4 million tonnes of aluminium rolled products. Across all areas, the high uncertainty surrounding the further course of the virus is makes forecasting considerably more difficult. In the transport sector, at any rate, it is assumed that the substitution of steel by aluminium in the area of outer panelling applications for sheet for hoods, doors and fenders will exert a lasting positive effect on demand for aluminium. Lightweight construction solutions deploying aluminium can significantly reduce weight and thereby also cars' fuel consumption as well as CO2 emissions.
The packaging industry is the sector that under current conditions reflects a more stable trend from the point of view of aluminium consumption. Overall, the CRU expects a decrease of less than 4 % and a solid demand level of almost 14 million tonnes of aluminium rolled products.
In terms of regions, CRU expects demand in Western Europe to diminish by 12.1 % to 3.8 million tonnes. A similar decrease of -12.3 % to 5.3 million tonnes is forecast for North America. Trends in the entire Asian region are expected to be somewhat more positive (especially in China). Here, CRU expects a decrease of 7.9 %. In China, demand for aluminium rolled products is set to reduce by just 4.1 % to 9.7 million tonnes.
15 See CRU Aluminium Rolled Products Market Outlook, May 2020
EARNINGS TRENDS
The reduction in demand owing to COVID-19, especially in the transport sector, also affected the Rolling Division's earnings performance. While 120,300 tonnes of aluminium rolled products continued to be shipped from the works in the first six months of 2019, significantly fewer tonnes of 105,800 were shipped in the first half of 2020 due to the coronavirus (-12.1 %). The shipment volume in the second quarter of 2020 of 49,800 tonnes decreased considerably (by -18.5 %) compared with the previous year's equivalent period.
Above all owing to the lower shipment volume, revenue in the first two quarters decreased by
20.8 % and amounted to EUR 371.8 million, compared with EUR 469.1 million in the correspond- ing prior-year period. In the 2nd quarter, revenue of EUR 165.5 million was significantly less than the previous year's comparable level of EUR 237.3 million.
The aforementioned factors (particularly the decrease in volumes and associated product mix adjustments owing to COVID-19) were the main reason for the reduction in EBITDA compared with the first half of the previous year, from EUR 65.3 million to EUR 37.0 million. This was partly offset by the early variabilisation of material and structural costs. On a quarterly comparison, EBITDA halved to EUR 14.8 million compared with the previous year (Q2/2019: EUR 33.2 million).
As a consequence, the operating result (EBIT) also decreased compared with the first six months of 2019, by 72.0 % from EUR 40.5 million to EUR 11.3 million. In a comparison of quarters, EBIT of EUR 2.1 million was markedly below the level of the previous year (H1/2019: EUR 20.7 million).
EMPLOYEES
Compared with the first half of 2019, the average number of employees in the Rolling Division was down from 1,519 individuals to 1,504 .
INVESTMENTS
Capital expenditure amounted to EUR 14.4 million during the first half of 2020. These investments thereby lay somewhat below the previous year's level of EUR 15.4 million. Investments in the second
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 15 |
H1/2020
quarter of 2020 amounted to EUR 7.1 million, compared with EUR 6.7 million in the equivalent prior-year period.
KEY FIGURES FOR THE ROLLING DIVISION IN EUR MILLION | Q2/2020 | Q2/2019 | Change in % | H1/2020 | H1/2019 | Change in % | |||||||||||
Shipments in tonnes | 49,800 | 61,100 | -18.5 % | 105,800 | 120,300 | -12.1 % | |||||||||||
Revenue | 165.5 | 237.3 | -30.3 % | 371.8 | 469.1 | -20.8 % | |||||||||||
of which internal revenues | 16.3 | 30.3 | -46.3 % | 37.7 | 62.0 | -39.3 % | |||||||||||
EBITDA | 14.8 | 33.2 | -55.3 % | 37.0 | 65.3 | -43.4 % | |||||||||||
EBIT | 2.1 | 20.7 | -89.9 % | 11.3 | 40.5 | -72.0 % | |||||||||||
Employees FTE (excluding apprentices) | 1,493 | 1,521 | -1.9 % | 1,504 | 1,519 | -1.0 % | |||||||||||
AMAG AUSTRIA METALL AG
SERVICE DIVISION
EARNINGS TRENDS
Revenue between January and June of the current financial year amounted to EUR 32.7 million, compared with EUR 34.3 million a year previously. In the second quarter of 2020, revenue stood at EUR 14.3 million, compared with EUR 16.1 in the previous year. The decrease is mainly due to lower energy consumption reflecting the lower production volume at the Ranshofen site.
Compared to the first half of 2019, EBITDA improved from EUR -3.2 million to EUR -0.8 million, which is attributable, in particular, to lower energy costs and other cost savings. EBITDA of EUR -0.4 million was achieved during the second quarter (previous year's quarter: EUR -2.1 million).
The operating result (EBIT) also rose in a comparison of the first halves of the year from EUR -5.7 million to EUR -3.4 million. In a quarter-on-quarter comparison, the Service Division reported EBIT of EUR -1.7 million, following EUR -3.4 million in the prior-year period.
KEY FIGURES FOR THE SERVICE DIVISION IN EUR MILLION | Q2/2020 | |||
Revenue | 14.3 | |||
of which internal revenues | 13.0 | |||
EBITDA | -0.4 | |||
EBIT | -1.7 | |||
Employees FTE (excluding apprentices) | 173 | |||
FINANCIAL REPORT | 16 |
H1/2020
EMPLOYEES
The average number of employees in the Service Division increased from 156 to 174 individuals in a comparison of half-years. Hiring occurred especially in the IT area.
INVESTMENTS
Capital expenditure in the first half of the year amounting to EUR 1.9 million (prior-year period: EUR 3.7 million) related primarily to supplementary investments in existing buildings (e.g. Center for Material Innovation) as well as environmental and safety investments (new drainage basin, fire pro- tection). In a quarter-on-quarter comparison, capital expenditure decreased from EUR 2.2 million to EUR 0.5 million.
Q2/2019 | Change in % | H1/2020 | H1/2019 | Change in % | ||||||||
16.1 | -11.5 % | 32.7 | 34.3 | -4.9 % | ||||||||
14.7 | -11.2 % | 29.9 | 31.5 | -5.0 % | ||||||||
-2.1 | 83.0 % | -0.8 | -3.2 | 75.0 % | ||||||||
-3.4 | 50.8 % | -3.4 | -5.7 | 40.0 % | ||||||||
157 | 9.7 % | 174 | 156 | 11.4 % | ||||||||
AMAG AUSTRIA METALL AG
OUTLOOK
ECONOMIC OUTLOOK
According to IMF16 estimates, the global economy is expected to shrink by 4.9 % in 2020 due to COVID-19 (2019: +2.9 %). This forecast is based on a number of assumptions regarding the further course of the pandemic, which renders it particularly uncertain. Among other factors, the duration of the virus and associated lockdown measures as well as adherence to social distancing and the reconfiguration of supply chains are affecting economic growth. COVID-19 is also evident in key economic and confidence indicators. Compared to 2019, purchasing manager indices for the manufacturing sector declined in all of AMAG's major sales markets.17
The IMF18 expects global economic growth of 5.4 % in 2021. This estimate is associated with a high level of uncertainty and depends on further developments and measures in relation to COVID-19. In detail, the IMF forecasts growth of 6.0 % for the Eurozone, while growth in the USA is assumed to be 4.5 %. Emerging and developing economies are forecast to report a growth of 5.9 %.
ALUMINIUM MARKET OUTLOOK
CRU forecasts, among other factors, were applied as an input for medium-term demand growth for primary aluminium and aluminium rolled products. Accordingly, a tangible drop in consumption of aluminium products is expected in 2020 due to COVID-19. Demand for both primary aluminium and aluminium rolled products is expected to decrease by around 9 % to 58.5 and 25.5 million tonnes respectively. By the end of 2024, the CRU expects demand in the primary aluminium sector to increase by a total of 5 % compared with 2019 (corresponding to a demand of around 67.4 million tonnes).19 With an expected increase of around 12 %, the CRU currently sees demand for aluminium rolled products in 2024 even more positively than in 2019 (corresponding to demand of around 31.5 million tonnes). 20
European automotive industry trends are the main drivers of the Casting Division. Global vehicle production is expected to decrease by more than 20 % in 2020, according to IHS Markit21 estimates.
16) See IMF, World Economic Outlook, June 2020
17 See Bloomberg
18) See IMF, World Economic Outlook, June 2020
FINANCIAL REPORT | 17 |
H1/2020
While the reduction in China is set to be the smallest at around -15 %, Europe and North America are expected to report a drop in production of around -25 % compared with 2019.
BUSINESS TREND OUTLOOK FOR 2020
The current economic situation is strongly influenced by COVID-19. This entails an extremely high level of uncertainty regarding the further course of the economy. AMAG's stable equity ratio and extremely solid liquidity position are of great importance, especially in the current economic situation.
AMAG Austria Metall AG is strategically very well positioned and covers various sectors with an extremely broadly diversified product portfolio. Demand growth in these industries differs greatly owing to COVID-19. However, subdued market expectations, especially in the automotive and aircraft in- dustries, do not alter the positive medium and long-term trend in global demand for aluminium. Moreover, in times such as these, especially the sustainability aspect - a cornerstone of AMAG's strategy - deserves particular emphasis. Mention should also be made of the measures that have been implemented - especially those aimed at containing the economic effects of COVID-19 - ongoing monitoring and, where relevant, applications for grants, as well as intensive contact with AMAG customers and suppliers. Our focus is also on adjusting fixed and structural costs to the lower capacity utilisation caused by the pandemic.
The Metal Division currently faces a significantly lower aluminium price than in the previous year. Premium income for primary aluminium deliveries to the USA have also diminished sharply. However, the reduction in raw material costs (especially for alumina and petroleum coke) in recent months is exerting a positive effect. Production at the Canadian "Alouette" interest is also running at a very good level.
In the Rolling and Casting divisions, COVID-19-related volume losses are expected in the second half of the year compared to the previous year's second half. Production cutbacks in the aircraft and automotive industries will be reflected accordingly in the results through lower shipment volumes and changes in the product mix.
- See CRU Aluminium Market Outlook, April 2020
- See CRU Aluminium Rolled Products Market Outlook, May 2020
- IHS Markit, May 2020
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 18 |
H1/2020
In light of the further development of the COVID-19 pandemic and associated economic policy measures, an estimate of the economic trends in the second half of 2020 is associated with particularly high uncertainties. Experience shows that prices for aluminium and alumina can also exhibit high volatilities over the course of the year.
Due to these reasons, an earnings forecast is only possible in the form of a considerable bandwidth. Based on the current circumstances and a number of assumptions regarding the further course of business, the Management Board expects EBITDA in the range of EUR 80 million to EUR 100 million in the 2020 financial year (2019: EUR 143 million).
AMAG AUSTRIA METALL AG
RISK AND OPPORTUNITY REPORT
A formalised risk management system designed to identify, assess and manage all of the significant risk exposures for AMAG Group and its environment forms an integral element of the AMAG Group's business activities. We aim to identify risks at an early juncture and proactively counter them where possible, in order to limit them to the greatest extent. Furthermore, we aim to exploit business opportunities on a targeted basis. A balanced approach to opportunity and risk management forms one of our Group's key success factors. The current situation, which is influenced by COVID-19, was taken into account accordingly for the identification and assessment of risks.
RISK MANAGEMENT SYSTEM
Our risk management is geared to ensuring a sustained positive trend in our financial position and performance as well as long-term growth in the AMAG Group's value, and to minimising negative influences on the environment. This system relies primarily on:
- Groupwide standards and instructions to regulate operational processes with a view to identify- ing, analysing, assessing and communicating risks, and actively managing risks and opportuni- ties,
- active hedging of specific risks (volatility in the aluminium price and in exchange rates),
- covering certain risks under a comprehensive insurance strategy.
Risks are managed based on these standards and instructions, and concern all levels of the management hierarchy. Strategic and operative risks are reviewed annually, and any requisite business policy adjustments are implemented as part of an institutionalised process. Moreover, the standards and instructions, and the scope and amount of insurance cover, are subject to ongoing review and updated whenever necessary.
In addition, external auditors conduct evaluations on a case-by-case basis in selected corporate areas to determine the effectiveness of the internal control system.
FINANCIAL REPORT | 19 |
H1/2020
INTERNAL CONTROL SYSTEM
Our internal control and risk management systems are based on the Internal Control and Enterprise Risk Managing Frameworks - internationally recognised standards established by the Committee of Sponsoring Organisations (COSO) of the Treadway Commission - and on ISO 31000:2010. The objective is for the relevant managers to identify and manage potential risks.
FURTHER INFORMATION
For a detailed description of the Group's risk exposures, and its risk management and internal control systems, please refer to the AMAG Austria Metall AG 2019 annual report and the Investor Relations area of our website at www.amag-al4u.com.
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 20 |
H1/2020
RELATED PARTY DISCLOSURES
Please refer to the interim consolidated financial statements for information about business relationships with related companies and individuals.
AMAG AUSTRIA METALL AG
INTERIM CONSOLIDATED FINANCIAL STATEMENTS ACCORDING TO IAS 34
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FINANCIAL REPORT | 21 |
H1/2020
ASSETS IN EUR THOUSAND | June | December | EQUITY AND LIABILITIES IN EUR THOUSAND | June | December | |||||||||||
30, 2020 | 31, 2019 | 30, 2020 | 31, 2019 | |||||||||||||
Intangible assets | 8,463 | 8,858 | Share capital | 35,264 | 35,264 | |||||||||||
Property, plant and equipment | 718,899 | 740,299 | Capital reserves | 377,661 | 377,661 | |||||||||||
Investments in associates | 1,807 | 1,767 | Retained earnings | 228,951 | 206,368 | |||||||||||
Other non-current assets and financial assets | 48,109 | 34,948 | Equity | 641,876 | 619,293 | |||||||||||
Deferred tax assets | 9,718 | 9,721 | Non-current provisions | 100,832 | 109,465 | |||||||||||
Non-current assets | 786,996 | 795,594 | Interest-bearingnon-current financial liabilities | 515,207 | 483,319 | |||||||||||
Inventories | 253,329 | 256,997 | Other non-current liabilities and grants | 71,490 | 59,553 | |||||||||||
Trade receivables | 113,992 | 117,577 | Deferred tax liabilities | 592 | 7 | |||||||||||
Current tax assets | 38 | 55 | Non-current liabilities | 688,122 | 652,345 | |||||||||||
Other current assets | 85,356 | 64,118 | Current provisions | 14,920 | 13,206 | |||||||||||
Cash and cash equivalents | 401,789 | 267,322 | Interest-bearing current financial liabilities | 135,007 | 77,123 | |||||||||||
Current assets | 854,503 | 706,069 | Trade payables | 61,104 | 73,050 | |||||||||||
TOTAL ASSETS | 1,641,499 | 1,501,663 | Current tax liabilities | 13,999 | 10,331 | |||||||||||
Other current liabilities and grants | 86,472 | 56,315 | ||||||||||||||
Current liabilities | 311,501 | 230,025 | ||||||||||||||
TOTAL EQUITY AND LIABILITIES | 1,641,499 | 1,501,663 | ||||||||||||||
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 22 |
H1/2020
CONSOLIDATED INCOME STATEMENT | |||||||||||||||||
ACC. TO THE COST OF SALES METHOD | |||||||||||||||||
IN EUR THOUSAND | Q2/2020 | Q2/2019 | H1/2020 | H1/2019 | 2019 | ||||||||||||
Revenue | 217,455 | 280,129 | 463,831 | 554,579 | 1,065,972 | ||||||||||||
Cost of sales | -188,988 | -234,765 | -395,592 | -470,920 | -903,463 | ||||||||||||
Gross profit | 28,467 | 45,365 | 68,239 | 83,659 | 162,509 | ||||||||||||
Other income | 216 | 4,067 | 4,977 | 6,499 | 12,584 | ||||||||||||
Selling and distribution expenses | -14,760 | -17,926 | -29,601 | -33,463 | -63,003 | ||||||||||||
Administrative expenses | -7,078 | -7,269 | -15,318 | -13,888 | -28,458 | ||||||||||||
Research and development expenses | -3,415 | -3,901 | -7,436 | -7,652 | -15,534 | ||||||||||||
Other expenses | -1,326 | -1,867 | -3,288 | -3,980 | -7,293 | ||||||||||||
Share of profit of equity-accounted investments | 22 | 30 | 40 | 107 | 262 | ||||||||||||
Earnings before interest and taxes (EBIT) | 2,125 | 18,499 | 17,613 | 31,281 | 61,067 | ||||||||||||
Net interest result | -878 | -2,243 | -3,063 | -4,538 | -8,991 | ||||||||||||
Other financial result | -1,066 | -541 | 256 | -712 | -1,079 | ||||||||||||
Net financial income (expenses) | -1,945 | -2,784 | -2,807 | -5,249 | -10,070 | ||||||||||||
Earnings before taxes (EBT) | 180 | 15,715 | 14,806 | 26,032 | 50,996 | ||||||||||||
Income taxes | 765 | -4,406 | -2,370 | -7,092 | -12,354 | ||||||||||||
Net income after taxes | 946 | 11,309 | 12,435 | 18,941 | 38,642 | ||||||||||||
Total number of no-par-value shares | 35,264,000 | 35,264,000 | 35,264,000 | 35,264,000 | 35,264,000 | ||||||||||||
Earnings per share | 0.03 | 0.32 | 0.35 | 0.54 | 1.10 | ||||||||||||
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 23 |
H1/2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
IN EUR THOUSAND | Q2/2020 | Q2/2019 | H1/2020 | H1/2019 | 2019 | ||||||||||
Net income after taxes | 946 | 11,309 | 12,435 | 18,941 | 38,642 | ||||||||||
Items that are or may be reclassified to profit or loss: | |||||||||||||||
Currency translation differences | -3,798 | -2,006 | 434 | 1,035 | 3,095 | ||||||||||
Changes in the hedging reserve | |||||||||||||||
Recognized (expenses) and income during the | |||||||||||||||
financial year | 8,225 | 17,067 | -497 | 5,136 | 3,332 | ||||||||||
Reclassifications of amounts that have been | |||||||||||||||
recognized in the statement of profit or loss | 4,573 | 1,947 | 6,592 | 4,693 | 7,969 | ||||||||||
Deferred taxes relating thereto | -3,268 | -4,994 | -1,632 | -2,214 | -2,688 | ||||||||||
Currency translation differences | 97 | 239 | -112 | -246 | -551 | ||||||||||
Changes in fair value reserve | 48 | -149 | 52 | -39 | -142 | ||||||||||
Deferred taxes relating thereto | -12 | 37 | -13 | 10 | 36 | ||||||||||
Items that will never be reclassified to profit or loss: | |||||||||||||||
Changes in revaluation reserve | 192 | 35 | 192 | 35 | 43 | ||||||||||
Deferred taxes relating thereto | -48 | -9 | -48 | -9 | -11 | ||||||||||
Remeasurement of defined benefit plans | 19,346 | -11,557 | 7,138 | -14,519 | -11,942 | ||||||||||
Deferred taxes relating thereto | -5,033 | 3,019 | -1,856 | 3,737 | 3,098 | ||||||||||
Currency translation differences | 292 | 172 | -102 | 1 | -142 | ||||||||||
Share of other comprehensive income of associates | 0 | 0 | 0 | 0 | -5 | ||||||||||
Deferred taxes relating thereto | 0 | 0 | 0 | 0 | 1 | ||||||||||
Other comprehensive income for the year net of tax | 20,613 | 3,801 | 10,148 | -2,379 | 2,093 | ||||||||||
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | 21,559 | 15,110 | 22,584 | 16,562 | 40,736 | ||||||||||
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 24 |
H1/2020
CONSOLIDATED STATEMENT OF CASH FLOWS
IN EUR THOUSAND | Q2/2020 | Q2/2019 | H1/2020 | H1/2019 | 2019 | ||||||||||
Earnings before taxes (EBT) | 180 | 15,715 | 14,806 | 26,032 | 50,996 | ||||||||||
Net interest result | 878 | 2,243 | 3,063 | 4,538 | 8,991 | ||||||||||
Share of profit of associates | -22 | -30 | -40 | -107 | -262 | ||||||||||
Depreciation on non-current assets | 20,763 | 20,441 | 41,734 | 40,676 | 81,906 | ||||||||||
Losses/gains from the disposal of non-current assets | -3 | 4 | -28 | 73 | 190 | ||||||||||
Proceeds from dividends | 0 | 251 | 0 | 251 | 251 | ||||||||||
Other non-cash expenses/income | 650 | 333 | -795 | 641 | 756 | ||||||||||
Changes in inventories | 16,074 | 15,701 | 3,820 | -368 | 222 | ||||||||||
Changes in trade receivables | 10,804 | 2,981 | 3,585 | -16,955 | 8,551 | ||||||||||
Changes in trade payables | -11,458 | -208 | -8,675 | 8,586 | -10,705 | ||||||||||
Changes in provisions | -732 | -2,601 | -986 | -3,275 | 53 | ||||||||||
Changes in derivatives | 1,773 | -52 | -5,255 | 9,832 | 22,975 | ||||||||||
Changes in other receivables and liabilities | 14,804 | 3,575 | 21,384 | -3,978 | -19,601 | ||||||||||
53,711 | 58,354 | 72,611 | 65,947 | 144,324 | |||||||||||
Tax payments | 1,585 | -354 | -1,591 | 171 | 1,982 | ||||||||||
Interest received | 1,672 | 225 | 1,991 | 511 | 1,021 | ||||||||||
Interest paid | -1,245 | -1,821 | -2,421 | -2,905 | -7,384 | ||||||||||
Cash flow from operating activities | 55,724 | 56,404 | 70,589 | 63,723 | 139,943 | ||||||||||
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 25 |
H1/2020
IN EUR THOUSAND | Q2/2020 | Q2/2019 | H1/2020 | H1/2019 | 2019 | ||||||||||
Cash flow from operating activities | 55,724 | 56,404 | 70,589 | 63,723 | 139,943 | ||||||||||
Proceeds from disposals of non-current assets | 63 | 74 | 176 | 444 | 1,103 | ||||||||||
Payments for investments in property, plant and equipment and intangible assets | -10,244 | -17,407 | -25,759 | -40,616 | -79,367 | ||||||||||
Proceeds from grants for investments | 407 | 205 | 805 | 1,125 | 1,870 | ||||||||||
Cash flow from investing activities | -9,774 | -17,127 | -24,777 | -39,047 | -76,394 | ||||||||||
Repayments of borrowings | -255 | -15,490 | -1,758 | -26,866 | -53,548 | ||||||||||
Proceeds from borrowings | 90,303 | 3,539 | 90,369 | 2,416 | 2,490 | ||||||||||
Dividends paid | 0 | -42,317 | 0 | -42,317 | -42,317 | ||||||||||
Cash flow from financing activities | 90,048 | -54,268 | 88,611 | -66,767 | -93,374 | ||||||||||
Change in cash and cash equivalents | 135,998 | -14,991 | 134,423 | -42,091 | -29,825 | ||||||||||
Cash and cash equivalents at the beginning of the period | 267,595 | 269,841 | 267,322 | 295,871 | 295,871 | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | -1,803 | -566 | 45 | 503 | 1,276 | ||||||||||
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 401,789 | 254,283 | 401,789 | 254,283 | 267,322 | ||||||||||
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 26 |
H1/2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share of | ||||||||||||||||||||||
compre- | ||||||||||||||||||||||
Revaluation of | hensive | |||||||||||||||||||||
IN EUR THOUSAND | Capital | Hedging | Fair value | Revaluation | defined | income of | Exchange | Retained | ||||||||||||||
Share capital | reserves | reserve | reserve | reserve | benefit plans | associates | differences | earnings | Equity | |||||||||||||
Balance as of December 31, 2018 | 35,264 | 377,661 | -25,511 | 64 | 629 | -27,914 | -27 | 43,922 | 216,786 | 620,874 | ||||||||||||
Net income after taxes | 18,941 | 18,941 | ||||||||||||||||||||
Other comprehensive income for the year net of tax | 7,369 | -29 | 26 | -10,780 | 1,035 | -2,379 | ||||||||||||||||
Total comprehensive income for the year | 7,369 | -29 | 26 | -10,780 | 0 | 1,035 | 18,941 | 16,562 | ||||||||||||||
Dividend distributions | -42,317 | -42,317 | ||||||||||||||||||||
Balance as of June 30, 2019 | 35,264 | 377,661 | -18,142 | 35 | 655 | -38,694 | -27 | 44,957 | 193,410 | 595,119 | ||||||||||||
Balance as of December 31, 2019 | 35,264 | 377,661 | -17,449 | -43 | 661 | -36,900 | -30 | 47,017 | 213,112 | 619,293 | ||||||||||||
Net income after taxes | 12,435 | 12,435 | ||||||||||||||||||||
Other comprehensive income for the year net of tax | 4,351 | 39 | 144 | 5,180 | 434 | 10,148 | ||||||||||||||||
Total comprehensive income for the year | 4,351 | 39 | 144 | 5,180 | 0 | 434 | 12,435 | 22,584 | ||||||||||||||
BALANCE AS OF JUNE 30, 2020 | 35,264 | 377,661 | -13,098 | -4 | 805 | -31,720 | -30 | 47,450 | 225,547 | 641,876 | ||||||||||||
AMAG AUSTRIA METALL AG
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
GENERAL
AMAG Austria Metall AG, (Lamprechtshausener Strasse 61, 5282 Ranshofen, Austria, registered under commercial register number 310593f at the Ried District Court), is an Austrian holding company whose corporate purpose is to produce, process and distribute aluminium, and aluminium wrought and cast products.
As an Austrian holding company, AMAG Austria Metall AG is registered in the companies register at Ried im Innkreis District Court, and its headquarters are located in 5282 Ranshofen, Lam- prechtshausener Strasse 61, Austria. The company prepares consolidated financial statements as the ultimate parent company of the AMAG Group. The shares of AMAG Austria Metall AG have been listed on the Prime Market of the Vienna Stock Exchange since April 8, 2011. The companies of the AMAG Group are included in the consolidated financial statements of B&C Holding Österreich GmbH. B&C Privatstiftung, based in Vienna, Austria, is the ultimate parent company of B&C Holding Österreich, and consequently of the company.
BASIS OF PREPARATION
The interim consolidated financial statements from the January 1 to June 30, 2020 accounting period have been prepared in accordance with International Financial Reporting Standards (IFRS), as formulated by the International Accounting Standards Board (IASB) and adopted by the European Union, and as applicable for interim financial statements (IAS 34), as well as the interpretations of the International Financial Reporting Interpretations Committee (IFRS-IC), which require application in 2020. The interim statements do not contain all of the information and disclosures provided in the consolidated annual financial statements for the year ended December 31, 2019, and should be read in conjunction with the latter.
The accounting and valuation methods are consistent with those applied in the consolidated financial statements for the financial year ending December 31, 2019.
FINANCIAL REPORT | 27 |
H1/2020
The consolidated interim financial statements are presented in thousands of euros. The totalling of rounded amounts and percentages may lead to rounding differences due to the application of automated calculations. Unless otherwise stated, the comparative disclosures refer to the first half of the 2019 financial year of AMAG Austria Metall AG (June 30, 2020 reporting date).
The Management Board of AMAG Austria Metall AG is satisfied that the Group interim report in all material respects gives a true and fair view of the Group's financial position and performance.
These consolidated interim financial statements as of June 30, 2020, were neither subjected to a full audit nor were they reviewed by an auditor.
ASSUMPTIONS AND ESTIMATION UNCERTAINTIES
The annual report of the financial year ending December 31, 2019 includes information about assumptions and uncertainties relating to estimates that can generate a considerable risk necessitating a significant adjustment during the following financial year.
Significant estimation uncertainties arose due to the current COVID-19 pandemic. This also had an impact on individual estimates in the interim financial statements, which differ from the consolidated financial statements as of December 31, 2019 of AMAG Austria Metall AG:
-
Credit risks relating to trade receivables:
The assessment of future developments as part of estimating the need for write-downs on trade receivables was evaluated in light of the current situation. Firstly, this led to a changed, higher estimate of the probabilities of default as well as a higher risk classification of individual coun- tries. The risk categories remained unchanged. As of June 30, 2020, this includes EUR 0.7 mil- lion in value adjustments for receivables. - Probability of occurrence of transactions (hedge accounting):
In the case of cash flow hedges, hedge accounting can be applied if the underlying transaction is highly likely to materialise. For existing hedges, this assessment is evaluated quarterly. As a consequence, the probability of occurrence of individual foreign currency transactions could no longer be classified as high, and on June 30, 2020 the hedge for foreign currency risks was
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 28 |
H1/2020
unwound accordingly. This led to a release of EUR -5.0 million from the cash flow hedge reserve, which was recognised in profit or loss.
-
Embedded derivative:
Accounting for the embedded derivative also required estimates to be made, including the ex- pected term. This assessment was also evaluated and adjusted in the light of the current situa- tion. This led to an extension of the term by one year and an increase in the derivative of USD 11.6 million. - Impairment of property, plant and equipment:
Due to the COVID-19 pandemic and associated uncertainties regarding the occurrence of the budgeted results, an indication of possible impairment (triggering event) was identified for the value of property, plant and equipment. For this reason, the impairment of property, plant and equipment was tested at the level of the cash-generating units. Due to planning uncertainties in three scenarios, this was implemented by means of DCF valuation based on a 5-year horizon. No need arose for the recognition of impairment losses in any of the three scenarios.
Going concern:
No indications exist to deviate from the going concern assumption. The Group has equity capital of EUR 641.9 million as of June 30, 2020. Furthermore, the Group reports positive cash flow (see consolidated cash flow statement) as well as a cash and cash equivalents position of EUR 401.8 mil- lion.
CHANGES IN THE SCOPE OF CONSOLIDATION
The scope of consolidation of AMAG Austria Metall AG was unchanged between January 1 and June 30, 2020. In the second half of the previous year, the scope of consolidation was expanded to include the newly founded coilDNA GmbH.
SEASONAL AND CYCLICAL FACTORS
The progression of business at the AMAG Group is generally not subject to significant seasonal fluc- tuation. In 2020, too, scheduled annual maintenance measures at the Ranshofen site will continue to be predominantly conducted during the second half of the year (August and December). As a consequence, lower production volumes are assumed for the fourth quarter of 2020 compared with previous quarters.
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 29 |
H1/2020
BUSINESS DIVISIONS
H1/2020 IN EUR THOUSAND | Metal | Casting | Rolling | Service | Consolidation | Group | ||||||||
Revenue | ||||||||||||||
External | 94,287 | 32,621 | 334,136 | 2,786 | 0 | 463,831 | ||||||||
Internal | 218,022 | 5,687 | 37,651 | 29,873 | -291,232 | 0 | ||||||||
312,309 | 38,308 | 371,787 | 32,659 | -291,232 | 463,831 | |||||||||
EBITDA | 20,133 | 3,053 | 36,957 | -797 | 0 | 59,347 | ||||||||
EBIT | 7,851 | 1,842 | 11,349 | -3,429 | 0 | 17,613 | ||||||||
Net financial income (expenses) | 557 | -61 | -2,607 | -697 | 0 | -2,807 | ||||||||
Earnings before taxes (EBT) | 8,408 | 1,781 | 8,742 | -4,125 | 0 | 14,806 | ||||||||
H1/2019 IN EUR THOUSAND | ||||||||||||||
Metal | Casting | Rolling | Service | Consolidation | Group | |||||||||
Revenue | ||||||||||||||
External | 96,965 | 47,589 | 407,131 | 2,894 | 0 | 554,579 | ||||||||
Internal | 284,741 | 5,998 | 62,011 | 31,454 | -384,203 | 0 | ||||||||
381,706 | 53,586 | 469,142 | 34,348 | -384,203 | 554,579 | |||||||||
EBITDA | 5,632 | 4,148 | 65,331 | -3,184 | 30 | 71,958 | ||||||||
EBIT | -6,476 | 2,918 | 40,524 | -5,715 | 30 | 31,281 | ||||||||
Net financial income (expenses) | -793 | -63 | -4,065 | -328 | 0 | -5,249 | ||||||||
Earnings before taxes (EBT) | -7,269 | 2,856 | 36,459 | -6,043 | 30 | 26,032 | ||||||||
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 30 |
H1/2020
NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Property, plant and equipment reduced from EUR 740.3 million at the end of the year 2019 to EUR 718.9 million at the end of June 2020. This decrease is predominately attributable to the depreciation of the expansion project in Ranshofen, which was capitalised. Obligations arising from investments in plant amounted to EUR 19.9 million as of June 30, 2020 (2019 year-end: EUR 18.1 million).
Trade receivables decreased from EUR 117.6 million at the 2019 year-end to EUR 114.0 million at the end of June 2020 due to the decline in revenue.
Cash and cash equivalents increased from EUR 267.3 million at the end of December 2019 to EUR 401.8 million at the end of June 2020.
The equity of the AMAG Group amounted to EUR 641.9 million at the end of June 2020 and was thereby EUR 22.6 million over the level of the 2019 annual financial statements (EUR 619.3 mil- lion). The change mainly reflects the result after income taxes for the first six months of 2020 of EUR 12.4 million, the change in the hedging reserve (IFRS 9) of EUR +4.4 million, and the revaluation of defined benefit pension plans of EUR +5.2 million, as well as an increase in currency translation differences of EUR +0.4 million. The previous year also included a dividend payment of EUR 42.3 million.
Since the balance sheet date, the interest rates relevant for the measurement of defined benefit pension plans and anniversary bonus provisions in Austria at the end of May - derived from the discount rates for IFRS valuations published by MERCER Germany - have been increased to 1.60 % (December 31, 2019: 1.30 %) for severance payments and anniversary bonus provisions, and to
- % (December 31, 2019: 1.20 %) for pension provisions. In Canada, the relevant interest rates have also increased for the pension provision and the provision for medical care benefits amount to
- % according to the "Fiera Capitals CIA Method Accounting Discount Rate Curve" (December 31, 2019: 3.20 %). This results in net actuarial gains of EUR 7.1 million, which were carried directly to other comprehensive income, and with EUR 0.5 million recognised in profit and loss.
Non-currentinterest-bearing financial liabilities increased from EUR 483.3 million in last year's consolidated financial statements to EUR 515.2 million as of June 30, 2020.
Due to the current situation, the assurances relating to AMAG's long-term financial liabilities (with the exception of a committed line) were amended as follows until December 31, 2022, as explained below: reduction of the equity ratio required to terminate the loan agreement from the current 30 % to 20 % and suspension of the net debt/EBITDA ratio.
A committed line now includes a timescale for net debt/EBITDA:
- 7.5 up to and including June 30, 2021; >; 5.5 up to and including June 30, 2022; > 4.75 up to and including December 31, 2022; > 4 from January 1, 2023. In the event of a shortfall within the specified period, the contract will be terminated. The required equity ratio is also reduced to 20 %.
All assurances to financing partners were complied with both in relation to the respective cut-off dates and also during the course of the year.
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 31 |
H1/2020
NOTES TO THE CONSOLIDATED INCOME STATEMENT
The AMAG Group recognises revenue from the sale of primary aluminium (Metal Division), aluminium rolled products (Rolling Division), aluminium cast alloys (Casting Division) and from services connected with building and space management, works services etc at its Ranshofen site (Service Divi- sion), whereby external revenue generated from services plays a subordinate role (0.56% of total revenue, 1st half-year of 2019: 0.51%).
Between January and June 2020, the revenue of the AMAG Group amounted to EUR 463.8 million, representing a 16.4 % decrease compared with the EUR 554.6 million generated in the prior-year comparable period.
Revenues are comprised as follows:
ALLOCATION OF | |||||||||||||||
REVENUE IN EUR | |||||||||||||||
THOUSAND | Q2/2020 | Q2/2019 | H1/2020 | H1/2019 | 2019 | ||||||||||
Revenue third parties | 222,067 | 281,852 | 470,630 | 558,236 | 1,073,797 | ||||||||||
Revenue from services | 1,219 | 1,428 | 2,786 | 2,894 | 5,723 | ||||||||||
Result derivatives | -5,832 | -3,150 | -9,585 | -6,552 | -13,548 | ||||||||||
217,455 | 280,129 | 463,831 | 554,579 | 1,065,972 | |||||||||||
The AMAG Group recognises revenue to third parties in the following regions:
REVENUE BY REGIONS IN EUR | ||||||||||
THOUSAND | Metal | Casting | Rolling | Group | ||||||
Western Europe (without Austria) | 31,222 | 20,709 | 146,973 | 198,904 | ||||||
Austria | 1 | 8,754 | 70,167 | 78,922 | ||||||
Rest of Europe | 5 | 3,158 | 39,304 | 42,467 | ||||||
North America | 62,650 | 0 | 64,024 | 126,674 | ||||||
Asia, Oceania and other | 0 | 0 | 23,662 | 23,662 | ||||||
93,879 | 32,621 | 344,130 | 470,630 | |||||||
AMAG has applied for short-time working at the Ranshofen location with effect from April 1, 2020. For the months April to June, EUR 3.8 million in refunds were recognised in personnel expenses.
Group earnings before interest, taxes, depreciation and amortisation (EBITDA) in the 1st half-year of 2020 decreased by EUR 12.6 million to EUR 59.3 million (1st half-year of 2019: EUR 72.0 mil- lion).
Consolidated earnings before interest and taxes (EBIT) amounted to EUR 17.6 million in the first six months of 2020, compared with EUR 31.3 million in the previous-year equivalent period.
Net income after taxes amounted to EUR 12.4 million in the first half of 2020 (prior-year comparable figure: EUR 18.9 million).
AMAG AUSTRIA METALL AG
NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flow from operating activities amounted to EUR 70.6 million during the first six months of the financial year under review, thereby EUR 6.9 million above the level for corresponding previous-year period (EUR 63.7 million), which is especially attributable to lower working capital requirements. Cash flow from investing activities stood at EUR -24.8 million in the 1st half-year (1st half-year of 2019: EUR -39.0 million). Cash flow from financing activities was positive at EUR 88.6 million in the 1st half-year of 2020 (1st half-year of 2019: EUR -66.8 million), which is attributable to the dividend payment, which has not yet been approved, as well as EUR 90.4 million of loans drawn down.
FINANCIAL REPORT | 32 |
H1/2020
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 33 |
H1/2020
NOTES ON FINANCIAL INSTRUMENTS
Additional disclosures about financial instruments pursuant to IFRS 7:
2020 FINANCIAL INSTRUMENTS | Mandatorily at fair | Equity | |||||||||||||||
value through | investments at fair | Not a financial | Book value | Fair value | |||||||||||||
PURSUANT TO IFRS 7 IN EUR THOUSAND | Fair Value Hedge | Cashflow Hedge | profit or loss | value through OCI | At amortised cost | instrument | June 30, 2020 | June 30, 2020 | |||||||||
Assets | |||||||||||||||||
Other non-current assets and financial assets | 0 | 42,649 | 19 | 1,527 | 3,833 | 81 | 48,109 | 48,109 | |||||||||
Trade receivables | 0 | 0 | 0 | 0 | 113,992 | 0 | 113,992 | 113,992 | |||||||||
Current tax assets | 0 | 0 | 0 | 0 | 0 | 38 | 38 | 38 | |||||||||
Other current assets | 292 | 19,306 | 36,465 | 0 | 15,717 | 13,575 | 85,356 | 85,356 | |||||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | 401,789 | 0 | 401,789 | 401,789 | |||||||||
Liabilities | |||||||||||||||||
Interest-bearingnon-current financial liabilities | |||||||||||||||||
(without leases) | 0 | 0 | 0 | 0 | 514,140 | 0 | 514,140 | 519,093 | |||||||||
Non-current lease liabilities | 0 | 0 | 0 | 0 | 1,067 | 0 | 1,067 | 1,067 | |||||||||
Other non-current liabilities and grants | 81 | 14,276 | 5,578 | 0 | 1,602 | 49,953 | 71,490 | 71,490 | |||||||||
Interest-bearing current financial liabilities | |||||||||||||||||
(without leases) | 0 | 0 | 0 | 0 | 134,570 | 0 | 134,570 | 134,645 | |||||||||
Current lease liabilities | 0 | 0 | 0 | 0 | 437 | 0 | 437 | 437 | |||||||||
Trade payables | 0 | 0 | 0 | 0 | 61,104 | 0 | 61,104 | 61,104 | |||||||||
Current tax liabilities | 0 | 0 | 0 | 0 | 0 | 13,999 | 13,999 | 13,999 | |||||||||
Other current liabilities and grants | 4,787 | 5,093 | 23,881 | 0 | 6,811 | 45,899 | 86,472 | 86,472 | |||||||||
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 34 |
H1/2020
2019 FINANCIAL INSTRUMENTS | Mandatorily at fair | Equity | Book value | Fair value | |||||||||||||
value through | investments at fair | Not a financial | December 31, | December 31, | |||||||||||||
PURSUANT TO IFRS 7 IN EUR THOUSAND | Fair Value Hedge | Cashflow Hedge | profit or loss | value through OCI | At amortised cost | instrument | 2019 | 2019 | |||||||||
Assets | |||||||||||||||||
Other non-current assets and financial assets | 5 | 32,265 | 42 | 1,335 | 1,286 | 15 | 34,948 | 34,948 | |||||||||
Trade receivables | 0 | 0 | 0 | 0 | 117,577 | 0 | 117,577 | 117,577 | |||||||||
Current tax assets | 0 | 0 | 0 | 0 | 0 | 55 | 55 | 55 | |||||||||
Other current assets | 460 | 17,841 | 5,521 | 0 | 23,252 | 17,045 | 64,118 | 64,118 | |||||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | 267,322 | 0 | 267,322 | 267,322 | |||||||||
Liabilities | |||||||||||||||||
Interest-bearingnon-current financial liabilities | |||||||||||||||||
(without leases) | 0 | 0 | 0 | 0 | 482,307 | 0 | 482,307 | 485,811 | |||||||||
Non-current lease liabilities | 0 | 0 | 0 | 0 | 1,012 | 0 | 1,012 | 1,012 | |||||||||
Other non-current liabilities and grants | 15 | 10,961 | 77 | 0 | 1,470 | 47,030 | 59,553 | 59,553 | |||||||||
Interest-bearing current financial liabilities | |||||||||||||||||
(without leases) | 0 | 0 | 0 | 0 | 76,356 | 0 | 76,356 | 80,619 | |||||||||
Current lease liabilities | 0 | 0 | 0 | 0 | 767 | 0 | 767 | 767 | |||||||||
Trade payables | 0 | 0 | 0 | 0 | 73,050 | 0 | 73,050 | 73,050 | |||||||||
Current tax liabilities | 0 | 0 | 0 | 0 | 0 | 10,331 | 10,331 | 10,331 | |||||||||
Other current liabilities and grants | 402 | 5,636 | 5,348 | 0 | 5,152 | 39,777 | 56,315 | 56,315 | |||||||||
Cash and cash equivalents, financial instruments, and trade receivables and other assets generally have short terms. As a consequence, the carrying amounts for these items are approximately the same as the respective fair value. Financial instruments not categorised in accordance with IFRS 7 include financial assets and liabilities measured at fair value as well as those recognised at amortised cost.
In general, trade payables and other current liabilities have terms of less than one year, and the recognised values are approximations of their respective fair value.
The fair values of bank borrowings and other financial liabilities are calculated as the present values of the related payments on the basis of the respective yield curve, taking account of the Group's credit risk exposure.
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 35 |
H1/2020
The measurement categories are as follows:
June 30, 2020 | December 31, 2019 | |||||||||||||||||||
MEASUREMENT CATEGORIES IN EUR THOUSAND | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
ASSETS | ||||||||||||||||||||
Other non-current assets and financial assets | 0 | 275 | 43,920 | 44,195 | 0 | 602 | 33,046 | 33,647 | ||||||||||||
Other current assets | 0 | 40,776 | 15,288 | 56,064 | 0 | 10,333 | 13,489 | 23,821 | ||||||||||||
LIABILITIES | ||||||||||||||||||||
Interest-bearingnon-current financial liabilities | 0 | 519,093 | 0 | 519,093 | 0 | 485,811 | 0 | 485,811 | ||||||||||||
Other non-current liabilities and grants | 0 | 19,935 | 0 | 19,935 | 0 | 11,053 | 0 | 11,053 | ||||||||||||
Interest-bearing current financial liabilities | 0 | 134,645 | 0 | 134,645 | 0 | 80,619 | 0 | 80,619 | ||||||||||||
Other current liabilities and grants | 0 | 33,761 | 0 | 33,761 | 0 | 11,386 | 0 | 11,386 | ||||||||||||
No reclassifications between measurement classes occurred during the first six months of the year.
The Group applies the following hierarchy to determine and report the fair value of financial instruments for each valuation:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: methods in which all inputs that have a material effect on the reported fair value are directly or indirectly observable. The transactions outlined below are recognised at this level:
Forward currency transactions:
In forward currency transactions, a specified amount of a certain currency is exchanged for an amount in another currency at an agreed exchange rate on a particular date. Both of the cash flows arising at the maturity date are recognised at present value on the basis of the yield curve for each transaction currency. The present value of the forward currency transaction comprises the difference between the
two cash flows discounted to their present value and translated into the reporting currency applying the exchange rates. The exchange rates and the yield curve are applied as inputs.
Interest rate swap:
Interest rate swaps involve the exchange of a floating interest rate for a fixed rate. Measurement entails calculating the present value of the variable interest payments and the present value of the fixed interest payments. The present value of the interest-rate swap is the difference between the two cash flows discounted to present value over the transaction term. The inputs comprise 3-month Eu- ribor and the yield curve.
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 36 |
H1/2020
Commodity futures:
The value of these futures is the difference between the contract price and the aluminium price quoted on the London Metal Exchange (LME) at the maturity date of the transaction. The LME quoted aluminium price including the term structure, and the euro/US dollar futures curve comprise the inputs.
Commodity options:
The Black-Scholes model is applied in the valuation of commodity options. The key inputs are the LME quoted aluminium price including the term structure, the euro/US dollar futures curve, and aluminium price volatility data.
Premium derivatives:
The valuation of the premium business derives from the difference between the contract price and the final quotation of the premium price according to the broker on the respective due date of the transaction. The closing prices of the premium price according to the broker and the currency forward structure curve (USD to EUR) are applied as inputs.
Level 3: methods based on input parameters that have a material effect on fair value and are not based on observable market data.
The measurement of the participating interests was not based on observable data, but instead on company estimates, and is consequently allocated to Level 3.
Assets measured at a fair value determined in accordance with Level 3 in the course of a subsequent measurement relate to the embedded derivative included in the electricity supply agreement for the Alouette smelter.
Power supply contract concluded by Aluminerie Alouette Inc.:
Alouette has a power contract with a state-owned utility that directly ties the rate to be paid by Alouette to the market price of aluminium under a contractual pricing formula.
The electricity supply contract contains an embedded derivative due to the dependency of the electricity price on the LME price. This derivative is designated as a hedging instrument as part of cash flow hedges. The fair value of the derivative is measured on the basis of a model. Given the monopolistic electricity market in Canada, no liquid electricity market exists in the conventional sense (a mark-to-market price is not directly observable). A forward price model is consequently employed to
value the derivative, applying an electricity reference price, related yield curves, forward aluminium prices and forward foreign currency exchange rates.
In order to obtain a market-based valuation of the contract, the present value of future electricity payments is subsequently calculated applying forward aluminium prices plus a premium (Midwest premium) based on the expected term of the electricity contract and compared with the present value of future electricity payments based on Alouette's reference electricity price taking into account USD to CAD forward structures. The difference calculated in this manner provides a model-based valuation of the embedded derivative.
The derivative's positive fair value on initial measurement was classified as a public subsidy (from the Government of Québec), and reported under other non-current and current liabilities accordingly. The subsidy is released through profit or loss in line with the expenses as expected according to the terms in the contract.
As of June 30, 2020, a change occurred in the estimate of the expected term (see assumptions and estimation uncertainties).
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 37 |
H1/2020
The change in the value of the embedded derivative is shown below:
IN EUR THOUSAND | June 30, | June 30, | |||||
2020 | 2019 | ||||||
As of January 1, 2020 | 45,200 | 39,525 | |||||
Addition | 10,311 | ||||||
Currency translation differences | 145 | 243 | |||||
Fair Value Changes | 9,587 | 11,776 | |||||
Recycling | -7,562 | -5,461 | |||||
AS OF JUNE 30, 2020 | 57,681 | 46,083 | |||||
Thereof current | 15,288 | 12,795 | |||||
The effect of a change in the LME price on measurement as of June 30 is outlined below:
SENSITIVITY IN EUR THOUSAND | June 30, 2020 | June 30, 2019 | |||||||||
+10% | -10% | +10% | -10% | ||||||||
Other non-current assets and financial | |||||||||||
assets | -14,654 | 14,654 | -15,078 | 15,078 | |||||||
Other current assets | -3,081 | 3,081 | -3,695 | 3,695 | |||||||
RELATED PARTY DISCLOSURES
Outstanding balances and transactions between AMAG Austria Metall AG and its subsidiaries are eliminated in the preparation of the consolidated financial statements, and are not commented upon here.
The Group's operations give rise to related-party business relationships in the form of purchases or sales of goods and services, and rendering or receiving of services, to and from associates. These transactions are all performed on an arm's length basis.
The Group has business relations with Raiffeisen Landesbank Oberösterreich AG associated with fi- nancing, investment and foreign exchange transactions.
The composition of the Management Board is unchanged compared with the previous year.
No loans have been extended to members of the Management or Supervisory boards, and no guarantees have been given on their behalf. No other transactions - and, in particular, no purchase contracts involving assets of significant value - have been entered into with related parties.
Compared with the previous year's financial statements, no significant changes occurred to business relationships with related parties during the first half of 2020.
SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
No significant events occurred after the June 30, 2020 balance sheet date.
AMAG AUSTRIA METALL AG
DECLARATION BY THE MANAGEMENT BOARD
We hereby declare that to the best of our knowledge the interim consolidated financial statements, prepared in accordance with the rules for interim financial reporting established by the International Financial Reporting Standards (IFRS), to the maximum possible extent give a true and fair view of the financial position and performance of AMAG Austria Metall AG.
We also confirm that to the best of our knowledge this Group interim report to the maximum possible extent gives a true and fair view of the financial position and performance of AMAG Austria Metall AG in respect of the significant events that occurred during the first six months of the financial year and their effect on the interim financial statements, and of the principal risks and uncertainties to which the Company will be exposed during the remaining six months of the financial year, as well as the mandatory related party disclosures.
Ranshofen, July 30, 2020
The Management Board
Gerald Mayer | Helmut Kaufmann | Victor Breguncci |
Chief Executive Officer, | Chief Operating Officer | Chief Sales Officer |
Chief Financial Officer |
FINANCIAL REPORT | 38 |
H1/2020
AMAG AUSTRIA METALL AG
THE AMAG SHARE
AMAG SHARE PRICE PERFORMANCE | TRADING VOLUMES |
FINANCIAL REPORT | 39 |
H1/2020
In the first half of 2020, the AMAG share traded in a range between EUR 19.60 and EUR 31.10. Compared with the 2019 year-end, the share price decreased by 17.0 % to EUR 25.30 as of June 30, 2020. The total shareholder return was -17.0 % in the first half of the year. On July 21, 2020, a dividend in the amount of EUR 0.50 per share was concluded in the Virtual Annual General Meet- ing. The Austrian benchmark index, the ATX, was down by -29.5 % to 2,247 points in the comparable period.
200.00
150.00
100.00
50.00
0.00
-50.00 | ||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||
AMAG | ATX | |||||||||||
Average daily trading volumes (double counting) in the share reduced to 9,377 shares in the period between January 2, 2020 and June 30, 2020, 21 % below the level for the first six months of 2019 (H1/2019: 11,890 shares).
INVESTOR RELATIONS
The AMAG share is currently covered by five analysts at the following firms: Baader Bank (add, June 19, 2020), Erste Group (hold, August 6, 2019), Kepler Cheuvreux (reduce, May 4, 2020), Landes- bank Baden-Württemberg (hold, June 10, 2020) and Raiffeisen Centrobank (hold, March 4, 2020).
- In order to raise AMAG's level of recognition in the capital market and to facilitate personal communication with investors, AMAG always aims to be present at various conferences and road shows. Due to COVID-19, such activities could only be realised in a reduced and primarily vir- tual form in the first half of 2020.
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 40 |
H1/2020
ANNUAL GENERAL MEETING | OWNERSHIP STRUCTURE |
AMAG Austria Metall AG held its ninth Ordinary Annual General Meeting as a virtual AGM at the company's headquarters in Ranshofen on July 21, 2020. All agenda items were addressed, and resolutions passed with large majorities, including approving the distribution of a dividend of EUR 0.50 per share. Further details of the agenda and the resolutions can be found in the Investor Relations section of our website at www.amag-al4u.com.
AMAG Austria Metall AG continues to enjoy a stable ownership structure with B&C Industrieholding GmbH comprising a core shareholder with its 52.7 % interest.
7.0% | 4.1% | ||
8.2% | |||
B&C Industrieholding GmbH *, **, Austria | |||
Raiffeisenlandesbank Oberösterreich AG *, Austria | 11.5% | ||
AMAG Employees Private Foundation, Austria | |||
Treibacher Industrieholding GmbH, Austria | |||
Esola Beteiligungsverwaltungs GmbH **, Austria | 52.7% | 16.5% | |
Free float | B&C Industrieholding GmbH |
*) B&C Industrieholding GmbH and Raiffeisenlandesbank Oberösterreich concluded an investment agreement on April 1, 2015.
B&C Industrieholding GmbH and Esola Beteiligungsverwaltungs GmbH entered into an investment agreement on February 14, 2019.
KEY SHARE PERFORMANCE INDICATORS (EUR) | Q2/2020 | Q2/2019 | Change in % | H1/2020 | H1/2019 | Change in % | 2019 | ||||||||||||
Earnings per share | 0.03 | 0.32 | -91.6 % | 0.35 | 0.54 | -34.3 % | 1.10 | ||||||||||||
Operating cahs flow per share | 1.58 | 1.60 | -1.2 % | 2.00 | 1.81 | 10.8 % | 3.97 | ||||||||||||
Market capitalisation (EUR million) | 892.18 | 1,079.08 | -17.3 % | 892.18 | 1,079.08 | -17.3 % | 1,128.45 | ||||||||||||
Share price high | 29.00 | 33.50 | -13.4 % | 31.10 | 35.00 | -11.1 % | 36.00 | ||||||||||||
Share price low | 24.80 | 29.90 | -17.1 % | 19.60 | 29.90 | -34.4 % | 26.93 | ||||||||||||
Closing price | 25.30 | 30.60 | -17.3 % | 25.30 | 30.60 | -17.3 % | 32.00 | ||||||||||||
Average price (volume weighted) | 26.74 | 31.48 | -15.0 % | 26.35 | 31.80 | -17.1 % | 31.58 | ||||||||||||
Shares in issue | 35,264,000 | 35,264,000 | 0.0 % | 35,264,000 | 35,264,000 | 0.0 % | 35,264,000 | ||||||||||||
AMAG AUSTRIA METALL AG
FINANCIAL REPORT | 41 |
H1/2020
2020 FINANCIAL CALENDER
February 27, 2020
April 30, 2020
July 11, 2020
July 21, 2020
July 24, 2020
July 27, 2020
July 28, 2020
July 30, 2020
October 29, 2020
Publication of 2019 annual financial statements
Information on Q1/2020
AGM record date
Virtual Annual General Meeting
Ex-dividend date
Dividend record date
Dividend payment date
H1 2020 report
Information on Q3/2020
NOTE
The forecasts, budgets and forward-looking assessments and statements contained in this report were compiled based on all information presently available to AMAG. In the event that the assumptions underlying these forecasts prove to be incorrect, targets be missed, or risks materialise, actual results may depart from those currently anticipated. We are not obligated to revise these forecasts in the light of new information or future events.
This report was prepared and the data contained in it verified with the greatest possible care. Never- theless, misprints and rounding and transmission errors cannot be entirely ruled out. In particular, AMAG and its representatives do not assume any responsibility for the completeness and correctness of information included in this report. This report is also available in German. In cases of doubt, the German-language version is authoritative.
INFORMATION ABOUT THE AMAG SHARE | This report does not comprise a recommendation or solicitation to purchase or sell securities of AMAG. | ||
ISIN | AT00000AMAG3 | ||
Share class | Ordinary bearer shares | ||
Ticker symbol: Vienna Stock Exchange | AMAG | ||
Indices | ATX-Prime, ATX BI, ATX GP, VÖNIX, WBI | ||
Reuters | AMAG.VI | ||
Bloomberg | AMAG AV | ||
Trading segment | Official trading | ||
Market segment | Prime Market | ||
First trading day | April 8, 2011 | ||
Issue price per share in EUR | 19.00 | ||
Number of shares in issue | 35.264.000 | ||
AMAG AUSTRIA METALL AG
PUBLISHED BY:
AMAG Austria Metall AG
Lamprechtshausenerstrasse 61
5282 Ranshofen
CONTACT:
Christoph M. Gabriel Head of Investor Relations Investor relations
Tel.: + 43 (0)7722 801 - 3821
Fax: + 43 (0)7722 801 - 8 3821
Email: investorrelations@amag.at
WWW.AMAG-AL4U.COM
FINANCIAL REPORT | 42 |
H1/2020
AMAG AUSTRIA METALL AG
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AMAG - Austria Metall AG published this content on 30 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 August 2020 12:53:12 UTC
