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    IKG   IT0004552359

INTEK GROUP S.P.A.

(IKG)
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Intek S p A : The Interim Financial Report on Operations at June 30, 2021 of INTEK Group SpA is approved

09/23/2021 EST

Registered office: 20121 Milan (MI) - Foro Buonaparte 44

Share capital Euro 335,069,162.51, fully paid-up

Tax Code and Milan Companies Register no. 00931330583

www.itkgroup.it

PRESS RELEASE

  • THE BOARD OF DIRECTORS OF INTEK GROUP SPA HAS APPROVED THE HALF-YEAR FINANCIAL REPORT AS AT 30 JUNE 2021, WITH THE SEPARATE FINANCIAL STATEMENTS SHOWING THE FOLLOWING:

IN MILLIONS OF EURO

30/06/2021

31/12/2020

NET INVESTMENTS

572.7

570.3

HOLDING COMPANY NET FINANCIAL DEBT

69.5

63.2

SHAREHOLDERS' EQUITY

503.1

507.2

NET PROFIT/(LOSS)

(3.9)

(4.2)*

*Net profit (loss) for the first half of 2020

  • KME:

EBITDA AS AT 30 JUNE 2021 OF EURO 47.6 MILLION; 17.4% HIGHER COMPARING TO THE FIRST HALF OF 2020 (EURO 40.6 MILLION)

AGREEMENT WITH EREDI GNUTTI METALLI EXECUTED FOR THE ACQUISITION OF THE ITALIAN ROLLED PRODUCTS BUSINESS

DISPOSAL OF 55% OF THE SPECIAL PRODUCTS BUSINESS AND ACQUISITION OF THE AURUBIS ROLLED FLAT PRODUCT BUSINESS CURRENTLY BEING FINALISED

  • CULTI MILANO:
    CONSOLIDATED EBITDA OF EURO 1.7 MILLION (EURO 1.0 MILLION IN THE FIRST HALF OF 2020 ON A LIKE-FOR-LIKE BASIS)
    CHINESE JOINT VENTURE BEGINS OPERATING

* * *

The Board of Directors of Intek Group SpA (hereinafter also "Intek Group" or the "Company"), a holding of diversified investments with the objective of a dynamic management of its holdings, has approved today the half-year financial report as at 30 June 2021.

As at 30 June 2021, the net investments held by the Company amounted to Euro 572.7 million (Euro

570.3 million at the end of 2020), of which 89% in the "copper" sector and the remainder in financial and real estate assets.

The Company maintains a sound financial structure: Shareholders' Equity as at 30 June 2021 amounted to Euro 503.1 million compared to Euro 507.2 million as at 31 December 2020. The change is to be attributed primarily to the result for the period, negative by Euro 3.9 million (loss of Euro 4.2 million in the first half of 2020) in the absence of income from equity investments.

1

Following are the main events that have characterised the Intek activities and those of its subsidiaries in the first half of 2021:

  1. Copper sector
    In this business sector, significant transactions are being carried out in order to implement the KME group's strategy of concentrating on copper and copper alloy rolled products, in which the group is the European leader and where it intends to focus its energy and future growth, given the appealing growth rates expected for the main reference markets.
    In June, an agreement was entered into with Paragon Partners GmbH, a German private equity firm which manages Euro 1.2 billion in funds, for the transfer of control of the Special Products business. The agreement calls for the creation of a Newco 55% held by Paragon and 45% by KME, to which the business will be transferred. The transaction, which is expected to be finalised by the end of 2021, will contribute total cash of Euro 260-280 million to KME - of which roughly Euro 60-80 million to be used to repay intra-group working capital loans - plus a vendor loan of Euro 32 million that will be repaid by the Newco. The transaction with Paragon - along with other transactions currently being researched on other assets and non-core activities - will substantially contribute to pursuing the group's progressive deleveraging target, while also enabling it to share pro rata in the future value creation of the Special Products business.
    With respect to the Copper sector, a transaction was carried out in June with S.A. Eredi Gnutti Metalli SpA ("EGM"), which resulted in the transfer to KME Italy SpA of the rolled business of EGM. This business generates revenue of roughly Euro 60 million and employs 70 people. The consideration of Euro 21.8 million was reinvested in full by EGM in the subscription of a KME Italy share capital increase, corresponding to 16% post-money. The transaction will make it possible to combine know- how, production capacity, distribution channels and logistics coverage, with a view to generating operating efficiencies and boosting market competitiveness while providing the highest quality service to customers.
    Also in the Copper sector, a term sheet was signed in August for the acquisition of part of the flat rolled products production segment of Aurubis AG. The scope of the transaction includes the FRP plant in Zutphen (Netherlands) and the slitting centres in Birmingham (United Kingdom), Dolný Kubín (Slovakia) and Mortara (Italy), for total turnover of roughly Euro 280 million and 360 employees. The final agreement is expected to be signed in the coming months and the finalisation of the transaction will be subject to several conditions precedent, including approval by the competent competition authorities.
    The current results of the Copper business showed revenue from sales, net of raw materials, up by 7.2% (from Euro 247.1 million in the first half of 2020 to Euro 264.7 million); EBITDA of Euro 47.6 million, 17.4% higher than in the first half of 2020, when it stood at Euro 40.6 million; EBIT of Euro 26.4 million (Euro 19.7 million in the first half of 2020). The net financial debt was Euro 290.5 million (Euro 270.7 million as at 31 December 2020). The increase can be attributed primarily to working capital, impacted by seasonal considerations and metal prices, and for around Euro 5.3 million to the effects of the classification of the Special Products business as an asset held for disposal.
  2. Culti Milano S.p.A.
    Despite the effects of the restrictive measures linked to the Covid-19 pandemic, in the first half of 2021 Culti Milano and its subsidiaries recorded significant commercial growth, confirming their differentiation and complementary channel strategy.
    In the first half of 2021, the Culti Milano Group recorded consolidated turnover of Euro 9.1 million and consolidated EBITDA of Euro 1.7 million compared to the same indicators in the first half of 2020 (on a like-for-like basis) of Euro 6.4 million and Euro 1.0 million, therefore marking a considerable increase in sales supported by significant profitability performance.
  3. Extraordinary finance transactions
    On 28 June 2021, Intek Group 2021-2024 Warrants were issued and assigned free of charge all ordinary and savings shareholders, with a ratio of 0.4 warrant for every share held. Each warrant allows the subscription of one Intek Group ordinary share at the exercise price of Euro 0.4 by 28 June 2024. A total of 172.9 million warrants were assigned which, if they are all exercised, will result in a share capital increase of Euro 69.2 million.

2

The voluntary public exchange offer on Intek Group savings shares took place from 30 June to 23 July. A total of 33.8 million savings shares were exchanged (equal to 67.41% of the share capital subject to the offer) and subsequently cancelled. In exchange, 785,417 "Intek Group S.p.A. 2020 - 2025" Bonds were issued as consideration, for a total value of Euro 17.0 million.

* * *

The main equity data of Intek as at 30 June 2021, compared with those as at 31 December 2020, are summarised in the following table.

Condensed separate statement of financial position

(in thousands of Euro)

30 Jun 2021

31 Dec 2020

Copper

515,473

90.01%

514,082

89.77%

Culti

27,309

4.77%

27,309

4.77%

Ducati Energia

16,013

2.80%

16,013

2.80%

Intek Investimenti

10,520

1.84%

10,241

1.79%

I2 Capital Partners SGR SpA

-

0.00%

(104)

-0.02%

Other investments

1,943

0.34%

2,165

0.38%

Other assets/liabilities

1,399

0.24%

634

0.11%

Net investments

572,657

100.00%

570,340

100.00%

Outstanding bonds (*)

75,266

78,288

Net cash

(5,740)

(15,128)

Holding company net financial debt

69,526

12.14%

63,160

11.07%

Total shareholders' equity

503,131

87.86%

507,180

88.93%

Notes:

  • In the table, investments are expressed net of any financial receivable/payable transactions outstanding with the Intek Group.
  • (*) Including accruing interest.
    • * *

Shareholders' Equity

The holding company's shareholders' equity amounted to Euro 503.1 million, compared to Euro 507.2 million as at 31 December 2020; the change, net of the buyback of treasury shares for Euro 0.1 million, was caused solely by the result for the year. Shareholders' equity per share was Euro 1.164 (Euro 1.175 as at 31 December 2020).

The Share Capital as at 30 June 2021 was Euro 335,069,009.80, divided into 389,131,478 ordinary shares and 50,109,818 savings shares, unchanged compared to 31 December 2020. All the shares were without par value.

As at 30 June 2021, the Company held a total of 6,949,112 treasury shares, of which 6,937,311 ordinary shares (equal to 1.783% of shares in this category) and 11,801 savings shares (equal to 0.024% of the capital for this category). The latter were subsequently cancelled along with the shares acquired through the public exchange offer. In the first half of 2021, 382,051 ordinary treasury shares were purchased, with a financial outlay of Euro 128 thousand.

Therefore, the Company currently holds only 6,937,311 ordinary treasury shares, equal to 1.783% of the ordinary share capital.

3

Financial management

Net financial debt of the holding company (excluding intra-group loans and leasing liabilities) totalled Euro 69.5 million as at 30 June 2021. The balance as at 31 December 2020 was Euro 63.2 million. It increased as a result of financial expenses and management costs for the year.

Intek's financial debt as at 30 June 2021, compared to 31 December 2020, can be broken down as follows:

Financial debt

(in thousands of Euro)

30 Jun 2021

31 Dec 2020

A

Cash

739

15,286

B

Cash equivalents

-

-

C

Other financial assets

7,597

593

D

Cash and cash equivalents (A+B+C)

8,336

15,879

E

Current financial debt

1,458

4,414

F

Current portion of non-current financial debt

584

572

G

Current financial debt (E+F)

2,042

4,986

H

Net current financial debt (G-D)

(6,294)

(10,893)

I

Non-current financial debt

2,742

2,965

J

Debt instruments

75,266

75,332

K

Trade payables and other non-current payables

-

-

L

Non-current financial debt (I + J + K)

78,008

78,297

M

Total financial debt (H + L)

71,714

67,404

Bank loans are shown net of sums restricted to secure them.

The Current portion of non-current financial debt and Non-current financial debt relate solely to lease agreements accounted for in accordance with IFRS 16.

* * *

Performance of primary investments "Copper" sector

Consolidated revenues in the first half of 2021 totalled Euro 1,106.2 million, up 24.6% compared to Euro 888.0 million in the same period of 2020. Net of the value of raw materials, revenue was up 7.2%, from Euro 247.1 million to Euro 264.7 million.

Gross operating income (EBITDA) in the first half of 2021 was Euro 47.6 million, 17.4% higher comparing to the first half of 2020 when EBITDA stood at Euro 40.6 million.

Net operating income (EBIT) was Euro 26.4 million (Euro 19.7 million in the first half of 2020).

Profit before non-recurringitems was Euro 6.4 million, while it reached the break-even point in the first half of 2020.

4

In addition to this result, there was a positive effect of Euro 21.5 million, net of taxes, from the valuation of inventories and forward agreements and a negative effect for Euro 13.3 million from non-recurring expenses. In the first half of 2020, these effects were instead both negative to the tune of Euro 28.3 million and Euro 10.0 million, respectively.

The KME Group's consolidated net loss (net of the profit/(loss) of non-controlling interests) amounted to Euro 6.3 million (compared to a loss of Euro 46.6 million in the first half of 2020).

The negative net financial position came to Euro 290.5 million as at 30 June 2021 (negative by Euro 270.7 million as at 31 December 2020). The increase can be attributed primarily to working capital, impacted by seasonal considerations and metal prices, and for around Euro 5.3 million to the effects of the classification of the Special Products business as an asset held for disposal. The Group is continuing to adopt measures to optimise working capital requirements.

Culti Milano

The main consolidated indicators can be summarised as follows:

  • total consolidated sales of Euro 9.1 million, up 102% compared to 30 June 2020 when they stood at Euro 4.5 million. The increase in sales recorded by the parent company CULTI Milano as well as by BAKEL also benefitted, for Euro 1.5 million, from the consolidation of SCENT Company as of the second half of 2020 and for Euro 1.3 million from the contribution to sales of the Chinese subsidiaries, which began operating in February 2021;
  • Consolidated EBITDA of Euro 1.7 million (+183% compared to the first half of 2020, when it amounted to Euro 1.0 million on a like-for-like basis);
  • EBIT of Euro 1.5 million (+200% compared to the first half of 2020, when it amounted to Euro
    0.5 million);
  • positive net financial position of Euro 2.2 million, down slightly compared to Euro 2.3 million as at 31 December 2020. Moreover, during the half-year the Asian joint venture was established with an investment of Euro 300 thousand and a contractual earn-out was recognised relating to the investment in the controlling share of BAKEL, for Euro 187 thousand.
    * * *

Intek Group Consolidated Financial Statements

The separate and consolidated financial statements of Intek Group as at 30 June 2021 include the same values as there are no instrumental subsidiaries. The liquidation of the subsidiary I2 Capital Partners SGR SpA, consolidated line-by-line in the financial statements as at 31 December 2020 was indeed concluded on 31 March 2021. Given the irrelevance of the income statement flows of this subsidiary, it was deconsolidated on 1 January 2021.

* * *

The Manager in charge of Financial Reporting, Giuseppe Mazza, hereby declares that, pursuant to article 154- bis, paragraph 2 of the Consolidated Law on Finance (Italian Legislative Decree no. 58/1998), the accounting information contained in this press release corresponds to the company's documents, books, and accounting records.

* * *

The press release is available on the website www.itkgroup.it, where it is possible to request information directly from the Company (phone: +39 02-806291;e-mail:info@itk.it) and on the authorised "eMarket STORAGE" system operated by Spafid Connect SpA at www.emarketstorage.com.

Milan, 23 September 2021

The Board of Directors

Annexes:

  1. Consolidated Statement of financial position
  2. Consolidated Income statement
  3. Consolidated Statement of cash flows

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Intek Group S.p.A. published this content on 23 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 September 2021 13:11:07 UTC.


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Sales 2020 14,8 M 16,8 M 16,8 M
Net income 2020 4,52 M 5,11 M 5,11 M
Net Debt 2020 66,9 M 75,6 M 75,6 M
P/E ratio 2020 168x
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Vincenzo Ugo Manes Chairman & Chief Executive Officer
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