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2016-11-03

AMG Advanced Metallurgical Group N.V.: AMG Advanced Metallurgical Group N.V. Reports Third Quarter 2016 Results

Key Highlights

* AMG ended the third quarter 2016 net debt free, with net cash of $1.9
million
* EBITDA(2)was $23.4 million in the third quarter 2016, a 15% increase over
the same period in 2015
* Net income attributable to shareholders increased by 5% to $5.2 million in
the third quarter 2016 from $4.9 million in the third quarter 2015
* EPS, on a fully diluted basis, was $0.18 in the third quarter 2016,
unchanged from third quarter 2015
* Annualized return on capital employed increased to 18.0% in the third
quarter 2016, as compared to 14.7% in the third quarter 2015

Amsterdam, 3 November 2016 (Regulated Information)

---
AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG")
reported third quarter 2016 revenue of $247.5 million, a 2% increase from
$241.9 million in the third quarter 2015. EBITDA for the third quarter 2016
was $23.4 million, a 15% increase from $20.4 million in the third quarter
2015. Net income attributable to shareholders increased to $5.2 million in
the third quarter 2016 from $4.9 million in the third quarter 2015. On a year
to date basis, EBITDA increased by 7% to $70.6 million, from $65.9 million in
the prior year, despite an increase in AMG's Performance Share Unit ("PSU")
plan costs of $8.7 million, compared to the same period in 2015, driven by
AMG's strong share price performance.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said,
"AMG's focus on operational excellence and price risk management resulted in
solid financial results in the third quarter 2016. We are particularly
pleased with the impact new innovations have had on the results of AMG
Engineering, such as: our industry leading SyncroTherm® heat treatment
furnaces; powder metallurgy furnaces related to additive manufacturing;
titanium re-melting furnaces; and turbine blade coating plants. These
innovative product offerings drove a significant portion of third quarter
2016 sales.

AMG Engineering achieved EBITDA of $8.9 million during the third quarter 2016,
an 83% increase from $4.9 million in the third quarter of 2015. AMG
Engineering signed $68.1 million in new orders during the third quarter of
2016, representing a 0.97x book to bill ratio. The Engineering division
continues to experience strong demand for plasma remelting and induction
furnaces for the aerospace market and heat treatment furnaces for the
automotive market. Order backlog was $158.1 million as of September 30, 2016,
consistent with June 30, 2016.

AMG Critical Materials generated EBITDA of $14.5 million during the third
quarter 2016. Year-over-year double-digit declines in average quarterly
prices of Chrome, Graphite, and Silicon negatively affected revenue in the
third quarter of 2016 compared to the third quarter of 2015.

On a year to date basis, AMG generated cash flows from operating activities of
$40.7 million, a decrease of 5% from $42.8 million in the same period in
2015. The year to date operating cash flows of $40.7 million includes
voluntary cash contributions to the Company's pension plans of $20.6 million
made in the second quarter of 2016. This strong cash flow generation enabled
AMG to end the third quarter net debt free, with net cash of $1.9 million."

Key Figures

-----------------------------------------------------------------------
| In 000's US Dollar |
| Q3 '16 Q3 '15 Change |
| Revenue $247,526 $241,867 2% |
| Gross profit 46,532 39,660 17% |
| Gross margin 18.8% 16.4% |
| |
| Operating profit 16,110 8,297 94% |
| Operating margin 6.5% 3.4% |
| |
| Net income attributable to shareholders 5,181 4,933 5% |
| |
| EPS - Fully diluted 0.18 0.18 - |
| |
| EBIT(1) 16,231 12,751 27% |
| EBITDA(2) 23,403 20,416 15% |
| EBITDA margin 9.5% 8.4% |
| |
| Cash flows from operating activities 20,677 27,697 (25%) |
-----------------------------------------------------------------------
Note:

1 EBIT is defined as earnings before interest and income taxes. EBIT excludes
restructuring and equity-settled share-based payments and includes foreign
currency gains or losses.
2 EBITDA is defined as EBIT adjusted for depreciation and amortization.

Operational Review

AMG Critical Materials

------------------------------------------------
| Q3 '16 Q3 '15 Change |
| Revenue $177,490 $187,741 (5%) |
| Gross profit 32,025 * 27,102 18% |
| Operating profit 9,106 6,143 48% |
| EBITDA 14,467 15,531 (7%) |
| |
------------------------------------------------
* Includes $2.1 million non-cash expense related to vanadium, nickel and
molybdenum inventory adjustments in the third quarter 2015

AMG Critical Materials continues to be impacted by weak metal prices, and as a
result, revenue decreased by 5%, to $177.5 million.

Double-digit declines in average quarterly prices of Chrome, Graphite and
Silicon negatively affected revenue in the third quarter of 2016 compared to
the third quarter of 2015.

Gross profit in the third quarter increased by $4.9 million, or 18%, to $32.0
million, due to the strong performance of Aluminum Master Alloys and
Tantalum. In addition, AMG Vanadium incurred a non-cash inventory adjustment
expense of $2.1 million in the prior year due to rapidly falling vanadium,
nickel and molybdenum prices.

SG&A expenses increased by $4.4 million, or 23%, compared to the prior year
due to higher PSU plan costs.

Third quarter 2016 EBITDA margin remained steady at 8% compared to the third
quarter 2015.

AMG Engineering

----------------------------------------------
| Q3 '16 Q3 '15 Change |
| Revenue $70,036 $54,126 29% |
| Gross profit 14,507 12,558 16% |
| Operating profit 7,004 2,154 225% |
| EBITDA 8,936 4,885 83% |
| |
----------------------------------------------
AMG Engineering signed $68.1 million in new orders during the third quarter of
2016, representing a 0.97x book to bill ratio. Order backlog was $158.1
million as of September 30, 2016, consistent with June 30, 2016. Year to
date, AMG Engineering signed $211.4 million in new orders, representing a
1.07x book to bill ratio.

AMG Engineering's third quarter 2016 revenue increased $15.9 million, or 29%,
to $70.0 million, due to strong sales of plasma remelting and induction
furnaces for the aerospace market.

Third quarter 2016 gross profit increased by $1.9 million, or 16%, to $14.5
million, due to higher revenues. Gross Margin decreased slightly to 21% from
23% in the third quarter of 2015 due to product mix effects.

SG&A expenses increased by $1.4 million, or 14%, compared to the prior year,
due to higher PSU plan costs.

EBITDA increased by $4.1 million to $8.9 million in the third quarter of 2016,
the highest quarterly EBITDA in nineteen quarters. The increase in EBITDA was
driven by higher gross profit and the sale of an unused production facility
in Berlin, which contributed $4.3 million to EBITDA during the quarter,
offset by higher SG&A expenses.

Financial Review

Tax

AMG recorded an income tax expense of $4.1 million in the third quarter of
2016 as compared to a tax expense of $4.7 million in the same period in 2015.
AMG paid taxes of $1.1 million in the third quarter of 2016 as compared to
tax payments of $1.5 million in the same period in 2015. For the third
quarter of 2016, AMG's effective cash tax rate was 12%, compared to 15% in
the same period in 2015.

Liquidity

----------------------------------------------------------------------------
| September 30, 2016 December 31, 2015 Change |
| Total debt $172,222 $126,743 36% |
| Cash and cash equivalents 174,077 127,778 36% |
| Net debt (cash) (1,855) (1,035) 79% |
----------------------------------------------------------------------------
AMG had a net cash position of $1.9 million as of September 30, 2016. Net debt
decreased by $0.8 million from December 31, 2015, while gross debt increased
by $45.5 million, driven by the increased term loan associated with the new
debt facility.

Cash flows from operating activities decreased to $20.7 million in the third
quarter 2016 from $27.7 million in the third quarter 2015.

Capital expenditures increased to $8.3 million in the third quarter of 2016
compared to $5.2 million in the same period in 2015. Capital spending in the
third quarter of 2016 included $4.2 million of maintenance capital. The
largest expansion capital project was for AMG's Ancuabe graphite mine
project.

Including the $174 million of cash, AMG had $350 million of total liquidity as
of September 30, 2016. AMG successfully enlarged and extended its syndicated
credit facility during the quarter. AMG incurred additional one-time
financing costs of $4.0 million related to the new facility.

Net Finance Costs

AMG's third quarter 2016 net finance costs were $6.8 million compared to net
finance income of $1.5 million in the third quarter of 2015. The increase was
primarily due to the write-off of $4.0 million of costs associated with the
previous credit facility, following the refinancing exercise completed in
July 2016. Furthermore, in the third quarter 2015, net finance expenses
benefited from the reversal of $2.1 million of accrued finance expenses.

SG&A

AMG's third quarter 2016 SG&A expenses were $34.7 million compared to $28.9
million in the third quarter of 2015, an increase of 20%. This increase was
primarily due to higher costs associated with the PSU plan as a result of
recent increases in the Company's share price compared to the defined peer
group.

On a year to date basis, the PSU plan costs increased by $8.7 million,
compared to the same period in 2015.

Out...

Författare Hugin

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