Nasdaq Copenhagen A/S
Nikolaj Plads 6
DK-1007 København K
Company reg. (CVR) no.: 24 93 28 18
11 August 2017
Interim report, H1 2017
1 January–30 June 2017
FOCUS ON OPTIMISING AND SELLING THE PROPERTY PORTFOLIO
After sale of the silicon business to GlobalWafers in 2016 we focus now on the sale of our property portfolio in Poland in most optimal way and also on the improvement of the daily property rental business.
Highlights of the FIRST HALF OF THE YEAR
- On January 27th 2017, Cemat A/S announced an offer to the shareholders to buy back the Company’s own shares at a fixed price of DKK 0,352 per share. At the end of the offer period, the Company has received 294,313,765 acceptances from shareholders representing 54.1% of the shares in the Company. On March 8th 2017 the extraordinary general meeting of Cemat A/S adopted a resolution to reduce the share capital of the company from nominally DKK 10,883,281.36 to nominally DKK 4,997,006.06. Completion and settlement of the buy-back offer took place on April 12th 2017.
- On June 23rd 2017, Cemat A/S paid out extraordinary dividend totaling approx. DKK 10.0m gross, corresponding to an amount of DKK 0.04 per share of nominally DKK 0.02.
- Consolidated EBITDA of the Cemat Group was DKK 0.7 million in H1 2017 (H1 2016: loss DKK 2.9 million). EBITDA from the property rental business in Poland was DKK 3.2 million in H1 2017 (H1 2016: DKK 3.5 million).
- A consolidated loss of the Cemat Group of DKK 2.1 million was posted for H1 2017.
Outlook for 2017
- Revenue for Cemat A/S Group is expected to amount to DKK 37-39 million in 2017.
- Group’s EBITDA is expected to be around DKK 2-3 million.
- After deduction of capital expenditures (investment property), finance costs and income tax a net consolidated loss of DKK 2-3 million is expected for 2017.
- The guidance is based on an exchange rate of DKK 175/PLN 100.
FINANCIAL HIGHLIGHTS FOR THE GROUP (UNAUDITED)
|DKK’000||H1 2017||H1 2016||FY 2016|
|Earnings before interest, tax, depreciation and amortization (EBITDA)||705||(2,931)||(12,573)|
|Operating profit/(loss) (EBIT)||(825)||(5,258)||(17,140)|
|Profit/(loss) for the period, continuing operations||(2,050)||(12,990)||13,646|
|Profit/(Loss) for the period, discontinuing operations||0||(45,832)||(40,975)|
|Profit/(loss)for the period||(2,050)||(58,822)||(33,329)|
|Of which attributable to parent shareholders||(2,436)||(59,114)||49,325|
|Cash flow statement:|
|Cash flows from operating activities||(1,388)||(30,830)||(65,396)|
|Cash flows from investing activities||(1,132)||(667)||382,894|
|Cash flow from financing activities||(112,743)||65,454||(191,524)|
|Equity attributable to parent company shareholders||81,112||170,992||192,914|
|Equity attributable to non-controlling shareholders||31,864||15,652||30,150|
|Total consolidated equity||112,976||186,644||223,064|
|Net interest-bearing debt||0||252,750||0|
|Net working capital (NWC)||(843)||112,151||(454)|
|EBITDA margin (%)||3.6||(40.8)||(49.4)|
|EBIT-margin/profit margin (%)||(4.3)||(73.2)||(67.4)|
|Return on invested capital (%)||(0.8)||(1.2)||(16.2)|
|Equity ratio (%)||81.8||35.6||90.1|
|Return on equity (%)||(1,2)||(26,3)||(13,8)|
|Current number of shares (thousands)||249,850||528,114||544,164|
|Earnings per share (DKK)||(0,01)||(0.11)||(0.06)|
|Price per share (DKK)||0.30||0.29||0.32|
|Average number of employees (FTE)||27||35||32|
THE PROPERTY BUSINESS
Cemat A/S’ business operations comprise a listed holding company in Denmark, which owns 100% of Cemat Real Estate S.A. which again owns 77,66% of CeMat’70 S.A, the property company, which comprises the group’s main activity. There are no other business operations in the Danish listed company.
The ongoing efforts to divest the assets of the Polish property business is continuing unabatedly.
CeMat ‘70 owns 133 thousand sqm of useable land and 41 thousand sqm of buildings on Wólczynska 133 in the Bielany district, which is located approximately 10 kilometers NW of the center of Warsaw, Poland. Bielany has undergone significant development over the past years with a large number of housing units and new retail businesses being established in the area. The land held by CeMat ‘70 is currently classified for industrial purposes, but the company is working to reclassify the land to residential and services usage to include it in the ongoing development of the district.
CeMat ‘70 engages in the letting of premises and land and the provision of utilities to its tenants, including power, water, technical gases and facility services, etc. CeMat ‘70 has approximately 110 tenants and an occupancy rate of approximately 85%. Topsil GlobalWafers (TGW) is the biggest tenant generating approx. 60% of income and 40% of profit contribution. TGW will continue its operations in Poland till the end of year 2017. In 2018 TGW may phase out its operations, and CeMat ‘70 is currently seeking new tenants.
Revenue of the Cemat Group was DKK 19.3 million in H1 2017 (H1 2016: DKK 7.2 million without sales to TGW, which was eliminated from the consolidated revenue as intra-group or DKK 18.2 including sales to TGW).
Costs were DKK 18.6 million in H1 2017 (H1 2016: DKK 10.1 million without costs of sales to TGW, which was eliminated from the consolidated costs of sales as intra-group or DKK 18.0 including costs of sales to TGW). This line item includes operating costs in the Polish property company and administrative expenses of the holding company related to being a listed company, including remuneration to the Board of Directors and the Management Board.
EBITDA was a profit of DKK 0.7 million in H1 2017 (H1 2016: a loss of DKK 2.9 million).
EBITDA of the property rental business was a profit of DKK 3.2 million in H1 2017. In the same period of 2016, EBITDA was DKK 3.5 million.
The Group’s investment property is measured at its estimated fair value in accordance with IAS 40 and IFRS 13, and any value adjustments are recognized in the income statement. For the purpose of preparation the H1 2017 financial report it was assumed that the fair value of the investment property expressed in PLN did not change from the previous year. A new valuation by an external, professional valuator will be made before the publication of the 2017 results.
Net financials amounted to an expense of DKK 0.8 million in H1 2017 (H1 2016: an expense of DKK 7.6 million). It comprised of bank interests and exchange rate losses from the valuation of intercompany loans.
A net loss of DKK 2.1 million was posted for the period (H1 2016: a loss of DKK 13.0 million).
The net result in the 1st half of 2017 is lower than expected. The reasons are higher than expected consultancy and legal expenses regarding transition from production to property business, loss of active VAT payer status in Cemat A/S (which is not a financial holding company), identification of additional costs regarding the property portfolio, negative interest from a high balance on the bank account and not realized foreign exchange differences.
As a part of these non-budgeted costs are of a “one-off” nature, and due to a better than budgeted performance of the property rental business, the result in the 2nd half of 2017 is expected to be better than in the 1st half.
CASH FLOW STATEMENT AND BALANCE SHEET
Cash flows from operating activities were an outflow of DKK 1.4 million in H1 2017.
Cash flows from investing activities were an outflow of DKK 1.1 million. Cash was spent on upgrading the company’s facilities and preparation of company’s properties for divestment.
Cash flows from financing activities were an outflow of DKK 112.7 million. Cash was spent on the share buy-back programme (DKK 104.1 million including related expenses), extraordinary dividend (DKK 8.5 million net, withholding tax outstanding at 30.06.2017) and financial lease repayments.
The Group’s non-current assets totaled DKK 109.8 million at 30 June 2017, consisting of land and buildings, usufruct rights and production equipment in the property business.
At 30 June 2017, there was no interest-bearing debt. It was repaid in full in July 2016.
The Group’s equity at 30 June 2017 stood at DKK 113.0 million, of which DKK 81,1 million was attributable to the shareholders of Cemat A/S, and DKK 31.9 million was attributable to non-controlling interests in CeMat ‘70 S.A. The equity ratio was 81.8% at 30 June 2017.
OUTLOOK FOR 2017
Revenue for Cemat A/S is expected to amount to DKK 37-39 million in 2017.
EBITDA generated by the Polish property rental business (CeMat ‘70) is expected to be around DKK 6-7 million. EBITDA for the group is expected to be around DKK 2-3 million.
After deduction of capital expenditures (investment property), finance costs and income tax a net consolidated loss of DKK 2-3 million is expected for 2017.
In the 2017 outlook it is assumed that the fair value of the property will not change in comparison to the valuation made at the end of 2016. However a new valuation by an external, professional valuator will be made before the publication of the 2017 results.
The main objective of Cemat is to prepare the company’s assets for divestment and carry out the actual divestment. The process has been accelerated in 2017 and the company has been confirmed in its expectation, that it will be able to divest the property. There are obstacles to be overcome like restitution claims, reclassification of the land for residential and services purposes, consolidation of the land and closing a deal with a buyer. However, bearing in mind the current favorable situation on the Warsaw real estate market the company’s management believes it will be able to sell the property for a price at least corresponding to the current valuation.
The forward-looking statements in this interim report reflect Management’s current expectations for certain future events and financial results. Forward-looking statements are inherently subject to uncertainty, and actual results may therefore differ materially from expectations.
Factors that may cause actual results to deviate materially from expectations include, but are not limited to, general economic developments, the financial markets, changes in the real estate market in Poland, legislation, changes in demand for the company’s services, and competition.
INVESTOR RELATIONS COMMUNICATION
Please direct any questions regarding this announcement to CEO Abdelmottaleb Doulan or Finance Manager Dariusz Biesiadecki through Bodil Harjo, Executive Secretary, tel.: +45 22 82 10 11, firstname.lastname@example.org.
At Cemat's shareholder portal at www.cemat.dk, shareholders can access information on their shareholdings and register their email addresses for electronic distribution of documents for general meetings and other material relevant to shareholders.
Under “Contacts” on Cemat’s website, it is possible to subscribe to and unsubscribe from Cemat’s electronic email service to receive annual reports, quarterly reports and other company announcements.
Prior to the publication of an interim report, Cemat observes a four-week silent period.
|11||20.06||Correction Payment of dividend|
|10||20.06||Payment of dividend|
|9||19.04||Major shareholder announcement|
|8||12.04||Implementation of reduction of share capital and settlement of the buy-back offer|
|7||11.04||Major shareholder announcement attachment (in Danish)|
|6||08.04||Board resolution on completion of the buy-back offer|
Course of the annual general meeting
Presentation (in Danish)
|4||14.02||Topsil GlobalWafers warns termination of tenancy agreement|
|3||14.02||Result of share buy-back offer|
Launch of buy-back offer in Cemat A/S
Share buy-back offer to the shareholders
Annual Report 2016 and change of financial calendar
This announcement has been prepared in a Danish-language and an English-language version. In the event of any discrepancies, the Danish version shall prevail.
The Board of Directors and the Management Board have today considered and adopted the interim report of Cemat A/S for the six months ended 30 June 2017.
The interim report is presented in accordance with IAS 34 “Interim financial reporting” as adopted by the EU and Danish disclosure requirements for interim reports of listed companies.
In our opinion, the interim financial statements give a true and fair view of the Group’s assets, liabilities and financial position at 30 June 2017 and of the results of the Group’s operations and cash flows for the six months ended 30 June 2017.
In our opinion, the management report includes a fair review of the development and performance of the business and financial position of the Group, the financial results for the period as well as the financial position in general of the consolidated companies, together with a description of the principal risks and uncertainties that the Group faces.
Copenhagen,11 August 2017
BOARD OF DIRECTORS:
|Jens Borelli-Kjær||Eivind Dam Jensen||Joanna L. Iwanowska-Nielsen|
|Chairman||Deputy Chairman||Board member|
INCOME STATEMENT (UNAUDITED)
|DKK’000||H1 2017||H1 2016||FY 2016|
Earnings before interest, tax, depreciation
and amortization (EBITDA)
Depreciation, amortization and impairment
Capital expenditures (investment property)
Operating profit/(loss) (EBIT)
|Unrealized marked value revaluation investment property||
|Profit/(loss) before tax||
Tax on profit/(loss) for the period
Profit/(loss) for the period from
|Profit/(loss) for the period, discontinued operations||0||(45,832)||(46,975)|
Profit/(loss) for the period, including
|Appropriation of profit/(loss) for the period:|
|Parent company shareholders||(2,436)||(59,114)||(49,325)|
|Earnings per share:|
|Earnings per share (DKK)||(0.01)||(0.11)||(0.06)|
|Diluted earnings per share (DKK)||(0.01)||(0.10)||(0.06)|
STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
|DKK’000||H1 2017||H1 2016||FY 2016|
|Profit/(loss) for the period||(2,050)||(58,822)||(33,329)|
Foreign exchange adjustment,
Comprehensive income for the period
|Parent company shareholders||2,314||(73,655)||(56,527)|
CASH FLOW STATEMENT (UNAUDITED)
|DKK’000||H1 2017||H1 2016||FY 2016|
|Operating profit/(loss) (EBIT) from continuing operations||(825)||(5,258)||(17,140)|
|Operating profit/(loss) (EBIT) from discontinued operations||0||(45,686)||(45,686)|
Depreciation, amortization and impairment
Capital expenditure recognized in the income statement (investment property)
Share-based payment recognized in the
|Change in net working capital||(1,310)||(19,328)||(9,522)|
|Financial income received||34||6||36|
|Financial expenses paid||(155)||(4,921)||(7,481)|
Cash flows from operating activities
|Acquisition etc. of intangible assets||0||(3,866)||(3,866)|
|Acquisition etc. of property, plant and equipment||(1,132)||(956)||(2,097)|
|Sale of property, plant and equipment||0||0||0|
|Sale of non-current assets concerning silicon business||0||0||388,857|
Cash flows from investing activities
|Loans and credits raised||0||65,454||0|
|Finance lease repayments||(157)||0||(232)|
|Repayments of loans and credits||0||0||(191,292)|
|Share buyback incl. related expenses||(104,122)||0||0|
Cash flows from financing activities
|Change in cash and cash equivalents||(115,263)||4,623||125,974|
|Cash and cash equivalents at beginning of period||134,609||8,830||8,830|
Market value adjustment of cash and cash
Cash and cash equivalents at end of period
BALANCE SHEET, ASSETS (UNAUDITED)
|Completed development projects||0||0||0|
|Development projects in progress||0||0||0|
|Rights of use||0||13,133||0|
|Other intangible assets||0||0||0|
|Land and buildings||0||37,019||0|
|Plant and machinery||0||4,856||0|
|Other fixtures and fittings, tools and equipment||0||37||0|
|Property, plant and equipment under construction||0||2,636||0|
Property, plant and equipment
|Investments in subsidiaries||0||0||0|
|Other non-current receivables||604||0||573|
|Deferred tax asset||0||0||0|
|Income tax receivable||0||0||95|
|Assets held for sale||0||459,531||0|
|Cash and cash equivalents||19,874||3,996||134,609|
BALANCE SHEET, EQUITY AND LIABILITIES (UNAUDITED)
|Reserve for share-based payment||0||5,189||0|
Equity attributable to
parent company shareholders
Equity attributable to non-controlling interests
|Due to credit institutions||0||0||0|
|Finance lease liabilities||0||288||175|
|Prepayments received from customers||0||0||0|
|Other non-current liabilities||76||465||589|
|Deferred tax liabilities||17,042||7,296||16,602|
|Due to credit institutions||0||256,746||0|
|Finance lease liabilities||262||232||244|
|Prepayments received from customers||0||0||0|
|Income tax payable||60||44||264|
|Liabilities relating to assets held for sale||0||69,531||0|
|Equity and liabilities||138,186||524,150||247,645|
STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
|Reserve for share-based payment||Retained earnings||
to parent company share-holders
Attribute-able to non-
|Equity at 01.01.2016||132,029||(19,499)||4,443||126,939||243,912||16,782||260,694|
|Profit/(loss) for the year||(59,115)||(59,115)||292||(58,823)|
|Equity at 30.06.2016||132,029||(34,050)||5,189||67,824||170,992||15,652||186,644|
|Equity at 01.01.2017||10,883||(26,701)||0||208,732||192,914||30,150||223,064|
|Profit/(loss) for the year||(2,436)||(2,436)||386||(2,050)|
|Other comprehensive income||4,751||4,751||1,328||6,079|
|Equity at 30.06.2017||4,997||(21,950)||0||98,066||81,112||31,864||112,976|
NOTES TO THE FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES, ACCOUNTING ESTIMATES, RISKS, ETC.
The interim report is presented in accordance with IAS 34 “Interim financial reporting” as adopted by the EU and additional Danish disclosure requirements for the interim reports of listed companies.
The interim report has been neither audited nor reviewed. The accounting policies are consistent with those of the Annual Report 2016, which includes a full description of the accounting policies.
For accounting estimates and judgments, see note 2, page 42 of the Annual Report 2016. For information on risks, see note 31, pages 65-68, and the section on risk management on pages 13-14 of the Annual Report 2016.
According to the accounting regulations, Management must consider whether the quarterly report can be prepared on a going concern basis. Based on the estimated outlook for the continuing operations, the management of Cemat believes that the existing cash reserves and expected future cash flows will be sufficient to maintain operations and fund any measures planned.
2 DISCONTINUED OPERATIONS
The comparative figures in the income statement and the cash flow statement have been restated to reflect the discontinued operations regarding silicon business divested in 2016.
3 FINANCIAL HIGHLIGHTS AND KEY RATIOS
The financial ratios have been calculated in accordance with “Recommendations and Financial Ratios 2015” issued by the Danish Finance Society. The individual calculation formulas are provided in note 1, page 37, of the Annual Report 2016.
Cemat at a glance
Cemat A/S (previously Topsil Semiconductor Materials A/S) is a listed holding company, whose activities are operation, development and sales of the Polish property company CeMat ’70 S.A. in Warsaw. It is the objectives of CeMat ‘70 to prepare the company’s assets for a divestment and sell them off.
CeMat ‘70 owns 133,000 sqm of useable land and and 41,000 sqm buildings on the outskirts of Warsaw approximately 10 kilometres from the centre of Warsaw in a district called Bielany, which has undergone significant development over the past few years with a large number of housing units and new retail businesses being established. The land held by CeMat ‘70 is classified for industrial purposes.
CeMat ‘70 is working to reclassify the land to residential and retail land to include it in the ongoing development of the district.
CeMat ‘70 has around 110 tenants. CeMat ‘70 engages in the letting of premises and land and the provision of utilities, including power, water, technical gases and facility services, etc. to its tenants.
For more information, go to www.cemat.dk
c/o DLA Piper Denmark Law Firm P/S
DK-1550 Copenhagen V
+45 22 82 10 11
CVR no.: 24 93 28 18