Following the announcement, in 2016,
of its forthcoming corporate transformation, MYTILINEOS Group entered a new
phase in its evolution, through a new, flexible organisational structure that
will result in business synergies in
both operational and financial terms and will create additional value for
its shareholders. At the same time, in 2016 the Group strengthened
significantly its presence in the domestic electricity market, secured the
position of ALUMINIUM OF GREECE (AoG) as one of the most competitive aluminium
producers globally and succeeded in opening up new markets for its EPC Projects
Sector.
With
regard to its financial performance in 2016, the Group posted a consolidated turnover of €1,246.1 million against €1,382.9 million in 2015, a decline due
primarily to the reduced contribution of the EPC Projects Sector. Earnings before interest, tax, depreciation
and amortisation (EBITDA) stood at €222.4
million, down from €234.4 million in 2015, with net profit after tax and minority rights standing at €34.2 million against €47.5 million in
the previous year.
It
is noted that 2016 financial results have been negatively affected by €13.5
higher depreciation cost of the Energy Sector. Depreciation cost is expected to
settle down to normal levels in 2017.
In particular, the performance of the Group's individual
activity sectors was as follows:
Metallurgy & Mining Sector
The Metallurgy & Mining Sector posted a turnover of €447.9
million against €549.4 million in 2015. Earnings
before interest, tax, depreciation and amortisation (EBITDA) stood
at €84.3
million, against €98.0 million for the previous year. It is pointed
out that the average total “LME + Premium” prices for aluminium declined by 14%
compared to 2015, adversely affecting the Sector’s performance.
The positive developments in the commodities markets
witnessed in late 2016 and early 2017, with the significant recovery of aluminium
prices and the strong performance of the USD, have affected positively the
results of the fourth quarter of 2016, creating positive prospects for next
year’s financial performance. More specifically, in the fourth quarter of 2016 earnings before interest, tax, depreciation
and amortisation (EBITDA) for the Sector reached €30.4 million from €17.0 million in the third quarter, posting an increase
of 79.0%.
In 2016, the agreement reached between AoG and the PPC, regarding
the supply of electricity, marked the successful completion of the Group’s
“Excellence” programme aimed at enhancing competitiveness and established AoG
as one of the leading aluminium producers globally.
The recent cooperation agreement concluded between AoG
and General Electric (GE) for the installation of the world’s first “Digital
Smelter”, an innovative digital solution in the aluminium electrolysis process,
together with the launch of the new programme “The Best”, scheduled to run until
the end of 2018, underline the commitment of the Group’s Management towards the
target of establishing AoG as one of the world’s most competitive aluminium
producers.
EPC Projects Sector
In the EPC
Projects Sector, the Group’s subsidiary METKA managed to sustain a
satisfactory financial performance, despite the unstable environment prevailing
in the Middle East markets.
In 2016, ΜΕΤΚΑ
posted a turnover of €445.1 million against
€668.0 million in the previous year. Earnings before interest, tax,
depreciation and amortisation (EBITDA) stood at €74.9 million, down from
€116.4 million in 2015. Net profit after
tax and minority rights stood at €53.3
million against €68.9 million for the previous year.
The dividend proposed for distribution for the
accounting period ended on 31 December 2016 amounts to €0.15 (gross dividend
per share) and is subject to the approval of the Annual General Meeting of the
company’s shareholders.
It is noted that the EBITDA figure for METKA in the
fourth quarter of 2016 includes a non-recurring income of €35.8 million,
representing compensation paid in connection with the implementation of the
Deir Ali project in Syria, which has been completed.
2016, was the first year of significant contribution from METKA-EGN, a company
active in the global market for solar power projects. Going forward, METKA
within its new business model, will seek to undertake new contracts, focusing
on markets with increased energy needs such as those of Serbia, Ghana, Nigeria
and Libya.
Energy Sector
The
Group’s Energy Sector posted a
strong growth in terms of business and financial results, as the Group
increased its share in the wholesale as well as in the retail electricity
market. More specifically, the Sector’s turnover
stood at €363.8 million for 2016 against €187.1 in the previous year,
posting an increase of 94.4%. Earnings before interest, tax, depreciation and
amortisation (EBITDA) stood at €65.3 million, up from €22.4 million
for 2015.
The Group’s power plants posted a 75% increase in output
and reached a 10% share of the total domestic generation market for 2016,
compared to 5.7% in 2015. At the same time, at the end of 2016 PROTERGIA, taking also advantage of the
strategic partnership with COSMOTE for the sale of its products through the
extensive network of COSMOTE and GERMANOS retail stores, rose to No 1 position among all private suppliers.
In light of the forthcoming corporate transformation,
the Annual Financial Report for 2016 will be the last report to reflect the
financial performance of the existing corporate structure. During the months
ahead, the Management of MYTILINEOS Group will focus on the completion of the
procedures for the absorption of the key subsidiaries into a single corporate
organisational structure, which will result in significant synergies, will allow for greater financial flexibility and will
strengthen its balance sheet. At the same time, it will also allow the optimal
allocation of capital to investments that will benefit all shareholders as well
as the domestic industry and the Greek economy in general.
