Reclassified consolidated statement of financial position of the Salini Impregilo Group
|(Amounts in thousands of euros)||March 31, 2014||December 31, 2013 (*)||Change|
|Property, plant and equipment, intangibles and non-current financial assets||827,683||843,149||(15,466)|
|Non-current assets (liabilities) held for sale||246,624||235,543||11,081|
|Provisions for risks||(105,014)||(105,023)||9|
|Post-employment benefits and other employee benefits||(18,863)||(20,508)||1,645|
|Other non-current assets (liabilities)||7,707||7,808||(101)|
|Tax assets (liabilities)||104,295||81,153||23,142|
|Contract work in progress||1,240,846||1,105,176||135,670|
|Advances on contract work in progress||(1,524,075)||(1,563,429)||39,354|
|Other current assets||334,134||296,583||37,551|
|Other current liabilities||(206,916)||(212,023)||5,107|
|Net invested capital||1,542,847||1,223,857||318,990|
|Equity attributable to the owners of the parent||870,097||699,041||171,056|
|Net financial position||634,095||331,708||302,387|
|Total financial resources||1,542,847||1,223,857||318,990|
(*) The statement of financial position data at December 31, 2013 were rec lassified due to the adoption of the new standards IFRS 10 and IFRS 11.
Net invested capital
The net invested capital amounted to 1,542.8 million euros at March 31, 2014, for an increase of 319.0 million euros compared with the end of the previous year. The main changes that occurred in net invested capital are chiefly the result of the factors reviewed below.
Property, plant and equipment, intangibles and non-current financial assets
Le immobilizzazioni materiali, immateriali e finanziarie nette diminuiscono per complessivi€ 15,5 milioni e sono composte come segue:
|Amounts in thousands of euros||March 31, 2014||December, 31 2013||Change|
|Property, plant and equipment||455,317||450,761||4,556|
|Other intangible assets||141,399||165,027||(23,628)|
|Investments in associates||230,967||227,361||3,606|
|Total property, plant and equipment, intangibles and non-current financial assets||827,683||843,149||(15,466)|
The main changes that occurred in this item compared with the end of the previous year are reviewed below:
- due to the qualification of the controlling interest held in Fisia Babcock Environment in accordance with the requirements of IFRS 5, the non-current assets belonging to that entity were reclassified into “Non-current assets (liabilities) held for sale” for a total amount of 12.9 million euros and a corresponding reduction in the net value of property, plant and equipment, intangibles and non-current financial assets;
- the amortization and depreciation for the period caused a further reduction of 43.2 million euros in the net value of these assets;
- lastly, additions for the period totaled 37.0 million euros, net of the currency translation effect. They concerned mainly some recently acquired large projects in Australia, Qatar and Chile and existing projects in Ethiopia.
The value of investments in associates increased by 3.6 million euros chiefly as a result of the valuation by the equity method of some significant equity interests.
Non-current assets (liabilities) held for sale
Non-current assets (liabilities) held for sale amounted to 246.6 million euros at March 31, 2014. They include the net non-financial assets (liabilities) of the following units of the Group:
- Todini Costruzioni Generali S.p.A. and its direct subsidiaries (net assets), for a total of 265.3 million euros;
- USW Campania Projects (net assets) for 5.7 million euros, unchanged compared with the end of the previous year.
- Fisia Babcock Environment (net liabilities) for 24.4 million euros.
The change that occurred in this item compared with the previous year, is attributable, in addition to the reclassification as held for sale of the net non-financial liabilities of Fisia Babcock Environment for 24.4 million euros, the net increase totaling 35.4 million euros reported by the Todini Group in the first quarter of 2014. This increase reflects the regular development of the projects assigned to this subsidiary and is not affected by effects of a particularly significant nature or not directly related to its operating activities.
Provisions for risks
The provisions for risks amounted to 105.0 million euros, practically unchanged compared with the end of the previous year. It is worth mentioning that no situations developed in the first quarter of 2014 that would have required changes in the valuations performed earlier as to the adequacy of these items and which, at this point, are totally confirmed.
Post-employment benefits and other employee benefits
This item amounted to 18.9 million euros for a decrease of 1.6 million euros compared with the previous year. This change, which reflects ordinary operational dynamics, included accruals of 2.5 million euros, offset by disbursements and contributions to pension funds.
Other non-current assets (liabilities)
Other net non-current assets totaled 7.7 million euros, or 0.1 million euros less than at December 31, 2013. A breakdown is provided below:
|Amounts in thousands of euros||March 31, 2014||December, 31 2013||Change|
|Other non-current assets||15,001||15,083||(82)|
|Non-current payables to unconsolidated Group companies||(6,233)||(6,230)||(3)|
|Other non-current liabilities||(1,061)||(1,045)||(16)|
|Total other non-current assets, liabilities||7,707||7,808||(101)|
Net tax assets
Net tax assets amounted to 104.3 million euros, for an overall increase of 23.1 million euros. A breakdown of this item is provided below:
|Amounts in thousands of euros||March 31, 2014||December 31, 2013||Change|
|Total net deferred tax assets (liabilities)||52,892||47,173||5,719|
|Total net current tax assets (liabilities)||(3,320)||2,082||(5,402)|
|Total other current tax assets (liabilities)||54,723||31,898||22,825|
|Total tax assets (liabilities)||104,295||81,153||23,142|
The increase in net tax assets and liabilities reflects for the most part the effects of the determination of the tax liability for the period at the consolidated level, taking also into account the different tax dynamics affecting foreign units and changes in the respective asset (liability) positions recognized in accordance with the tax laws of the countries where the units operate. In this regard, it is worth mentioning that, as required by the relevant international accounting standards, for the purpose of preparing this Interim report on operations, the consolidated tax expense for the period is determined based on estimates that could reasonably be made about the foreseeable operating performance for the current year and the resulting tax impact.
Working capital increased by 298.7 million euros, rising from 181.7 million euros to 480.4 million euros. The main changes that affected the various components of working capital, which for the most part reflect the evolution of the Group’s operating activities and production progress during the period on some projects in Italy and abroad, are summarized below:
- Inventories totaled 223.9 million euros, or 8.6 million euros more than the previous year due to the combined effect of increased procurement activity for the progress of orders outside Italy, specifically concerning hydroelectric projects in Ethiopia, offset only in part by the use of inventories for construction activities on some international projects, including the Angostura and Sogamoso River hydroelectric projects and lots 2 and 3 of the Abu Dhabi hydraulic tunnel.
- Contract work in progress increased by 135.7 million euros overall, growing from 1,105.2 million euros to 1,240.8 million euros. This change reflects the effects of production gains, particularly with regard to projects in Africa, the Middle East and the EU countries (excluding Italy), totaling 141.4 million euros, offset in part by a reduction of assets in Italy amounting to 5.7 million euros.
- Advances on contract work in progress and “negative” contract work in progress (i.e., invoiced advances greater than the cumulative value of the projects constructed) totaled 1,524.1 million euros, for a decrease of 39.3 million euros. This net reduction is the combined result of a net increase of 8.7 million euros in contractually required advances and a decrease of 48 million euros in “negative” contract work in progress. The net increase in contractually required advances reflects new disbursements of 21 million euros for the Gibe III project in Ethiopia and of about 102 million euros for projects in Arabia and Qatar and the amounts used for production completed in connection with active projects, particularly those in Nigeria (5.9 million euros), Denmark (9.7 million euros) and Colombia.
- Receivables grew by 87.9 million euros, reflecting the effect of increases of 17.7 million euros in receivables from customers and of 70.3 million euros in receivables from unconsolidated project companies. The gain in receivables from customers is attributable mainly to projects in Latin America (Venezuela primarily). The increase in Venezuelan receivables reflects temporary payment delays by customers in this area, caused in part by the situation that developed recently in that country and described in the “Risk Areas” paragraph of the Construction sector, later in this Report on operations. The increase in receivables from unconsolidated project companies refers mainly to amounts owed by Italian consortia and consortium companies (Pedelombarda and Salerno Reggio Calabria), which the Group expects to collect after the end of the third quarter of 2014.
- Payables increased by 15.6 million euros. This change is the net result of a decrease of 39.7 million euros in payables owed to external parties, resulting from payments made during the period, and an increase of 55.3 million euros in payables owed to unconsolidated project companies.
- Other current assets increased by 37.5 million euros due mainly to a change in miscellaneous receivables that reflects primarily receivables from partners in new projects in the Middle East. Other current liabilities decreased by 5.1 million euros, due chiefly to a reduction in miscellaneous payables that reflects mainly amounts owed to partners in projects in South America.
Net financial position
At March 31, 2014, the consolidated net financial position of the Group’s continuing operations was negative by 634.1 million euros (negative by 331.7 million euros), while that of the non-current assets held for sale was negative by 60.9 million euros (negative by 53.9 million euros). At the end of the period, the Net debt/Equity ratio on a consolidated basis was 0.7. The net financial position for non-current assets held for sale refers primarily to Todini Costruzioni Generali S.p.A. and its subsidiaries.
The change that occurred in the net financial position, absent special events not directly related to the development of the Group’s industrial operations, is substantially consistent with the evolution in net working capital, which increased compared with December 31, 2013. This situation is considered typical of industry dynamics in the earlier months of the year.
The structure of the Group’s net financial position at March 31, 2014 is summarized in the table below:
Net financial position of the Salini Impregilo Group
|(Amounts in thousands of euros)||March 31, 2014||December 31, 2013||Change|
|Non-current financial assets||57,229||48,928||8,301|
|Current financial assets||163,260||222,112||(58,852)|
|Cash and cash equivalents||712,485||908,631||(196,146)|
|Total cash and cash equivalents and other financial assets||932,974||1,179,671||(246,697)|
|Bank loans and other borrowings||(626,393)||(625,127)||(1,266)|
|Finance lease payables||(100,487)||(107,237)||6,750|
|Total non-current indebtedness||(1,278,686)||(1,284,906)||6,220|
|Current portion of bank loans and current account facilities||(442,628)||(320,797)||(121,831)|
|Current portion of bonds||(3,399)||(952)||(2,447)|
|Current portion of finance lease payables||(50,321)||(48,646)||(1,675)|
|Total current indebtedness||(496,348)||(370,395)||(125,953)|
|Financial assets held by SPVs||274,478||223,789||50,689|
|Current indebtedness held by SPVs||(56,251)||(62,046)||5,795|
|Non-current indebtedness held by SPVs||(5,709)||(14,483)||8,774|
|Total other financial assets (liabilities)||207,965||143,922||64,043|
|Total net financial position – continuing operations||(634,095)||(331,708)||(302,387)|
|Net financial position for assets held for sale||(60,902)||(53,868)||(7,034)|
|Net financial position including non-current assets held for sale||(694,997)||(385,576)||(309,421)|