A brief analysis follows below of the separate financial statements at 31 December 2013 of the parent company Salini SpA prepared in accordance with International Financial Reporting Standards adopted by the European Union. In accordance with the provisions of IFRS 1, data for financial year 2012 were restated pursuant to the provisions of the International Accounting Standards.
Summary of financial information and other information concerning operations
Salini S.p.A.’s separate financial statements for financial year 2013, which are submitted for the approval of the Shareholders’ Meeting, show pre-tax profit of €415.6 million and net profit of €419.1 million, with a value of production of €769 million.
Pre-tax profit was greatly affected by financial activities, which, as well as reflecting the costs sustained in supporting production activities and investments and the results of foreign exchange losses, shows the positive effect, equal to €534 million, of the dividend distribution made by the subsidiary Impregilo S.p.A.
Profit margins, though in the presence of significant non-recurring costs incurred for the completion of the public tender offer and calculated in an amount of about €35 million, represent levels of excellence, with EBITDA of €55 million, equivalent to 7. 2% of total revenues.
The net financial position amounted to €(726) million after making significant investments for the control of Impregilo S.p.A. and covering the ordinary operations of the Group, and was in line with the management’s forecasts.
Reclassified income statement
|(Values in €/000)||December 2013||December 2012|
|Costs of production||(608,210)||79.1%||(578,184)||77.5%|
|Other operating costs||(7,848)||1.0%||(8,021)||1.1%|
|Depreciation and amortisation||(60,322)||7.8%||(47,998)||6.4%|
|Allocation to provisions||0||0.0%||0||0.0%|
|Total net financial and investment income||427,364||55.6%||22,890||3.1%|
Economic and operating performance
|Key consolidated income figures €/000||31 december 2013||31 december 2012|
|Net profit/Total Revenues||54.5%||4.6%|
At 31 December 2013 the total revenues of Salini S.p.A. stood at €769 million, with foreign projects accounting for 93%.
Operating revenues amounted to €757.4 million, accounting for 98.5% of turnover.
The Ethiopian hydroelectric projects, Gibe III and Grand Ethiopian Renaissance Dam, as well as the Kyzilorda road project in Kazakhstan, provided a significant contribution to this result.
|Operating revenues by geographical area (€/000)||31 december 2013||%||31 december 2012||%|
|EU (excluding Italy)||648||0%||-||0%|
|TOTAL OPERATING REVENUES||757,429||100%||686,054||100%|
The dams and hydroelectric plants sector was the most significant, where, with the substantial contribution from the above-mentioned Gibe III and Grand Ethiopian Renaissance Dam projects, revenues accrued represented 78% of the annual total.
The performance of the roads and motorways segment was also extremely significant, mainly due to the full operation of the lots for the reconstruction of the “Western Europe - Western China International Transit Corridor” in Kazakhstan and the works on the construction of the section of motorway “R881 Comprehensive Improvements of the Parallel Roads” in Dubai.
Other non-operating revenues, amounting to €11.6 million, relate essentially to the provision of goods and services which, by their very nature, are not part of the core business and to services provided to the Group (e.g. technical and administrative services, transfers of materials and insurance reimbursements).
Direct production costs stand at €608.2 million and account for 79.1% of total revenues. Service costs, which represent the direct cost with a greater weighting, refer mainly to expenses incurred to support production volumes and, net of the ancillary costs (amounting to about €35 million) incurred for the public tender offer for Impregilo, are proportional to the growth in turnover.
Personnel costs, equivalent to €97.9 million, absorbed 12.7% of the value of production and were essentially in line with the figures at Group level.
Results of operations
Results of operations reflected the comments made in the previous paragraphs.
In particular, the profit margins were significantly affected by the costs incurred for the acquisition of control of the subsidiary Impregilo SpA, whose benefits became visible only in EBT through the receipt of dividends amounting to approximately €534 million.
Total net financial and investment income
The net financial and investment income, equivalent to €427.4 million, was mainly impacted by:
- distribution of dividends by the subsidiary Impregilo S.p.A. totalling approximately €534 million;
- impairment test conducted by the subsidiary Todini Costruzioni Generali S.p.A. to assess its current ability to generate cash flows in accordance with IFRS 36. The comparison between the value in use and the overall investment of the Company in Todini Costruzioni Generali S.p.A. resulted in an impairment loss of €69 million, resulting in a write-down of the carrying amount of the investment (€35.2 million) and recognition in the provision for risks of investment losses of an additional amount of €33.8 million. For more details on the impairment test’s criteria and calculation methods, refer to the relevant section of the notes to the financial statements;
- financial expenses incurred to obtain the cash necessary to carry out the takeover bid for Impregilo equivalent to about €35 million.
Result for the period
EBT (pre-tax profit) amounted to €415.6 million, or 54% of total revenues.
The provision for taxes for the year includes a current portion of €(8.9) million and a portion for deferred taxes of €12.4 million.
For additional information on the calculation of taxes, please see the details in the dedicated section “Income taxes E22” of the explanatory notes to the financial statements.
Reclassified statement of financial position
|(Values in €/000)||December 2013||December 2012||Change||% Change|
|Intangible fixed assets||161||255||(93)||-36.6%|
|Tangible fixed assets||224,636||208,488||16,148||7.7%|
|Other fixed assets||4,427||4,402||25||0.6%|
|Total fixed assets (A)||1,525,133||570,259||954,874||n.s.|
|Amounts due from clients||251,391||227,617||23,774||10.4%|
|Amounts due to clients||(557,598)||(549,236)||(8,362)||1.5%|
|Tax assets (liabilities)||25,952||(141)||26,093||n.s.|
|Operating working capital (B)||(83,734)||(242,263)||158,529||n.s.|
|Non-current assets held for sale (C)||-||-||-|
|Non-current liabilities held for sale (D)||-||-||-|
|Provisions for risks and charges||(41,512)||(8,852)||(32,659)||368.9%|
|Total reserves (C)||(43,368)||(10,713)||(32,655)||305%|
|Total uses (D=A+B+C)||1,398,032||317,283||1,080,748||n.s.|
|Cash and cash equivalents||49,904||71,632||(21,729)||-30.3%|
|Current financial assets||447,929||241,848||206,082||85.2%|
|Non-current financial assets||4,350||4,358||(8)||-0.2%|
|Current financial liabilities||(222,835)||(101,885)||(120,951)||n.s.|
|Non-current financial liabilities||(1,005,374)||(272,034)||(733,340)||n.s.|
|Net financial payables/receivables||(726,026)||(56,080)||(669,946)||n.s.|
Fixed assets stood at €1,525.1 million and mainly comprised the value of the equity investment in Impregilo S.p.A. of approximately €1,253.3 million and the technical equipment at work sites, representing 15% of total fixed assets.
Net invested capital, amounting to €1,398 million, in addition to the strategic investment in the subsidiary Impregilo, reflected the evolving trend in production revenues, whose growing importance impacted cash flow uses and, more in general, the Company’s capital structure in a balanced manner.
Net financial position
|(Valori in Euro/000)||31 december 2013||31 december 2012||Change|
|Cash and cash equivalents||49,904||71,632||(21,729)|
|Current financial assets||447,929||241,848||206,082|
|Current financial liabilities||(222,835)||(101,885)||(120,951)|
|Total current position||274,998||211,596||63,402|
|Non-current financial assets||4,350||4,358||(8)|
|Non-current financial liabilities||(1,005,374)||(272,034)||(733,340)|
|Total non-current position||(1,001,024)||(267,676)||(733,348)|
|Net financial position||(726,026)||(56,080)||(669,946)|
The net financial position result at 31 December 2013 stood at€(726) million of investments planned to support the growth in contract production volumes and to continue with the Campione Nazionale®, project completed through the acquisition of control of Impregilo S.p.A.
Specifically, the balance of non-current financial liabilities was mainly composed of an unsecured term loan facility of approximately €354 million with a three-year maturity, signed on 10 December 2013 to refinance the remaining portion of the debt incurred for the public tender offer for the subsidiary Impregilo S.p.A. and the liabilities related to the issue of the bond in July for a nominal amount of €400 million maturing in 2018.
These transactions, together with the signing of a revolving unsecured line amounting to €100 million with a 3-year maturity and not yet used at the balance sheet date, shifted the mix of maturities toward the long term, increasing the cash flow elasticity and financial flexibility.