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EANS-News: Oxea GmbH
Oxea reports robust earnings and strong cash flows
-------------------------------------------------------------------------------- Corporate news transmitted by euro adhoc. The issuer/originator is solely responsible for the content of this announcement. -------------------------------------------------------------------------------- quarterly report Luxembourg (euro adhoc) - Highlights Q2 2012: * Net sales were EUR380 million versus EUR391 million in the prior year period * Operating profit was EUR47 million versus EUR47 million in the prior year period * Net income was EUR23 million versus EUR16 million in the prior year period * EBITDA was EUR53 million versus EUR52 million in the prior year period * Adjusted EBITDA was EUR46 million versus EUR56 million in the prior year period Oxea, a leading global supplier of Oxo Intermediates and Oxo Derivatives, today announced robust earnings for the second quarter of 2012, with net sales of EUR380 million getting close to prior year's level. Margins in Q2 2012 were impacted by the Turnarounds at the plants in Oberhausen and Bay City and by the inventory carry over impact from the strong decrease in propylene prices. Therefore, adjusted EBITDA could not yet reach the level of the prior year period. On a quarter to quarter basis, Oxea was again able to increase revenue and adjusted EBITDA. Compared to the first quarter of 2012, revenues were up by 2% and adjusted EBITDA was up by 3%. This underpins the continuation of the positive earnings trend in the first half of 2012 after a softer second half of 2011. In the first half of 2012, Oxea generated strong cash flows, mainly due to a significant improvement of Trade Working Capital. Cash provided by operating activities was EUR71 million compared with EUR48 million in the corresponding period of the prior year. The strong financial position allowed Oxea to redeem 5% of the outstanding Senior Secured Notes in June 2012. A further optional redemption of 5% was announced in July 2012 and completed as of August 10, 2012. Within two years after the Bond issue, Oxea has executed all three redemption options, each of 5% of outstanding Senior Secured Notes at a redemption price of 103% as permitted under the terms and conditions of the Indenture. |In EUR million | Three months| Six months | |Unaudited | ended | ended | | | June 30 | June 30 | | |2012 |2011 |2012 |2011 | |------------------|------|------|------|------| |Net sales |379.7 |391.2 |751.2 |768.2 | |Gross profit | 46.4 | 54.9 | 93.7 |123.0 | |SG&A | (9.6)|(8.8) |(19.1)|(19.2)| |R&D | (1.6)|(1.5) | (3.3)| (3.1)| |Other operating | 11.9 | 2.0 | 13.7 | 3.2 | |income/expense | | | | | |Operating profit | 47.1 | 46.6 | 85.0 |103.9 | |Net income | 22.7 | 16.4 | 38.8 | 46.4 | |EBITDA | 53.3 | 52.4 | 97.3 |115.9 | |Adjusted EBITDA | 46.0 | 56.4 | 90.5 |122.2 | Net sales Net sales for the three months ended June 30, 2012 were EUR379.7 million, a decrease of 2.9% compared with the corresponding period of the prior year. Overall, volumes were 2.9% lower, mainly driven by the Turnarounds as mentioned above in Q2 2012. Oxo Intermediates volumes and Oxo Derivatives were 2.0% and 5.9% lower, respectively, than in the corresponding period of the prior year. Of our revenues for the three months ended June 30, 2012, EUR191 million resulted from sales in Europe, EUR120 million in North America, and EUR68 million in the rest of the world compared to EUR212 million, EUR117 million, and EUR62 million, respectively, in the prior year period. Gross profit Gross profit for the three months ended June 30, 2012 amounted to EUR46.4 million compared with EUR54.9 million in the corresponding period of the prior year. This development is mainly due to the Turnarounds and the inventory carry over impact of the strong decrease in propylene prices as mentioned above, such that gross profit amounted to 12.2% of sales compared with 14.0% in the second quarter of 2011. Selling, general & administration expense (SG&A) SG&A expense for the three months ended June 30, 2012 amounted to EUR9.6 million compared with EUR8.8 million in the corresponding period of the prior year, mainly due to higher consulting fees and the strong US Dollar during Q2 2012. Other operating income/(expense) Net other operating income for the three months ended June 30, 2012 amounted to EUR11.9 million compared with a net other operating income of EUR2.0 million in the corresponding period of the prior year. The increase is primarily attributable to insurance income, which has been treated as an exceptional item for purposes of calculating adjusted EBITDA. Operating result Operating result for the three months ended June, 2012 was EUR47.1 million compared with EUR46.6 million in the corresponding prior year period, primarily as a result of lower gross profit and higher SG&A expense as explained above, compensated by higher net other operating income. Financial result Net financial expense was EUR14.6 million compared with EUR16.8 million in Q2 2011 due to higher net foreign currency losses in the corresponding period of the prior year. Net income Net income was EUR22.7 million compared with EUR16.4 million in the corresponding period of the prior year due to a higher operating result and a lower net financial expense as mentioned above, as well as lower income taxes. Adjusted EBITDA Adjusted EBITDA at EUR46.0 million compared with EUR56.4 million in the corresponding period of the prior year was mainly driven by lower gross profit as mentioned above. Cash flow The company continued to generate positive free cash flow and during the first half of 2012, Oxea generated EUR70.7 million in cash from operating activities compared with EUR48.0 million in the corresponding period of the prior year. Higher inflows from working capital were partly offset by lower earnings from operating activities and higher income tax payments. Cash used in investing activities was EUR37.8 million compared with EUR12.5 million in the corresponding period of the prior year due to higher spending for growth projects. Cash used in financing activities was EUR48.7 million compared to EUR104.5 million in the corresponding period of the prior year, which included a payment to shareholders in the amount of EUR55 million. Oxea is a global manufacturer of Oxo Intermediates and Derivatives such as alcohols, polyols, carboxylic acids, specialty esters and amines. These products are sold in the merchant market (where sales are to third party customers) and used for the production of high-quality coatings, lubricants, cosmetic and pharmaceutical products, flavourings and fragrances, printing inks and plastics. In 2011, Oxea generated revenue of about EUR1.5 billion with its 1,365 employees in Europe, the Americas and Asia. Please note: This press release contains financial information regarding the businesses and assets of OXEA S.à r.l. (the "Company") and its consolidated subsidiaries (the "Group"). Such financial information has not been audited, reviewed or verified by any independent accounting firm. The inclusion of such financial information in this press release or any related presentation should not be regarded as a representation or warranty by the Company, any of its respective affiliates, advisors or representatives or any other person as to the accuracy or completeness of such information's portrayal of the financial condition or results of operations by the Group. This press release and related presentations (including on our website) may contain information, data and predictions about our markets and our competitive position. While we believe this data to be reliable, it has not been independently verified, and we make no representation or warranty as to the accuracy or completeness of such information set forth in this document. Additionally, industry publications and reports from which such information, data or predictions may be obtained generally state that the information contained therein has been obtained from sources believed to be reliable but that the accuracy and completeness of such information is not guaranteed and in some instances state that they do not assume liability for such information. We cannot therefore assure you of the accuracy and completeness of such information and we have not independently verified such information. In addition, we have made statements in this document regarding our industry and position in the industry based on our experience and our own investigation of market conditions. We cannot assure you that the assumptions underlying these statements are accurate or correctly reflect the state and development of, or our position in, the industry, and none of our internal surveys or information has been verified by any independent sources. Certain statements in this document are forward-looking. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. These factors include, among others: the cyclical and highly variable nature of our business and its sensitivity to changes in supply and demand; adverse and uncertain global economic conditions; the highly variable nature of raw materials costs and any loss of key suppliers or supply shortages or disruptions; the competitive nature of our industry; the ability to comply with current or future laws and regulations relating to environmental, health and safety matters as well as the safety of our products, related costs of maintaining compliance and addressing liabilities as well as risks relating to compliance with antitrust and tax laws; our reliance on a limited number of suppliers for certain of our key raw materials; operational risks, including the risk of environmental contamination and potential product liability claims; operational interruptions at our facilities due to events that are outside of our control such as severe weather conditions, unscheduled downtimes, terrorist attacks, natural disasters or other events that may interrupt or damage our operations or the impact of scheduled outages on our results of operations; the risk that our insurance coverage may not be sufficient to cover all risks; risks relating to the global nature of our operations, including, among others, fluctuations in exchange rates; the loss of major customers or key customers for certain of our products; the loss of key personnel; risks relating to acquisitions and dispositions, including any impairment risks with respect to historical acquisitions, our ability to successfully integrate acquired businesses, and unexpected liabilities relating to such acquisitions or contingent liabilities in connection with such dispositions; the requirement to make further contributions to our pension schemes; the failure to protect our intellectual property rights; limitations on our ability to adjust the quality of certain products that we manufacture; and potential conflicts of interests with our principal shareholder. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. New risks can emerge from time to time, and it is not possible for us to predict all such risks, nor can we assess the impact of all such risks on our business or the extent to which any risks, or combination of risks and other factors, may cause actual results to differ materially from those contained in any forward-looking statements. Neither the Company nor the Group undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this document. EBITDA is defined as net income for the year before financial result, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to remove the effects of certain non-cash and non-recurring expenses and charges. EBITDA and Adjusted EBITDA are supplemental measures of our performance and liquidity that are not required by or presented in accordance with IFRS. EBITDA and Adjusted EBITDA are not measurements of our financial performance or liquidity under IFRS and should not be considered as an alternative to profit for the period presented, results from operating activities or any other performance measures derived in accordance with IFRS or as an alternative to cash flow from operating activities as a measure of our liquidity. We believe EBITDA and Adjusted EBITDA facilitate operating performance comparisons from period to period and company to company by eliminating potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of change in effective tax rates or net operating losses) and the age and book value and amortization of tangible and intangible assets (which have an effect on related depreciation expense). We also present EBITDA and Adjusted EBITDA because we believe it these are frequently used by securities analysts, investors and other interested parties in the evaluation of similar issuers, the majority of which present EBITDA and Adjusted EBITDA when reporting their results. Finally, we present EBITDA and Adjusted EBITDA as measures of our ability to service our debt. Further inquiry note: Bernhard Spetsmann Managing Director (Finance, IT) firstname.lastname@example.org Birgit Reichel Communications/PR email@example.com end of announcement euro adhoc -------------------------------------------------------------------------------- company: Oxea GmbH Otto-Roelen-Straße 3 D-46147 Oberhausen phone: +49(0)208 693 3112 FAX: +49(0)208 693 3101 mail: firstname.lastname@example.org WWW: http://www.oxea-chemicals.com sector: Chemicals ISIN: XS0523636594 indexes: stockmarkets: Open Market: Frankfurt language: English