NIREUS S.A.
Announcement
Merger of NIREUS S.A. AND KEGO S.A. The Boards of Directors of Nireus SA and Kego SA decided in tandem to start the process of merging the two companies by absorption; Nireus SA will absorb Kego SA with a balance sheet transformation date of 31/12/2007.
Concurrently, it was decided to suggest to the General Assemblies of both Companies an exchange ratio of 0,95 shares of NIREUS for 1 share of KEGO, expecting relevant reports by an independent financial advisor as well as the approvals of the corporate bodies of the two companies, fulfilling all legal framework.
NΙREUS presently controls 28% of the share capital of KEGO (59% together with related parties) and has undertaken the management of the company. This merger is considered to be to the advantage of NΙREUS Group for several reasons. KEGO operates profitably in the production of fish-feed and the production and sale of innovative products for livestock production. But most importantly, KEGO possesses by global exclusivity, in cooperation with an international research institute, the know-how for the production of selected eggs for Mediterranean fish farming species. The selected eggs provide unique advantages in the production process of Mediterranean fish; they increase revenues and reduce costs, since fish species develop at a faster rate. Thus, the production cycle, production cost (fixed costs, labor costs, e.t.c.) and the operational cost (reduction in working capital needs) are all reduced. Moreover, the merging with KEGO will strengthen the financials results of the Group.
Finally, KEGO will launch the split of the agro-livestock sector and its contribution to one of its subsidiaries. This is will occur in tandem with the absorption process by NIREUS and will have a transformational balance sheet of 31.12.2007. It is expected that the split will enable the sector to develop dynamically and autonomously in the context of the Group, retaining at the same time the successful brand name KEGO.
GROUP PERFORMANCE IN 2007
In 2007, NIREUS Group performed strongly and at an accelerated rate compared to previous years. For 2007, it is expected that sales will be 212,0 million euros, EBIDTA 39,0 million euros, earning before taxes 22,0 mi., earnings after taxes at 17,0 mi. and earning after taxes and minorities 12,0 mi. These financial results correspond to percentage increases as follows (the comparable increases for 2006 are given in parentheses): sales + 31,3% in 2007 (+16,9% in 2006), in EBIDTA +39,1% (+42,6% ), EBT +43,8% (+37,0%), EAT +90,5% (+15,4%) and EAT-minorities +34,5% (+19,6%).
However, the above expected results deviate by approximately 15% from the initial estimates that have been presented in the course of the year, according to the business plan of the company. The reasons for this deviation are:
a. The lower than expected average price of Mediterranean fish, as it was incorporated in the business plan.
b. The decline of the positive impact, in the results of the Group, of the contribution of Marine Farms ASA; this was due to differences in biomass that resulted from acquisition of units in Spain by this company.
c. In the reduction of revenues because of extraordinary and unforeseen events (fire in the Evia region of Greece and strike of the land transportation sector)
Concurrently, it was decided to suggest to the General Assemblies of both Companies an exchange ratio of 0,95 shares of NIREUS for 1 share of KEGO, expecting relevant reports by an independent financial advisor as well as the approvals of the corporate bodies of the two companies, fulfilling all legal framework.
NΙREUS presently controls 28% of the share capital of KEGO (59% together with related parties) and has undertaken the management of the company. This merger is considered to be to the advantage of NΙREUS Group for several reasons. KEGO operates profitably in the production of fish-feed and the production and sale of innovative products for livestock production. But most importantly, KEGO possesses by global exclusivity, in cooperation with an international research institute, the know-how for the production of selected eggs for Mediterranean fish farming species. The selected eggs provide unique advantages in the production process of Mediterranean fish; they increase revenues and reduce costs, since fish species develop at a faster rate. Thus, the production cycle, production cost (fixed costs, labor costs, e.t.c.) and the operational cost (reduction in working capital needs) are all reduced. Moreover, the merging with KEGO will strengthen the financials results of the Group.
Finally, KEGO will launch the split of the agro-livestock sector and its contribution to one of its subsidiaries. This is will occur in tandem with the absorption process by NIREUS and will have a transformational balance sheet of 31.12.2007. It is expected that the split will enable the sector to develop dynamically and autonomously in the context of the Group, retaining at the same time the successful brand name KEGO.
GROUP PERFORMANCE IN 2007
In 2007, NIREUS Group performed strongly and at an accelerated rate compared to previous years. For 2007, it is expected that sales will be 212,0 million euros, EBIDTA 39,0 million euros, earning before taxes 22,0 mi., earnings after taxes at 17,0 mi. and earning after taxes and minorities 12,0 mi. These financial results correspond to percentage increases as follows (the comparable increases for 2006 are given in parentheses): sales + 31,3% in 2007 (+16,9% in 2006), in EBIDTA +39,1% (+42,6% ), EBT +43,8% (+37,0%), EAT +90,5% (+15,4%) and EAT-minorities +34,5% (+19,6%).
However, the above expected results deviate by approximately 15% from the initial estimates that have been presented in the course of the year, according to the business plan of the company. The reasons for this deviation are:
a. The lower than expected average price of Mediterranean fish, as it was incorporated in the business plan.
b. The decline of the positive impact, in the results of the Group, of the contribution of Marine Farms ASA; this was due to differences in biomass that resulted from acquisition of units in Spain by this company.
c. In the reduction of revenues because of extraordinary and unforeseen events (fire in the Evia region of Greece and strike of the land transportation sector)