Halcor Group of companies announced its Fiscal Year (FY) 2007 consolidated financial results according to the International Financial Reporting Standards (IFRS).
Consolidated turnover increased by 9.9% to euro 1,369.6 mln versus euro 1,246.6 mln in 2006. Consistent with the originally set goals, in FY 2007 Halcor achieved an 8% increase in the weighted fabrication prices and a 10% increase in volume of sales despite very high copper prices that prevailed during most part of the year, a fact which intensified substitution mainly with products used in installation. On the other hand, average copper price eased marginally in 2007 to euro 5,198 per ton versus euro 5,342 per ton in 2006.
With respect to volume, in 2007 cable products accounted for 35% of total sales, tubes for 28%, rolled products for 20%, brass rods for 10% while copper bus bars for 7%. Exports, the main growth driver of Halcor group, represent once again 78% of the group's consolidated turnover.
Performance of the group during FY 2007 was based on purely recurring results. While during the better part of the year metal prices in general and especially copper price maintained very high levels comparable to those of 2006, with obvious consequences both on product demand but also increased working capital needs, during the last few months they dropped significantly so that the company instead of having extraordinary profits from the appreciation of the metal like in 2006, it devaluated its inventories affecting Q4 financial results. On the contrary, the further improvement of the plants performance continued, most notably for HALCOR S.A. and its subsidiary HELLENIC CABLES S.A.
In FY 2007, consolidated gross profit decreased by 10.9% to euro 105.6 mln. versus euro 118.5 mln. in FY 2006. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) reached euro 86.4 mln. down by 9.3% from euro 95.3 in FY 2006, while earnings before interest and tax (EBIT) declined by 13% decline to euro 62.7 mln. The euro 10.3 mln devaluation of the group's inventory in the 4th quarter of the year, reflecting the sharp drop of copper and zinc prices at year end, had an adverse impact on above figures.
Consolidated earnings before tax (EBT) marked a 35.8% decrease to euro 33.3 mln versus euro 51.9 mln in FY 2006 affected by the increased financing requirements during the year combined with higher interest rates. Finally, net earnings after taxes and minorities marked a 44.3% decrease to euro 20.0 mln. or euro 0.198 per share versus euro 36.0 mln. or euro 0.360 per share in FY 2006.
Despite the consistently high metal prices during the first 3 quarters of the year which also coincide with the high-demand period and consequently higher working capital requirements, the group's operating cash flow for the year, in contrast to 2006, was positive. This is also attributed to the more stringent inventory management policy that has been already implemented throughout the whole group already since the second half of 2006.
Towards the completion of Group's investment plan, targeting production of high added valued industrial products, HALCOR's capex in 2007 reached a total of euro 35 mln, with euro 13 mln allocated to the Bulgarian subsidiary Sofia Med, euro 9 mln to Hellenic Cables and the remaining euro 12 mln to the parent Company.
Conditions that determined FY 2007 remain for the time being the same. Metal prices are again reaching their historical highs, resulting once more to further substitution for certain product categories. In present market conditions, the Group adheres to its strategic plan focusing on higher value added products, least susceptible to substitution effects. During 2008 the group intends to further boost its sales by strengthening its position in traditional markets, by expanding into new markets while by continuously improving its cost structure absorbs the pressure on fabrication prices induced by current world economy.
The FY 2007 Data and Information and the Financial Statements are being published on Tuesday, March 4, 2008 in the daily press and are posted on the company's website at the address www.halcor.gr