Solid performance in 1Q 2008:
Revenues more than doubled to euro 381.1 mln
Operating Profit (EBIT) increased by 363% to euro 53.7 mln
Net Income after minorities increased by 26.4% to euro 20.4 mln
Revenues
Revenues more than doubled to euro 381.1 mln driven by a 78% increase in construction and the full consolidation of Attiki Odos.
Operating Profits (EBIT)
Operating profits increased by 363% to euro 53.7 mln. The increase in the group's operating profit is due to increased profitability in construction, energy & environment, and the full consolidation of Attiki Odos.
EBIT margin increased from 6.2% in 1Q2007 to 14.1% in 1Q2008 reflecting the change in the consolidated revenue mix towards higher margin revenues.
The stabilization trend of construction operating margins continued in 1Q2008 with the construction EBIT margin at 5.2% vs 2.7% in 1Q2007.
Profit from Associates
Profits from associates dropped from euro 9.8 million in 1Q2007 to 1.4 mln in 1Q2008 reflecting the different accounting treatment of Attiki Odos (full consolidation vs equity accounting).
Financial Expenses
Net financial expenses in 1Q2008 increased to euro 9.4 mln vs euro 0.3 mln in 1Q2007 reflecting higher borrowing levels that to a large extent related to the full consolidation of Attiki Odos.
Profit before Tax and Profit after tax
Profit before tax increased by 116% to euro 45.7 mln and Net Profit before minorities increased by 73% to euro 30.4 mln. Net Profit after minorities in 1Q2008 amounted to euro 20.4 mln. The modest increase of 26% vs 1Q2007 in Net Profit after minorities is due to higher minorities resulting from the full consolidation of Attiki Odos.
Effective Tax rate
The effective tax rate in 1Q2008 is 33% vs 17% in 1Q2007, due to the accounting treatment of Attiki Odos.
EPS
Earnings per share amounted to euro 0.12, compared to the euro 0.10 per share in 1Q2007.
Balance Sheet
Moving on to the Balance Sheet we would like to point out that the application of IFRIC 12 has led to a retroactive reclasification of assets and liabilities as of 31/12/2007. Based on IFRIC 12, BOT assets are classified as intangible assets instead of 'prepayments for long term leases' at a value net of any government grants or financial contribution claims from the state. The overall effect on the consolidated balance sheet as of 31/12/2007 was that BOT related assets were reduced by euro 280 million wherea s on the liabilities, subsidies were reduced by c. euro 340 mln and an increase in long term provisions by c. euro 60 mln.
Total Assets as of 31/3/2008 amounted to 3,232.6 million vs 2,995.5 mln as of 31/12/2007.
Total Equity including minorities as of 31/3/2008 amounted to 1,176.2 mln vs euro 1,153.1 mln as of 31/12/2007.
Other reserves decreased by c. euro 13. 2 mln as a result of forex losses, mostly attributed to unrealized losses regarding the group's participation in European Goldfields, and losses from interest rate swaps of Moreas.
Total equity was also negatively affected by the acquisition of own shares of euro 5.1 mln. Minorities increased by euro 23.7 mln due to minorities' share of group profits of ?10 mln and their rights of euro 14.9 mln attributed to Moreas and the newly consolidated Inscut.
Total Debt reached euro 1,190.5 mln vs euro 1,060.8 mln as of 31/12/2007 of which euro 729.2 mln is non-recourse project finance related debt of Attiki Odos, Thermaiki and Moreas.
Adjusting for the non-recourse project finance related debt and related cash, the group's net debt position as of 31/3/08 was euro 144.5 mln vs a net cash position of euro 7.9 mln as of 31/12/07. The increase in net debt is due financing the group's equity and sub-debt participation in BOT projects (c. euro 90 mln), capex requirements in energy and working capital requirements for construction related activities.
Full year outlook for 2008
The group's prospects for 2008 are very positive. With the construction backlog at an all time high of c. euro 5 billion, construction related revenues are expected to substantially increase in line with the increase in 1Q2008. Infrastructure related works where AKTOR is the leading player in Greece and international construction projects are expected to be the main growth drivers. The stabilisation of construction operating margin around 5% is expected to continue.
As indicated in the 1Q2008 concessions will benefit from the full effect of the Attiki Odo consolidation. The new concession projects are not expected to have a significant P&L impact in 2008 but Thermaiki Odos and Moreas are expected to have a more significant balance sheet impact. Patra-Korinthos-Tsakona will commence at the end of June 2008.
In energy the group is embarking on an aggressive expansion plan of its wind farm portfolio with a total pipeline of 1607 MW of which 81 MW for 2008-2009 is currently under construction. However, the expected impact of wind farms on the group's P&L in 2008 is limited as additional capacity of c. 27 MW is expected to come on stream towards the end of the year.
In environment the emphasis is on delivering on the current project backlog of c. euro 120 mln, leveraging our leading position as a waste to energy player in Greece and further expanding our service portfolio in higher value added services. We expect the segment's growing profitability contribution to the group to continue.
In real estate the group aims to develop various projects in Greece and in the Balkans in which it has already invested.
In Quarries we are in the process of re-organising our portfolio of activities.
Overall we expect revenues and operating income to increase in 2008 mainly from construction and concessions and to a lesser extent from energy & environment. The other business operations of the group i.e. real estate and quarries are expected to have a positive effect from next year.