ELVALHALCOR HELLENIC COPPER AND ALUMINIUM INDUSTRY S.A.
Press Release regarding Q3 2009 Group Financial Results
Halcor Group of companies announced its Q3 2009 consolidated financial results according to the International Financial Reporting Standards (IFRS). Consolidated turnover reached in Q3 2009 euro 482.8 million. versus euro 938.3 million in Q3 2008, decreased by 48.5%. This drop is mainly due to the decreased total volume of sales by 30% and also to the reduced prices of metals compared to last year's nine-month period.
Copper and zinc prices, after collapsing at the end of 2008, registered a strongly upward performance during the first nine months of 2009 but still remained at a considerably lower average level in relation to the corresponding period of 2008. Thus, the average copper price was lower by 35.2% and stood at euro 3,388 per ton compared to euro 5,228 per ton while the average zinc price was lower by 22.4% and stood at euro 1,071 per ton compared to euro 1,380 per ton. In terms of volumes, during the nine-month period of 2009 the sales of cables accounted for 41% of total sales, the sales of copper tubes for 26%, rolling products for 19%, brass rods for 7% and copper bus bars for 7%.
The consolidated gross profits fell by 50.4% and amounted to euro 19.1 million compared to euro 38.5 million during the nine-month period of 2008. The consolidated earnings before interest, tax, depreciation and amortization (EBITDA) amounted to euro 12.3 million compared to euro 28.5 million during the corresponding last-year period, thus being reduced by 56.8% while the results before interest and tax (ΕΒΙΤ) amounted to losses euro 6.9 million versus profits euro 10.5 million during the nine-month period of 2008. During the nine-month period of 2009, consolidated results (earnings / losses before taxes) stood at losses equal to euro 19.7 million compared to losses of euro 14.7 million over the previous year corresponding period. Finally, losses after taxes and minority interests amounted to euro 18.8 million or euro -0.185 per share.
This drop in results is due both to the contraction of construction activity to which a large portion of our products (copper tubes for water supply and heating, rolling products for roofing, cables) is directed and to the shrunk demand for copper industrial products. In addition, the upward performance of copper price and mainly the strong volatility noticed in relation thereto intensified uncertainty in the market, thus having a negative impact on demand.
Given that fabrication prices had already reached low levels, in principle they were maintained at the same levels despite the reduced demand and increased competition. Moreover, particular attention was given to the management of production cost through the optimization and the reorganization of the production processes). In addition to the steps taken to reduce production cost, HALCOR Group put into practice measures to contain administrative and selling expenses; as a result, they were reduced by 5.5% and the sum of euro 1.7 million was saved. The emphasis given to cost cutting continues and we expect the rate of decrease in operating expenses achieved during the nine-month period, to be retained until the end of the year.
Through the better management of inventories and working capital, we attained positive cash flows from operating activities (euro 28.8 million) over the nine-month period of 2009. Also, financial expenses stood at euro 12.8 million, being reduced by euro 14.6 million (or 53.1%) as a result of the drop in both interest rates and the Group's net debt, since loans came to euro 417 million during the nine-month period of 2009 in comparison with euro 586 million over the respective period of 2008.
Amid this difficult macroeconomic environment, the Group pursues the implementation of its strategic plan consisting in improving production cost, in the development of products of higher added value subject to minor or nil substitution and in strengthening its activity outside Greece in new markets where it was not operating to date.
The Q3 2009 Data and Information and the Financial Statements are being published on Tuesday, November 24, 2009 in the daily press and are posted on the company's website at the address www.halcor.gr
Copper and zinc prices, after collapsing at the end of 2008, registered a strongly upward performance during the first nine months of 2009 but still remained at a considerably lower average level in relation to the corresponding period of 2008. Thus, the average copper price was lower by 35.2% and stood at euro 3,388 per ton compared to euro 5,228 per ton while the average zinc price was lower by 22.4% and stood at euro 1,071 per ton compared to euro 1,380 per ton. In terms of volumes, during the nine-month period of 2009 the sales of cables accounted for 41% of total sales, the sales of copper tubes for 26%, rolling products for 19%, brass rods for 7% and copper bus bars for 7%.
The consolidated gross profits fell by 50.4% and amounted to euro 19.1 million compared to euro 38.5 million during the nine-month period of 2008. The consolidated earnings before interest, tax, depreciation and amortization (EBITDA) amounted to euro 12.3 million compared to euro 28.5 million during the corresponding last-year period, thus being reduced by 56.8% while the results before interest and tax (ΕΒΙΤ) amounted to losses euro 6.9 million versus profits euro 10.5 million during the nine-month period of 2008. During the nine-month period of 2009, consolidated results (earnings / losses before taxes) stood at losses equal to euro 19.7 million compared to losses of euro 14.7 million over the previous year corresponding period. Finally, losses after taxes and minority interests amounted to euro 18.8 million or euro -0.185 per share.
This drop in results is due both to the contraction of construction activity to which a large portion of our products (copper tubes for water supply and heating, rolling products for roofing, cables) is directed and to the shrunk demand for copper industrial products. In addition, the upward performance of copper price and mainly the strong volatility noticed in relation thereto intensified uncertainty in the market, thus having a negative impact on demand.
Given that fabrication prices had already reached low levels, in principle they were maintained at the same levels despite the reduced demand and increased competition. Moreover, particular attention was given to the management of production cost through the optimization and the reorganization of the production processes). In addition to the steps taken to reduce production cost, HALCOR Group put into practice measures to contain administrative and selling expenses; as a result, they were reduced by 5.5% and the sum of euro 1.7 million was saved. The emphasis given to cost cutting continues and we expect the rate of decrease in operating expenses achieved during the nine-month period, to be retained until the end of the year.
Through the better management of inventories and working capital, we attained positive cash flows from operating activities (euro 28.8 million) over the nine-month period of 2009. Also, financial expenses stood at euro 12.8 million, being reduced by euro 14.6 million (or 53.1%) as a result of the drop in both interest rates and the Group's net debt, since loans came to euro 417 million during the nine-month period of 2009 in comparison with euro 586 million over the respective period of 2008.
Amid this difficult macroeconomic environment, the Group pursues the implementation of its strategic plan consisting in improving production cost, in the development of products of higher added value subject to minor or nil substitution and in strengthening its activity outside Greece in new markets where it was not operating to date.
The Q3 2009 Data and Information and the Financial Statements are being published on Tuesday, November 24, 2009 in the daily press and are posted on the company's website at the address www.halcor.gr