FINANCIAL YEAR 2020 RESULTS (Correct Repetition)

Athens, April 8, 2021

 

 

2020:  Foundation year for the development of EYDAP

Towards a solution for the financial pending issues of previous years

 

 

“2020 was a year of strong challenges, which we had never faced in the past", Mr. Harry Sachinis, CEO of EYDAP, stated during the announcement of the financial results of 2020. "During the year, we were called to face the unprecedented conditions imposed by COVID-19, ensuring the health and safety of our employees, while remaining committed to our mission for uninterrupted water supply to every household.  At the same time, in 2020 we set the foundations to be very close to an agreement with the Greek government that permanently closes the pending issues of the past, provides tools and new opportunities for the Company to undertake development initiatives, and guarantees consumers excellent quality water, in a low price. This combination together with the ongoing major reform program, which is already being implemented in EYDAP, creates the guarantees for the dynamic development course of the company and the achievement of the respective results”.

 

According to the financial results, the turnover of the Company amounted to 330.3 million € from 323.7 million € in 2019, showing an increase by 2% (+6.6 million €). Total consumption increased to 399.7 million cubic meters from 392.3 million cubic meters in 2019 (+ 1.9%).

 

The fiscal year 2020 was characterized by two important events that affected the financial statements:

 

First, by the provision for the additional price of raw water for the period 2013 to 2020, in the context of the advanced discussions with the Greek State for the extension of the right of exclusive water disposal in Company's area of jurisdiction.

 

Second, by the change in the Company's customer receivables, which is significantly due to the COVID-19 pandemic and led to the need of an additional provision for impairment of financial assets, amounting to € 11.4 million (€ 2.6 million in 2019).

 

In the context of settling the additional price of raw water for the period 2013 to 2020 and taking into account the development of the relevant negotiations, as well as the studies and opinions of technical and legal advisors, the Company proceeded to a provision for the additional cost of raw water for the period 2013-2020, amounting to € 157.5 million, which burdens once-off the results of the current year.  The cash position of the Company remains strong, with 462 million euros in cash equivalents. It is noted that the cash position of the Company remains strong, with 462 million euros in cash and cash equivalents.

 

For the year 2020, the formed provision amounts to approximately € 22.2 million which is included in the cost of sales. For the years 2013 to 2019, a provision of a total amount of € 135.3 million was formed, which is included in the Other Expenses account.

 

The result of the above two changes contributed to the reduction of the EBITDA of the Company by € -164.8 million  (-153%), which amounted to € -57.1  million from € 107.7 million in 2019. The EBITDA margin stood at -17.3% from 33.3% in 2019.

 

It is noted that without these two provisions for raw water, Adjusted EBITDA would have been € 100.4 million versus € 107.6 million in 2019, recording a decrease of -7.3 million € (-6.7%).

 

Additionally, without the provision for impairment of financial assets due to COVID-19  and without the two additional provisions for the raw water in the period 2013-2020, the Adjusted EBITDA-I would have stood at € 111.8 million from € 110.3 million in 2019, up € 1.5 million (+ 1.4%).

 

It is also noted, that the total operating cost of the Company (ie the sum of Cost of Goods Sold, Management Operating Expenses, Disposal Expenses and Impairment of Financial Assets) increased by 13% or +33.4 million euros and amounted to 288.6 million euros from 255.1 million euros in 2019, mainly due to the increase in the cost of goods sold by +20.2 million (+ 12.6%) and the provision for impairment of financial assets by euro 8.8 million (+ 336%) due to the change in customer claims of the company, significantly attributed to the COVID-19 pandemic.

 

The increase in operating expenses * before depreciation by 35.4 million euros, the increase in turnover by 6.6 million euros, the decrease in other operating income by 0.4 million euros (decline in revenues from forfeiture of guarantees-penalties and reduction of revenues from previous years) as well as the increase of other expenses by 135.5 million euros led to the reduction of EBITDA* (i.e. losses) of the Company by - 164.8 million euros (-153%), which amounted to -57 million euros from 107.7 million euros in 2019. The EBITDA margin was -17.3% from 33.3% in 2019.

 

Similarly, the Company's EBIT* decreased by -162.7 million euros (-231%) and amounted to losses of -92.2 million euros from 70.6 million euros in 2019. The EBIT margin stood at -27.9% from 21.8% in 2019.

 

Profits (Losses) before taxes of the Company amounted to -80.4 million euros from 84.0 million euros in 2019, recording a decrease of -196% or -164.5 million euros.

 

Profits after taxes of the Company decreased by -214% and amounted to -66.1 million euros from 58.1 million euros in 2019. The net profit margin fell to -20% from 17.9% in 2019.

 

Net Operating Cash inflows for the group increased from € 78.3 million in 2019 to € 93.2 million in 2020. Profit / loss before taxes decreased by € -164.5 million, while adjustments for non-cash items increased by € 168 million. Also, the adjustments of operating accounts decreased by -9.5 million €, which were covered by the significant change by +20.2 million presented in the paid taxes (-12.1 million € in 2020 against -32.3 million € in 2019).

 

 

The Company is in the final stage of negotiations with the Greek State for the extension of the right of exclusive disposal of water in its area of ​​jurisdiction for the period 2021-2040. The proposed agreement is a comprehensive framework that permanently closes the accumulated pending issues of the past and ensures the development course of the Company in the future.  It also includes regulation of institutional issues such as reorganization of the Company in matters of operation and human resources, the capacity of participation of EYDAP in PPP tenders and the capacity of recovering the additional costs of 2013-2020, without burdening the final consumer. It ensures a raw water price for the period 2021-2040, which on average will be about 35% lower than the price of the period 2013-2020.

 

Regarding the unprecedented situations faced by the world community, Greek society and consequently EYDAP due to the COVID-19 pandemic, the Company showed resilience and responded immediately to the emerging conditions, by implementing business plans in all its operations, guided by the uninterrupted provision of water and sewerage services, the public health, but also the health and safety of its employees.

 

The intention of the Company's Management is the distribution of a dividend to the shareholders from the retained earnings and / or return of capital from the issuance of equity shares, amounting to a total of 50 million Euros. The distribution will be formed in the next period by the Board of Directors, in order to be approved by the Shareholders General Meeting.  Based on the closing price on 31/12/2020, the dividend yield is set at 6.8 %.

 

 

 

 

The Annual Financial Report and the Data and Information for the Year 2020 are posted on the corporate website www.eydap.gr

 

* Alternative performance measurement indicator.

See section Alternative performance measurement indicators in the a
Annual Financial Report 2020 which is posted on the corporate website www.eydap.gr.

The financial figures mentioned in the announcement concern the Company unless otherwise stated.


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