AMG Advanced Metallurgical Group N.V. Reports First Quarter 2014 Results

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Overig advies 08/05/2014 07:27
Key Highlights
Revenue was $274.9 million in the first quarter 2014, a 7% decrease from the same period in 2013
EBITDA([1])was $20.1 million in the first quarter 2014, a 10% decrease from the same period in 2013
Earnings per share on a fully diluted basis was $0.14 in the first quarter 2014, a 56% increase over the same period in 2013
Cash flows from operating activities were $5.7 million in the first quarter 2014, compared to $0.7 million in the same period in 2013
AMG Processing generated revenue of $145.1 million and EBITDA of $9.4 million in the first quarter 2014
AMG Engineering generated revenue of $48.8 million and EBITDA of $1.5 million in the first quarter 2014
AMG Mining generated revenue of $81.0 million and EBITDA of $9.1 million in the first quarter 2014
As of March 31, 2014, cash on the balance sheet was $97.9 million; net debt was $160.9 million
- Amsterdam, 8 May 2014 (Regulated Information) --- AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") reported first quarter 2014 revenue of $274.9 million, a 7% decrease from $296.5 million in the first quarter 2013.

EBITDA decreased 10% to $20.1 million in the first quarter 2014 from $22.2 million in the first quarter 2013. Net income attributable to shareholders for the first quarter 2014 was $3.9 million, or $0.14 per fully diluted share, a 59% increase from $2.5 million, or $0.09 in the first quarter 2013.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, "The specialty metals industry continued to experience low market prices during the first quarter 2014. The management changes made in AMG Superalloys and AMG Titanium Alloys & Coatings began to yield operational improvements during the quarter. These operational activities resulted in improved margins and cash flows, which is our primary focus. We are also making progress on our strategic plans to optimize our portfolio and obtain critical mass in critical materials."

Operational Review
AMG Processing
Q1'14 Q1'13 Change
Revenue $145,110 $153,076 (5%)
Gross profit 18,927 19,925 (5%)
Operating profit 5,239 5,232 0%
EBITDA 9,419 8,713 8%
Capital expenditures 2,322 6,557(65%)

AMG Processing's first quarter 2014 revenue decreased $8.0 million to $145.1 million. The decline was primarily the result of a 24% decline in AMG Titanium Alloys & Coatings revenue, due to lower prices and volumes, and a 3% decline in AMG Aluminum revenue, due to lower master alloy prices. These declines were partially offset by a 12% increase in AMG Vanadium revenue on improved volumes from the capacity expansion that was completed in 2013.

The first quarter 2014 gross margin was 13%, consistent with the first quarter 2013, due to improved operational performance, despite lower revenues. Specifically, improved vanadium prices and the operation of the expanded AMG Vanadium roaster compared to the first quarter 2013, resulted in a 200% increase in AMG Vanadium gross margins. This helped offset a 34% decline in AMG Superalloys margins as lower market prices impacted margins.

The first quarter 2014 EBITDA increased by $0.7 million, or 6% of revenue, which is consistent with the first quarter 2013. The EBITDA increase was the result of a $1.7 million decline in SG&A expenses, which more than offset a $1.0 million decrease in gross profit. The decrease in SG&A expenses was related to a decline in personnel cost and professional fees related to efficiency initiatives.

Capital expenditures were $2.3 million for the first quarter 2014, a 65% decrease from the first quarter 2013. Capital investments made in the first quarter included $1.9 million of maintenance expenditures.

Cash flows from operating activities were $5.7 million for the quarter ended March 31, 2014 compared to cash flows from operating activities of $0.7 million in the same period in 2013. Net cash flows from operating activities are comprised of $20.1 million in EBITDA offset by $7.2 million increase in working capital and deferred revenue, $1.3 million of cash tax payments, $0.9 million of net cash interest payments, and restructuring payments of $2.7 million.

Cash flows used in investing activities were $5.7 million for the quarter ended March 31, 2014. The $3.4 million decrease compared to the same period in 2013 is primarily composed of a $3.3 million decrease in capital investments. This reduction in capital investments reflects management's continued cash control initiatives and more stringent return metrics.

Cash flows used in financing activities were $5.1 million for the quarter ended March 31, 2014 as the Company repaid $5.2 million of borrowings. In the same period in 2013, AMG repaid $4.2 million of borrowings.
Outlook
AMG continues to improve its operational performance and is executing on the strategy to gain critical mass in critical materials. These improvements are helping offset the continued weak specialty metals markets. The destocking in the global aerospace value chain is expected to continue for the balance of the year and slowing China growth remains a concern. Despite these challenging market conditions, AMG's improved operational performance should enable it to produce significant operating cash flow in 2014, and increase ROCE, EBITDA, and net income over 2013 levels.

zie geheel bericht op www.amg-nv.com



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