Key Highlights
- Revenue increased 48% in the second quarter 2008 compared to the second quarter 2007 (YTD Increase 35%)
- EBITDA increased 97% in the second quarter 2008 when compared to the second quarter 2007 (YTD Increase 87%)
- EPS on a fully diluted basis increased 114% compared to the second quarter 2007 to $0.92, EPS, excluding non-recurring charges, increased 170% compared to the second quarter 2007 to $1.16
- Advanced Materials and Engineering Systems experienced robust revenue and - EBITDA growth during second quarter 2008, driven primarily by improved pricing in metals and alloys and continuing demand for solar silicon DSS furnaces
- Timminco's second quarter revenue and EBITDA improved by 63% and over 600% compared to the second quarter of 2007
- Timminco shipments of solar grade silicon more than doubled to 221 MT in the second quarter
- Graphit Kropfmühl contributed $24.6 million to revenue and $3.0 million to - EBITDA since the completion of its acquisition on 22 April 2008
Amsterdam, 12 August 2008 --- AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") today announced its second quarter 2008 results. The Company's revenue increased to $413.0 million in the quarter ended 30 June 2008 from $279.0 million in the second quarter 2007, a 48% increase.
Net income attributable to shareholders for the second quarter 2008 was $25.3 million, or $0.92 per fully diluted share. Excluding AMG's 50.5% portion of the non- recurring restructuring expenses at Timminco, net income attributable to shareholders for the second quarter 2008 was $31.9 million, or $1.16 per fully diluted share. This represents an increase of 170% compared to net income of $11.8 million or $0.43 per fully diluted share for the second quarter 2007. EBITDA rose 97% to $63.4 million in the second quarter 2008 compared with $32.1 million in the second quarter 2007.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, commented: "I am pleased to report record earnings for the second quarter and the first half of 2008. We had strong performances in both our Advanced Materials and Engineering Systems businesses. Both divisions increased revenue and earnings due to growth in the solar, steel and superalloy end markets. AMG's majority owned subsidiary, Timminco Limited, improved the quality and more than doubled the shipments of solar grade silicon during the second quarter as compared to the first quarter 2008, despite typical challenges associated with a ramp up of a new facility."
Key Figures
In 000's US Dollar
Q2'08 Q2'07 (1) Change
Revenue $413,005 $279,008 48%
Gross profit 92,002 53,078 73%
Gross margin 22.3% 19.0%
Operating income 40,879 25,133 63%
Operating margin 9.9% 9.0%
Net Income attributable to shareholders
25,273
11,758
115%
EPS- Fully diluted 0.92 0.43 114%
Adjusted EPS-Fully diluted (2) 1.16 0.43 170%
EBITDA (3) 63,392 32,142 97%
EBITDA margin 15.3% 11.5%
Notes:
(1) Q2 2007 Revenue has been restated due to an adjustment at Timminco
(2) Adjusted for non-recurring, restructuring charges at Timminco
(3) EBITDA is defined as earnings before interest, tax, depreciation and amortization and excludes nonrecurring items
Operational Review
Advanced Materials Division
Q2'08 Q2'07 Change
Revenue $226,452 $173,416 31%
Gross profit
Operating income 46,860
26,858 30,444
13,403 54%
100%
EBITDA 30,528 16,755 82%
Capital expenditures 6,005 3,579 68%
The Advanced Materials division's second quarter 2008 financial results were driven by continued strong pricing and solid volumes in ferrovanadium, chromium and certain other key products. Revenue increased by $53.0 million or 30.6% to $226.5 million. Gross profit improved by $16.4 million or 53.9% to $46.9 million. SG&A expenses increased marginally because of additional corporate infrastructure. EBITDA increased by $13.8 million, an 82% improvement over the second quarter 2007 to $30.5 million.
Gross margins expanded from 17.6% in the second quarter of 2007 to 20.7% in second quarter of 2008. The division's secure raw material supply enabled it to increase gross margins at a faster pace than revenue. The most notable price increases over second quarter 2007 were in ferrovanadium and chromium metal, with ferrovanadium prices increasing by 88% and chromium metal prices increasing by 42%. Coating materials for thin film solar applications, vanadium chemicals and antimony products also delivered strong margins in the period. One area of pricing weakness was in ferronickel-molybdenum as London Metal Exchange nickel prices fell approximately 47% from the same period in the prior year.
Operating income for the second quarter 2008 improved 100% to $26.9 million, up from $13.4 million for the comparable period in 2007. This was primarily due to the increase in gross profit offset by a marginal increase in selling, general and administrative expenses that was attributable to a build-up in corporate infrastructure.
Capital expenditures were $6.0 million for the quarter, 67.6% higher than the comparable period in 2007, as previously announced capacity expansion initiatives in ferrovanadium, tantalum and hydropower continue to be on schedule. The division has recently approved a $2 million capacity expansion for the production of coating materials for thin film solar applications.
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Outlook
In the context of commenting on the first quarter 2008 results, AMG stated that the EBITDA growth 2007 versus 2006 of 65% would be achieved or exceeded for full year 2008 versus 2007. We are pleased to confirm that statement.
