AMG reports fourth quarter and full year 2009 results

Key Highlights

  • Revenue was  $231.4 million in the fourth quarter 2009; full year revenue was $867.4 million 

  • EBITDA[1] was $12.4 million in the fourth quarter 2009; full year EBITDA was $69.1 million 

  • EPS on a fully diluted basis was ($1.13) in the fourth quarter 2009; full year EPS, was ($2.82); Adjusted EPS, excluding Timminco and non-recurring charges on a fully diluted basis was $0.03 in the fourth quarter 2009; full year EPS, was ($0.39)   

  • The Advanced Materials Division continued to recover in the second half of 2010; fourth quarter revenue was $124.3 million; EBITDA was $5.3 million 

  • The Engineering Systems Division fourth quarter revenue was $73.8 million; EBITDA was $5.9 million  

  • Graphit Kropfmühl fourth quarter revenue was $33.3 million; EBITDA was $1.2 million 

  • As of 31 December 2009 cash on hand was $117.0 million, net debt of $86.8 million; $34.1 million full year 2009 free cash flow[2] 


[1]
EBITDA is defined as earnings before interest, tax, depreciation and amortization and excludes nonrecurring items.  

[2] Free cash flow is defined as EBITDA less change in working capital and maintenance capital expenditures

Amsterdam, 17 March 2010 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported fourth quarter 2009 revenue of $231.4 million a 17% decrease from $280.1 million in the fourth quarter 2008.

EBITDA increased 264% to $12.4 million in the fourth quarter 2009 from $3.4 million in the fourth quarter 2008.  Net loss attributable to shareholders for the fourth quarter 2009 was ($30.2) million, or ($1.13) per fully diluted share.  Excluding non-recurring charges and Timminco, AMG’s net income attributable to shareholders for the fourth quarter 2009 was $0.8 million, or $0.03 per fully diluted share.  Net loss attributable to shareholders for the fourth quarter 2008 was ($54.1) million, or ($1.96) per fully diluted share.  

Full year 2009 revenue decreased 32% to $867.4 million, from $1,280.1 million in 2008.  EBITDA decreased 58% to $69.1 million in 2009 compared with $165.3 million in 2008.  Net loss attributable to shareholders for the full year 2009 was ($75.6) million, or ($2.82) per fully diluted share.  Excluding non-recurring charges and Timminco, AMG’s net loss attributable to shareholders for the full year 2009 was ($10.6) million, or ($0.39) per fully diluted share.  Net income attributable to shareholders for continuing operations for the full year 2008, excluding the non-recurring write down in AMG’s investment in Graphit Kropfmühl, was $74.3 million, or $2.70 per fully diluted share.  

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, commented: “2009 was a challenging year.  Our end primary markets of aerospace, energy, infrastructure and specialty metals and chemicals underwent dramatic contractions and dislocations caused by the global economic crisis.  While AMG’s portfolio approach to metallurgical based solutions helped stabilize the impact on revenues, we were still significantly affected across all of our business units.  The Advanced Materials Division’s revenues and earnings improved in the second half of 2009, driven by the recovery in the global economy.  The Engineering Systems Division entered 2009 with a significant order backlog, but the market for capital equipment deteriorated as the year progressed. Graphit Kropfmühl delivered consistent results throughout the year, driven by resiliency in the energy and specialty chemicals markets, but profits were impacted by higher raw material costs.  During the fourth quarter, however, demand improved with revenue increasing in both Advanced Materials and Engineering Systems.  We remain focused on our long term business strategy and we expect to see a substantial improvement in market conditions in the second half of 2010.”


Accounting Note

On September 28, 2009, the Company reduced its ownership percentage of Timminco from 50.8% to 47.9%.  AMG owned 42.5% of Timminco as of December 31, 2009.  As such, AMG accounts for Timminco under the IFRS equity method of accounting.  For purposes of this release, this accounting treatment requires AMG to deconsolidate its investment in Timminco as of September 28 and include Timminco’s quarterly and year to date financial results as one line item – “discontinued operations” on the profit and loss statement.  For the fourth quarter, Timminco’s results are shown in the line item share of loss from associates.  The carrying value of AMG’s investment in Timminco is included as an “Investment in Associate” on the asset portion of AMG’s balance sheet.  As such, the Key Figures below except for net income attributable to shareholders and earnings per share exclude the financial performance of Timminco during the period and all prior year figures have been restated to exclude Timminco.


Key Figures

In 000’s US Dollar

 

 

 

 

 

 

Q4 ’09

Q4 ’08

Change

 

 FY ’09

FY ’08

Change

 

 

 

 

 

 

 

 

Revenue

$231,388

$280,076

(17%)

 

$867,447

$1,280,120

  (32%)

Gross profit

46,354

35,671

    30%

 

165,587

262,369

   (37%)

Gross margin

20.0%

12.7%

 

 

19.1%

20.5%

 

 

 

 

 

 

 

 

 

Operating income (loss)

1,840

(51,094)

N/A

 

20,561

78,869

(74%)

Operating margin

0.8%

N/A

 

 

2.4%

6.2%

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to shareholders

(30,227)

(54,096)

N/A

 

 

(75,642)

14,453

     N/A

 

 

 

 

 

 

 

 

 

EPS- Fully diluted

($1.13)

($1.96)

 

 

($2.82)

$0.53

 

Adjusted EPS-Fully diluted[1]

         $0.03

($0.38)          

 

 

($0.39)

            2.70

 

 

 

 

 

 

 

 

 

EBIT[1]

6,165

(3,193)

N/A

 

45,370

140,453

   (68%)

EBITDA[1][2]

12,432

3,413

264%

 

69,128

165,330

(58%)

EBITDA margin

5.4%

1.2%

 

 

8.0%

12.9%

 

Notes:

[1] Adjusted for non-recurring, restructuring charges, discontinued operations and equity accounting treatment for AMG’s investment in Timminco

[2]EBITDA is defined as earnings before interest, tax, depreciation and amortization and excludes nonrecurring items



Operational Review – Fourth Quarter 2009

Advanced Materials Division

 

Q4 ’09

Q4 ’08

Change

Revenue

$124,306

$146,469

(15%)

Gross profit

Operating income (loss)

20,827

689

1,180

(14,853)

1665%

N/A

EBITDA

5,331

(13,270)

N/A

Capital expenditures

4,983

13,648

(63%)

 

The Advanced Materials division’s fourth quarter 2009 financial results continued to be impacted by sluggish demand for the majority of its products, most notably in the steel, superalloy and titanium markets.  Fourth quarter revenue decreased 15% to $124.3 million from the fourth quarter 2008.  

Gross margin percentage increased from 1% of revenue in the fourth quarter of 2008 to 17% in the fourth quarter of 2009.  The 2008 gross margin was impacted by a write down in ferrovanadium inventories.  Gross margin in 2009 was characterized by slightly lower volumes in most specialty metals and a decline in end product prices slightly offset by cost containment measures, from the fourth quarter of 2008.  The decrease in revenue and margins was primarily caused by ferrovanadium, with reference prices decreasing by 47% and volumes declining by 12% over the fourth quarter 2008.  Titanium master alloys, vanadium chemicals, ferronickel-molybdenum and ferrotitanium products were also impacted by falling end market prices.  Even more significant were the decreased volumes as the result of decreased global demand.  Aluminium master alloys volumes decreased 9% and titanium master alloys volumes declined by 80% during the fourth quarter 2009 compared to the fourth quarter 2008.  Despite these challenges, end market demand continued to improve slowly from a bottom in the second quarter of 2009.

The fourth quarter 2009 EBITDA increased by $18.6 million to $5.3 million, compared to the same period in 2008.  This was the result of the increase in gross margin, which was driven by cost savings and efficiency initiatives implemented during 2009.  Sequentially, fourth quarter 2009 EBITDA was essentially flat, with increases in revenues and margins offset by corporate costs.

Capital expenditures were $5.0 million for the third quarter 2009, 63% less than the comparable period in 2008.  The Division was only performing maintenance capital investment during the quarter because of the cost containment measures.


Engineering Systems Division

 

Q4 ’09

Q4 ’08

Change

Revenue

$73,809

$106,730

(31%)

Gross profit

Operating income

22,415

1,542

32,252

12,173

(31%)

(87%)

EBITDA

5,895

16,090

(63%)

Capital expenditures

2,988

9,384

(68%)

 

The Engineering Systems division’s order intake was significantly affected by the global economic slowdown as customers continued to defer investment decisions during the fourth quarter 2009 because of the weak credit markets and a slow recovery in their end market demand.  Order backlog was at $162 million on December 31, 2009, down 21% from $204 million on September 30, 2009.  The decrease was primarily due to a significant reduction in orders for solar furnace systems to $12 million during the quarter.  Overall, order intake was $47 million during the fourth quarter 2009, only slightly below $48 million in the third quarter 2009.  The backlog consists primarily of melting and remelting systems for the titanium and specialty steel industries and solar silicon DSS furnaces.

Fourth quarter 2009 revenue decreased by $32.9 million or 31% compared to the same period 2008.  Sales of solar silicon DSS melting furnaces for the photovoltaic industry decreased 53% in the fourth quarter 2009 compared to the same period in 2008.  During the fourth quarter 2009, 49% of revenue was generated by sales of solar silicon and melting furnaces, down from 59% in the same period 2008.  Revenue from remelting systems, primarily for the aerospace and specialty steel industries, decreased by 67% during the fourth quarter 2009.  The recently implemented nuclear business contributed $4.3 million in revenue during the fourth quarter, a 54% increase over the same period 2008.

Despite these challenging markets, the Engineering Systems division was able to stabilize gross margin at 30% of revenue in the fourth quarter 2009 the same level as in the fourth quarter 2008.  The stable gross margin was due to constant prices per unit and a slight decrease in raw material prices.

Fourth quarter 2009 EBITDA was $5.9 million, a 63% decrease over the same period in 2008.  The EBITDA margin decreased to 8% during the fourth quarter 2009 compared to 15% for the same period in 2008.  The EBITDA margin decrease was attributable to the lower revenue, and increases in research and development and corporate expenses.

Capital expenditures decreased to $3.0 million in the fourth quarter 2009, 68% less than the comparable period in 2008.  This decrease was a result of the completion of the expansion of the Berlin production plant and the heat treatment services facility in Mexico during 2008 as well as the focus on minimizing capital investment during the fourth quarter 2009.


Graphit Kropfmühl

 

Q4 ’09

Q4 ’08

Change

Revenue

$33,273

$26,877

24%

Gross profit

Operating loss

3,112

(391)

2,239

(48,414)

39%

99%

EBITDA

1,206

593

103%

Capital expenditures

762

3,335

(77%)


Graphit Kropfmühl’s (“GK”) fourth quarter 2009 revenue increased by 24% primarily due to an increase in silicon metal revenues.  

Gross margin improved to 9% of revenue in the fourth quarter 2009 from 8% of revenues in the fourth quarter 2008.  The fourth quarter 2008 operating income of negative $48.4 million was a result of purchase accounting adjustments and asset impairment charges related to the acquisition of GK.

Fourth quarter 2009 EBITDA was $1.2 million, a 103% increase compared to the fourth quarter 2008.  The EBITDA margin increased to 4% during the fourth quarter 2009 compared to 2% in the same period 2008.  The EBITDA margin increase was attributable to the increase in revenue in both silicon and graphite and a slight decrease in SG&A expenses.

Capital expenditures decreased to $0.8 million for the fourth quarter 2009, 77% less than the same period 2008.  The decrease in capital expenditures was a result of the completion of the expansion of the silicon metal facilities in early 2009.  


Operational Review – Year 2009

Advanced Materials Division

 

FY ’09

FY ’08

Change

Revenue

$429,083

$756,726

(43%)

Gross profit

Operating (loss) income

47,866

(28,761)

124,208

49,293

(61%)

N/A

EBITDA

(36)

62,060

N/A

Capital expenditures

11,546

31,767

(64%)



Advanced Materials’ 2009 revenue decreased by $327.6 million, or 43%, to $429.1 million.  Gross profit decreased by $76.3 million or 61% to $47.9 million due to lower average selling prices of many products and ferrovanadium in particular.  SG&A expenses decreased slightly from $70.4 million to $68.1 million as a result of the decrease in direct costs offset by an increase in corporate expenses.  EBITDA decreased to breakeven due to the decrease in gross profit, slightly offset by a decrease in SG&A.

Gross margins decreased from 16% in 2008 to 11% in 2009.  This was caused by significantly lower end product prices on average and decreased volumes, particularly in ferrovanadium and coatings materials.

Operating loss in 2009 was ($28.8) million, down from income of $49.3 million in 2008.  This was primarily due to the decrease in gross profit, which was slightly offset by the slight decrease in selling, general and administrative expenses, attributable to cost containment measures.

Capital expenditures were $11.5 million for the year, 64% less than 2008.  The Division performed only essential capital investment during 2009 to lower costs and increase capacity.  These investments included the completion of the tantalum mine and hydropower facility expansion which began in 2008.


Engineering Systems Division

 

FY ’09

FY ’08

Change

Revenue

$320,530

$435,462

(26%)

Gross profit

Operating income

105,776

48,015

136,296

83,495

(22%)

(42%)

EBITDA

62,885

95,632

(34%)

Capital expenditures

6,735

29,648

(77%)


Engineering Systems’ order intake for 2009 was $183.7 million.  Engineering Systems’ 2009 revenue decreased by $114.9 million, or 26%, to $320.5 million.  Gross profit decreased by $30.5 million or 22% to $105.8 million due to the significant decrease in revenues, particularly from advanced vacuum remelting systems for titanium.  SG&A expenses increased by $0.8 million to $58.1 million as cost cutting measures in the Division were offset by an increase in R&D spending related to new casting technology.   EBITDA decreased by $32.7 million to $62.9 million as a result of the decrease in gross profit.

Gross margins increased from 31% in 2008 to 33% in 2009.  This was caused by a favourable product mix involving high volumes of solar DSS furnaces and the in sourcing of production, which reduced cost of goods sold.

2009 operating income was $48.0 million, down 42% from $83.5 million in 2008.  This was primarily due to the decrease in revenues and gross profit.

Capital expenditures were $6.7 million for the year, 77% less than 2008.  The decrease was the result of the completion of the DSS production facility and heat treatment service operations during 2008 and only essential investments being performed in 2009.


Graphit Kropfmühl

 

FY            ’09

8 months ’08[1]

Revenue

$117,834

$87,932

Gross profit

Operating income (loss)

11,945

1,307

1,865

(53,919)

EBITDA

6,279

7,638

Capital expenditures

      7,251

      7,014


Notes:
[1] 2008 Gross profit and operating income include purchase accounting adjustments in the amount of $10.8 million and $12.0 million, respectively.



AMG consolidated GK from May 2008 forward, when it acquired control.  For the eight months ended 31 December GK generated $87.9 million in revenue and $1.9 million in gross profit.  The gross profit was primarily attributable to the silicon metal business unit, offset by $10.8 million in purchase accounting related to the acquisition of GK by AMG.  EBITDA was $7.6 million or 9% of revenue.  GK spent $7.0 million in capital expenditures during the period, primarily on the expansion of production capacity in the silicon metal operations.

GK generated full year 2009 revenue of $117.8 million and $11.9 million in gross profit.  55% of the gross profit was generated by the silicon metal unit and 45% was generated from the natural graphite business unit. 2009 EBITDA was $6.3 million or 5% of revenue.  GK spent $7.3 million in capital expenditures primarily due to the expansion of a silicon furnace and the relocation and upgrading of certain natural graphite production activities.


Timminco

AMG’s ownership in Timminco decreased to less than 50% of Timminco’s common equity as the result of issuance of shares by Timminco during the third quarter 2009.  AMG owned 42.5% of Timminco’s common equity as of December 31, 2009.  AMG now accounts for its investment in Timminco via the equity accounting method.  Timminco’s net loss through nine months is included in discontinued operations while its losses since deconsolidation are included in share of loss from associates on AMG’s income statement and the carrying value of AMG’s investment in Timminco of $19.5 million is reported as an asset on AMG’s balance sheet.  Additional information on Timminco and its fourth quarter 2009 financial statements can be found at www.Timminco.com.


Financial Review

Taxes

AMG recorded a tax provision of $15.2 million in the year ended 31 December 2009 on pre-tax losses of $28.6 million.  This does not compare favourably with the normalized effective tax rate of 38%.  This is due to a $27.5 million loss from AMG’s share in Timminco’s losses in the fourth quarter of 2009, which is not deductible for tax purposes. Additionally, there are losses being generated in jurisdictions where AMG already has significant net operating losses.  The inability to recognise these tax benefits is due to the Company’s historical net operating loss position of the subsidiaries where the expenses were recorded.

Liquidity

 

Q4′ 09

Q4’08[1]

Change

Total debt

$203,796

$183,352

11%

Cash & short-term investments

117,016

139,786

(16%)

Net debt (cash)

86,780

43,566

99%


Notes:

[1] Restated to eliminate Timminco for comparative purposes.


AMG had a net debt position of $86.8 million as of December 31 2009.  The Company’s liquidity position decreased by $43.2 million, due to $25.5 million of capital investments and $33.9 million of capital infusions into Timminco, offset by $16.4 million operating cash flows from continuing operations.

Recently AMG reached agreement to amend its senior credit facility (the “Credit Facility”) to improve financial flexibility and position itself to be able to take advantage of potential market opportunities.  

AMG’s Credit Facility consists of a $100 million term loan and a $175 million multicurrency revolving credit facility.  The Credit Facility matures on August 30, 2012.  AMG has increased its senior net debt leverage covenant from 2.00x trailing twelve months EBITDA, as defined in the Credit Facility, to 3.00x trailing twelve months EBITDA.  The total leverage covenant remains unchanged at 3.75x trailing twelve months EBITDA.


Cash Flow

 

Twelve months ended

 

31 December 2009

31 December 2008

 

 

 

Cash flows (used in) from operations

$(2,091)

$123,353

Capital expenditures

(25,532)

(68,429)

Acquisitions, net of cash

(69,993)

Cash flows used in discontinued operations

(32,039)

(65,485)

Cash flows from other investing

(32,610)

(16,783)

Cash flows used in investing activities

(90,181)

(220,690)

Cash flows generated from financing activities

15,060

30,774

Cash flows used in discontinued operations

47,578

48,800

Effect of exchange rates on cash held

3,177

(11,322)

Net decrease in cash and cash equivalents

(26,457)

(29,085)


Cash flows from operations were ($2.1) million for full year 2009 as compared to $123.4 million in 2008.  2009 cash flows from operations were down significantly year over year, as a result of a $96.2 million decrease in EBITDA, and a $26.1 million increase in working capital, as compared to 2008.  The working capital increase is the result of a decrease in accounts payable and customer deposits in the Engineering Systems division, offset by a decrease in inventory due to lower raw material prices and inventory levels for the Advanced Materials division’s products.  Inventories declined by $52.8 million within continuing operations.  

Cash used in investing activities was $90.2 million in 2009.  This decrease of $130.5 million from 2008 is primarily related to the $42.9 million decrease in capital investments, primarily in Advanced Materials and Engineering Systems and the $62.9 million cost for the purchase of approximately 79.5% of Graphit Kropfmühl in 2008.

2009 cash from financing activities was $62.6 million, a decrease of $16.9 million from 2008.  This decrease was primarily the result of two factors, $20.0 million borrowed on the credit facility for the acquisition of approximately 79.5% of Graphit Kropfmühl in April 2008, and $10.7 million borrowings to fund the working capital increases in Advanced Materials during 2008, offset in 2009 by a net $14.4 million draw down from various credit facilities.


Outlook

The market continues to show signs of improvement.  The Advanced Materials division is currently benefitting from increases in specialty metals prices and demand, albeit from low levels.  The Engineering Systems division entered 2010 with a substantially reduced backlog compared to 2009.  Requests for new orders are increasing from mid-year 2009 low levels, but the first half of 2010 will continue to be challenging.  GK’s end markets are also gradually improving, but this growth is not expected to accelerate until the second half of the year.  AMG remains positive on long term growth prospects for its core markets of aerospace, energy, infrastructure and specialty metals and chemicals, however most of the near term growth is expected to occur later in the year.  Overall, AMG expects its portfolio of metals based technology businesses to produce results ahead of 2009 levels.



Unaudited
AMG Advanced Metallurgical Group N.V.
Consolidated Income Statement

 

For the year ended December 31

 

 

In thousands of US Dollars

2009

2008

Continuing operations

 

*Restated

Revenue

867,447

1,280,120

Cost of sales

701,860

1,017,751

Gross profit

165,587

262,369

 

 

 

 

Selling, general and administrative expenses

137,537

138,227

Restructuring expense

7,782

2,879

Asset impairment expense

1,718

47,119

Environmental expense

3,998

1,433

Other expenses

173

2,430

Other income

(6,182)

(8,588)

Operating  profit

20,561

78,869

 

 

 

 

Interest expense

18,419

20,077

Interest income

(3,587)

(6,414)

Foreign exchange loss

2,418

5,071

Net finance costs

17,250

18,734

 

 

 

Share of (loss) gain of associates

(31,958)

547

(Loss) profit before income tax

(28,647)

60,682

 

 

 

 

Income tax expense

15,205

36,962

(Loss) profit for the year from continuing operations

(43,852)

23,720

 

 

 

Loss after tax for the year from discontinued operations

(54,378)

(21,162)

(Loss) profit for the year

(98,230)

2,558

 

 

 

Attributable to:

 

 

 

Shareholders of the Company

(75,642)

14,453

 

Minority interests

(22,588)

(11,895)

 

 

(98,230)

2,558

(Loss) earnings per share

 

 

Basic (loss) / earnings per share

(2.82)

0.54

Diluted (loss) / earnings per share

(2.82)

0.53

(Loss) earnings per share from continuing operations

 

 

Basic (loss) / earnings per share from continuing operations

(1.77)

0.94

Diluted (loss) / earnings per share from continuing operations

(1.77)

0.92



Unaudited

AMG Advanced Metallurgical Group N.V.

Consolidated Income Statement

 

For the three months  ended December 31

 

 

In thousands of US Dollars

2009

2008

Continuing operations

 

*Restated

Revenue

231,388

280,076

Cost of sales

185,034

244,405

Gross profit

46,354

35,671

 

 

 

 

Selling, general and administrative expenses

42,605

36,754

Restructuring expense

2,087

2,750

Asset impairment expense

1,718

47,119

Environmental expense

(164)

1,402

Other expenses

65

2,384

Other income

(1,797)

(3,644)

Operating  profit (loss)

1,840

(51,094)

 

 

 

 

Interest expense

2,538

3,700

Interest income

(970)

(1,387)

Foreign exchange loss

2,594

2,977

Net finance costs

4,162

5,290

 

 

 

Share of loss of associates

(29,273)

(34)

(Loss) before income tax

(31,595)

(56,418)

 

 

 

 

Income tax (benefit) expense

(2,436)

3,870

Loss for the year from continuing operations

(29,159)

(60,288)

 

 

 

Profit after tax for the year from discontinued operations

202

1,195

Loss for the year

(28,957)

(59,093)

 

 

 

Attributable to:

 

 

 

Shareholders of the Company

(30,227)

(54,096)

 

Minority interests

1,270

(4,997)

 

 

(28,957)

(59,093)

(Loss) earnings per share

 

 

Basic (loss) / earnings per share

(1.13)

(2.02)

Diluted (loss) / earnings per share

(1.13)

(1.96)

(Loss) earnings per share from continuing operations

 

 

Basic (loss) / earnings per share from continuing operations

(1.13)

(2.04)

Diluted (loss) / earnings per share from continuing operations

(1.13)

(1.98)



Unaudited

AMG Advanced Metallurgical Group N.V.

Consolidated Statement of Financial Position

 

 

As at December 31

 

 

In thousands of US Dollars

2009

2008

Assets

 

 

 

Property, plant and equipment

211,022

313,470

 

Intangible assets

28,253

47,060

 

Investments in associates

34,794

15,700

 

Derivative financial instruments

1,718

 

Deferred tax assets

10,912

29,181

 

Restricted cash

13,263

15,889

 

Notes receivable

5,542

2,132

 

Other assets

11,980

11,612

Total non-current assets

317,484

435,044

 

Inventories

193,378

318,793

 

Trade and other receivables

147,787

173,422

 

Derivative financial instruments

4,954

6,393

 

Other assets

30,359

52,804

 

Short term investments

95

 

Cash and cash equivalents

117,016

143,473

Total current assets

493,494

694,980

Total assets

810,978

1,130,024

 

 

 

 

Equity

 

 

 

Issued capital

725

724

 

Share premium

379,518

379,297

 

Other reserves

31,284

(2,215)

 

Retained earnings (deficit)

(198,897)

(123,110)

Equity attributable to shareholders of the Company

212,630

254,696

Minority interests

15,793

57,115

Total equity

228,423

311,811

Liabilities

 

 

 

Loans and borrowings

168,319

138,990

 

Employee benefits

91,358

103,176

 

Provisions

14,862

12,841

 

Government grants

669

291

 

Other liabilities

7,984

9,245

 

Derivative financial instruments

1,339

3,530

 

Deferred tax liabilities

26,395

56,013

Total non-current liabilities

310,926

324,086

 

 

 

 

 

Loans and borrowings

3,464

3,021

 

Short term bank debt

32,013

83,566

 

Related party debt

6,456

 

Government grants

234

8,360

 

Other liabilities

46,179

53,882

 

Trade and other payables

69,791

156,697

 

Derivative financial instruments

6,048

15,419

 

Advance payments

54,764

94,049

 

Unearned revenue

35,624

 

Current taxes payable

36,050

14,708

 

Provisions

23,086

22,345

Total current liabilities

271,629

494,127

Total liabilities

582,555

818,213

Total equity and liabilities

810,978

1,130,024



Unaudited

AMG Advanced Metallurgical Group N.V.

Consolidated Statement of Cash Flows

For the year ended December 31

 

 

In thousands of US Dollars

2009

2008

Cash flows (used in) from operating activities

 

*Restated

(Loss) profit for the period from continuing operations

(43,852)

23,720

(Loss) for the period from discontinued operations

(54,378)

(21,162)

(Loss) profit for the period

(98,230)

2,558

Adjustments to reconcile profit to net cash flows:

 

 

Non-cash:

 

 

   Depreciation and amortization

23,758

24,877

   Amortization of purchase accounting adjustment to inventory

8,178

   Restructuring expense

7,782

2,879

   Asset impairment loss

1,718

47,119

   Environmental expense

3,998

1,433

   Net finance costs

17,250

18,734

   Share of loss (gain) of associates

31,958

(547)

   Loss (gain) on sale or disposal of property, plant and equipment

6,253

(547)

   Equity-settled share-based payment transactions

13,729

16,909

   Cash-settled share-based payment transactions

3,605

   Income tax expense

15,205

36,962

Working capital adjustments

 

 

   Change in inventories

45,338

(77,804)

   Change in trade and other receivables

(564)

53,166

   Change in prepayments

12,490

(10,015)

   Change in trade payables, provisions, and other liabilities

(97,919)

20,812

   Change in government grants

(7,783)

(8,184)

   Other

5,934

(7,986)

Interest paid

(15,289)

(14,949)

Interest received

2,468

5,922

Income tax paid, net

(9,711)

(23,104)

Cash flows  from discontinued operations

35,919

26,940

Net cash flows (used in) from operating activities

(2,091)

123,353

 

 

 

Cash flows used in investing activities

 

 

Proceeds from sale of property, plant and equipment

129

858

Acquisition of associates

(10,432)

Acquisition of subsidiaries (net of cash acquired of $1,671)

(69,993)

Acquisition of property, plant and equipment and intangibles

(25,532)

(68,429)

Related party loans

(5,262)

Investments in associates

(28,943)

Change in restricted cash

1,410

(286)

Other

56

(6,923)

Cash flows used in discontinued operations

(32,039)

(65,485)

Net cash flows used in investing activities

(90,181)

(220,690)

 

Cash flows from financing activities

 

 

Proceeds from issuance of debt

30,175

37,690

Repayment of borrowings

(15,785)

(7,754)

Other

670

838

Cash flows from discontinued operations

47,578

48,800

Net cash flows from financing activities

62,638

79,574

 

 

 

Net decrease in cash and cash equivalents

(29,634)

(17,763)

Cash and cash equivalents at January 1

143,473

172,558

Effect of exchange rate fluctuations and consolidation changes on cash held

3,177

(11,322)

Cash and cash equivalents at December 31

117,016

143,473



About AMG

AMG, incorporated in the Netherlands, is a global leader in the production of highly engineered specialty metal products and advanced vacuum furnace systems.  AMG serves growing industries worldwide with its unique combination of metallurgical engineering expertise and production know-how.  AMG is a market leader in many of its products and systems, which are critical to the production of key components for the aerospace, energy (including solar and nuclear), electronics, optics, chemicals, construction and transportation industries.  AMG has two operating divisions, Advanced Materials and Engineering Systems, and owns interests in publicly-listed companies Graphit Kropfmühl AG (Deutsche Börse: GKR.DE) and Timminco Limited (TSX: “TIM”).  

The Advanced Materials Division develops and produces niche specialty metals and complex metals products, many of which are used in demanding, safety-critical, high-stress environments.  AMG is one of a limited number of significant producers globally of niche specialty metals, such as ferrovanadium, ferronickel-molybdenum, aluminum master alloys and additives, chromium metal and ferrotitanium, used by steel, aluminum, chemical and superalloy producers for aerospace, automotive, energy, electronics, optics, chemicals, construction and other applications.  Other key products produced by AMG include specialty alloys for titanium and superalloys, coating materials, tantalum and niobium oxides, vanadium chemicals and antimony trioxide.

The Engineering Systems Division designs, engineers and produces advanced vacuum furnace systems and operates vacuum heat treatment facilities.  AMG is a global leader in supplying technologically-advanced vacuum furnace systems to customers in the aerospace, energy (including solar and nuclear), transportation, electronics, superalloys and specialty steel industries.  Examples of furnace systems produced by AMG include vacuum remelting, solar silicon melting and crystallization, vacuum induction melting, vacuum heat treatment and high pressure gas quenching, vacuum precision casting, turbine blade coating and sintering.  AMG also provides vacuum case-hardening heat treatment services on a tolling basis to customers through facilities equipped with vacuum heat treatment furnaces.

Graphit Kropfmühl AG is a majority controlled, publicly listed subsidiary of AMG.  Based on its secure raw material sources in Africa, China and Europe, Graphit Kropfmühl is a specialist in the production of silicon metal and the extraction, processing and refining of natural crystalline graphite for a wide range of energy saving industrial applications.  

Timminco Limited is a publicly listed associate of AMG.  Timminco is a leader in the production of upgraded metallurgical silicon for the rapidly growing solar photovoltaic energy industry.  Timminco also produces silicon metal for use in a broad range of industrial applications.

AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, the United States, Canada, Mexico, Brazil, Sri Lanka and Australia and also has sales and customer service offices in Belgium, Russia, China and Japan (website: www.amg-nv.com).  


For further information please contact:

AMG Advanced Metallurgical Group N.V.

+1 610 975 4901

Jonathan Costello

 

Vice President of Corporate Communications

 

jcostello@amg-nv.com

 


Disclaimer

Certain statements in this press release are not historical facts and are “forward looking.”  Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information.  When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements.  By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved.  These forward-looking statements speak only as of the date of this press release.  AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.

The full press release including tables can be downloaded from the following link:

 

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