AMG reports fourth quarter and full year 2010 results

Key Highlights

  • Revenue was  $270.7 million in the fourth quarter 2010, a 17% increase over the same period in 2009; full year revenue was $990.5 million, a 14% increase over 2009
  • EBITDA[1] was $20.2 million in the fourth quarter 2010, a 62% increase over the same period in 2009; full year EBITDA was $84.9 million, a 23% increase over the full year 2009
  • EPS on a fully diluted basis was $0.46 in the fourth quarter 2010; full year EPS, was $0.09; excluding Timminco, EPS improved to $0.10 in Q4 2010, up from $0.03 in Q4 2009; full year EPS excluding Timminco was $0.52   
  • The Advanced Materials Division generated revenue of $168.9 million and EBITDA of $7.7 million in Q4 2010; full year revenue and EBITDA was $616.3 million and $39.8 million, respectively
  • The Engineering Systems Division generated revenue of $67.7 million and EBITDA of $10.0 million in Q4 2010; full year revenue and EBITDA was $245.7 million and $37.5 million, respectively
  • Graphit Kropfmühl generated revenue of $34.2 million and EBITDA of $2.5 million in Q4 2010; full year revenue and EBITDA was $128.6 million and $7.6 million, respectively
  • As of 31 December 2010, cash on the balance sheet was $89.3 million, net debt was $147.8 million

 

Amsterdam, 16 March 2011 (Regulated Information) AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported fourth quarter 2010 revenue of $270.7 million a 17% increase from $231.4 million in the fourth quarter 2009.

EBITDA increased 62% to $20.2 million in the fourth quarter 2010 from $12.4 million in the fourth quarter 2009.  Net income attributable to shareholders for the fourth quarter 2010 was $12.5 million, or $0.46 per fully diluted share.  Net loss attributable to shareholders for the fourth quarter 2009 was ($30.2) million, or ($1.13) per fully diluted share.  Excluding AMG’s share of Timminco’s net income in the fourth quarter, AMG’s net income attributable to shareholders for the fourth quarter 2010 was $2.4 million, or $0.10 per fully diluted share compared to $800 thousand, or $0.03 per fully diluted share in 2009. 

Full year 2010 revenue increased 14% to $990.5 million, from $867.4 million in 2009.  EBITDA increased 23% to $84.9 million in 2010 compared with $69.1 million in 2009.  Net income attributable to shareholders for the full year 2010 was $2.4 million, or $0.09 per fully diluted share.  Excluding AMG’s portion of Timminco’s net loss, AMG’s net income attributable to shareholders for the full year 2010 was $13.9 million, or $0.52 per fully diluted share.  Net loss attributable to shareholders for continuing operations for the full year 2009, excluding AMG’s portion of Timminco’s net loss, was ($10.6) million, or ($0.39) per fully diluted share. 

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, commented: “2010 was a transition year.  Our primary end markets of Aerospace, Energy, Infrastructure and Specialty Metals and Chemicals began to rebound from the global financial crisis.  AMG’s portfolio approach to specialty metals acted as a stabilizer in 2010 as the Advanced Materials division saw significant improvement in pricing and demand for its products.  Although the Engineering Systems division entered 2010 with a low order backlog, the market for vacuum systems improved substantially in the second half of the year after reaching a bottom in mid-year.  Graphit Kropfmühl’s performance also improved in the second half of 2010, driven by the energy and specialty chemicals markets.  The improvement in market conditions experienced in the second half of 2010 and our investments in tantalum, antimony and aluminium master alloys position the business for revenue and EBITDA growth in 2011.”

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


Key Figures

In 000’s US Dollar        
  Q4 ’10 Q4 ’09 Change   FY ’10 FY ’09 Change
               
Revenue $270,731 $231,388 17%   $990,495 $867,447 14%
Gross profit 49,382 46,354 7%   178,558 165,587 8%
Gross margin 18.2% 20.0%     18.0% 19.1%  
               
Operating income (loss) 6,323 1,840 244%   43,259 20,561 110%
Operating margin 2.3% 0.8%     4.4% 2.4%  
               
Net income (loss)
attributable to shareholders
12,481 (30,227) N/A   2,414 (75,642) N/A
               
EPS- Fully diluted $0.46 ($1.13)     $0.09 ($2.82)  
Adjusted EPS-Fully diluted[1] $0.10 $0.03     $0.52 ($0.39)  
               
EBIT[2] 12,917 6,165 110%   59,866 45,370 32%
EBITDA[3] 20,171 12,432 62%   84,875 69,128 23%
EBITDA margin 7.5% 5.4%     8.6% 8.0%  

Notes:

[1] Adjusted to exclude all Timminco results including equity gains (losses) which accounted for $0.36 in EPS in Q4 2010
[2] EBIT is defined as earnings before interest, tax and excludes nonrecurring items
[3] EBITDA is defined as earnings before interest, tax, depreciation and amortization and excludes nonrecurring items


Operational Review – Fourth Quarter 2010


Advanced Materials Division

  Q4 ’10 Q4 ’09 Change
Revenue $168,863 $124,306 36%
Gross profit
Operating income
24,265
1,432
20,827
689
17%
108%
EBITDA 7,738 5,331 45%
Capital expenditures 7,321 4,983 47%

 

The Advanced Materials division’s fourth quarter 2010 financial results were driven by a rebound in the aerospace, specialty metal and chemical and energy industries.  Revenue increased by $44.6 million, or 36%, to $168.9 million.  The increase in revenue was driven by price increases in most products and in particular by antimony and chrome metal, with reference prices increasing by 70% and 31%, respectively. While prices improved across most products, volume growth was uneven.  Ferrovanadium and chrome metal volumes increased by 30% and 6%, respectively however volumes for antimony decreased by 11% during the fourth quarter 2010 compared to the fourth quarter 2009.

The fourth quarter 2010 gross margin of 14% of revenue declined from 17% of revenue in the fourth quarter 2009 due to unfavourable changes in product mix. Specifically, significant increases in revenue from lower margin aluminium products more than offset increased economies of scale, resulting in lower gross margins despite the increase in revenue.

Fourth quarter 2010 EBITDA increased by $2.4 million to 5% of revenue from 4% of revenue in 2009, due to the increase in gross profit and a 1% decrease in SG&A compared to the same period in the prior year. 

Capital expenditures were $7.3 million for the quarter, 47% more than the fourth quarter 2009.  The primary growth capital investments made in the fourth quarter involved the expansion of the ferrovanadium logistics facility and production facilities for coatings used in solar thin films.


Engineering Systems Division

  Q4 ’10 Q4 ’09 Change
Revenue $67,676 $73,809 (8%)
Gross profit
Operating income
20,946
7,041
22,415
1,542
(7%)
357%
EBITDA 9,963 5,895 69%
Capital expenditures 4,911 2,988 64%

 

Despite an increase in order intake compared to the fourth quarter 2009 and the third quarter 2010, the Engineering Systems division’s fourth quarter 2010 revenue was adversely impacted by the low order backlog level with which the division began the current quarter.  The order backlog was $183.3 million as of December 31, 2010, up 25% from $147.1 million on September 30, 2010.  The division generated order intake of $107.6 million in the fourth quarter 2010, a 1.59x book to bill ratio and a 129% increase compared to the fourth quarter 2009.   Order intake for the solar industry improved 254% from the same period in 2009, accounting for 38% of total order intake. Demand for vacuum furnaces for specialty steel used in aerospace and energy also increased substantially compared to the same period in the prior year.  The Division’s current order backlog consists of a diversified mix of remelting systems and induction casting systems for the titanium and specialty steel industries, solar crystallisation systems and vacuum heat treatment furnaces.

Fourth quarter 2010 revenue decreased by $6.1 million, or 8%, compared to the same quarter in 2009.  The revenue decrease was primarily due to the lower order backlog level at the beginning of the quarter compared to the opening order backlog level in the fourth quarter 2009.  Sales of solar silicon DSS furnaces for the photovoltaic industry decreased 44% in the fourth quarter 2010 compared to the same period in 2009.  During the fourth quarter 2010, 30% of revenue was generated from sales of solar silicon furnaces, down from 49% in fourth quarter 2009.  Revenue from remelting systems, primarily for the aerospace and specialty steel industries, increased by 3% in the fourth quarter 2010 while the Own and Operate business increased revenue by 22%.

Gross margin was 31% of revenue in the fourth quarter 2010, up slightly from 30% of revenue in the same period in the prior year.  The increase in the gross margin was due to favourable changes in product mix.

Fourth quarter 2010 EBITDA was $10.0 million, a 69% increase over the same period in 2009.  The EBITDA margin increased to 15% in the fourth quarter 2010 compared to 8% for the same period in the prior year.  The EBITDA margin increase was attributable to higher gross margin and a 30% reduction in SG&A primarily due to recovery of a bad debt and a decrease in research and development expenses.

Capital expenditures increased to $4.9 million in the fourth quarter 2010, 64% more than the fourth quarter 2009.  This increase was a result of the expenditures related to the heat treatment services facility in Mexico during the fourth quarter 2010.


Graphit Kropfmühl

  Q4 ’10 Q4 ’09 Change
Revenue $34,192 $33,273 3%
Gross profit
Operating loss
4,171
(2,150)
3,112
(391)
34%
450%
EBITDA 2,470 1,206 105%
Capital expenditures 1,687 762 121%

 

Increasing volumes for both silicon metal and natural graphite resulted in improved revenues and EBITDA for Graphit Kropfmühl (“GK”) during the fourth quarter 2010.  Fourth quarter 2010 revenue increased $900 thousand, or 3%, compared to the same quarter in 2009.  Natural graphite revenue increased $1.6 million, or 16%, driven by increases in both volumes and pricing.  This increase, however, was muted by a $700 thousand, or 3%, decrease in silicon metal revenue due to lower contract prices more than offsetting high volumes. 

Gross margin improved to 12% of revenue in the fourth quarter 2010 from 9% in the same period in the prior year.  The fourth quarter 2010 gross profit was positively impacted by higher natural graphite end market prices and lower per unit production costs.

Fourth quarter 2010 EBITDA was $2.5 million, a 105% increase compared to the fourth quarter 2009.  The EBITDA margin increased to 7% in the fourth quarter 2010 up significantly from 4% in the same period of the prior year.  The overall EBITDA margin increase was attributable to increased natural graphite gross margin and a 3% decrease in SG&A expenses, slightly offset by lower contract prices for silicon metal.

Capital expenditures increased to $1.7 million for the fourth quarter 2010, 121% more than the same period 2009.  The increase in capital expenditures was due to expansion of the high purity natural graphite production facility to meet increased market demand. 


Timminco

AMG’s ownership in Timminco was 42.5% as of December 31, 2010. AMG accounts for its investment in Timminco via the equity accounting method.  Timminco’s income for the fourth quarter 2010 is included in share of income from associates on AMG’s income statement and the carrying value of AMG’s investment in Timminco of $17.7 million is listed as an asset on AMG’s balance sheet.  During the fourth quarter, Timminco sold 49% of its silicon metal operation to Dow Corning for $40.3 million in cash and up to an additional $10.0 million based upon hitting incentive targets.  Timminco used the proceeds of this transaction to repay all of its senior bank debt.  Additional information on Timminco and its fourth quarter 2010 financial statements can be found at www.Timminco.com.


Operational Review – Year 2010

Advanced Materials Division

  FY ’10 FY ’09 Change
Revenue $616,267 $429,083 44%
Gross profit
Operating income (loss)
94,749
20,678
47,866
(28,761)
98%
N/A
EBITDA 39,823 (36) N/A
Capital expenditures 20,484 11,546 77%

 

Advanced Materials’ 2010 revenue increased by $187.2 million, or 44%, from 2009, to $616.3 million.  This was a direct result of increases in average selling prices and volumes for many products, most notably for antimony and titanium alloys. 

Gross margin increased to 15% in 2010 from to 11% in 2009.  2010 Gross profit increased by $46.9 million, or 98%, from 2009, to $94.7 million due to higher average selling prices and an increase in volumes of products, such as ferrovanadium, chrome metal and aluminium master alloys and powders.  The increase in gross profit was driven by increases in end product prices for specialty metals products in which the Division is naturally long, such as antimony and ferrovanadium.

2010 EBITDA increased to $39.8 million, or 6%, of revenue due to the increase in gross profit, slightly offset by an increase in SG&A expenses.  SG&A expenses increased 4% to $70.5 million in 2010 from $68.1 million in 2009 as a slight decrease in direct costs was offset by an increase in corporate expenses.

Capital expenditures were $20.5 million in 2010, 77% more than 2009.  The Division invested in growth capital expenditures in its ferrovanadium, tantalum and aluminium operations during 2010 to in an effort to lower costs and increase security of raw material supply.


Engineering Systems Division

  FY ’10 FY ’09 Change
Revenue $245,652 $320,530 (23%)
Gross profit
Operating income
70,119
22,916
105,776
48,015
(34%)
(52%)
EBITDA 37,452 62,885 (40%)
Capital expenditures 7,877 6,735 17%

 

Engineering Systems’ order intake for 2010 was $280.8 million, up 53% from 2009.  Despite this, the Engineering Systems’ 2010 revenue decreased by $74.9 million, or 23%, from 2009, to $245.7 million as a result of a low order backlog at the beginning of 2010 and time delay of that backlog turning into revenue.

Gross margin decreased from 33% in 2009 to 29% in 2010.  2010 Gross profit decreased by $35.7 million, or 34%, from 2009 to $70.1 million due to the significantly lower revenue particularly a 53% decline in solar silicon systems revenue compared to 2009 and the resulting effect of diminished economies of scale.

2010 EBITDA decreased by $25.4 million, or 40%, from 2009, to $37.5 million as a result of the decrease in gross profit, slightly offset by a decrease in SG&A expenses.  EBITDA margin decreased to 15% of revenue from 20% in 2009.  SG&A expenses decreased by $11.5 million, or 20%, to $46.6 million as the Division benefitted from a full year of the cost cutting measures implemented in late 2009.

Capital expenditures were $7.9 million in 2010, 17% more than 2009.  This increase was a result of the expansion of the heat treatment services facility in Mexico, which was completed during the fourth quarter 2010.


Graphit Kropfmühl

  FY ’10 FY ’09 Change
Revenue $128,576 $117,834 9%
Gross profit
Operating (loss) income
13,690
(335)
11,945
1,307
15%
N/A
EBITDA 7,600 6,279 21%
Capital expenditures 4,612 7,251 (36%)

 

GK’s 2010 revenue increased by $10.7 million, or 9%, from 2009, to $128.6 million.  The increase was primarily driven by an increase in natural graphite pricing and volumes.

Gross margin increased from 10% in 2009 to 11% in 2010.  2010 Gross profit increased by $1.7 million, or 15%, from 2009 to $13.7 million due to a 47% increase in gross profit in natural graphite. GK’s improved gross profit was primarily generated by higher prices and improved economies of scale from natural graphite, slightly offset by a 17% decrease in silicon metal gross profit.

2010 EBITDA increased by $1.3 million, or 21%, from 2009, to $7.6 million as a result of the increase in gross profit, slightly offset by a $500 thousand increase in SG&A.  EBITDA margin increased to 6% of revenue from 5% in 2009. 

Capital expenditures were $4.6 million in 2010, 36% less than 2009.  This decrease was a result of the reduction in capital spending on silicon furnace expansion in 2010 compared to 2009 and the completion of the relocation and upgrading of certain natural graphite production activities in early 2010.


Financial Review

Taxes

AMG recorded a tax expense of $11.2 million in the year ended December 31, 2010 as compared to a tax expense of $15.2 million in the year ended December 31, 2009.  Excluding losses in associates, for which AMG cannot recognize a tax benefit since these companies are not consolidated, AMG’s effective tax rate was 34.2% for 2010.    


Liquidity

  December 31, 2010 December 31, 2009 Change
Total debt $237,089 $203,796 16%
Cash & short-term investments 89,311 117,016 (24%)
Net debt 147,778 86,780 70%

 

AMG had a net debt position of $147.8 million as of December 31, 2010. AMG’s net debt position increased $61.0 million since December 31, 2009 due to $35.4 million of cash tax payments, $9.7 million investment in Timminco, $33.0 million in capital investments, a $17.2 million investment in the antimony mine in Turkey, a $4.0 million acquisition of Mono2 solar technology and a $45.2 million increase in working capital due to increasing material costs and provisions, reduced by EBITDA of $84.9 million.

Cash Flow    
  Twelve Months Ended
  December ’10 December ’09
     
Operating cash flows used in continuing operations $(1,623) $16,368
Operating cash flows used in discontinued operations (18,459)
Net cash flows used in operations (1,623) (2,091)
Capital expenditures (32,973) (25,532)
Acquisitions, net of cash (20,154)
Investment in associates (10,765) (28,943)
Cash flows used in discontinued operations (32,039)
Cash flows (used in) from other investing 1,320 (3,667)
Net cash flows used in investing activities (62,572) (90,181)
Financing cash flows from continuing operations 42,352 15,060
Financing cash flows from discontinued operations 47,578
Cash flows generated from financing activities 42,352 62,638

 

Cash flows used in operations were $1.6 million during 2010 as compared to $2.1 million in 2009.  The cash flows used in operations during 2010 are a result of $35.4 million in cash tax payments as well as a $45.2 million increase in working capital and provisions, offset by $84.9 million in EBITDA.  The substantial cash tax payments are partially due to the difference between IFRS percentage of completion accounting as compared to completed contract methodology for tax payments.

Cash used in investing activities was $62.6 million during 2010.  This decrease of $27.6 million from 2009 is composed of an $18.2 million decrease in investments in associates, primarily Timminco, and a $32.0 million decrease in cash flows used by Timminco, which was classified as a discontinued operation in 2009, slightly offset by a $7.4 million increase in capital investments and a $20.2 million increase in acquisitions.  The Company invested $16.5 million to acquire a Turkish antimony mine and $3.7 million to acquire the Mono2 solar technology during 2010.

Cash generated from financing activities during 2010 was $42.4 million, a $20.3 million decrease from 2009.  This decrease was primarily attributable to cash flows from discontinued operations recognized in 2009 that are not applicable in 2010, offset by $42.4 million in draws on the revolving lines of credit, which were primarily used to fund the acquisition of the Turkish antimony mine.


Outlook

AMG improved its market position for a number of materials and metals technologies used in the end markets of Aerospace, Energy, Infrastructure and Specialty Metals during 2010. These activities combined with improving markets should generate continued revenue and earnings growth in 2011.  The Advanced Materials division’s acquisition of the antimony mine and smelter, cost reductions made in the aerospace master alloys and coatings products, the acquisition of aluminium alloy producer KB Alloys, LLC and rising prices and demand for tantalum and aerospace master alloys should yield double digit percentage revenue growth for this division in 2011.  The Engineering Systems division began 2011 with a 13% larger order backlog than it began 2010 due to improved demand in the specialty steel and solar industries.  This should result in a revenue growth rate during 2011 similar to the current increase in order backlog; however, margin pressure may increase.  We expect strengthening demand for natural graphite and improved pricing to result in revenue growth at Graphit Kropfmühl in 2011.  The growth in revenue across all business segments combined with ongoing capital investments to improve efficiencies should result in an increased EBITDA margin in 2011.


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

For the year ended December 31    
In thousands of US Dollars 2010 2009
Continuing operations    
Revenue 990,495 867,447
Cost of sales 811,937 701,860
Gross profit 178,558 165,587
       
Selling, general and administrative expenses 128,934 137,537
Restructuring expense 423 7,782
Asset impairment expense 602 1,718
Environmental expense 6,421 3,998
Other expenses 260 173
Other income (1,341) (6,182)
Operating  profit 43,259 20,561
       
Finance expense 18,727 18,419
Finance income (5,429) (3,587)
Foreign exchange (gain) loss (2,799) 2,418
Net finance costs 10,499 17,250
     
Share of  loss of associates (19,405) (31,958)
Profit (loss) before income tax 13,355 (28,647)
       
Income tax expense 11,207 15,205
Profit (loss) for the year from continuing operations 2,148 (43,852)
     
Loss after tax for the year from discontinued operations (54,378)
Profit (loss) for the year 2,148 (98,230)
     
Attributable to:    
  Shareholders of the Company 2,414 (75,642)
  Non-controlling interests (266) (22,588)
    2,148 (98,230)
Earnings (loss) per share    
Basic earnings (loss) per share 0.09 (2.82)
Diluted earnings (loss) per share 0.09 (2.82)
Earnings (loss) per share from continuing operations    
Basic earnings (loss) per share from continuing operations 0.09 (1.77)
Diluted earnings (loss) per share from continuing operations 0.09 (1.77)



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

For the three months ended December 31    
In thousands of US Dollars 2010 2009
Continuing operations    
Revenue 270,731 231,388
Cost of sales 221,349 185,034
Gross profit 49,382 46,354
       
Selling, general and administrative expenses 36,765 42,605
Restructuring expense 417 2,087
Asset impairment expense 602 1,718
Environmental expense 5,658 (164)
Other expenses 248 65
Other income (631) (1,797)
Operating  profit 6,323 1,840
       
Finance expense 2,966 2,538
Finance income (2,459) (970)
Foreign exchange loss 1,535 2,594
Net finance costs 2,042 4,162
     
Share of  income (loss) of associates 7,569 (29,273)
Profit (loss) before income tax 11,850 (31,595)
       
Income tax benefit (110) (2,436)
Profit (loss) for the period from continuing operations 11,960 (29,159)
     
Profit after tax for the period from discontinued operations 202
Profit (loss) for the period 11,960 (28,957)
     
Attributable to:    
  Shareholders of the Company 12,481 (30,227)
  Non-controlling interests (521) 1,270
    11,960 (28,957)
Earnings (loss) per share    
Basic earnings (loss) per share 0.46 (1.13)
Diluted earnings (loss) per share 0.46 (1.13)
Earnings (loss) per share from continuing operations    
Basic earnings (loss) per share from continuing operations 0.46 (1.13)
Diluted earnings (loss) per share from continuing operations 0.46 (1.13)

 

Unaudited
AMG Advanced Metallurgical Group N.V.
   
Consolidated Statement of Financial Position      
         
As at December 31      
In thousands of US Dollars   2010 2009
Assets      
  Property, plant and equipment   228,612 211,022
  Intangible assets   27,002 28,253
  Investments in associates   25,186 34,794
  Derivative financial instruments   5,199 1,718
  Deferred tax assets   22,107 10,912
  Restricted cash   12,528 13,263
  Notes receivable   322 5,542
  Other assets   15,372 11,980
Total non-current assets   336,328 317,484
  Inventories   207,204 193,378
  Trade and other receivables   175,421 147,787
  Derivative financial instruments   5,731 4,954
  Other assets   41,080 30,359
  Cash and cash equivalents   89,311 117,016
Total current assets   518,747 493,494
Total assets   855,075 810,978
         
Equity      
  Issued capital   741 725
  Share premium   381,636 379,518
  Other reserves   36,158 31,284
  Retained earnings (deficit)   (196,481) (198,897)
Equity attributable to shareholders of the Company 222,054 212,630
         
Non-controlling interests   11,911 15,793
         
Total equity   233,965 228,423
         
Liabilities      
  Loans and borrowings   187,813 168,319
  Employee benefits   88,372 91,358
  Provisions   20,607 14,862
  Government grants   642 669
  Other liabilities   5,517 7,984
  Derivative financial instruments   698 1,339
  Deferred tax liabilities   25,436 26,395
Total non-current liabilities   329,085 310,926
         
  Loans and borrowings   4,254 3,464
  Short term bank debt   45,022 32,013
  Government grants   175 234
  Other liabilities   43,287 46,179
  Trade and other payables   102,253 69,791
  Derivative financial instruments   1,754 6,048
  Advance payments   49,597 54,764
  Current taxes payable   24,979 36,050
  Provisions   20,704 23,086
Total current liabilities   292,025 271,629
Total liabilities   621,110 582,555
Total equity and liabilities   855,075 810,978

 


Unaudited
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Cash Flows

For the year ended December 31    
In thousands of US Dollars 2010 2009
Cash flows used in operating activities    
Loss for the period from continuing operations 2,148 (43,852)
Loss for the period from discontinued operations (54,378)
Loss for the period 2,148 (98,230)
Adjustments to reconcile loss to net cash flows:    
Non-cash:    
   Depreciation and amortization 25,009 23,758
   Restructuring expense 423 7,782
   Asset impairment expense 602 1,718
   Environmental expense 6,421 3,998
   Net finance costs 10,499 17,250
   Share of loss of associates 19,405 31,958
   Loss on sale or disposal of property, plant and equipment 262 6,253
   Equity-settled share-based payment transactions 6,362 13,729
   Cash-settled share-based payment transactions 1,964 3,605
   Income tax expense 11,207 15,205
Working capital adjustments    
   Change in inventories (23,774) 45,338
   Change in trade and other receivables (40,033) (564)
   Change in prepayments (12,248) 12,490
   Change in trade payables, provisions, and other liabilities 35,488 (97,919)
   Change in government grants (17) (7,783)
   Other 3,936 5,934
Interest paid (15,334) (15,289)
Interest received 1,496 2,468
Income tax paid, net (35,439) (9,711)
Cash flows  from discontinued operations 35,919
Net cash flows used in operating activities (1,623) (2,091)
     
Cash flows used in investing activities    
Proceeds from sale of property, plant and equipment 983 129
Acquisition of subsidiaries (net of cash acquired of nil) (20,154)
Acquisition of property, plant and equipment and intangibles (32,973) (25,532)
Related party loans 264 (5,262)
Investments in/acquisition of associates (10,765) (28,943)
Change in restricted cash 151 1,410
Other (78) 56
Cash flows used in discontinued operations (32,039)
Net cash flows used in investing activities (62,572) (90,181)
Cash flows from financing activities      
Proceeds from issuance of debt   45,546 30,175
Repayment of borrowings   (3,432) (15,785)
Other   238 670
Cash flows from discontinued operations   47,578
Net cash flows from financing activities   42,352 62,638
       
Net decrease in cash and cash equivalents   (21,843) (29,634)
Cash and cash equivalents at January 1   117,016 143,473
Effect of exchange rate fluctuations on cash held   (5,862) 3,177
Cash and cash equivalents at December 31   89,311 117,016

 

About AMG

AMG creates and applies innovative metallurgical solutions to support the global trend of sustainable development of natural resources and CO2 reduction.  AMG produces highly engineered specialty metal products and advanced vacuum furnace systems for the Energy, Aerospace, Infrastructure and Specialty Metals and Chemicals end markets.  AMG consists of 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 specialty metals, alloys and high performance materials. AMG is a significant producer of specialty metals, such as ferrovanadium, ferronickel-molybdenum, aluminum master alloys and additives, chromium metal and ferrotitanium, for Energy, Aerospace, Infrastructure and Specialty Metal and Chemicals applications.  Other key products 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, primarily for the Aerospace and Energy (including solar and nuclear) industries.  Furnace systems produced by AMG include vacuum remelting, solar silicon melting and crystallization, vacuum induction melting, vacuum heat treatment and high pressure gas quenching, turbine blade coating and sintering.  AMG also provides vacuum case-hardening heat treatment services on a tolling basis.

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 affiliate of AMG. Timminco produces silicon metal for the chemical, aluminum, electronic and solar industries.  Timminco also produces solar grade silicon, using its proprietary technology for purifying silicon metal, for the solar energy industry.

With over 2,600 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, the United States, Canada, Mexico, Brazil, and Sri Lanka and also has sales and customer service offices in Belgium, Russia, China and Japan (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 revenue 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.  Finally, statements of fact contained herein reflect the facts as of the date of this press release.

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

AMG reports fourth quarter and full year 2010 results