Espoo, Finland, 2015-11-05 07:45 CET (GLOBE NEWSWIRE) -- Dovre Group Plc Interim report November 5, 2015 at 8.45 a.m.
DOVRE GROUP INTERIM REPORT JANUARY 1 – SEPTEMBER 30, 2015
Q3: POSITIVE OPERATING RESULT DESPITE NEGATIVE MARKET TREND
The merger between Dovre Group and Norwegian Petroleum Consulting Group AS (NPC) was completed on May 28, 2015. NPC’s financials are reported as part of Dovre Group’s Project Personnel business area as of May 28, 2015.
The interim report is unaudited. In parentheses last year’s corresponding period excluding NPC.
July – September 2015
- Net sales EUR 30.8 (24.7) million – growth 25%
- Net sales excluding NPC’s share decreased by 29% – in constant currencies -28%
- Project Personnel: net sales EUR 29.2 (22.8) million – growth 28%
- Consulting: net sales EUR 1.5 (1.8) million – change - 15 %
- EBITDA excluding non-recurring items EUR 0.4 (0.5) million, which is 1.2 (2.1) % of net sales
- N on-recurring items EUR -0.0 (-0.2) million in total
- Operating result EUR 0.2 (0.3) million
- Result for the period EUR -0.4 (0.1) million, incl. EUR -0.6 million due to write-offs in the Group’s associate SaraRasa
- Earnings per share EUR - 0.00 (0.00)
- Net cash flow from operating activities EUR 0.7 (0 .1) million
January – September 2015
- Net sales EUR 85.7 (73.5) million – growth 17%
- Net sales excluding NPC’s share decreased by 8% – in constant currencies -10%
- Project Personnel: net sales EUR 80.2 (68.0) million – growth 18%
- Consulting: net sales EUR 5.5 (5.5) million – change 0 %
- EBITDA excluding non-recurring items EUR 1.1 (1.3) million, which is 1.3 (1.7) % of net sales
- N on-recurring items EUR -1.1 (-0.3) million in total, EUR -0.5 million of which due to external advisory services and EUR -0.6 million due to restructuring costs
- Operating result EUR -0,4 (0,6) million
- Result for the period EUR -1.1 (-0.1) million, incl. EUR -0.8 (-0.4) million of the result of the Group’s associate SaraRasa
- Earnings per share EUR - 0.01 (-0.00)
- Net cash flow from operating activities EUR -2.4 (-1 .1) million
Guidance for 2015 (updated on October 1, 2015): Net sales are expected to be EUR 115-120 million and the EBITDA excluding non-recurring items EUR 1.0-1.5 million.
PATRICK VON ESSEN, CEO:
“Heavy head wind continued in the oil and gas sector. Our comparable net sales (not including NPC) in Q3 fell significantly from the previous year. Approximately two thirds of the decline was due to reduced volumes, i.e. the number of consultants, and one third due to lower prices demanded by our clients. Our comparable net sales declined especially in Norway and Canada.
Net sales including NPC grew by 25% in Q3. Operating profit and EBITDA improved towards the end of the quarter, but fell short of the previous year.
The integration between Dovre Group and NPC proceeds on schedule. Creating new, unified processes and culture takes time, but we are on the right track and have made significant progress. We have a new common organization in Norway and have moved under a single roof both in Stavanger and Oslo.
In Q3, our ownership in our associate SaraRasa Bioindo’s Indonesian production unit decreased to 20% due to a new owner in the production unit. Bioindo’s production plant was relocated to Surabaya. Dovre Group’s share of the write-offs recognized for raw materials and factory buildings in connection with the relocation totaled approx. EUR 0.6 million in Q3. The production line has been started in test mode in the new location in the end of October, and full-scale production is estimated to start during November.
In accordance with our strategy, we actively pursue diversification into other market segments. We have secured more orders in major investment projects in, for example, electricity production, power transmission and process industries. While this is a promising development, it is not yet enough to compensate for the heavy drop in demand in the oil and gas industry.
Implementation of the Group’s focused growth strategy, released in October 2014, is underway, and we have refined the details of putting the strategy into action. As outlined in the strategy, our target is to have net sales of EUR 200 million and an operating result exceeding EUR 10 million in 2019. To create the building blocks of profitable growth, in 2016 we aim to unify and streamline our work processes throughout the whole organization, to significantly improve our sales process, and to continue diversifying into other market segments.”
FUTURE OUTLOOK AND GUIDANCE 2015
The market is still affected by several uncertainties, including general economic trends, oil price, and political instabilities. Our main markets are, however, in politically and economically stable countries.
Our clients in the Project Personnel business area are still cautious about investments and we do not expect demand to pick up in 2015. Market situation in Norway remains challenging. The completion of a major project in Canada considerably earlier than anticipated will have a negative impact on our end-of-year net sales and profitability (EBITDA). We have secured more orders in major investment projects in, for example, electricity production, power transmission and process industries. While this is a promising development, it is not yet enough to compensate for the heavy fall in demand in the oil and gas industry.
In the Consulting business area, market outlook for the end of the year is positive both in Norway and Finland.
Markets are consolidating and we expect this trend to continue. We expect our relative fixed costs to decrease each year going forward.
Guidance for 2015 (updated October 1, 2015): Net sales are expected to be EUR 115-120 million and the EBITDA excluding non-recurring items EUR 1.0-1.5 million.
KEY FIGURES
| EUR million | 7-9 2015 | 7-9 2014 | Change % | 1-9 2015 | 1-9 2014 | Change % | 1-12 2014 |
| Net sales | 30.8 | 24.7 | 24.8 | 85.7 | 73.5 | 16.6 | 98.9 |
| EBITDA excl. non-recurring items | 0.4 | 0.5 | -28.8 | 1.1 | 1.3 | -8.4 | 2.1 |
| % of net sales | 1.2 % | 2.1 % | 1.3 % | 1.7 % | 2.1 % | ||
| Non-recurring items *) | -0.0 | -0.2 | 75.4 | -1.1 | -0.3 | -229.1 | -0.5 |
| Operating result (EBIT) | 0.2 | 0.3 | -41.0 | -0.4 | 0.6 | -161.3 | 1.2 |
| % of net sales | 0.5 % | 1.1 % | -0.4 % | 0.8 % | 1.2 % | ||
| Result | -0.4 | 0.1 | -487.3 | -1.1 | -0.1 | -1 664.6 | 0.3 |
| % of net sales | -1.4 % | 0.4 % | -1.3 % | -0.1 % | 0.3 % | ||
| Net cash flow from operations | 0.7 | 0.1 | 401.5 | -2.4 | -1.1 | -115.3 | 1.9 |
| Cash and cash equivalents | 8.4 | 7.7 | 8.8 | 8.4 | 7.7 | 8.8 | 10.3 |
| Debt-equity ratio (Gearing), % | -6.5 % | -30.0 % | -78.2 | -6.5 % | -30.0 % | -78.2 | -42.2 % |
| Earnings per share. EUR: | |||||||
| Undiluted | -0.00 | 0.00 | -344.4 | -0.01 | -0.00 | -1 296.5 | 0.00 |
| Diluted | - 0.00 | 0.00 | -345.4 | -0.01 | -0.00 | -1 301.6 | 0.00 |
*) In 2015, non-recurring items in Q3 and the period under review consist of external advisory services and restructuring costs related to the merger with NPC. In 2014, non-recurring items in Q3 and the period under review consisted of external advisory services, costs related to the Group’s withdrawal from biorenewables consulting and changes in personnel.
BRIEFING FOR PRESS AND FINANCIAL ANALYSTS ON NOVEMBER 10, 2015
Dovre Group’s briefing on the company’s Q3/2015 interim report will be held on Tuesday, November 10, 2015, starting at 10 a.m. Finnish time (EET). The briefing is held in English and will be organized as a conference call.
To participate in the conference call from Finland, please dial 5-10 minutes prior to the start of the conference to 09 2310 1605, event code 188503.
To participate in the conference call outside Finland, please use one of the local numbers listed below. The event code is 188503.
Calling from Norway: 023 89 44 77 Calling from Sweden: 020 22 90 90 Calling from the UK: 0800 026 0573
From other countries, please dial +358 9 2310 1605, event code 188503.
The presentation material is available on the company’s website www.dovregroup.com on Thursday, November 5, 2015.
This is a summary of Dovre Group Plc’s interim report Jan. 1 – Sept. 30, 2015. The report is attached to this bulletin and is also available online at www.dovregroup.com -> Investors.
For additional information, please contact:
Dovre Group Plc Patrick von Essen, CEO ( patrick.essen@dovregroup.com )
Heidi Karlsson, CFO ( heidi.karlsson@dovregroup.com )
tel. +358-20-436 2000 www.dovregroup.com
Distribution NASDAQ OMX Helsinki Ltd Major media www.dovregroup.com
