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Urenco Finance N.V.  -  44FK   

URENCO Group - Full Year Audited Financial Results

Released 07:00 03-Mar-2016

RNS Number : 8680Q
Urenco Finance N.V.
03 March 2016
 

news release  

3 March 2016

 

URENCO Group - Full Year Audited Financial Results

 

 

London - 3 March 2016 - URENCO Group ("URENCO" or "the Group"), an international supplier of uranium enrichment services and nuclear fuel cycle products, today announces its results for the full year ended 31 December 2015.

 

Summary

·        Strong financial results supported by current order book and favourable foreign exchange movements

·        Order book extending beyond 2025

·        Completion of the €4 billion capacity expansion programme in USA  

·        Commercial operation of Tails Management Facility (TMF) is scheduled for 2017

·        Market conditions continue to remain challenging due to a build-up of worldwide inventories

        

 

Financial highlights


2015

2014

Change


€m

€m

%

Revenue

1,842.2

1,612.0

14.3

EBITDA

EBITDA margin %

1,167.3

63.4%

1,070.8

66.4%

9.0

(3.0)pp

Income from operating activities

664.6

652.9

1.8

Net income

452.1

404.5

11.8

Earnings per share

2.7

2.4

12.5

Capital expenditure(i)

 517.4

537.1

(3.7)

Cash generated from operating activities

1,201.5

979.2

22.7

 (i) Capital expenditure reflects investment in property, plant and equipment plus the prepayments in respect of fixed asset purchases for the period.

 

Dr Thomas Haeberle, Chief Executive of URENCO, commenting on the full year results, said:

 

"I am pleased to present my inaugural set of financial results for URENCO which show strong financial performance for 2015 against what continues to be an extremely challenging global enrichment market.

 

We expect pricing pressures to continue in the near term as we deliver on our existing orders. Developing our offer and range of services as well as building on our flexibility to deliver will be priorities in the coming years. We remain committed to being a reliable long-term partner to our customers.

 

I have joined the company at a key point in its development and have been immediately impressed by the skills and expertise of URENCO's people. Our objective is to continue to achieve a high level of employee engagement and commitment.

 

URENCO is proud to be a key contributor to a low carbon environment and I look forward to meeting the challenges of a difficult enrichment market and leading URENCO to sustained long-term success."

 

 

 

Financial Results

 

Revenue for the year ended 31 December 2015 was €1,842.2 million, compared to €1,612.0 million in 2014. This year-on-year increase of €230.2 million was due primarily to additional SWU revenue of €161.1 million and additional Uranium revenue of €48.3 million as a result of both higher volumes and higher average unit revenues driven by the favourable impact of foreign exchange movements.

 

EBITDA for 2015 increased by 9.0% to €1,167.3 million compared to last year (2014: €1,070.8 million) which was mainly due to the increased revenue. Overall, the performance of the underlying business was steady and broadly in line with management expectations. The EBITDA margin for 2015 of 63.4% (2014: 66.4%) was adversely impacted by increased costs following a periodic review of tails and decommissioning provisions.

 

Depreciation was €496.1 million in 2015 (2014: €417.9 million) reflecting a higher underlying charge for the USA operations as well as an adverse impact from foreign exchange movements.

 

The tax charge in 2015 decreased compared to last year by €35.7 million to €81.0 million (2014: €116.7 million) and the effective tax rate of the Group was reduced to 15.2% in 2015 from 22.4% in 2014. These movements in tax charge and effective tax rate are predominantly attributable to non-deductible and non-taxable items.

 

Net finance costs for 2015 were €131.5 million, compared to €131.7 million in 2014, with an increase in costs associated with the refinancing of debt being offset by a favourable impact from foreign exchange movements on cash flow hedges.

 

Net income increased to €452.1 million (2014: €404.5 million), corresponding to a net income margin of 24.5% (2014: 25.1%). This increase in net income was mainly due to increased EBITDA and lower income tax expense, partially offset by higher depreciation.

 

Cash flow

 

Operating cash flows before movements in working capital amounted to €1,325.0 million (2014: €1,132.7 million) and cash generated from operating activities was €1,201.5 million (2014: €979.2 million) as a result of higher revenues partially offset by increased operating costs and adverse working capital movements.

 

Tax paid in the period was €121.7 million (2014: €145.7 million). Net cash flows from operating activities increased by 29.6% to €1,079.8 million (2014: €833.5 million).

 

The Group invested a total of €517.4 million in 2015 (2014: €537.1 million), reflecting the conclusion of our capacity expansion programme in the USA and the ongoing investment in TMF.

 

Capital structure and funding

 

Net debt increased to €2,827.5 million (2014: €2,774.0 million). The Group's net debt to total asset ratio remained strong at 36% (2014: 38%) well within the Group's target ratio of less than 60%.

 

In August 2015, URENCO issued €500 million in bonds with a coupon of 2.25%, which will mature in 2022. The proceeds have been used to manage future debt maturities, including a tender which resulted in a repurchase of part of the 4% Eurobonds due in May 2017. The nominal value of the repurchased bonds was €137.6 million.

 

During the year URENCO entered into €1.0 billion of cross currency swaps to convert the economic exposure of part of the Group's debt from euros to US dollars.

 

The Company's debt is rated by Moody's (Baa1/Stable/P-2) and Standard & Poor's (BBB+/Stable). In June 2015, URENCO announced that it was no longer retaining the services of Fitch.   

 

In 2015 the final dividend for the year ended 31 December 2014 of €340.0 million was paid (dividend paid in 2014 for the year ended 31 December 2013: €340.0 million). The final dividend for 2015 of €350 million has been approved and will be paid to shareholders on 17 March 2016.

 

Outlook

 

URENCO continues to have long term visibility of future revenues with an order book which extends beyond 2025. The value of URENCO's order book at 31 December 2015 was approximately €16.6 billion based on €/$ of 1 : 1.09 (2014: approximately €15.8 billion based on €/$ of 1 : 1.30).

 

URENCO anticipates pricing pressures to continue in the near term due to the presence of excess inventories. It is possible that URENCO will experience ongoing challenges to profit margin in the coming years. However, URENCO is a company which takes a long-term view and continues to provide

customers with the best possible service delivery and the highest level of quality and expertise.

 

Leadership

 

Sir John Hood KNZM, Chairman of the URENCO Board, reached the end of his original three year tenure in December 2014 and continued in his position as Chairman until 31 December 2015.

 

On 1 January 2016, Stephen Billingham was appointed Chairman of the URENCO Board. Stephen has been non-executive director of the company since 2009 and will be Chairman of the Board during 2016 whilst URENCO continues the search process for a long term successor to Sir John Hood.

 

Dr Thomas Haeberle took up the role of CEO on 1 January 2016 succeeding Helmut Engelbrecht who served as CEO from 2005 to 2015. Thomas previously served as President and CEO of Infracor GmbH, the key service provider of Marl Chemical Park and he has also served as President of Degussa's Methacrylates, Building Blocks and Industrial Chemicals Business Units. In 2009 he was appointed to the Board of Evonik Degussa GmbH and in 2011 to the Board of Evonik Industries AG.

 

 

 

-ENDS-

 

Contact

Jayne Hallett

Director of Corporate Communications

+44 1753 660 660

 

Oliver Buckley / Michael Evans

Madano Partnership

+44 20 7593 4000

oliver.buckley@madano.com

michael.evans@madano.com

 



 

About URENCO Group

 

URENCO is an international supplier of enrichment services with its head office based close to London, UK. With plants in Germany, the Netherlands, the UK and in the US, it operates in a pivotal area of the nuclear fuel supply chain which enables the sustainable generation of electricity for consumers around the world.

 

Using centrifuge technology designed and developed by URENCO, the URENCO Group provides safe, cost-effective and reliable uranium enrichment services for civil power generation within a framework of high environmental, social and corporate responsibility standards.

 

For more information, please visit www.urenco.comU

 

DEFINITIONS

 

Revenue - Revenue from sale of goods and services.

 

Net Income - Income for the period/year attributable to equity holders of the parent.

 

EBITDA - Earnings before interest (including other finance costs), taxation, depreciation and amortisation and joint venture results (or income from operating activities plus depreciation and amortisation, plus joint venture results).

 

Order book - Contracted and agreed business estimated on the basis of "requirements" and "fixed commitment" contracts.

 

Separative Work Unit ('SWU') - The standard measure of the effort required to increase the concentration of the fissionable U235 isotope.

 

Net Debt - Loans and borrowings (current and non-current) plus obligations under finance leases less cash and cash equivalents.

 

Net Finance Costs - Finance costs less finance income net of capitalised borrowing costs and including costs/income of non-designated hedges.

 

Tails (Depleted UF6) - Uranium hexafluoride that contains a lower concentration than the natural concentration (0.711%) of U235 isotope.

 

 

Disclaimer

 

This press release is not intended to be read as the Group's statutory accounts as defined in section 435 of the Companies Act 2006. Information contained in this release is based on the 2015 Consolidated Financial Statements of the URENCO Group, which were authorised for the issue by the Board of Directors on 2 March 2016. The auditor's report on the 2015 Consolidated Financial Statements of the Group was unqualified and did not contain a statement under section 498 of the Companies Act 2006. The Group's 2014 statutory accounts have been delivered to the registrar of companies.

 
This release and the information contained within it does not constitute an offering of securities or otherwise constitute an invitation or inducement to underwrite, subscribe for or otherwise acquire securities in any company within the URENCO Group.

 
Any forward-looking statements contained within this release are inherently subject to risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements and, accordingly, any person reviewing this release should not rely on such forward-looking statements.

 

 

 

 

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December

 



2015

2014



€m

€m





Revenue from sale of goods and services


1,842.2

1,612.0




Work performed by the Group and capitalised


20.8

18.1

Changes to inventories of work in progress and finished goods


24.4

2.7

Raw materials and consumables used


(11.0)

(8.8)

Tails provision created


(182.9)

(149.2)

Employee benefits expense


(202.3)

(168.5)

Depreciation and amortisation


(496.1)

(417.9)

Other expenses


(323.9)

(235.5)

Share of results of joint venture


(6.6)

-

Income from operating activities

664.6

652.9





Finance income


89.3

35.5

Finance costs


(220.8)

(167.2)

Income before tax

533.1

521.2





Income tax expense


(81.0)

(116.7)




Net income for the year attributable to the owners of the Company


452.1

404.5





Earnings per share


Basic earnings per share


2.7

2.4

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December

 



2015

2014



€m

€m





Net income for the year attributable to the owners of the Company


452.1

404.5





Other comprehensive income:








Items that may be reclassified subsequently to

the income statement

 




Cash flow hedges - transfers to revenue


57.4

(0.9)

Cash flow hedges - mark to market


(133.7)

(121.9)

Net investment hedge - mark to market


(87.6)

(38.7)

Deferred tax credit on hedges


7.1

23.7

Current tax credit/(charge) on hedges


3.3

(0.2)

Exchange differences on hedge reserve


(2.9)

(1.5)



(156.4)

(139.5)





Exchange differences on foreign currency translation of foreign operations


298.8

273.5

Share of joint venture exchange differences on foreign currency translation of foreign operations


(0.2)

-



298.6

273.5





Items that will not be reclassified subsequently to

the income statement

 




Actuarial gains/(losses) on defined benefit pension schemes 


38.9

(44.5)

Deferred tax (charge)/credit on actuarial gains/(losses)


(10.3)

10.3

Current tax credit on actuarial gains/(losses)


-

0.2

Share of joint venture actuarial gains on defined

benefit pension schemes


2.5

-

Utility partner payments


(0.3)

(0.1)

Deferred tax credit on utility partner payments


0.1

-



30.9

(34.1)





Other comprehensive income


173.1

99.9





Total comprehensive income for the year attributable to the owners of the Company


625.2

504.4





 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December

 



2015

€m

2014

€m









Non-current assets




Property, plant and equipment


6,150.5

5,483.9

Investment property


7.5

5.8

Intangible assets


52.5

64.4

Investments


7.2

0.7

Financial assets


9.1

9.0

Derivative financial instruments

 

77.7

16.2

Deferred tax assets


301.1

248.3



6,605.5

5,828.3

Current assets




Inventories


507.7

475.2

Trade and other receivables


426.6

543.9

Derivative financial instruments


21.6

24.7

Short-term bank deposits


-

322.8

Cash and cash equivalents


391.3

199.5



1,347.2

1,566.1

Total assets


7,952.7

7,394.4





Equity and liabilities




Equity attributable to the owners of the Company




Share capital


237.3

237.3

Additional paid in capital


16.3

16.3

Retained earnings


2,008.9

1,865.9

Hedging reserve


(287.7)

(131.3)

Foreign currency translation reserve


455.5

156.9

Total equity


2,430.3

2,145.1





Non-current liabilities




Trade and other payables


140.4

132.0

Interest bearing loans and borrowings

 

2,989.6

2,792.8

Provisions


1,416.0

1,108.1

Retirement benefit obligations

  

70.9

101.6

Deferred income


42.4

40.9

Derivative financial instruments

  

203.3

92.2

Deferred tax liabilities


58.2

47.9



4,920.8

4,315.5

Current liabilities




Trade and other payables


278.2

291.8

Interest bearing loans and borrowings


229.2

503.5

Provisions


5.0

1.7

Derivative financial instruments

 

83.3

109.0

Income tax payable


4.1

19.1

Deferred income


1.8

8.7



601.6

933.8

Total liabilities


5,522.4

5,249.3

Total equity and liabilities


7,952.7

7,394.4

 



 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

As at 31 December

 

 


 

 

Share capital

€m

 

Additional paid in capital

€m

 

 

Retained earnings

€m

 

 

Hedging reserves

€m

Foreign currency translation reserve

€m

Attributable to equity holders of the parent

€m

As at 1 January 2015

237.3

16.3

1,865.9

(131.3)

156.9

2,145.1

Income for the period

-

-

452.1

-

-

452.1

Other comprehensive income

-

-

30.9

(156.4)

298.6

173.1

Total comprehensive income

-

-

483.0

(156.4)

298.6

625.2

Equity dividends paid

-

-

(340.0)

-

-

(340.0)

As at 31 December 2015

237.3

16.3

2,008.9

(287.7)

455.5

2,430.3

 

 

 


 

 

Share capital

€m

 

Additional paid in capital

€m

 

 

Retained earnings

€m

 

 

Hedging reserves

€m

Foreign currency translation reserve

€m

Attributable to equity holders of the parent

€m

As at 1 January 2014

237.3

16.3

1,835.5

8.2

(116.6)

1,980.7

Income for the period

-

-

404.5

-

-

404.5

Other comprehensive income

-

-

(34.1)

(139.5)

273.5

99.9

Total comprehensive income

-

-

370.4

(139.5)

273.5

504.4

Equity dividends paid

-

-

(340.0)

-

-

(340.0)

As at 31 December 2014

237.3

16.3

1,865.9

(131.3)

156.9

2,145.1

 

 

 

Hedging reserve

The hedging reserve is a separate component of equity used to record changes in the fair values of cash flow hedging instruments and net investment hedges in accordance with the Group's accounting policy.

 

 

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries and the parent entity into the euro presentational currency.

 

 

 



 

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December



2015

2014



€m

€m

Income before tax


533.1

521.2

 

Adjustments to reconcile Group income before tax to net cash

inflows from operating activities:




Share of joint venture results


(3.9)

-

Depreciation and amortisation


496.1

417.9

Finance income


(89.3)

(35.5)

Finance cost


220.8

167.2

Loss on disposal / write off of property, plant and equipment


0.8

0.8

Increase in provisions


167.4

61.1

Operating cash flows before movements in working capital


1,325.0

1,132.7

Increase in inventories


(10.9)

(106.7)

Decrease/(increase) in receivables and other debtors


0.6

(14.8)

Decrease in payables and other creditors


(113.2)

(32.0)

Cash generated from operating activities


1,201.5

979.2

Income taxes paid


(121.7)

(145.7)

Net cash flow from operating activities


1,079.8

833.5





Investing activities



 

Interest received


42.9

31.2

Proceeds from sale of property, plant and equipment


0.5

16.1

Purchases of property, plant and equipment


(449.9)

(426.4)

Prepayments in respect of fixed asset purchases(i)


(67.5)

(110.7)

Purchase of intangible assets


(2.3)

(5.5)

Purchase of investment


(0.3)

(0.2)

Net cash flow from investing activities


(476.6)

(495.5)





Financing activities




Interest paid


(172.0)

(139.7)

Payments in respect of derivatives


(93.4)

(0.5)

Dividends paid to equity holders


(340.0)

(340.0)

Proceeds from new borrowings


827.7

1,599.6

Placement of short-term deposits


-

(322.8)

Repayment of borrowings


(989.7)

(1,045.4)

Net cash flow from financing activities


(767.4)

(248.8)





Net (decrease)/increase in cash and cash equivalents


(164.2)

89.2

Cash and cash equivalents and short-term deposits at 1 January


522.3

90.2

Effect of foreign exchange rate changes


33.2

20.1

Cash and cash equivalents at 31 December


391.3

199.5

Short-term deposits at 31 December


-

322.8

Cash and cash equivalents and short-term deposits at 31 December


391.3

522.3

(i)      This represents prepayments in respect of fixed asset purchases payments made to the ETC joint venture in advance of deliveries of centrifuge cascades.               


This information is provided by RNS
The company news service from the London Stock Exchange
 
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URENCO Group - Full Year Audited Financial Results - RNS