2005 Annual Report Duro Felguera 2005 Annual Report Index
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2005 ANNUAL REPORT DURO FELGUERA 2005 ANNUAL REPORT INDEX 4 MAIN FIGURES FOR THE YEAR 6 LETTER FROM THE CHAIRMAN 11 GOVERMING BODIES 12 Board of Directors 13 Committees 14 Management Committee 15 Corporate structure 17 ECONOMIC INFORMATION AND STOCK EXCHANGE EVOLUTION 18 Evolution of Profit 20 Balance sheet and Profit and Lost Accont 22 Stock Exchange evolution 23 ACTIVITIES’ REPORT 24 Commercial Activity 27 Human Resources 30 Comunication and Image 33 ACTIVITIES OF THE BUSINESS LINES 47 DIRECTORY 49 CORPORATE REPORT 71 ECONOMIC AND FINANCIAL REPORT Consolidated Annual Accounts and Management Report for the Year 2005 Annual Accounts and Management Report for the Year 2005 of the holding company MAIN FIGURES 1 FOR THE YEAR 1.a BALANCE SHEET AND PROFIT AND LOST ACCOUNT PROFIT AND LOSS ACCOUNT (Million euros) 2001 2002 2003 2004 (*) 2005(*) ORDER INTAKE 335.99 558.17 311.13 767.05 725.59 BACKLOG 303.05 429.76 352.77 718.58 971.13 SALES 356.47 463.99 342.89 319.86 511.19 National 265.88 309.82 152.98 185.84 320.94 International 90.59 154.17 189.91 134.02 190.25 LABOUR COSTS 150.69 106.70 92.88 82.08 94.84 PROFIT BEFORE TAXES 8.19 8.59 -8.48 10.14 20.57 AVERAGE WORKFORCE 3,229 3,276 2,723 1,946 1,934 (*) Data calculated using International Financial Reporting Standards BALANCE SHEET (Million euros) 2001 2002 2003 2004 (*) 2005(*) NON-CURRENT ASSETS 200170.81 64.23 81.75 125.14 131.68 Property, plant and equipment 53.10 41.66 54.03 95.20 96.96 CURRENT ASSETS 217.65 310.91 186.23 255.17 350.58 Cash and cash eequivalents 49.27 35.40 24.13 44.20 100.31 TOTAL ASSETS 288.46 375.14 267.98 380.31 482.26 4 EQUITY ATTRIBUTABLE TO PARENT COMPANY 66.72 67.20 53.27 78.49 95.14 MINORITY INTERESTS 3.99 4.88 7.10 6.30 7.61 DEFERRED INCOME 6.89 7.20 6.32 10.49 9.83 NON-CURRENT LIABILITIES 18.87 60.80 17.68 47.53 57.91 Long-term bank loans 11.96 48.60 14.82 25.95 31.20 CURRENT LIABILITIES 191.99 235.06 183.61 237.50 311.77 Short-term bank loans 27.48 54.10 34.83 56.54 26.25 TOTAL LIABILITIES AND EQUITY 288.46 375.14 267.98 380.31 482.26 (*) Data calculated using International Financial Reporting Standards MAIN FIGURES FOR THE YEAR 1.b MAIN CONTRACTS INTEGRAL PROJECT MANAGEMENT SPAIN HC Energía /AP Combined Cycle Power Plant Soto de Ribera (400 MW) Asturias SPAIN HC Energía /AP Combined Cycle Power Plant Castejón (400 MW) Navarra SPAIN Endesa Combined Cycle Power Plant Puentes de García Rodríguez (800 MW) La Coruña ITALY Endesa Italia Monfalcone Coal Fired Power Plant Desulphurization (2 x 170 MW) QATAR KOBE Stockyard machinery VENEZUELA Ferrrominera Orinoco Phase I extension VENEZUELA Ferrrominera Orinoco Phase II engineering and equipment SPAIN Endesa Prioriño Port (El Ferrol) LIBYA ROO 3 tanks of 50,000 m3 SPAIN ENAGAS 1 tank of 150,000 m3 AUXILIARY SERVICES FOR INDUSTRY SPAIN REPSOL YPF Extension of revamping mechanical erection (La Coruña) 5 SPAIN CEPSA Mechanical erection for SS. AA. La Rábida refinery (Huelva) SPAIN AES Erection of gas and steam turbo-generators at combined cycle power plant (Cartagena) MANUFACTURING SAUDI ARABIA ARAMCO 2 Columns for propylene output JAPAN REPIC CORP. 30 Vacuum Vessels FRANCE AIR LIQUIDE Service Modules GREECE ERGOSE Diverse railway track material DURO FELGUERA 2005 ANNUAL REPORT LETTER 2 FROM CHAIRMAN Dear shareholder, I am writing to you again to provide you with the most important information of the year 2005 and to explain to you the main lines that will orientate our management over the next few years. And so I do with the satisfaction of being able to affirm that Duro Felguera closed the year 2005 with excellent results that go far beyond those of previous years, and with the conviction that the company now has a more solid presence in the market and, as a consequence, faces its future with better prospects than those 6 announced a year ago. The positive evolution of our businesses has been favourably received in the stock markets, what has translated itself into a notable revaluation of the shares. This circumstance, together with the improvement of the dividend, has been highly profitable to our shareholders. The evolution of the company has far surpassed that registered by our sector, that of Engineering and Construction of Industrial Plants and Equipments, both in Spain and in the global market in which Duro Felguera >> The evolution of the company has far operates. surpassed that registered by our sector, that Thus, on the basis of the data provided by the business of Engineering and Construction of association SERCOBE about the forecasts for closure of Industrial Plants and Equipments, both in the year 2005, the sector in Spain grew 7.8% in turnover, Spain and in the global market. while Duro Felguera grew 60%. The Spanish exports of the sector increased 3.7%, as opposed to the 47% growth experienced by our company. At the same time, the company’s order intake amounted to 726 million euros, of which 227 million corresponded to international contracts. International order intake, which represented LETTER FROM THE CHAIRMAN JuanEVOLUCIÓN Carlos Torres EN BOLSAInclán >> The Integral Project Management in the fields of power systems, industrial plants and the installation of fuel storage plants was consolidated as the core business of the company. nearly a third of the total of the group, increased 23% right path. The strategic orientation of concentrating our last year. efforts on the activity of managing major projects and on those areas in which our know-how has accumulated a Our sales volume reached 511 million euros after increasing long tradition of knowledge and experience is yielding 60%. Of this figure, 190.25 million correspond to sales fruit. Once again, the success is jot only to the credit of carried out in the international markets. one business line but also of the collective effort and contribution of all the units of the group. With the At the end of 2005, the backlog, that is, the work contracted exception of Felguera Construcciones Mecánicas all the and still pending, was at historical maximums for the subsidiaries have had extremely positive results and a clear company, being at 971 million Euros, so not only did it line of growth. grow 35% in relation to the previous year, but also tripled 7 that of 2003. This backlog is equivalent to two years’ By activity segments, the Integral Project Management in production and it gives the group the necessary stability the fields of power systems, industrial plants and the for the next three years. installation of fuel storage plants was consolidated as the core business of the company, as it concentrated 67.1% The profit after tax was of 24.9 million euros, with a 224% of the group’s sales and 81% of the year’s order intake. growth in relation to the previous year, while the EBITDA Amongst the latter, mention should be made of the was at 27.4 million, having increased 65%. combined cycle power plants of Castejón II (Navarra), Soto de Ribera (Asturias) and Puentes de García Rodríguez (La In relation to the consolidated balance sheet, it is worth Coruña), as well as of a natural liquid gas storage tank in noting the excellent liquidity and reduced bank debts Cartagena and new extensions of the project for an iron caused by an optimal economic structure of the projects ore concentration plant in Venezuela. in execution, by means of which the financial resources of the clients are obtained by advances that, in combination Within the area of major projects, some relevant contracts with a flexible financing, make it possible to adapt the were finished in 2005, the highlights being the combined economic and financial amounts of the balance in the cycle power plants of Son Reus II, in Majorca, and Barranco different cash-flow stages of the projects. de Tirajana I, in Gran Canaria, both already in commercial operation after being executed as sole contractor by our The other amounts of the balance are in keeping with the company, while other projects continued to be carried level of activity reached in the year, particularly the out, such as the simple cycle of Fiume Santo, in Italy, or Working Capital, which is at 38.8 million euros. the extension of a simple cycle power plant to a combined cycle one in Ventanilla (Peru) as well as the iron ore These figures are higher than those announced in the concentration plant in Venezuela and the liquid gas storage previous year’s report and confirm that we are on the tanks in the Barcelona regasification plant. DURO FELGUERA 2005 ANNUAL REPORT LETTER 2 FROM CHAIRMAN >> We are no longer a company the market identifies by its means of production, which although important have taken on a secondary role. The main asset of our group at present is clearly knowledge. Generally speaking, in 2005 our company was consolidated by the companies Felguera Montajes y Mantenimiento, among the major Spanish companies specialising in the Mompresa and Opemasa, is to increase their relevance management of turnkey projects as it has maintained its within our business as a whole in order to achieve more leadership in the execution of combined cycles and the regular profits that are less vulnerable better to the cycles installation of fuel storage plants, entering new areas of that affect major projects.