9M2014 REPORT
TABLE OF CONTENTS
MANAGEMENT REPORT 03 01 | MARTIFER GROUP 05 Highlights 06 Key Financial Indicators 06 Main Events 07
02 | FINANCIAL PERFORMANCE 11 Introductory Note 12 Result Analysis 12 Total Revenues 12 EBITDA 13 Capex 14 Capital Structure Analysis 14
03 | ANALYSIS BY SEGMENT 17 Metallic Constructions 18 RE Developer 19
04 | MARTIFER SHARE PERFORMANCE 21
INTERIM CONSOLIDATED FINANCIAL INFORMATION 25 05 | INTERIM CONSOLIDATED FINANCIAL STATEMENTS 27
06 | NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 33
PAGE 2 9M2014 REPORT
MANAGEMENT REPORT
PAGE 4 9M2014 REPORT
01 Martifer Group
01 | MARTIFER GROUP
HIGHLIGHTS
Total Revenues in 9M14 was 158 M€
Growth on operational performance, reflected on the 35 % increase in EBITDA (on a comparable basis) to 8.5 M€
Consolidated EBITDA Margin of 5 % in 9M14, comparing with 3 % in 9M13, +2.7 p.p. (on a comparable basis)
Net Profit of the continued operations strongly influenced by the reinforcement of provisions and impairment losses as well as financial expenses of 49.6 M€
Consolidated Net Profit attributable to shareholders of -60.3 M€, influenced by the net profit of discontinued operations of -13.4 M€
Consolidated Net Debt reduction to 296 M€, a 39 M€ decrease compared with 2013
MAIN FINANCIAL INDICATORS
M€ sep-14 sep-13 Var. (%)
Revenues 158.2 234.0 -32% EBITDA 8.5 6.3 35% EBITDA Margin 5% 3% 2.7 pp EBIT -35.1 -25.6 -37% EBIT Margin -22% -11% -11.2 pp Financial Results -17.1 -19.4 12% Profit before taxes -52.1 -45.0 -16% Profit after taxes on continued operations -54.4 -50.2 -8% Discontinued operations’ Result -24.6 1.5 n.m. Net Profit -79.0 -48.7 -62% Attributable to non-controlling interests -18.7 1.5 n.m. Attributable to shareholders -60.3 -50.2 -20%
PAGE 6 9M2014 REPORT
JANUARY 2014
West Sea signs contract for the Sub-concession of Estaleiros Navais de Viana do Castelo
Following an international public tender, Martifer Energy Systems and Navalria, subsidiaries of the Martifer Group, were awarded with the sub-concession for “private use of public domain and of the areas allocated to the dominial concession” attributed to the company Estaleiros Navais de Viana do Castelo (ENVC).
Martifer Group, via its new subsidiary West Sea – Estaleiros Navais, Lda., aims to develop its activity in the national and international markets and implement, in the areas included in the ENVC sub-concession, a shipbuilding and repair project, which is expected to create 400 new work places throughout the next three years. With this sub-concession, Martifer Group increases its capacity for the shipbuilding and repair. The contract was signed in January 2014.
Martifer Solar USA INC and Martifer Aurora LLC begin the voluntary process for Chapter 11
On 21 January 2014 the affiliates Martifer Solar USA INC and Martifer Aurora Solar LLC started voluntary restructuring processes under Chapter 11 (US Bankruptcy Code).
FEBRUARY 2014
Martifer Renewables concludes the sale of Rosa dos Ventos
On 27 of February, Martifer Renewables has concluded, through its subsidiary Martifer Renováveis Geração de Energia e Participações, S.A., controlled at 55%, the sale of 100% shares in the company Rosa dos Ventos Geração e Comercialização de Energia, by the $R70.3m total amount to the Brazilian company CPFL. Rosa dos Ventos Geração e Comercialização de Energia SA owns the wind farm with 14.7 MW of energy capacity. The sale agreement by both entities has been established on 18 June 2013.
MARCH 2014
Martifer concludes two new ships for Douro Azul
Navalria, Martifer‘s subsidiary, concluded, in March, the construction of the two hotel ships Viking Hemming and Viking Torgil, for the company Douro Azul.
The ships, which will operate cruises in the Douro River, were built in one year and have a distinctive feature: a round shaped bow that allows the creation of an exterior deck with capacity for 42 passengers.
Martifer Metallic Constructions restructures debt
Martifer Metallic Constructions completed the conversion of part of its debt from short term to medium and long term.
9M2014 REPORT PAGE 7
APRIL 2014
Martifer Metallic Constructions increases equity
Martifer Metallic Constructions increased, via Martifer SGPS’ main shareholders, its equity in around 28 million euros.
Martifer Solar and Adenium Energy Capital awarded PPA for 10 MW PV plant in Jordan
Martifer Solar and Adenium Energy Capital were awarded a Power Purchase Agreement (PPA) with the national utility of Jordan, NEPCO (National Electric Power Company) for a 10 MW AC solar PV plant.
Martifer Solar has been selected as the lead developer and will provide engineering, procurement and construction (EPC) services. Following the connection of the plant, Martifer Solar will be responsible for the related operations and maintenance (O&M) service.
The project will be developed with Adenium Energy, which will finance it in around USD$ 26 million.
Martifer Solar concludes the construction of a 78.4 MW PV portfolio for Lightsource Renewable Energy in the UK
Martifer Solar concluded a 78.4 MW portfolio of photovoltaic plants in the United Kingdom. The utility-scale combined capacity consists of five plants, which are located in the counties of Cambridgeshire, Devon, Nottingham and Swindon, and was built for Lightsource Renewable Energy.
Martifer SGPS, S.A. Annual General Meeting
On 28 April 2014, Martifer SGPS, S.A. Annual meeting took place, with a participation of 79.85 % of its total share capital, having all the proposals in the Agenda present in the Call Notice been approved by unanimity.
MAY 2014
WEST SEA takes possession of the Establishment of the Sub-concession
On 2 May 2014, the company West Sea - Estaleiros Navais, Lda, a part of the Martifer Group, took possession of the Sub- concession, following the “Sub-concession for private use of public domain and of the areas allocated to the dominial concession” attributed to the company Estaleiros Navais de Viana do Castelo (ENVC).
JUNE 2014
Martifer Renewables signs conditional sale agreement of the Gizalki wind farm to the Ikea Group
A conditional sale agreement was celebrated, in which the IKEA Group will finance the development of the Gizalki wind farm (36 MW), in Poland, which is ready to build. The sale of the Gizalki project will only be concluded after its construction and connection to the grid. The sale of these assets is included in the asset rotation policy, implemented by Martifer Renewables’ management team, RE Developer business area of the Martifer Group.
PAGE 8 9M2014 REPORT
JULY 2014
Most of assets of Martifer Solar USA INC sold to BayWa
On 1st July, the development of the Chapter 11 process, initiated by Martifer Solar USA INC in January, led to the court of Nevada to approve the sale of most assets of Martifer Solar USA, Inc. to the proponent BayWa by 7.6 million USD. The result of the sale is framed with the book value of assets.
Martifer Solar prevails with 8 MW PV plant in Ukraine
Martifer Solar concluded a new 8 MW PV plant, named Shargorod, in the Vinnytsia region, in Ukraine.
Ventinveste SA signs deal with Ferrostaal GmbH
In July 2014, the company Âncora Wind – Energia Eólica, S.A., aimed to establish the partnership between Ventinveste, S.A. and Ferrostaal, GmbH for the development of wind projects with a total of 171 MW, included in the Ventinveste Consortium. The construction should begin after the financial closing, which is expected by the end of 2014.
AUGUST 2014
Martifer SGPS agrees the transfer of its shareholding held in Nutre SGPS
Martifer SGPS has decided, during the first semester of 2014, to sell the participation held in Nutre SGPS, SA. During the 3rd quarter of 2014, following a proposal of investment presented by Orchadia, S.A. group, it was agreed the transference of the shares held in Nutre SGPS, SA. The transfer is still subject to the accomplishment of several conditions (including, amongst others, decisions of Public and Governmental Authorities). The amount of the transfer is in line with the value of the financial investment.
SEPTEMBER 2014
Martifer SGPS decides to focus the Group’s activity in metallic construction (Steel structures, Aluminium and glass façades, Oil & Gas infrastructures and Naval Industry)
Martifer SGPS decided in September, to focus the Group’s activity in Metallic construction (Steel structures, Aluminium and glass façades, Oil & Gas infrastructures and Naval Industry) and fulfil the active sale plan of its 55 % share on Martifer Solar. As the sale is highly likely, Martifer Solar’s assets and liabilities were classified as “non current assets held for sale” and “liabilities associated to non current assets held for sale”, respectively, being Martifer Solar Net Profit presented as “discontinued operations’ result”.
9M2014 REPORT PAGE 9
PAGE 10 9M2014 REPORT
02 Financial Performance
02 | FINANCIAL PERFORMANCE
INTRODUCTORY NOTE
In September 2014, the Group started to classify the solar business unit (composed by Martifer Solar, SA and its subsidiaries) as a non current asset held for sale. This change resulted from the fact that it is currently in process a sale plan for Martifer SGPS’s economic interest (currently 55 %) on Martifer Solar.
Since the requirements of IFRS 5 were fulfilled, the contribution to Martifer’s consolidated results, coming from this segment, is presented in an autonomous line in the Consolidated P&L and the values YoY were adjusted to allow comparison. The contribution of assets and liabilities of the operational unit classified as held for sale are also presented in separated lines from the Group’s remaining consolidated assets and liabilities on 30 September 2014.
The breakdown of these contributions is included in the Notes to Interim Consolidated Financial Statements (Note 20).
RESULTS ANALYSIS
M€ Sep-14 Sep-13 Var. (%) Revenues 158.2 234.0 -32% EBITDA 8.5 6.3 35% EBITDA Margin 5% 3% 2.7 pp Depreciation & Amortization -11.0 -10.6 -4% Provisions & Impairment Losses -32.5 -21.3 -53% EBIT -35.1 -25.6 -37% EBIT margin -22% -11% -11.2 pp Financial Results -17.1 -19.4 12% Profit before taxes -52.1 -45.0 -16% Income tax -2.3 -5.2 57% Profit after taxes on continued operations -54.4 -50.2 -8% Discontinued operations’ Result -24.6 1.5 n.m. Attributable to non-controlling interests -11.1 2.1 n.m. Attributable to shareholders -13.4 -0.6 <-100% Net Profit -79.0 -48.7 -62% Attributable to non-controlling interests -18.7 1.5 n.m. Attributable to shareholders -60.3 -50.2 -20% Earnings per share € -0.616 -0.513 -20%
TOTAL REVENUES
In the 9M14, total Revenues reached 158 million euros (234 million euros in the 9M13, on a comparable basis), being 136 million euros regarding the Metallic Construction segment and 22 million euros from the RE Developer segment.
sep-14 sep-13 REVENUES M€ WEIGHT M€ WEIGHT VAR. (%) Martifer Consolidated 158 234 -32% Metallic Construction 136 86% 208 89% -34% RE Developer 22 14% 27 12% -21% Others, Holding and Adjust. - 0% -1 0% n.m.
PAGE 12 9M2014 REPORT
Geographic breakdown of the Group’s Revenues is shown on the chart below:
15% 24% Portugal
European Union (other)
África 7% Ásia 39% 15% América
EBITDA
In the 9M14, EBITDA shows a 35 % increase YoY (on a comparable basis) with the EBITDA margin on 5 % (3 % YoY). The negative EBITDA in the metallic construction segment (-3 million euros) is compensated by the positive EBITDA of the RE Developer segment (12 million euros).
sep-14 sep-13 EBITDA €M MARG. M€ MARG. VAR. (%) Martifer Consolidated 8.5 5% 6.3 3% 35% Metallic Construction -3.2 -2% -13.8 -7% 77% RE Developer 11.8 55% 21.3 78% -45% Others, Holding and Adjust. 0.0 -1.2 96%
9M2014 REPORT PAGE 13
CAPEX
The amount of investment in fixed assets in the 9M14 was 12 million euros, mainly resulting from the investment in the Metallic construction segment (10 million euros).
CAPEX 2007 – 9M2014 (M€)
213
122 102
61 57 46 10 12
CAPITAL STRUCTURE ANALYSIS
€M set-14 dez-13 VAR. %
Fixed Assets (including Goodwill) 197.3 230.0 -14% Other non current assets 72.8 164.9 -56% Inventory and Receivables 216.2 322.9 -33% Cash and cash equivalents 21.3 39.2 -46% Assets held for sale 210.6 30.8 >100% Total Assets 718.2 787.8 -9% Shareholders Equity 74.0 100.0 -26% Non-controlling interests -18.8 36.8 -91% Non-controlling interests related with assets held for sale 22.1 2.9 >100% Total Equity 77.3 139.7 -45% Non-current debt and leasings 216.8 236.8 -8% Other non-current liabilities 51.1 37.5 36% Current debt and leasings 100.7 138.1 -27% Other current liabilities 139.9 224.5 -38% Liabilities related with Assets held for sale 132.5 11.2 >100% Total Liabilities 640.9 648.1 -1%
Total assets reached 718 million euros (788 million euros on 31 December 2013), with the non-current assets totalling 270 million euros.
Equity on 30 September 2014 totalled 77 million euros, which compares with 140 million euros on 31 December 2013. The decrease results mainly from the net profit of the period, partially compensated by the equity increase in Martifer Metallic Constructions.
PAGE 14 9M2014 REPORT
NET DEBT
The Group’s Consolidated Net Debt (Borrowings + Financial Leases (+/-) Derivatives – Cash and Cash Equivalents) reached, on 30 September 2014, 296 million euros, showing a 39 million euros decrease when compared to the end of the year 2013.
The breakdown by segment is shown on the chart below:
Metallic Construction 129 145 RE Developer
Holding
22
The Group continues focused on reducing net debt through the sale of non core assets.
TREND OF CONSOLIDATED NET DEBT (2008 – 9M2014) - M€
600
500 485 444
400 377 321 330 330 296 300
200
100
0 2008 2009 2010 2011 2012 2013 2014
9M2014 REPORT PAGE 15
PAGE 16 9M2014 REPORT
03 Analysis by Segment
03 | ANALYSIS BY SEGMENT
METALLIC CONSTRUCTION
ACTIVITY
The order book at the end of the 9 months totalled 241 million euros and is spread throughout several countries in different geographical regions.
ORDER BOOK BY GEOGRAPHY
sep-14 dec-13 Value Value Geography (M€) % (M€) % Western Europe 132 55% 111 37% Africa 63 26% 90 30% Eastern Europe and Middle East 23 10% 51 17% Latin America 23 10% 45 15% TOTAL 241 100% 297 100%
RESULTS
€M set-14 set-13 VAR. % Revenues 136.4 207.7 -34% EBITDA -3.2 -13.8 77% EBITDA Margin -2% -7% 4.3 pp Depreciation & Amortization -5.1 -5.4 6% Provisions & Impairment Losses -31.4 -8.1 <-100% EBIT -39.7 -27.3 -45% EBIT margin -29% -13% -15.9 pp Financial Results -11.5 -11.8 3% Profit before taxes -51.2 -39.2 -31% Income tax -0.2 -4.4 96% Net Profit -51.3 -43.6 -18% Attributable to non-controlling interests 0.4 0.1 >100% Attributable to shareholders -51.7 -43.7 -18%
Revenues in the Metallic Constructions area totalling 136 million euros (208 million euros in the 9M13) have been penalized by the delay in some projects, negatively affecting the performance in the period, namely in EBITDA which, nevertheless, presents a 77 % improvement regarding the 9M13, with the EBITDA Margin increasing 4 p.p. YoY.
Sales and services rendered continue focused in the external market.
PAGE 18 9M2014 REPORT
15% Portugal 24% European Union (other)
Africa 8% Asia 37% America 16%
EBITDA in the 9M14 was negative in just 3 million euros (14 million euros in the 9M13), showing an around 77 % improvement YoY.
Financial Results were negative in 12 million euros and provision and impairment losses totalling 31 million euros decisively contribute for the period net profit, which totalled -51 million euros (-44 million euros in the 9M13).
Net Financial Debt in the Metallic Construction area by the end of the 9M14 totalled 129 million euros (127 million euros at the end of 2013).
Total CAPEX in the 9M14 was around 10 million euros, corresponding, mainly, to the investment being made by this segment in Brazil.
RE DEVELOPER
ACTIVITY
Martifer Renewables has currently 80 MW of wind farms in operation, from which 49 MW with contribution to revenues. The revenues from the wind farms in Portugal, with a 31 MW capacity, by being held at 50 %, contribute to the results through equity method.
RESULTS
€M set-14 set-13 VAR.% Revenues 21.6 27.2 -21% EBITDA 11.8 21.3 -45% EBITDA Margin 55% 78% -23.9 pp Depreciation & Amortization -4.9 -3.9 -26% Provisions & Impairment Losses -1.1 -13.2 92% EBIT 5.8 4.3 35% EBIT margin 27% 16% 11 pp Financial Results 0.8 -1.2 n.m. Profit before taxes 6.6 3.1 >100% Income tax -2.1 -0.8 <-100% Net Profit 4.5 2.2 >100% Attributable to non-controlling interests 3.1 0.0 n.m. Attributable to shareholders 1.5 2.3 -36%
9M2014 REPORT PAGE 19
Total Revenues of the RE Developer in the 9M14 reached 22 million euros (27 million euros in the 9M13), influenced not only by the wind farms and solar parks in operation in the period, totalling 49 MW, but also by the sale of wind farms in Brazil.
EBITDA reached 12 million euros in the 9M14 (21 million euros YoY).
Net Profit at the end of 9M14 was positive in 4.5 million euros. In the 9M13, Martifer Renewables had registered a Net Profit of around 2 million euros.
Net debt at the end of the 9M14 reached 22 million euros, showing a 9 million euros increase when compared with the end of 2013 (13 million euros).
PAGE 20 9M2014 REPORT
04 Share Price Performance
04 | SHARE PRICE PERFORMANCE
SHARE PRICE TREND
180
160
140
120
100
80 Martifer 60 PSI 20
40
20
0
Source: Reuters
TRADED VOLUME (‘000 shares)
1400
1200
1000
800
600
400
200
0
Source: Reuters
At the end of the 9M14, Martifer shares dropped around 45 % with the PSI-20, Euronext Lisbon’s main index, decreasing around 13 %, when compared with the end of 2013. Martifer’s share price closed the 9M14 at 0,38 €/share. The maximum price achieved was 1,20 €/ share and minimum 0,37 €/share.
PAGE 22 9M2014 REPORT
The average volume of stocks traded daily during the 9M14 was 62 645 shares (33 610 YoY).
Martifer’s market value at 30 September 2014 was 38 million euros.
Oliveira de Frades, 3 November 2014
The Board of Directors,
Carlos Manuel Marques Martins Jorge Alberto Marques Martins (Chairman of the Board of Directors) (Vice-Chairman of the Board of Directors)
Mário Rui Rodrigues Matias Luís Filipe Cardoso da Silva (Member of the Board of Directors) (Member of the Board of Directors)
Arnaldo José Nunes da Costa Figueiredo Jorge Bento Ribeiro Barbosa Farinha (Member of the Board of Directors) (Member of the Board of Directors)
Luís Valadares Tavares (Member of the Board of Directors)
9M2014 REPORT PAGE 23
PAGE 24 9M2014 REPORT
INTERIM CONSOLIDATED FINANCIAL INFORMATION
PAGE 26 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
05 INTERIM CONSOLIDATED FINANCIAL STATEMENTS
05 | INTERIM CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENTS FOR THE 9 MONTH PERIODS ENDED 30 SEPTEMBER OF 2014 AND 2013 (amounts expressed in Euro)
(Translation of consolidated financial statements originally issued in Portuguese - note 31)
9M' 2013 9M' 2014 PRO-FORMA 9M' 2013 NOTES 3rd QUARTER 3rd QUARTER (NON AUDITED) (NON AUDITED) (NON AUDITED) 2014 2013 1) ADJUSTED ADJUSTED (NON AUDITED) (NON AUDITED) Sales and services rendered 3 e 4 134,057,945 206,626,101 416,459,259 42,862,227 288,777,929 Other income 5 24,181,515 27,357,148 47,824,498 1,666,886 38,483,231 Cost of goods sold 6 (37,028,008) (60,768,842) (160,715,680) (12,045,770) (120,487,357) Subcontractors 7 (24,484,436) (51,167,749) (111,123,713) (6,161,627) (74,171,180) External supplies and services 8 (35,502,361) (52,849,870) (84,146,042) (9,419,548) (54,218,763) Staff costs 9 (43,190,997) (47,275,435) (61,294,719) (13,616,998) (29,762,277) Other operational gains and losses 10 (9,515,060) (15,616,242) (27,364,537) (2,530,872) (18,637,182) 8,518,598 6,305,111 19,639,066 754,298 29,984,401 Amortizations 3 (11,049,660) (10,605,304) (12,882,777) (3,555,447) (5,685,878) Provisions 11 (30,429,611) (2,826,625) (4,190,840) (22,257,345) (2,441,187) Impairment losses 11 (2,107,546) (18,478,809) (18,478,809) (1,505,151) (830,623) Operating income (35,068,219) (25,605,627) (15,913,360) (26,563,645) 21,026,713 Financial income 12 3,980,643 21,808,363 25,886,578 1,876,264 11,102,855 Financial expenses 12 (21,955,901) (24,559,606) (39,466,520) (7,638,129) (23,018,356) Gains / (losses) on associate companies and joint 13 899,226 (16,644,759) (16,431,710) 731,608 (6,473,878) arrangements Profit before tax (52,144,251) (45,001,629) (45,925,012) (31,593,902) 2,637,334 Income tax 14 (2,261,838) (5,244,430) (2,808,392) (310,013) 218,540 Profit after tax (54,406,089) (50,246,059) (48,733,404) (31,903,915) 2,855,874
Earnings of the disposal group classified as held for sale 20 (24,573,064) 1,512,655 (8,810,348) (2,912,217) Attributable to: non-controlling interests (11,137,785) 2,121,447 - (3,890,305) (1,896,751) owners of Martifer (13,435,279) (608,792) - (4,920,043) (1,015,467) Profit for the year (78,979,153) (48,733,404) (48,733,404) (40,714,263) (56,344)
Attributable to: non-controlling interests 21 (18,718,960) 1,468,117 1,468,120 (10,945,310) (1,740) owners of Martifer (60,260,194) (50,201,524) (50,201,524) (29,768,951) (54,600)
Earnings per share: Basic 15 (0.6163) (0.5134) (0.5134) (0.3044) (0.0006) from continued operations (0.4789) (0.5072) (0.5134) (0.2541) 0.0098 from discontinued operations (0.1374) (0.0062) - (0.0503) (0.0104) Diluted 15 (0.6163) (0.5134) (0.5134) (0.3044) (0.0006) from continued operations (0.4789) (0.5072) (0.5134) (0.2541) 0.0098 from discontinued operations (0.1374) (0.0062) - (0.0503) (0.0104)
1) In September 2014, the Group started to classify the solar business unit (composed by Martifer Solar, SA and its subsidiaries) as a non current asset held for sale. Since the requirements of IFRS 5 were fulfilled, the contribution to Martifer’s consolidated results, coming from this segment, is presented in an autonomous line in the Consolidated P&L and the values YoY were adjusted to allow comparison. The detail of this contribution is presented in note 20.
The accompanying notes are part of these financial statements
PAGE 28 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE 9 MONTH PERIODS ENDED 30 SEPTEMBER OF 2014 E 2013 (amounts expressed in Euro)
(Translation of consolidated financial statements originally issued in Portuguese - note 31)
9M' 2013 PRO- 3rd QUARTER 3rd QUARTER 9M' 2014 FORMA 9M' 2013 2014 PRO- 2013 PRO-
(NON AUDITED) (NON AUDITED) (NON AUDITED) FORMA FORMA 1) (NON AUDITED) (NON AUDITED)
Profit for the year (78,979,153) (48,733,404) (48,733,404) (40,714,263) (56,344) Fair value of cash flow hedges (derivatives), net of tax (434,146) 1,163,070 1,163,070 20,101 251,243
Exchange differences arising on (i) translating foreign operations; (ii) net investment in 4,016,850 (4,426,586) (4,426,586) (1,083,443) 979,043 subsidiaries and (iii) goodwill
Income recognized directly in equity 3,582,704 (3,263,516) (3,263,516) (1,063,343) 1,230,285
Total comprehensive income for the period (75,396,449) (51,996,920) (51,996,920) (41,777,603) 1,173,945
Attributable to: non-controlling interests (18,148,591) 1,305,174 1,305,174 (11,487,936) 341,320 owners of Martifer (57,247,859) (53,302,094) (53,302,094) (30,289,668) 832,626
Total comprehensive income for the period from continued operations (49,763,663) (53,414,949) - (30,983,051) 1,553,368 from discontinued operations (25,632,786) 1,418,028 - (10,794,552) (379,422)
1) In September 2014, the Group started to classify the solar business unit (composed by Martifer Solar, SA and its subsidiaries) as a non current asset held for sale. Since the requirements of IFRS 5 were fulfilled, the contribution to Martifer’s consolidated results, coming from this segment, is presented in an autonomous line in the Consolidated P&L and the values YoY were adjusted to allow comparison. The detail of this contribution is presented in note 20.
The accompanying notes are part of these financial statements
9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION PAGE 29
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AT 30 SEPTEMBER 2014 AND 31 DECEMBER 2013 (amounts expressed in Euro)
(Translation of consolidated financial statements originally issued in Portuguese - note 31)
30 SEPTEMBER 31 DECEMBER NOTES 2014 (NON 2013 (AUDITED) AUDITED)
ASSETS Non-current assets Goodwill 10,980,675 12,909,431 Intangible assets 4,767,086 7,503,472 Tangible assets 181,571,463 209,544,798 Investment property 16,221,074 16,195,865 Financial assets under the equity method 16 8,286,650 41,282,069 Available for sale investments 17 1,678,230 575,621 Other non-current receivables 18 39,786,740 92,479,001 Deferred tax assets 6,846,815 14,360,132 270,138,733 394,850,389 Current assets Inventories 18,334,623 26,515,807 Trade receivables 18 72,025,480 121,615,674 Other receivables 18 46,641,942 51,455,759 Income tax 252,410 1,779,777 Current tax assets 9,893,264 17,396,316 Other current assets 19 69,019,764 104,115,097 Cash and cash equivalents 21,281,278 38,843,709 Derivatives - 388,468 Non current assets held for sale 20 210,609,055 30,812,048 448,057,816 392,922,655
Total assets 718,196,549 787,773,044
EQUITY Issued capital 21 50,000,000 50,000,000 Share premium 186,500,000 186,500,000 Treasury stock (2,868,519) (2,868,519) Reserves (99,411,536) (64,654,736) Profit for the year (60,260,194) (68,961,164) Equity attributable to owners of Martifer 73,959,751 100,015,581 Non-controlling interests 21 (18,764,565) 36,784,990 Non-controlling interests attributable to non current assets held for sale 20 22,061,857 2,891,441 Total equity 77,257,043 139,692,012
LIABILITIES Non-current liabilities Borrowings 22 202,557,146 222,842,770 Obligation under finance leases 14,195,679 13,917,683 Other non-current liabilities 23 12,636,715 13,725,090 Provisions 24 37,475,856 22,326,882 Deferred tax liabilities 958,728 1,494,669 267,824,124 274,307,094 Current liabilities Borrowings 22 98,164,761 133,751,722 Obligation under finance leases 2,516,617 4,357,014 Trade payables 23 70,871,188 130,031,422 Other payables 23 23,451,773 28,851,369 Income tax 953,355 3,278,785 Current tax liabilities 10,300,794 15,325,642 Other current liabilities 25 34,061,664 46,827,457 Derivatives 257,921 164,254 Liabilities related with non current assets held for sale 20 132,537,308 11,186,273 373,115,381 373,773,938 Total liabilities 640,939,505 648,081,032
Total equity and liabilities 718,196,549 787,773,044
The accompanying notes are part of these financial statements
PAGE 30 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE 9 MONTH PERIODS ENDED 30 SEPTEMBER OF 2014 AND 2013 (amounts expressed in Euro)
(Translation of consolidated financial statements originally issued in Portuguese - note 31)
FAIR VALUE EQUITY RESERVES FOREIGN NET ATTRIBUTABLE NON- ISSUED SHARE TREASURY CASH FLOW CURRENCY OTHER ISSUED PROFIT OF TO OWNERS CONTROLLING TOTAL EQUITY CAPITAL PREMIUM STOCK HEDGE TRANSLATION RESERVES CAPITAL THE YEAR OF THE INTERESTS RESERVES DERIVATIVES PARENT
Balance at 1 January 2013 50,000,000 186,500,000 (2,868,519) (902,433) (18,903,670) - 18,306,920 (55,852,988) 176,279,310 50,975,912 227,255,223 Appropriation of the profit of 2012 ------(55,852,988) 55,852,988 - - -
Comprehensive income for the year: Profit for the year ------(50,201,524) (50,201,524) 1,468,117 (48,733,404)
Exchange differences arising on (i) translating foreign - - - (3,499,889) - - - (3,499,889) (208,081) (3,707,969) operations and (ii) net investment in subsidiaries
Exchange differences arising on goodwill - - - (709,257) - - - (709,257) (9,360) (718,617) Other changes in equity of subsidiaries - - - 1,108,576 - - - 1,108,576 54,494 1,163,070
Total comprehensive income for the year - - - 1,108,576 (4,209,146) - - (50,201,524) (53,302,094) 1,305,174 (51,996,920) Other changes in equity of subsidiaries ------(193,839) - (193,839) 39,465 (154,374) Changes in the consolidation perimeter ------(13,196) - (13,196) (75,672) (88,868) Non-controlling interests transactions - - - - - (2,374,197) - (2,374,197) 745,119 (1,629,078) Balance at 30 September 2013 50,000,000 186,500,000 (2,868,519) 206,143 (23,112,816) - (40,127,300) (50,201,524) 120,395,984 52,989,998 173,385,982
Balance at 1 January 2014 50,000,000 186,500,000 (2,868,519) 307,575 (21,990,557) - (42,971,754) (68,961,164) 100,015,581 39,676,431 139,692,012 Appropriation of the profit of 2013 ------(68,961,164) 68,961,164) - - -
Comprehensive income for the year: Profit for the year ------(60,260,194) (60,260,194) (18,718,960) (78,979,154)
Exchange differences arising on (i) translating foreign - - - - 3,352,899 - - - 3,352,899 629,412 3,982,311 operations and (ii) net investment in subsidiaries
Exchange differences arising on goodwill - - - 18,997 - - - 18,997 15,543 34,539
Other changes in equity of subsidiaries - - - (359,560) - - - (359,560) (74,586) (434,146)
Total comprehensive income for the year - - - (359,560) 3,371,896 - - (60,260,194) (57,247,859) (18,148,591) (75,396,450)
Other changes in equity of subsidiaries ------(7,119,485) - (7,119,485) (6,055,060) (13,174,545) Changes in the consolidation perimeter ------1,304,927 - 1,304,927 (3,168,901) (1,863,974) Non-controlling interests transactions ------37,006,587 - 37,006,587 (9,006,587) 28,000,000 Balance at 30 September 2014 50,000,000 186,500,000 (2,868,519) (51,986) (18,618,661) - (80.740.889) (60.260.194) 73,959,751 3,297,292 77,257,043
The accompanying notes are part of these financial statements
9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION PAGE 31
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE 9 MONTH PERIODS ENDED 30 SEPTEMBER OF 2014 AND 2013 (amounts expressed in Euro)
(Translation of consolidated financial statements originally issued in Portuguese - note 31)
9M' 2014 9M' 2013
(NON AUDITED) (NON AUDITED)
OPERATING ACTIVITIES
Receipts from customers 178,615,162 373,126,092 Payments to suppliers (120,119,096) (278,576,721) Payments to employees (42,097,360) (55,747,753) Cash generated from operations 16,398,706 38,801,618 Income tax paid (2,267,903) (711,178) Other receipts/(payments) relating to operating activities (23,761,036) 14,055,303 Cash generated from other operating activities (26,028,939) 13,344,124 Net cash generated by operating activities from discontinued operations 2,359,878 (39,832,289) Net cash generated by operating activities (1) (7,270,355) 12,313,454
INVESTING ACTIVITIES
Receipts arising from: Financial assets 22,363,122 7,587,349 Intangible assets 468,724 1,182,660 Tangible assets 9,047,955 117,942 Investment grants 140,902 4,952 Interest and similar income 85,206 2,323,723 Others 197,008 279,851 32,302,918 11,496,477 Payments arising from: Financial assets - (1,622,859) Intangible assets (110,334) (1,403,314) Tangible assets (11,349,646) (8,844,632) Others (184,374) (354,765) (11,644,364) (12,031,687) Net cash generated by investing activities from discontinued (1,479,220) (215,011) operations Net cash generated by investing activities (2) 19,179,334 (750,221)
FINANCING ACTIVITIES Borrowings 277,060,440 501,752,518 Issue of equity shares, supplementary capital and share premiums 15,000,000 - Others 51,264 1,612,806 292,111,704 503,365,324 Payments arising from: Borrowings (278,536,094) (485,375,411) Leasings (503,194) (2,231,615) Interest and similar costs (15,463,946) (16,372,975) Reduction of capital and other reserves (12,192,035) - Others - (1,600,548) (306,695,269) (505,580,549) Net cash generated by financing activities from discontinued (2,845,121) (16,040,360) operations Net cash generated by financing activities (3) (17,428,686) (18,255,585)
Net increase in cash and cash equivalents (4)=(1)+(2)+(3) (5,519,707) (6,692,352) Changes in the consolidation perimeter and others (227,593) (3,879,971) Effect of foreign exchange currencies 1,331,586 (815,203) Cash and cash equivalents at the beginning of the period 38,843,709 38,024,569 Cash and cash equivalents at the end of the period from continuing operations 21,281,278 19,432,431 from discontinued operations 13,146,717 7,204,612
The accompanying notes are part of these financial statements
PAGE 32 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
06 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
06 | NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTORY NOTE
Martifer SGPS, S.A., with its head-office at Zona Industrial, Apartado 17, Oliveira de Frades – Portugal (‘Martifer SGPS’ or ‘the Company’), and its group of companies (‘Group’), have as its main activity the construction of steel infrastructures (Steel structures, Aluminium and glass façades, Oil & Gas infrastructures and Naval Industry) and the promotion and development of renewable energy projects (Note 3).
Martifer SGPS decided, in September, to focus the Group’s activity in Metallic construction (Steel structures, Aluminium and glass façades, Oil & Gas infrastructures and Naval Industry) and fulfil the active sale plan of its 55 % share on Martifer Solar. As the sale is highly likely, Martifer Solar’s assets and liabilities were classified as “non current assets held for sale” and “liabilities associated to non current assets held for sale”, respectively, being Martifer Solar Net Profit presented as “discontinued operations’ result” (Note 20).
Martifer SGPS was incorporated on 29 October 2004, its share capital having been realized through the delivery of shares, valued at its market value, that the shareholders held in Martifer - Construções, S.A., a company that was incorporated in 1990 and which, at that time, was the holding company of the current Martifer Group.
As of June 2007, after the initial public offering Martifer SGPS, S.A. shares have been listed on Euronext Lisbon.
At 30 September 2014, the Group has developed its activity in Portugal, Spain, Slovakia, Romania, Angola, Brazil, United States of America, Mozambique, Ireland, Bulgaria, Netherlands, France, Morocco, United Kingdom, Saudi Arabia, Germany, Malta and Algeria.
The accompanying notes were selected to help the understanding of the more significant changes in the financial position and the financial performance of the Group since the last annual reporting, dated of 31 December 2013.
All the amounts presented in these notes are expressed in Euros (rounded at unit), unless otherwise stated.
These consolidated financial statements are not audited.
1. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
These accompanying consolidated financial statements relate to the consolidated financial statements of the Martifer Group and were prepared in accordance with the International Financial Reporting Standards (“IFRS”), as adopted by the European Union, in force at the beginning of the economic period started 1 January 2014. These are the International Financial Reporting Standards, issued by the International Accounting Standards Board ("IASB"), and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") or by the previous Standing Interpretations Committee ("SIC"), that have been endorsed by the European Union.
The interim consolidated financial report for the period ended at 30 September 2014 has been prepared in accordance with IAS 34 - ‘Interim Financial Reporting’ as adopted by the European Union.
These consolidated financial statements have been prepared on a going concern basis from the books and accounting records of the companies included in the consolidation (Note 2) and have been prepared under the historical cost convention, except for the revaluation of certain financial instruments, which are stated at fair value.
The accounting policies adopted are consistent with those considered in the financial statements for the year ended as of 31 December 2013 and disclosed in the corresponding notes.
The following standards, interpretations, amendments and revisions endorsed by the European Union and with mandatory effects from 31 December 2013, have been adopted for the first time in the current year.
EFFECTIVE DATE
PAGE 34 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
IAS 32 – Financial Instruments: Presentation 01-01-14
IAS 36 – Impairment of Assets 01-01-14
IAS 39 – Financial Instruments: Recognition and Measurement 01-01-14
Changes in IFRS 10, 11 and IAS 27: Investment Entities 01-01-14
IFRS 10 – Consolidated Financial Statements 01-01-14
IFRS 11 – Joint Arrangements 01-01-14
IFRS 12 – Disclosure of Interests in Other Entities 01-01-14
Changes in IFRS 10, 11 and IAS 27: Transition 01-01-14
IAS 27 – Consolidated and Separate Financial Statements 01-01-14
IAS 28 – Investments in Associates 01-01-14
The amendments or new International Financial Reporting Standards (IFRS) and/or Interpretations issued or entering into force during the period ended in 30 September 2014 had no significant impact on the Group’s consolidated financial statements.
The consolidated financial statements were presented in Euros since this is the main currency of the Group’s operations.
In the preparation of the consolidated financial statements, in accordance with the IAS/IFRS, the Group’s Board of Directors adopted certain assumptions and estimations that affect the assets and liabilities reported, as well as the profits and losses incurred related to the reported periods. All the estimations and assumptions of the Board of Directors were performed taking into consideration the best knowledge available at the financial statements approval date of the events and the dealings in progress.
2. GROUP COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS
Group companies included in the consolidated financial statements, their consolidation methods, head offices and percentage of share capital held by the Group, at 30 September 2014 and 31 December 2013 are as follows:
COMPANIES CONSOLIDATED THROUGH THE FULL CONSOLIDATION METHOD
PERCENTAGE OF SHARE CAPITAL HELD
COMPANY HEAD OFFICE DESIGNATION DIRECTLY INDIRECTLY TOTAL 2013 Martifer SGPS, S.A. Oliveira de Frades Martifer SGPS Holding Martifer Inovação e Gestão, S.A. Oliveira de Frades Martifer Inovação 100.00% - 100.00% 100.00% Martifer Inovação Martifer Gestiune Si Servicii, S.R.L. Bucharest 100.00% - 100.00% 100.00% Roménia
Martifer Metallic Martifer Metallic Constructions SGPS, S.A. Oliveira de Frades 75.00% - 75.00% 100.00% Constructions Martifer - Construções Metalomecânicas, S.A. Oliveira de Frades Martifer Construções - 75.00% 75.00% 100.00% Martifer Mota-Engil Coffey Construction Joint Dublin MMECC 1) - 45.00% 45.00% 60.00% Venture Limited Martifer – Construcciones Metálicas España, S.A. Madrid Martifer Espanha - 75.00% 75.00% 100.00% Martifer – Construções Metálicas Angola, S.A. Luanda Martifer Angola - 59.06% 59.06% 78.75% Martifer Construction Limited Dublin Martifer Irlanda - 75.00% 75.00% 100.00% Martifer Polska Sp. Zo.o. Gliwice Martifer Polska - 75.00% 75.00% 100.00% Martifer Constructions, SAS Rungis Martifer França - 75.00% 75.00% 100.00% Martifer Constructii SRL Bucharest Martifer Constructii - 75.00% 75.00% 100.00% Park Logistyczny Biskupice Gliwice Biskupice - 75.00% 75.00% 100.00% Martifer Konstrukcje Sp. Z o.o. Gliwice Martifer Konstrukcje - 75.00% 75.00% 100.00% Martifer Slovakia S.R.O. Bratislava Martifer Slovakia - 75.00% 75.00% 100.00% Sociedade de Madeiras do Vouga, S.A. Albergaria-a-Velha Madeiras do Vouga - 75.00% 75.00% 100.00% Martifer - Gestão de Investimentos, S.A. Oliveira de Frades MGI - 75.00% 75.00% 100.00% Nagatel Viseu, Promoção Imobiliária, S.A. Oliveira de Frades Nagatel Viseu - 75.00% 75.00% 100.00% Martifer Retail & Warehousing Angola, S.A. Luanda Martifer Retail Angola - 75.00% 75.00% 100.00%
9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION PAGE 35
PERCENTAGE OF SHARE CAPITAL HELD
COMPANY HEAD OFFICE DESIGNATION DIRECTLY INDIRECTLY TOTAL 2013 Martifer Aluminium Pty, Ltd Sidney Sassall - 75.00% 75.00% 100.00% Martifer - Alumínios, S.A. Oliveira de Frades Martifer Alumínios - 75.00% 75.00% 100.00% Martifer Alumínios Angola, S.A. Luanda Martifer Alumínios Angola - 75.00% 75.00% 100.00% Martifer Aluminium Martifer Aluminium Limited Dublin - 75.00% 75.00% 100.00% Irlanda Martifer Aluminium Reino Martifer Aluminium UK Limited London - 75.00% 75.00% 100.00% Unido Martifer Aluminium Martifer Aluminium SAS Rungis - 75.00% 75.00% 100.00% França Martifer Alumínios Ltda São Paulo Martifer Alumínios Brasil - 74.99% 74.99% 99.99% Martifer UK Limited London Martifer UK - 75.00% 75.00% 100.00% MT Construction Maroc, S.A.R.L. Tangier Martifer Marrocos - 75.00% 75.00% 100.00% Martifer - Construções Metálicas, Ltda. Fortaleza Martifer Brasil - 74.85% 74.85% 99.80% Saudi Martifer Constructions LLC Riyadh Martifer Arábia Saudita - 75.00% 75.00% 100.00% Martifer Beteiligungsverwaltungs GmbH Vienna Martifer GmbH 100.00% - 100.00% 100.00% M City Gliwice Sp. Zo.o Gliwice M City Gliwice - 75.00% 75.00% 100.00% Martifer Energy Systems Martifer Energy Systems II, SGPS, S.A. Oliveira de Frades 100.00% - 100.00% 100.00% II Martifer Energia S.R.L. Bucharest Martifer Energia Roménia - 100.00% 100.00% 100.00% Martifer Energia LLC Kiev Martifer Energia Ucrânia - 100.00% 100.00% 100.00% Martifer Wind Energy Systems LLC San Angelo TX Martifer Wind USA - 100.00% 100.00% 100.00% Martifer Energia África do Martifer Energy Systems PTY Cape Town - 85.00% 85.00% 85.00% Sul Navalria – Docas, Construções e Reparações Aveiro Navalria - 100.00% 100.00% 100.00% Navais, S.A. Gebox, S.A. Ílhavo Gebox - 100.00% 100.00% 100.00% West Sea - Estaleiros Navais, Lda. Oliveira de Frades West Sea - 100.00% 100.00% 100.00% Martifer Global SGPS, S.A. Oliveira de Frades Martifer Global 100.00% - 100.00% 100.00% Martifer Construcciones Peru, S.A. Lima Martifer Peru - 100.00% 100.00% 100.00% Global Holding Limited Zebbug Global Holding Limited - 100.00% 100.00% 100.00% Global Engineering & Construction Limited Zebbug Global Engineering - 100.00% 100.00% 100.00%
Martifer Solar SGPS, S.A. Oliveira de Frades Martifer Solar SGPS 100.00% - 100.00% 100.00% Martifer Solar, S.A. Oliveira de Frades Martifer Solar 4) - 55.00% 55.00% 55.00% Martifer Solar Sistemas Martifer Solar Sistemas Solares, S.A. Madrid 4) - 55.00% 55.00% 55.00% Solares Solar Parks Construccion Parques Solares ETVE, 4) Madrid Solar Parks - 55.00% 55.00% 55.00% S.A. Parque Solar Seseña III, S.L. Madrid Seseña III4) - 55.00% 55.00% 55.00% MTS Solar Sistemas Solares, S.A. Mexico City Martifer Solar México4) - 54.45% 54.45% 54.45% Martifer Solar Chile Holding, Lda Santiago Martifer Solar Chile4) - 55.00% 55.00% 55.00% Martifer Solar Chile Operaciones Limitada Santiago Solar Chile Operaciones4) - 55.00% 55.00% 55.00% Martifer Solar Sistemas Solares Equador S.A. Sangolquí Martifer Solar Equador4) - 54.45% 54.45% 54.45% Martifer Solar Servicios Martifer Solar Servicios México Mexico City 4) - 55.00% 55.00% 55.00% México Martifer Solar S.R.L. Milan Martifer Solar Itália4) - 55.00% 55.00% 55.00% MTS1 S.R.L. Siracusa MTS14) - 55.00% 55.00% 55.00% MTS2 S.R.L. Siracusa MTS24) - 55.00% 55.00% 55.00% MTS3 S.R.L. Siracusa MTS34) - 55.00% 55.00% 55.00% Martifer Solar RO S.R.L. Bucharest Martifer Solar Roménia4) - 55.00% 55.00% 55.00% Martifer Solar Inc. S. Francisco CA Martifer Inc. 4) - 55.00% 55.00% 55.00% Martifer Solar USA, Inc. Santa Monica CA AEM 4) - 54.61% 54.61% 54.61% Martifer Aurora Solar, LLC Santa Monica CA Solar Aurora 1) 4) - 54.07% 54.07% 54.07% MT Silverado Fund I LLC S. Francisco CA Silverado 1) 4) - 31.42% 31.42% 31.42% Martifer Solar Finance LLC S. Francisco CA Martifer Solar Finance4) - 55.00% 55.00% 55.00% Martifer Solar Hellas, A.T.E. Athens PVI 1) 4) - 39.13% 39.13% 39.13% Martifer Solar Angola Luanda Martifer Solar Angola 1) 4) - 41.25% 41.25% 41.25% Martifer Solar N.V. Deerlijk Martifer Solar Bélgica4) - 55.00% 55.00% 55.00% Martifer Solar UK Limited London Martifer Solar UK4) - 55.00% 55.00% 55.00% Martifer Solar S.A.S. Lyon Martifer Solar França4) - 55.00% 55.00% 55.00% Martifer Solar República Martifer Solar CZ Prague 4) - 55.00% 55.00% 55.00% Checa Home Energy France SAS Lyon Home Energy França 4) - 55.00% 55.00% 55.00% PVGlass S.r.l Milan PVGlass Itália4) - 55.00% 55.00% 55.00%
PAGE 36 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
PERCENTAGE OF SHARE CAPITAL HELD
COMPANY HEAD OFFICE DESIGNATION DIRECTLY INDIRECTLY TOTAL 2013 MPrime Solar Solutions, S.A. Oliveira de Frades Mprime4) - 55.00% 55.00% 55.00% MPrime GMBH Munich MPrime GMBH4) - 55.00% 55.00% 55.00% Sol Cativante, Lda. Sever do Vouga Sol Cativante 4) - 55.00% 55.00% 55.00% Martifer Solar Investments, B.V. Amsterdam Martifer Solar Holanda4) - 55.00% 55.00% 55.00% Martifer Solar Canadá, Ltd. Toronto Martifer Solar Canadá4) - - - 55.00% MTS6 S.R.L. Siracusa MTS64) - 55.00% 55.00% 55.00% Martifer Solar Martifer Solar SK s.r.o. Dolny Kubin 4) - 55.00% 55.00% 55.00% Eslováquia Ginosa Solar Farm, S.R.L. Rome Ginosa Solar Farm4) - 55.00% 55.00% 55.00% Solar Spritehood S.R.L Rome Solar Spritehood4) - 55.00% 55.00% 55.00% MTS7, S.R.L. Rome MTS74) - 55.00% 55.00% 55.00% Canopy - Naos Paris Canopy Naos4) - 55.00% 55.00% 55.00% Steadfast Fairview Solar, Ltd Andover Steadfast Fairview Solar4) - 55.00% 55.00% 55.00% Steadfast Molland Solar, Ltd Andover Steadfast Molland Solar4) - 55.00% 55.00% 55.00% Martifer Solar UA, LLC Kyiv Martifer Solar Ucrânia4) - 55.00% 55.00% 55.00% Inspira Martifer Solar Limited Mumbai Inspira Martifer Solar 1) 4) - 28.05% 28.05% 28.05% Martifer Solar Senegal 1) Societé Developpement Local SA Dakar 4) - 28.05% 28.05% 28.05%
Martimak Solar Besiktas Martimak1) 4) - 44.00% 44.00% 44.00% Martiper Solar Besiktas Martiper1) 4) - 44.00% 44.00% 44.00% Martifer Solar Singapura PTE. LTD. Singapore Martifer Solar Singapura4) - 55.00% 55.00% 55.00% Martifer Solar Japan KK Tokyo Martifer Solar Japan4) - 55.00% 55.00% 55.00% EVIVA SOLAR 1 LTD Athens Eviva Solar 14) - 54.90% 54.90% 54.90% EVIVA SOLAR 2 LTD Athens Eviva Solar 24) - 54.90% 54.90% 54.90% MTS Francis Court Solar Limited London MTS Francis2) 4) - 55.00% 55.00% 55.00% MTS Spittleborough Solar Limited London MTS Spittleborough4) - - - 55.00% MTS Tonge Solar Limited London MTS Tonge4) - 55.00% 55.00% 55.00% MTS Rydon Solar Limited London MTS Rydon4) - 55.00% 55.00% 55.00% Martifer Solar Martifer Solar MZ, S.A. Maputo 4) - 28.05% 28.05% 28.05% Moçambique 1) Greencoverage Unipessoal, Lda. Oliveira de Frades Greencoverage4) - 55.00% 55.00% 55.00% Martifer Solar, Ltda Pindamonhangaba Martifer Solar Brasil4) - 54.45% 54.45% 54.45% Visiontera Unipessoal, Lda Oliveira de Frades Visiontera4) - 55.00% 55.00% 55.00% Inovsun, Lda. Oliveira de Frades Inovsun4) - 55.00% 55.00% 55.00% Martifer Solar Middle Martifer Solar Middle East Dubai 4) - 55.00% 55.00% 55.00% East Belive in Bright Unipessoal, LDA. Oliveira de Frades Belive in Bright4) - 55.00% 55.00% 55.00% Montidílico Unipessoal, LDA. Oliveira de Frades Montidílico4) - - - 55.00%
Martifer Renewables Martifer Renewables SGPS, S.A. Oliveira de Frades 100.00% - 100.00% 100.00% SGPS Martifer Renewables, S.A. Oliveira de Frades Martifer Renewables SA - 100.00% 100.00% 100.00% Martifer Renovables ETVE, S.A.U. Madrid Martifer Renovables - 100.00% 100.00% 100.00% Eurocab FV 1 S.L. Madrid Eurocab 1 - 100.00% 100.00% 100.00% Eurocab FV 2 S.L. Madrid Eurocab 2 - 100.00% 100.00% 100.00% Eurocab FV 3 S.L. Madrid Eurocab 3 - 100.00% 100.00% 100.00% Eurocab FV 4 S.L. Madrid Eurocab 4 - 100.00% 100.00% 100.00% Eurocab FV 5 S.L. Madrid Eurocab 5 - 100.00% 100.00% 100.00% Eurocab FV 6 S.L. Madrid Eurocab 6 - 100.00% 100.00% 100.00% Eurocab FV 7 S.L. Madrid Eurocab 7 - 100.00% 100.00% 100.00% Eurocab FV 8 S.L. Madrid Eurocab 8 - 100.00% 100.00% 100.00% Eurocab FV 9 S.L. Madrid Eurocab 9 - 100.00% 100.00% 100.00% Eurocab FV 10 S.L. Madrid Eurocab 10 - 100.00% 100.00% 100.00% Eurocab FV 11 S.L. Madrid Eurocab 11 - 100.00% 100.00% 100.00% Eurocab FV 12 S.L. Madrid Eurocab 12 - 100.00% 100.00% 100.00% Eurocab FV 13 S.L. Madrid Eurocab 13 - 100.00% 100.00% 100.00% Eurocab FV 14 S.L. Madrid Eurocab 14 - 100.00% 100.00% 100.00% Eurocab FV 15 S.L. Madrid Eurocab 15 - 100.00% 100.00% 100.00% Eurocab FV 16 S.L. Madrid Eurocab 16 - 100.00% 100.00% 100.00% Eurocab FV 17 S.L. Madrid Eurocab 17 - 100.00% 100.00% 100.00% Eurocab FV 18 S.L. Madrid Eurocab 18 - 100.00% 100.00% 100.00% Eurocab FV 19 S.L. Madrid Eurocab 19 - 100.00% 100.00% 100.00%
9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION PAGE 37
PERCENTAGE OF SHARE CAPITAL HELD
COMPANY HEAD OFFICE DESIGNATION DIRECTLY INDIRECTLY TOTAL 2013 Eviva Energy S.R.L. Bucharest Eviva Roménia - 100.00% 100.00% 100.00% Eviva Nalbant S.R.O. Bucharest Eviva Nalbant - 100.00% 100.00% 100.00% Eviva Agighiol S.R.L. Bucharest Eviva Agighiol - 99.00% 99.00% 99.00% Eviva Casimcea S.R.O. Bucharest Eviva Casimcea - 99.00% 99.00% 99.00% Premium Management Consulting, S.R.L. Bucharest Premium Management - 85.00% 85.00% 85.00% MW Topolog, S.R.L. Bucharest MW Topolog - 99.00% 99.00% 99.00% Martifer Renewables, S.A. Gliwice Eviva Polónia - 100.00% 100.00% 100.00% Martifer Renewables Pty, Ltd. Sidney Eviva Austrália - 100.00% 100.00% 100.00% Eviva Beteiligungsverwaltungs GmbH Vienna Eviva GmbH - 100.00% 100.00% 100.00% Eviva Hidro S.R.L. Bucharest Eviva Hidro 1.00% 99.00% 100.00% 100.00% Martifer Deutschland GmbH Berlin Martifer Deutschland - 100.00% 100.00% 100.00% Wind Farm Odrzechowa Sp. Zo.o Gliwice Wind Odrzechowa - 100.00% 100.00% 100.00% Eviva Gizalki Sp. Zo.o Miastko Eviva Gizalki 5) - - - 100.00% Wind Farm Bukowsko Sp. Zo.o Gliwice Wind Farm Bukowsko - 100.00% 100.00% 100.00% Wind Farm Markowa Sp. Zo.o Gliwice Wind Farm Markowa - 100.00% 100.00% 100.00% Wind Farm Lada Sp. Zo.o Gliwice Wind Farm Lada - 100.00% 100.00% 100.00% Wind Farm Jawornik Sp. Zo.o Gliwice Wind Farm Jawornik - 100.00% 100.00% 100.00% Wind Farm Piersno Sp. Zo.o Gliwice Wind Farm Piersno - 100.00% 100.00% 100.00% Wind Farm Oborniki Sp. Zo.o Gliwice Wind Farm Oborniki - 100.00% 100.00% 100.00% Martifer Renewables Brazil B.V. Amsterdam Renewables Holanda - 100.00% 100.00% 100.00% Martifer Renewables Investments ETVE, S.A. Madrid Eurocab 21 - 100.00% 100.00% 100.00% Renewables Italy Martifer Renewables Italy BV Amsterdam - 100.00% 100.00% 100.00% Holanda Martifer Renewables Martifer Renewables Brasil Participações LTDA Fortaleza - 100.00% 100.00% 100.00% Brasil Vesto EAD Varna Vesto - - - 100.00% DVP1 Limited Varna DVP1 - - - 100.00% DVP2 Limited Varna DVP2 - - - 100.00% Martifer Renováveis - Geração de Energia e Fortaleza Ventania - 55.00% 55.00% 55.00% Participações S.A. Eólica Cajueiro da Praia, Ltda . Fortaleza Cajueiro - 55.00% 55.00% 55.00% Eólica Coqueirais, Ltda. Fortaleza Cacimbas - 55.00% 55.00% 55.00% SBER – Sociedade Brasileira de Energias Fortaleza SBER 1) - 41.25% 41.25% 41.25% Renováveis, Ltda. Melosa – Geração de Energia e Fortaleza Melosa - 55.00% 55.00% 55.00% Participações, Ltda. Eólica Paraipaba, Ltda . Fortaleza Paraipaba - 55.00% 55.00% 55.00% Eólica Chapadão, Ltda. Fortaleza Chapadão - 55.00% 55.00% 55.00% Rosa dos Ventos - Geração e Fortaleza Rosa dos Ventos3) - - - 55.00% Comercialização de Energia, S.A Eólica Macaúbas, Ltda. Fortaleza Macaúbas - 54.99% 54.99% 54.99% Eólica Sobradinho, Ltda. Fortaleza Sobradinho - 54.99% 54.99% 54.99% MSPAR Energia e Participações, SA Barueri MSPAR - 100.00% 100.00% 55.00% Martifer Renewables Martifer Renewables O&M Sp. z o.o. Gliwice - 52.00% 52.00% 52.00% O&M
1) The consolidation of these companies using the full consolidation method is a consequence of the Group having stepped shareholdings, but exercising control at each level.
2) Its prior designation was MTS Downs Farm Solar Limited.
3) This company was classified at 31 december 2013 as a Non current Asset held for sale (Note 20).
4) This company was classified at 30 September 2014 as a Non current Asset held for sale (Note 20).
5) The consolidation of this company at 30 September 2014 is through equity method (Note 16).
PAGE 38 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
COMPANIES CONSOLIDATED THROUGH THE EQUITY METHOD
PERCENTAGE OF SHARE CAPITAL HELD
COMPANY HEAD OFFICE DESIGNATION DIRECTLY INDIRECTLY TOTAL 2013 Metallic Construction Associate companies: Liszki Green Park, Sp. Zo.o Gliwice Liszki Green Park - 33.75% 33.75% 45.00% Martifer Amal, S.A. Nacala Martifer Amal - 35.00% 35.00% 35.00% Oliveira de Martifer Amal, S.A. Martifer Amal - 30.00% 30.00% 30.00% Frades Martimetal Spa Alger Martimetal - 49.00% 49.00% - Joint control companies: Promoquatro – Investimentos Imobiliários, Oliveira de Promoquatro - 37.50% 37.50% 50.00% Lda. Frades M City Bialystok Sp. Zo.o Gliwice M City Bialystok - 37.50% 37.50% 50.00% M City Radom Sp. Zo.o Gliwice M City Radom - 37.50% 37.50% 50.00% M. City Szczecin Sp. Z o.o. Gliwice M City Szczecin - 37.50% 37.50% 50.00% Solar Associate companies: 3) Parque Solar Seseña I, S.L. Madrid Seseña I - 20.63% 20.63% 20.63% Canaverosa Renovables, SL Madrid Canaverosa 3) - 26.94% 26.94% 26.94% Empresa de Energia Renovable Maria del Sol Santiago Maria del Sol3) - 26.95% 26.95% 26.95% Norte S.A. MSN Solar Uno SpA Santiago MSN Solar Uno3) - 26.95% 26.95% 26.95% MSN Solar Dos SpA Santiago MSN Solar Dos3) - 26.95% 26.95% 26.95% MSN Solar Tres SpA Santiago MSN Solar Tres3) - 26.95% 26.95% 26.95% MSN Solar Cuatro SpA Santiago MSN Solar Cuatro3) - 26.95% 26.95% 26.95% MSN Solar Cinco SpA Santiago MSN Solar Cinco3) - 26.95% 26.95% 26.95% FTP Solar LLC New York FTP Solar3) - 11.75% 11.75% 11.75% Martifer Solar Martifer Solar Canadá, Ltd. Toronto 3) - 27.50% 27.50% - Canadá Renewables Associate companies: Eviva Gizalki Sp. Zo.o Miastko Eviva Gizalki 4) - 100.00% 100.00% - Joint control companies: Ventinveste, S.A. Lisbon Ventinveste SA 5.00% 41.00% 46.00% 46.00% Ventinveste Eólica, SGPS, S.A. Lisbon Ventinveste Eólica - 46.00% 46.00% 46.00% Oliveira de Ventinveste Indústria SGPS, S.A. Ventinveste Indústria - 46.00% 46.00% 46.00% Frades Parque Eólico de Torrinheiras, S.A. Lisbon PE Torrinheiras - 46.00% 46.00% 46.00% Parque Eólico do Douro Sul, S.A. Lisbon PE Douro Sul - 46.00% 46.00% 46.00% Parque Eólico do Pinhal do Oeste, S.A. Lisbon PE Pinhal do Oeste - 46.00% 46.00% 46.00% Parque Eólico de Vale Grande. S.A. Lisbon PE Vale Grande - 46.00% 46.00% 46.00% Parque Eólico de Vale do Chão, S.A. Lisbon PE Vale do Chão - 46.00% 46.00% 46.00% Parque Eólico do Cabeço Norte, S.A. Lisbon PE Cabeço Norte - 46.00% 46.00% 46.00% Parque Eólico da Serra do Oeste, S.A. Lisbon PE Serra do Oeste - 46.00% 46.00% 46.00% Parque Eólico do Planalto, S.A. Lisbon PE Planalto - 46.00% 46.00% 46.00% Eviva Dunowo, Sp. Z o.o. Gliwice Eviva Dunowo - 50.00% 50.00% 50.00% SPEE 3 – Parque Eólico do Baião, S.A. Lisbon SPEE 3 - 50.00% 50.00% 50.00% SPEE 2 – Parque Eólico de Vila Franca de Oliveira de SPEE 2 - 50.00% 50.00% 50.00% Xira, S.A. Frades Oliveira de PE Penha da Parque Eólico da Penha da Gardunha, Lda. - 50.00% 50.00% 50.00% Frades Gardunha Others Associate companies: Oliveira de 2) Nutre SGPS, S.A. Prio SGPS 49.00% - 49.00% 49.00% Frades Oliveira de 2) Nutre, S.A. Prio Foods - 49.00% 49.00% 49.00% Frades Oliveira de 2) Nutre - Industrias Alimentares, S.A. Prio Alimentar - 49.00% 49.00% 49.00% Frades Nutre MZ. S.A. Maputo Nutre Moçambique 2) - 49.00% 49.00% 49.00% Nutre Farming Nutre Farming, S.R.L. Bucharest 2) - 49.00% 49.00% 49.00% Roménia Prio AgRomert S.R.L. Bucharest Prio AgRomert 2) - 49.00% 49.00% 49.00% Prio Balta S.R.L. Bucharest Prio Balta 2) - 49.00% 49.00% 49.00%
9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION PAGE 39
PERCENTAGE OF SHARE CAPITAL HELD
COMPANY HEAD OFFICE DESIGNATION DIRECTLY INDIRECTLY TOTAL 2013 Prio Facaieni S.R.L. Bucharest Prio Facaieni 2) - 49.00% 49.00% 49.00% Prio Ialomita S.R.L. Bucharest Prio Ialomita 2) - 49.00% 49.00% 49.00% Prio Rapita S.R.L. Bucharest Prio Rapita 2) - 49.00% 49.00% 49.00% Nutre Farming West Part S.R.L. Bucharest Nutre West Part 2) - 49.00% 49.00% 49.00% Prio Terra Agricola S.R.L. Bucharest Prio Terra Agricola 2) - 49.00% 49.00% 49.00% Prio Turism Rural S.R.L Bucharest Prio Turism Rural 2) - 49.00% 49.00% 49.00% Agromec Balaciu Bucharest Agromec Balaciu 2) - 42.60% 42.60% 42.60% Miharox S.R.L. Bucharest Miharox 2) - 40.47% 40.47% 40.47% Zimbrul. S.A. Bucharest Zimbrul 2) - 49.00% 49.00% 49.00% Agrozootehnica. S.A. Bucharest Agrozootehnica 2) - 48.98% 48.98% 48.98% Prio Agrotrans S.R.L. Bucharest Prio Agrotrans 2) - 49.00% 49.00% 49.00% S. Luís do 2) Nutre Brasil LTDA Prio Foods Brasil - 49.00% 49.00% 49.00% Maranhão Prio Extractie S.R.L. Bucharest Prio Extractie 2) - 22.05% 22.05% 22.05% Prio Agro Industries. Sp. Z o.o. Gliwice Prio Polónia 2) - 49.00% 49.00% 49.00% Prio Biocombustibil S.R.L. Bucharest Prio Biocombustibil 2) - 22.05% 22.05% 22.05% Prio Meat S.R.L Bucharest Prio Meat 2) - 49.00% 49.00% 49.00% Prio Foods – AJFS Construções, ACE Lisbon Prio Foods ACE 2) - 24.50% 24.50% 24.50% Nutre Farming B.V. Amsterdam Nutre Farming 2) - 49.00% 49.00% 49.00% Bunge Prio Bunge Prio Cooperativa U.A. Amsterdam 2) - 22.05% 22.05% 22.05% Cooperativa Bunge Roménia S.R.L. Buzau Bunge Roménia 2) - 22.05% 22.05% 22.05% Centralrest, Lda Ilhavo Centralrest 2) - 9.80% 9.80% 9.80% Prio Agriculture, B.V. Delft Prio Holanda 2) - 49.00% 49.00% 49.00% Porthold Project Development BV Amsterdam Porthold 2) - 49.00% 49.00% 49.00% Fertilis Agro-Indústrias, Lda Luanda Fertilis 2) - 29.40% 29.40% 29.40% Oliveira de Prio Energy SGPS. S.A. Prio Energy SGPS 1) 5,00% - 5.00% 10.00% Frades Oliveira de Prio Biocombustíveis Prio Biocombustíveis. S.A. - 5.00% 5.00% 10.00% Frades 1) Oliveira de Prio Energy. S.A. Prio Energy 1) - 5.00% 5.00% 10.00% Frades Mondefin Coimbra Mondefin 1) - 5.00% 5.00% 10.00% Oliveira de Prio Parque de Tanques de Aveiro, S.A. Prio Tanques 1) - 5.00% 5.00% 10.00% Frades Oliveira de 1) Prio.E-Electric, S.A. Prio.E-Electric - 5.00% 5.00% 10.00% Frades Oliveira de PRIO.E - Mobility Solutions, Lda _PT Park Charge 1) - 5.00% 5.00% 10.00% Frades Oliveira de 1) Prio. E – SGPS, S.A. Prio E SGPS - 5.00% 5.00% 10.00% Frades Oliveira de Share Motivation, Lda. Share Motivation 1) - 5.00% 5.00% 10.00% Frades IMO 505, Lda Coimbra IMO 5051) - 5.00% 5.00% - Prio Gas Lisboa, SA Aveiro Prio Gas 1) - 2.50% 2.50% -
1) The consolidation of this company through the equity method results from the Group having significant influence of its parent company, which in turn has significant influence on the investee. 2) The consolidation of this company through the equity method was stopped because Group decided classify the financial investment in Nutre SGPS as Non- current asset held for sale (Note 20). 3) This company was classified at 30 September 2014 as a Non current Asset held for sale (Note 20). 4) The consolidation of this company through the equity method results from the Group having significant influence in the company (Note 16).
During the 9 month period ended 30 September of 2014 and during 2013 the changes occurred in the consolidation perimeter were as follows:
PAGE 40 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
Incorporated companies:
In the 9 month period ended 30 September of 2014:
HEAD OFFICE
Metallic Construction
Associated companies: Martimetal Spa Argel
In 2013:
HEAD OFFICE
Metallic Construction Subsidiary companies:
Martifer Aluminium SAS Rungis Martifer Alumínios Ltda São Paulo West Sea - Estaleiros Navais, Lda. Oliveira de Frades Martifer Construcciones Peru, S.A. Lima Global Holding Limited Zebbug Global Engineering & Construction Limited Zebbug
Associated companies: Martifer Amal, S.A. (Portugal) Oliveira de Frades
Solar Subsidiary companies: Martifer Solar Servicios México Mexico City Martifer Solar Japan KK Tokyo MTS Francis Court Solar Limited London MTS Spittleborough Solar Limited London MTS Tonge Solar Limited London MTS Rydon Solar Limited London Visiontera Unipessoal, Lda Oliveira de Frades Martifer Solar Middle East Dubai Belive in Bright Unipessoal, Lda. Oliveira de Frades Montidílico Unipessoal, Lda. Oliveira de Frades
Associated companies: MSN Solar Uno SpA Santiago MSN Solar Dos SpA Santiago MSN Solar Tres SpA Santiago MSN Solar Cuatro SpA Santiago MSN Solar Cinco SpA Santiago FTP Solar LLC New York
Renewables Subsidiary companies: Eólica Macaúbas, Ltda. Fortaleza Eólica Sobradinho, Ltda. Fortaleza MSPAR Energia e Participações, SA Barueri Martifer Renewables O&M Sp. z o.o. Gliwice
Others:
Associated companies: Nutre Farming West Part S.R.L. Bucharest
9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION PAGE 41
Acquired companies:
In the 9 month period ended 30 September of 2014:
HEAD OFFICE
Others:
Associated companies:
IMO 505, Lda Coimbra Prio Gas Lisboa, SA Aveiro
In 2013:
HEAD OFFICE
Others:
Associated companies:
Fertilis Agro-Indústrias, Lda Luanda
Sold / dissolved companies:
In the 9 month period ended 30 September of 2014:
HEAD OFFICE
Solar MTS Spittleborough Solar Limited London Montidílico Unipessoal, LDA. Oliveira de Frades
Renewables Vesto EAD Varna DVP1 Limited Varna DVP2 Limited Varna Rosa dos Ventos - Geração e Comercialização de Energia, S.A Fortaleza
In 2013:
HEAD OFFICE
Solar Subsidiary companies: MTS4 S.R.L. Siracusa MPrime Italia S.r.l Oliveira de Frades Sol Cativante VII, Lda. Viseu Eviva Mepe Athens MTS Trewidland Solar, Ltd London Steadfast Apsley Solar, Ltd Andover LRCC – La Rad Campo Charro – Energias Renováveis, Lda. São Martinho do Porto
Renewables Subsidiary companies: Martifer Renewables Bippen GmbH Berlin Energia Wiatrowa Sp. Zo.o Gliwice
Joint control companies: Macquarie Capital Wind Fund Pty Limited Sidney
PAGE 42 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
Changes in the consolidation method:
In the 9 month period ended 30 September of 2014:
MTS 3 - from equity method to full consolidation due to the increase in the shareholding held by Martifer Solar Itália from 49% to 100%. Martifer Solar Canadá - from full consolidation to equity method due to the decrease in the shareholding held by Martifer Solar Investments B.V. from 100% to 50%. Eviva Gizalki - from full consolidation to equity method due to the loss of control, in particular by not having autonomy to manage its financial and operational policies (Note 16).
In 2013:
Prio Agriculture B.V. (Prio Holanda) – from full consolidation to equity method due to its sale by Martifer Renewables SGPS, S.A. to Nutre SGPS, S.A. Porthold Project Development BV (Porthold) - from full consolidation to equity method due to the sale of Prio Agriculture B.V. by Martifer Renewables SGPS, S.A. to Nutre SGPS, S.A. MTS 3 – from full consolidation to equity method due to the decrease in the shareholding held by Martifer Solar Itália from 100% to 49%. Ventinveste Indústria SGPS, S.A. – from full consolidation to equity method due to loss of control over same, namely for not managing its financial and operational policies.
Other changes in the consolidation perimeter: In the 9 month period ended 30 September of 2014: MS Par Energia e Participações – transfer of the total shares held by Martifer Renováveis, SA to Martifer Renewables Brasil Participações, Ltda. Prio Energy SGPS - decrease in the shareholding held by Martifer SGPS, S.A. from 10% to 5%. Martifer Metallic Constructions SGPS, S.A - decrease in the shareholding held by Martifer SGPS, S.A. from 100% to 75%. Martifer Aluminium PTY – transfer of the total shares held by Martifer Alumínios, SA to Martifer Metallic Constructions SGPS, SA.
In 2013: Porthold Project Development BV (Porthold) – increase in the shareholding held by Prio Agriculture B.V from 55% to 100%. Eviva Gizalki Sp.Zo.o (Eviva Gizalki) – increase in the shareholding held by Martifer Renewables SGPS, S.A. from 72% to 100%. Martifer Solar USA, Inc. (AEM) – increase in the shareholding held by Martifer Solar Inc. from 63.5% to 99.293%. Eviva Nalbant S.R.O. (Eviva Nalbant) – increase in the shareholding held by Eviva Energy S.R.L. from 99% to 100%. Rosa dos Ventos S.A. (Rosa dos Ventos) – increase in the shareholding held by Martifer Renováveis-Geração de Energia e Participações, S.A. from 97.5% to 100%. Prio Energy SGPS – decrease in the shareholding held by Martifer SGPS, S.A. from 49% to 10%. PV Glass, SA – merger by incorporation in Martifer Solar S.A. PV Glass, Srl – change in shareholder structure as a result of the merger by incorporation of PV Glass in Martifer Solar S.A. M City Gliwice Sp. Zo.o – increase in the shareholding held by Martifer GmbH from 52.6% to 97.8% and a further increase of 2% through Martifer Metallic Constructions, SGPS, S.A.
3. INFORMATION BY BUSINESS SEGMENTS
The Group bases its disclosure of information for primary segments on its internal organisation in terms of management.
The Group is organised in two business areas: ‘Metallic Construction’ and ‘RE Developer’ that are coordinated and supported by Martifer SGPS.
9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION PAGE 43
The ‘Metallic Construction’ business area includes all the construction activities of steel structures, aluminium façades and glass and stainless steel solutions. It includes also the wind power division, components, turbine assembly and turnkey wind farm delivery, engineering division and naval industry. The ‘RE Developer’ segment includes the promotion and development of projects of renewable energy, with special emphasis in the wind sector.
Amounts related with Martifer SGPS, Martifer Inovação e Gestão S.A. (MIG) and Martifer Gestiune Si Servicii, S.R.L. (MIG RO) are reported as ‘Others’.
In September 2014, Group decided to classify the ‘Solar’ segment (composed by Martifer Solar, SA and its subsidiaries) as a Non current asset held for sale. Since the requirements of IFRS 5 were fulfilled, the contribution to Martifer’s consolidated results, coming from this segment, is presented in an autonomous line in the Consolidated P&L and the values YoY were adjusted to allow comparison. The detail of this contribution is presented in note 20.
The accounting policies used in the preparation of the information by business segments is the same used in the preparation of the attached financial statements (Note 1).
At 30 September 2014 and 2013, the breakdown of sales and services rendered by primary segments is as follows:
SALES TO EXTERNAL CUSTOMERS INTERSEGMENT SALES TOTAL
9M'13 9M'13 9M'13 9M'14 9M'13 9M'14 9M'13 9M'14 9M'13 PRO FORMA PRO FORMA PRO FORMA
Metallic Construction 126,488,697 191,912,019 191,912,019 23,795,755 31,515,569 31,515,569 150,284,452 223,427,588 223,427,588 Solar (*) - - 209,833,159 - - 61,053,835 - - 270,886,994 RE Developer 6,520,224 13,850,987 13,850,987 281,256 1,601,569 1,601,569 6,801,480 15,452,556 15,452,556 Others 1,049,024 863,094 863,093 3,235,917 2,731,480 2,731,480 4,284,941 3,594,574 3,594,573 134,057,945 206,626,101 416,459,259 27,312,928 35,848,618 96,902,453 161,370,873 242,474,719 513,361,712
Intersegment (23,972,685) (33,323,090) (94,120,968) eliminations Own work (3,340,243) (2,525,528) (2,781,485) capitalized (Note 5) 134,057,945 206,626,101 416,459,259 (*) Discontinued activity (Note 20)
Sales and services rendered by geographical segments are as follows:
9M'13 9M'14 9M'13 PRO FORMA
Iberian Peninsula Metallic Construction 39,578,527 76,053,105 75,973,576 Solar (*) - - 37,944,926 RE Developer 3,372,524 4,373,370 4,373,370 Others 931,340 738,668 738,668 European Union (other) Metallic Construction 31,392,444 37,292,849 37,292,849 Solar (*) - - 86,581,952 RE Developer 2,155,194 4,947,951 4,947,951 Others 117,684 44,898 44,898 Other markets Metallic Construction 55,517,726 78,645,594 78,645,594 Solar (*) - - 85,385,808 RE Developer 992,506 4,529,666 4,529,666 134,057,945 206,626,101 416,459,259 (*)Discontinued activity (Note 20)
PAGE 44 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
At 30 September 2014 and 2013, the earnings before interest, taxes, amortizations, provisions and impairment losses (EBITDA), earnings before interest and taxes (EBIT) and profit after tax by primary segments are as follows:
EBITDA EBIT PROFIT AFTER TAX
9M'13 9M'13 9M'13 9M'14 9M'13 9M'14 9M'13 9M'14 9M'13 PRO FORMA PRO FORMA PRO FORMA
Metallic Construction (3,206,826) (13,846,976) (13,846,976) (39,696,082) (27,354,749) (27,354,749) (51,310,414) (43,563,849) (43,563,849) Solar(*) - - 12,004,048 - - 8,362,360 - - 184,128 RE Developer 11,775,191 21,335,766 21,335,766 5,809,552 4,316,395 4,316,395 4,543,572 2,247,923 2,247,923 Others (49,767) (1,183,679) 146,228 (1,181,689) (2,567,274) (1,237,366) (7,639,247) (8,930,133) (7,601,606) 8,518,598 6,305,111 19,639,066 (35,068,219) (25,605,628) (15,913,360) (54,406,089) (50,246,059) (48,733,404) (*)Discontinued activity (Note 20)
The Group’s net assets and liabilities by operating segments at 30 September 2014 and 31 December 2013 are as follows:
ASSETS LIABILITIES
30 SEPTEMBER 31 DECEMBER 30 SEPTEMBER 31 DECEMBER
2014 2013 2014 2013
Metallic Construction 350,500,939 331,230,804 349,527,107 307,847,934 Solar (*) 185,938,523 254,606,180 132,537,308 180,727,147 RE Developer 158,442,508 166,932,839 44,176,134 44,917,163 Others 529,422,535 525,799,738 173,648,949 163,855,470 Intra-group eliminations (506,107,956) (490,796,517) (58,949,993) (49,266,682) 718,196,549 787,773,044 640,939,505 648,081,032 (*)Discontinued activity (Note 20)
The Group’s capital expenditures (acquisition of tangible and intangible assets) and amortizations, by operating segments, till 30 September 2014 and 2013, are as follows:
CAPITAL EXPENDITURES AMORTIZATIONS
30 SEPTEMBER 30 SEPTEMBER 9M'14 9M'13
2014 2013 EURO EURO
Metallic Construction 10,137,084 4,568,007 5,059,566 5,369,165
Solar (*) 595,736 3,747,555 - 2,277,473 RE Developer 1,008,441 1,881,150 4,858,170 3,852,544 Others 5,477 62,394 1,131,924 1,383,595 11,746,738 10,259,106 11,049,660 12,882,777 (*)Discontinued activity (Note 20)
4. SALES AND SERVICES RENDERED
At 30 September 2014 and 2013, the breakdown of sales and services rendered is as follows:
9M'13 9M'14 9M'13 PRO FORMA Revenue from the sale of merchandise 11,620,545 28,495,638 101,704,438
Revenue from the sale of goods 42,692,101 71,773,610 108,592,237 Services rendered 79,745,299 106,356,853 206,162,584 134,057,945 206,626,101 416,459,259
9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION PAGE 45
5. OTHER OPERATIONAL GAINS
At 30 September 2014 and 2013 the breakdown of the caption ‘Other operational gains’ is as follows:
9M'13 9M'14 9M'13 PRO FORMA
Change in production (138,120) 2,525,528 18,234,147 Own work capitalised 3,340,243 1,806,308 2,781,485 Reversals of impairment losses 782,507 1,817,132 2,422,681 Supplementary income 1,109,156 915,964 1,060,300 Capital Gains in non-financial assets 14,736,137 12,479,292 12,689,254 Foreign exchange gains 2,879,649 4,256,685 6,590,692 Other operational gains 1,471,943 3,556,239 4,045,939 Total 24,181,515 27,357,148 47,824,498
The amount included under the caption 'Own work capitalized’, during the period ended 30 September 2014 is related primarily with work carried out in Brazil in the 'Metallic Construction’ segment.
At 30 September 2014 the caption ‘Capital Gains in non-financial assets’ includes the gain with the sale of 100% of shares of Rosa dos Ventos Geração e Comercialização de Energia, SA by the amount of $R70,3m to the Brazilian company CPFL. The sale was agreed by the entities at 18 June 2013
6. COST OF GOODS SOLD
At 30 September 2014 and 2013 the cost of goods sold is as follows:
RAW- MATERIALS, 30 SEPTEMBER 2013 MERCHANDISE SUBSIDIARIES AND TOTAL OTHER CONSUMABLES Opening balance 6,557,447 10,825,365 17,382,812 Purchases 60,696,754 98,058,496 158,755,250 Changes in the consolidation perimeter, currency exchange differences, transfers and others 4,083,183 54,095 4,137,278 Reclassification of assets 6,416,400 - 6,416,400 Closing balance 12,540,306 13,435,754 25,976,060 65,213,478 95,502,202 160,715,680
RAW- MATERIALS, 30 SEPTEMBER 2013 PRO FORMA MERCHANDISE SUBSIDIARIES AND TOTAL OTHER CONSUMABLES Opening balance 6,557,447 10,825,365 17,382,812 Purchases 6,605,531 55,989,926 62,595,457 Changes in the consolidation perimeter, currency exchange differences, transfers and others 1,316,434 495,782 1,812,216 Reclassification for Non current asset held for sale (Nota 20) (2,308,509) (5,084,928) (7,393,437) Closing balance 4,042,859 9,585,347 13,628,206 8,128,044 52,640,798 60,768,842
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RAW- MATERIALS, 30 SEPTEMBER 2014 MERCHANDISE SUBSIDIARIES AND TOTAL OTHER CONSUMABLES Opening balance 5,663,577 11,458,141 17,121,718 Purchases 6,492,247 30,881,903 37,374,150 Changes in the consolidation perimeter, currency exchange differences, transfers and others (424,215) 22,668 (401,547) Reclassification for Non current asset held for sale (Nota 20) (1,596,147) (3,386,662) (4,982,809) Closing balance 3,145,304 8,938,200 12,083,504 6,990,158 30,037,850 37,028,008
7. SUBCONTRACTORS
At 30 September 2014 and 2013 the subcontractors is as follows:
9M'13 9M'14 9M'13 PRO FORMA Subcontractors 24,484,436 51,167,749 111,123,713 24,484,436 51,167,749 111,123,713
The subcontracts in 2014 are related with construction works carried out in ‘Metallic Construction’ segment.
8. EXTERNAL SUPPLIES AND SERVICES
At 30 September 2014 and 2013 the external supplies and services are as follows:
9M'13 9M'14 9M'13 PRO FORMA
Transportation of goods 4,570,882 11,489,409 13,877,959 Specialized works 8,592,326 6,350,763 25,767,774 Leases and rents 8,941,915 11,418,665 13,362,965 Service Fees 153,989 9,724,747 10,874,395 Travelling expenses 3,099,235 3,605,284 4,797,306 Electricity and Fuel 1,949,648 2,571,428 3,119,588 Insurance 1,656,748 1,737,727 2,602,667 Maintenance and repairs 1,197,474 1,114,972 1,267,985 Communications 693,633 786,652 1,271,517 Security 659,054 519,614 1,202,870 Legal and notarial fees 977,478 341,855 919,076 Commissions 140,812 231,542 604,629 Advertising 230,002 172,687 748,549 Cleaning, health and safety 426,280 396,925 509,609 Tools and devices 228,499 439,728 463,198 Other 1,984,386 1,947,872 2,755,956 35,502,361 52,849,870 84,146,042
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9. STAFF COSTS
At 30 September 2014 and 2013, staff costs are as follows:
9M'13 9M'14 9M'13 PRO FORMA Salaries 33,570,711 36,312,388 47,428,099 Social contributions 9,620,286 10,963,047 13,866,620 43,190,997 47,275,435 61,294,719
The caption ‘social contributions’ includes mainly the social security contributions, the food and health subsidies, insurance costs and dismissal compensation.
10. OTHER OPERATIONAL LOSSES
At 30 September 2014 and 2013, the caption ‘Other operational losses’ is as follows:
9M'13 9M'14 9M'13 PRO FORMA
Taxes 2,881,887 3,534,965 4,557,816 Impairment losses: Trade debtors (Note 18) 139,061 707,723 6,788,025 Other impairment losses - 2,029,269 2,029,269 Losses in non-financial assets 3,265,864 196,990 611,873 Foreign exchange losses 1,259,666 3,560,260 6,870,471 Trade debtors write-off - 1,407,218 1,407,218 Other operational losses 1,968,582 4,179,817 5,099,865 Total 9,515,060 15,616,242 27,364,537
The amount in caption ‘Losses in non-financial assets’ refers mainly to costs with wind projects that were discontinued, in ‘RE Developer’ segment.
11. PROVISIONS AND IMPAIRMENT LOSSES IN FIXED ASSETS
The provisions and impairment losses during the nine month periods ended 30 September of 2014 and 2013 were as follows:
9M'13 9M'14 9M'13 PRO FORMA Impairment losses 2,107,546 18,478,809 18,478,809
Provisions (Note 24) Arising from the use of the equity method 332,976 685,803 685,803 Quality guarantees (14,962) - 31,535 Onerous contracts 22,000,000 - - Legal claims in progress 7,964,299 1,197,016 1,197,016 Others 147,298 943,806 2,276,486 30,429,611 2,826,625 4,190,840
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The increase of provisions until 30 September 2014 is mainly due to the booking of a provision in Martifer Construções related with a compensation to be paid to Alstom according to the arbitration proceedings of Sostanj (Slovenia) and Manheim (Germany). This compensation was established and paid in the end of 1st half 2014.
Until 30 September 2014, the amount of provisions for onerous contracts is mainly concerned with the estimated liabilities associated with possible contractual obligations in operations, in 'Metallic Constructions' segment.
12. NET FINANCIAL RESULTS
The net financial results for the periods ended on 30 September 2014 and 2013 can be analysed as follows:
9M'13 FINANCIAL INCOME 9M'14 9M'13 PRO FORMA Loans and accounts receivable (including bank deposits) - Interest income 862,333 1,963,012 3,465,850 Financial assets available for sale - Dividend income 27,341 27,341 - Gains on the sale of financial assets 32,470 17,888,615 17,383,756 Other financial income related to other financial assets - Foreign exchange gains 2,508,839 1,764,804 4,036,839 - Other financial income 577,001 164,591 972,792 3,980,643 21,808,363 25,886,578
9M'13 FINANCIAL EXPENSES 9M'14 9M'13 PRO FORMA Loans and accounts payable - Interest expenses in bank loans and in finance leases 17,710,245 16,484,933 23,825,524 - Of which included in the acquisition cost of assets in progress (16,987) (49,982) (49,982) Available for sale financial assets - Losses on the sale of financial assets 89,267 268,305 268,305 Other financial expenses related to other financial liabilities - Foreign exchange losses 1,155,731 3,236,471 6,656,088 - Other financial expenses 3,017,645 4,619,879 8,766,585 21,955,901 24,559,606 39,466,520
The captions 'Foreign exchange gains / (losses)' are related to the occurrence of currency fluctuations, particularly in affiliated companies out of Euro zone.
13. GAINS/ (LOSSES) IN ASSOCIATED COMPANIES AND JOINT ARRANGEMENTS
At 30 September 2014 and 2013, the gains and losses on associated companies and joint-ventures are as follows:
9M'13 9M'14 9M'13 PRO FORMA Grupo Nutre (165,962) (18,559,356) (18,559,356) Others 1,065,188 1,914,597 2,127,646 899,226 (16,644,759) (16,431,710)
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14. INCOME TAX
At 30 September 2014 and 2013, the reconciliation between current tax and income tax of the period is summarized as follows:
9M'13 9M'14 9M'13 PRO FORMA Current tax 2,642,846 738,312 2,092,351 Deferred tax - generated by temporary differences (118,034) - 107,223 Deferred tax - reversal of temporary differences (43,747) 743,474 1,256,237 Effect of changes in the income tax rate (19,930) (19,930) (19,930) Deferred tax - tax losses recognition (77,351) 3,792,272 (590,260) Correction to the tax of previous year - - (27,531) Other (121,945) (9,697) (9,697) Deferred tax (381,008) 4,506,119 716,042 Income tax 2,261,838 5,244,431 2,808,393
15. EARNINGS PER SHARE
Martifer SGPS only issued ordinary shares, and as such, no shares have special voting or dividend rights.
There is no situation in the Group that may represent a reduction of earnings per share caused by options, "warrants" convertible bonds or other rights attached to ordinary shares.
Therefore, at 30 September 2014 there were no differences between the basic earnings per share and the diluted earnings per share calculation.
The share capital of Martifer SGPS is represented by 100,000,000 ordinary shares, fully paid, representing a share capital of Euro 50,000,000.
The weighted average number of shares outstanding is deducted of 2,215,910 treasury stocks acquired by Martifer SGPS.
At 30 September 2014 and 2013, the basic and diluted earnings per share can be summarised as follows:
9M'13 9M'14 9M'13 PRO FORMA Profit for the year (I) (60,260,194) (50,201,524) (50,201,524) Weighted average number of shares outstanding (II) 97,784,090 97,784,090 97,784,090 Basic and diluted earnings per share (I) / (II) (0.6163) (0.5134) (0.5134) from continuing operations (0.4789) (0.5072) (0.5134) from discontinued activity (0.1374) (0.0062) -
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16. FINANCIAL ASSETS UNDER THE EQUITY METHOD
At 30 September 2014 and 31 December 2013, financial assets under the equity method are as follows:
30 SEPTEMBER 2014 31 DECEMBER 2013
Prio Energy 1,550,387 2,686,807 Eviva Gizalki 3,913,011 - Martimetal 700,861 - SPEE 3 - Parque eólico de Baião, SA 496,032 499,853 SPEE 2 - Parque eólico de Vila Franca de Xira, SA 1,431,019 1,048,183 FTP Solar LLC - 36,287,978 Promoquatro - Investimentos Imobiliários, Lda 52,751 120,260 Martifer Amal, S.A. (Portugal) - 15,000 Martifer Amal, S.A. (Moçambique) 142,270 285,771 Canaverosa - 136,301 Parque Sesena 1 - 196,663
Other 319 5,254 8,286,650 41,282,069
In the end of the 1st half of 2014 Martifer SGPS decreased its equity investment in Prio Energy SGPS to 5%. Since the company maintains a position in the Board of that associate, and consequently significant influence exists, the consolidation through equity method was kept.
Martifer Renewables, SGPS, S.A. agreed in 2014 with the IKEA Retail Sp. Zo.o., the sale of total shares of Eviva Gizalki, Sp. Zo.o., implying the compliance of certain requirements set out in the contract. The terms of the contract, which provides that the company builds a wind farm until 2016, do not allow Martifer Renewables SGPS maintain the control of the subsidiary but only significative influence in its management. As a consequence the consolidation method changed from full consolidation to equity method.
Since the financial assets held in FTP Solar, Canaverosa and Parque Solar Sesena 1 are part of ‘Solar’ segment, they are at 30 September 2014 included in the line ‘Non current assets held for sale’ of Balance sheet (Note 20).
At 30 September 2014 and 31 December 2013, the movement occurred in this caption is as follows:
30 SEPTEMBER 2014 31 DECEMBER 2013
Opening balance 41,282,070 15,680,011
Acquisitions - 36,302,978 Application of the equity method (282,554) 1,706,974 Decrease in share capital - (2,043,840) Sales - (10,208,467) Changes resulting from the loss of control in subsidiaries (32,707,931) 4,900 Effect of foreign currency exchange differences - (22,387) Other changes (4,935) (138,099) Closing balance 8,286,650 41,282,069
17. AVAILABLE FOR SALE INVESTMENTS
At 30 September 2014 and 31 December 2013, available for sale investments are as follows:
30 SEPTEMBER 31 DECEMBER
2014 2013
Non-current financial investment 230,956 338,166
Others 1,447,274 237,457 1,678,230 575,621
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At 30 September 2014 and 31 December 2013, the movement occurred in the caption ‘Available for sale investments’ is as follows:
30 SEPTEMBER 31 DECEMBER
2014 2013 Opening balance 575,622 2,310,267
Additions 1,378,994 306,925 Reductions (25,827) (235,268) Reclassification to Non-current assets held for sale (Note 20) - (1,607,994) Changes in the consolidation perimeter - (189,688) Other (250,560) (8,619) Closing balance 1,678,230 575,621
18. TRADE AND OTHER RECEIVABLES
The detail of the caption ‘trade and other receivables’, for the periods ended at 30 September 2014 and 31 December 2013 is as follows:
NON CURRENT CURRENT 30 SEPTEMBER 31 DECEMBER 30 SEPTEMBER 31 DECEMBER
2014 2013 2014 2013 Cost: Trade receivables:
Trade receivables 2,502,880 29,132,168 71,999,498 123,985,850 Notes receivables - - 94,096 763,697 Doubtful trade receivables - - 12,334,977 25,620,958 2,502,880 29,132,168 84,428,571 150,370,505
Other receivables: Related companies 37,009,541 61,480,963 17,865,530 14,993,979 Advances to suppliers 4,736 2,718 5,520,406 10,199,844 Others 388,073 1,982,307 27,186,510 33,699,529 37,402,350 63,465,988 50,572,446 58,893,352
39,905,230 92,598,156 135,001,017 209,263,858
At 30 September 2014 and 31 December 2013, impairment losses in accounts receivables are as follows:
NON CURRENT CURRENT
30 SEPTEMBER 31 DECEMBER 30 SEPTEMBER 31 DECEMBER
2014 2013 2014 2013 Accumulated impairment losses:
Doubtful trade receivables - - 12,403,091 28,754,831 Other receivables 118,490 119,154 3,930,504 7,437,595 118,490 119,154 16,333,595 36,192,426
Carrying amount – trade receivables 2,502,880 29,132,168 72,025,480 121,615,674
Carrying amount - other receivables 37,283,860 63,346,834 46,641,942 51,455,757
Total 39,786,740 92,479,001 118,667,422 173,071,432
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19. OTHER CURRENT ASSETS
At 30 September 2014 and 31 December 2013, the breakdown of the caption ‘Other current assets’ is as follows:
30 SEPTEMBER 2014 31 DECEMBER 2013
Accrued income: Construction contracts Cost 67,849,297 102,714,982 Impairment losses (4,990,722) (5,769,831) Carrying amount 62,858,575 96,945,151 Interest to be received 808,436 31,309 Other accrued income 3,053,546 4,225,822 66,720,557 101,202,282
Prepayments: Insurances 514,805 732,194 Financial expenses 337,295 533,108 Rents 96,727 485,044 Other prepayments 484,427 797,360 1,433,254 2,547,706
Other (current) financial assets 865,953 365,109
69,019,764 104,115,097
20. NON-CURRENT ASSETS HELD FOR SALE
The Group is in negotiations for the sale of the real estate project in Szczecin (Poland), previously classified as an investment property, with its sale being highly probable. The Group continues committed to selling these assets. Thus, the conditions set by IFRS 5 to the maintenance of this asset as Non-current asset held for sale for a period higher than 12 months are satisfied.
In current year Martifer Group put into effect an active plan to sell the equity investment of 49% in Nutre SGPS. As the transfer of the participation is highly probable, Group decided, under IFRS 5, classify the financial investment as Non-current asset held for sale and stop the consolidation under equity method, as defined in IAS 28.
Martifer SGPS decided in September, to focus the Group’s activity in Metallic construction (Steel structures, Aluminium and glass façades, Oil & Gas infrastructures and Naval Industry) and fulfil the active sale plan of its 55 % share on Martifer Solar. As the sale is highly likely, Martifer Solar’s assets and liabilities were classified as “non current assets held for sale” and “liabilities associated to non current assets held for sale”, respectively, being Martifer Solar Net Profit presented as “discontinued operations’ result” (the values YoY were adjusted to allow comparison).
The breakdown of assets and liabilities, as well as the profit for the year of assets held for sale at 31 December 2013 and 30 September 2014 is as follows:
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30 SEPTEMBER 31 DECEMBER
2014 2013 Non-current Assets Goodwill 1,988,046 Intangible assets 1,054,440 - Tangible assets 20,609,785 22,048,574 Investment property 5,070,532 5,002,006 Financial assets under the equity method 59,463,335 - Available for sale investments 517,630 1,357,067 Other non-current receivables 34,108,982 - Deferred tax assets 9,695,192 - Current assets - - Inventories 4,533,547 - Trade receivables 27,399,810 1,865,298 Other receivables 11,248,172 246 Current tax assets 5,963,484 3,060 Other current assets 15,808,055 135,622 Cash and cash equivalents 13,146,717 400,175 Derivatives 1,327 - Non current assets held for sale 210,609,055 30,812,048
Non-controlling interests attributable to non current assets held for sale 22,061,857 2,891,441
Non-current liabilities Borrowings 26,156,427 10,889,344 Obligation under finance leases 646,631 - Other non-current liabilities 533,004 - Provisions 5,786,000 - Deferred tax liabilities 848,433 - Current liabilities - - Borrowings 39,223,733 - Obligation under finance leases 179,565 - Trade payables 24,781,017 2,621 Other payables 4,038,788 255,297 Current tax liabilities 9,733,927 29,777 Other current liabilities 20,534,966 9,234 Derivatives 74,817 - Liabilities related with non current assets held for sale 132,537,308 11,186,273
Net amount of Non current assets held for sale 56,009,889 16,734,334
9M' 2014
Sales and services rendered 64,302,594 Other income 2,959,683 Cost of goods sold (31,224,866) Subcontractors (17,995,166) External supplies and services (20,688,214) Staff costs (11,894,387) Other operational gains and losses (6,597,097) (21,137,454) Amortizations (1,947,635) Provisions and Impairment losses (717,922) Operating income (23,803,010) Financial income 5,949,162 Financial expenses (6,575,254) Gains / (losses) on associate companies and joint arrangements (264,328) Profit before tax (24,693,430) Income tax 120,366
Profit for the year (24,573,064)
Attributable to: non-controlling interests (11,137,785) owners of Martifer (13,435,279)
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At 31 December 2013 this caption included also assets and liabilities of entity Rosa dos Ventos Geração e comercialização de Energias, S.A. which was already sold, as well as the land and factory of Martifer Polska, Sp. Zo.o., in ‘Metallic Construction’ segment.
21. SHARE CAPITAL, TREASURY SHARES AND NON-CONTROLLING INTERESTS
Share capital
Martifer SGPS, SA share capital, fully subscribed and paid at 30 September 2013, amounts to Euro 50,000,000 and it is represented by 100,000,000 bearer shares with a nominal value of 50 cents each. All shares have the same rights, including one vote per share. During first nine months of 2014 and 2013, no movements occurred in the number of shares of the Group.
During first nine months of 2014, Martifer SGPS, S.A. did not acquire any shares (2012: 402,819 treasury shares were acquired). After these acquisitions, the Group held 2,215,910 treasury shares, corresponding to 2.22% of its capital.
At 30 September 2014, the share capital of Martifer SGPS, S.A. was held in 42.7% by I’M SGPS, S.A., 37.5% by Mota-Engil SGPS, S.A., and 2.22% are treasury shares. The remaining 17.58% represents free-float listed in Euronext Lisbon.
Non-controlling interests
Movements in the non-controlling interests are as follows:
30 SEPTEMBER 30 SEPTEMBER
2014 2013 Opening balance 39,676,431 50,975,912 Net profit of the year (18,718,960) 1,468,120 Other changes in equity of subsidiaries (5,484,691) (123,481) Changes in the consolidation perimeter (3,168,901) (75,672) Transactions with non-controlling interests (9,006,587) 745,119 3,297,292 52,989,998 From continued operations (18,764,565) 50,106,597 From discontinued operations 22,061,857 2,883,401
The detail of the main non-controlling interests can be analysed as follows:
% NON-CONTROLLING INTERESTS 30 30 SEPTEMBER 30 SEPTEMBER 2013 30 SEPTEMBER SEPTEMBER 2014 PRO FORMA 1) 2013 2014
Martifer Metallic Constructions SGPS, S.A. 25.00% 0.00% 4,504,026 - Martifer - Alumínios, S.A. 25.00% 0.00% (3,890,335) - Martifer Aluminium Pty, Ltd 25.00% 0.00% (3,213,574) - Martifer - Construções Metalomecânicas, S.A. 25.00% 0.00% (15,979,698) - Martifer – Construções Metálicas Angola, S.A. 40.94% 21.25% 2,480,676 966,930 Martifer Renováveis - Geração de Energia e Participações S.A. 45.00% 45.00% 1,327,022 1,070,780 Martifer Polska Sp. Zo.o. 25.00% 0.00% (2,480,310) - Martifer Constructii S.R.L. 25.00% 0.00% (2,398,620) - Ventinveste Indústria SGPS, S.A. 0.00% 54.00% 9,866,945 Non-controlling interests attributable to non current assets held for sale (Note 20) 22,061,857 40,692,618 Others 886,248 (2,490,676)
3,297,292 50,106,597
The non-controlling interests at 30 September 2014 reflect the impact of the reduction of the equity investment in Martifer Metallic Constructions, held by Martifer SGPS from 100% to 75%, in result of the increase of equity in this company by the new shareholder Vector Diálogo SGPS, SA, and the classification of Martifer Solar and subsidiaries as non current asset held for sale (Note 20).
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22. BORROWINGS
At 30 September 2014 and 31 December 2013, borrowings can be analysed as follows:
BETWEEN 1 AND BETWEEN 3 AND MORE THAN 5 31 DECEMBER 2013 UNTIL 1 YEAR TOTAL 3 YEARS 5 YEARS YEARS Bank loans 57,100,333 46,334,767 91,213,197 55,289,820 249,938,117 Bank overdrafts 15,808,078 - 707,711 1,808,595 18,324,384 Authorized overdrafts 42,592,133 412,160 4,395,956 10,135,017 57,535,266 Commercial paper 8,000,000 3,000,000 3,250,000 - 14,250,000 Other borrowings 10,251,178 1,712,287 1,926,745 2,656,515 16,546,725 133,751,722 51,459,214 101,493,609 69,889,947 356,594,492
Obligation under finance leases 18,274,697 Cash and cash equivalents 38,843,709 Derivatives 224,214 Net debt 335,801,266
BETWEEN 1 AND BETWEEN 3 AND MORE THAN 5 30 SEPTEMBER 2014 UNTIL 1 YEAR TOTAL 3 YEARS 5 YEARS YEARS Bank loans 10,633,535 29,405,010 106,058,285 44,632,718 190,729,548 Bank overdrafts 14,796,284 325,531 976,594 1,302,125 17,400,534 Authorized overdrafts 50,645,512 816,080 2,823,241 8,091,978 62,376,811 Commercial paper 10,250,000 3,000,000 1,000,000 14,250,000 Other borrowings 11,839,430 861,540 1,050,279 2,213,763 15,965,012 98,164,761 34,408,161 111,908,399 56,240,584 300,721,905
Obligation under finance leases 16,712,296 Cash and cash equivalents 21,281,278 Derivatives (257,921) Net debt 296,410,844
The Group continues focused on reducing net debt, as such, it continues committed to the process of selling non-core assets. As a note, the net debt at 31 December 2013 included the companies of ‘Solar’ segment, classified in 2014 as ‘Non current asset held for sale’.
23. TRADE PAYABLES AND OTHER PAYABLES
At 30 September 2014 and 31 December 2013, trade payables and other payables can be analysed as follows:
NON CURRENT CURRENT 30 SEPTEMBER 31 DECEMBER 30 SEPTEMBER 31 DECEMBER
2014 2013 2014 2013 Trade payables 11,615,426 11,972,874 70,871,188 130,031,422
Fixed assets suppliers - 795,630 1,016,400 Related companies and other shareholders 7,413 421,870 906,005 3,648,374 Advanced payments received from customers - - 15,510,339 16,532,026 Other creditors 1,013,876 1,330,346 6,239,799 7,654,569 Other payables 1,021,289 1,752,216 23,451,773 28,851,369
Total 12,636,715 13,725,090 94,322,961 158,882,791
PAGE 56 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
The balance of non-current ‘Trade payables’ is related, mainly, with retentions in works performed by external parties, which will be released after the period of guarantee.
At 30 September 2014 and 31 December 2013, the non-current balances due to related companies and other shareholders refer to loans obtained from joint-arrangements and associated companies, which bear interest at Euribor 3M increased by a 6.75% spread.
24. PROVISIONS
The information related with ‘Provisions’ as of 30 September 2014 and 31 December 2013 can be detailed as follows:
30 SEPTEMBER 2014 31 DECEMBER 2013
Quality guarantees 1,499,528 3,335,399
Legal claims in progress 3,481,289 1,553,532 Provisions arising from the use of the equity method 5,939,737 5,450,401 Onerous contracts 22,000,000 16,043 Others 4,555,302 11,971,506 37,475,856 22,326,882
The change in the Provisions, compared with 31 December 2013, is as follows:
CHANGE OF CONSOLIDATION OPENING CLOSING ADDITIONS DEDUCTIONS APPLICATIONS PERIMETER, EXCHANGE RATE BALANCE BALANCE DIFFERENCES, TRANSFERS Quality guarantees 3,335,399 - (14,962) - (1,820,909) 1,499,528 Legal claims in progress (Note 11) 4,387,432 7,965,986 (1,687) (7,850,140) (1,020,301) 3,481,290 Provisions arising from the use of 5,450,401 332,976 - - 156,360 5,939,737 the equity method Onerous contracts (Note 11) 16,043 22,000,000 - - (16,043) 22,000,000 Others 9,137,606 323,359 (176,061) (1,392,597) (3,337,005) 4,555,302 22,326,882 30,622,321 (192,710) (9,242,737) (6,037,898) 37,475,856
25. OTHER CURRENT LIABILITIES
At 30 September 2014 and 31 December 2013, other current liabilities are made up as follows:
30 SEPTEMBER 2014 31 DECEMBER 2013
Accrued expenses
Holiday pay and bonuses 5,784,512 5,867,390 Interest borne but not yet overdue 5,519,558 3,922,237 Production performed by third parties not yet invoiced 1,169,473 4,865,198 Other accrued expenses 2,883,951 7,377,052 15,357,494 22,031,877
Deferred income
Production invoiced and not yet performed (related to construction contracts) 15,036,751 20,350,406 Subsidies / Government grants 821,636 1,753,735 Other deferred income 2,845,782 2,691,439 18,704,169 24,795,580
34,061,664 46,827,457
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The caption "Other accrued expenses" includes supplies and services rendered up to 30 September 2014 whose invoices were received after this date.
26. CONTINGENT LIABILITIES
There are no significant changes to the disclosed in the notes to the financial statements for the period ended 31 December 2013, with the exception of arbitration proceedings of Sostanj (Slovenia) and Manheim (Germany) which were already solved (Note 11).
27. COMMITMENTS
The nature of the Group's commitments did not change in comparison with 31 December 2013.
28. RELATED PARTIES
Group companies have commercial relations with each other that qualify as related parties transactions. All of these transactions are performed on an arm’s length basis.
Consequently, all these transactions are eliminated, since the consolidated financial statements disclose information regarding the holding company and its subsidiaries as if they were a single entity.
The balances resulting from transactions performed with associate and jointly controlled companies, accounted through the equity method, are not eliminated. The amount of the balances not eliminated is approximately Euro 47 million, with special regard to the accounts receivable from Nutre Group, Solar and Ventinveste.
Besides current transactions, some relating to civil construction done with the Mota-Engil Group and others associated with real estate management projects under way done by Estia Group, there are not any other significant balances and transactions performed with related parties during the period ended 30 September 2014, that had affected significantly the financial position or performance of the Group.
29. SUBSEQUENT EVENTS
Since the date of the financial statements to the current date there is no subsequent events to be disclosed.
30. APPROVAL OF THE FINANCIAL STATEMENTS
The accompanying consolidated financial statements were approved by the Board of Directors on 3 November 2014.
PAGE 58 9 MONTHS 2014 | INTERIM MANAGEMENT REPORT AND FINANCIAL INFORMATION
31. EXPLANATION ADDED FOR TRANSLATION OF THE FINANCIAL STATEMENTS
These financial statements are a translation of the consolidated financial statements originally issued in Portuguese in accordance with the International Financial Reporting Standards as adopted by European Union. In the event of discrepancies, the Portuguese version prevails.
Oliveira de Frades, 3 November 2014
The Chief Accountant The Board of Directors
______Isabel Cristina Loureiro Silva Carlos Manuel Marques Martins
______Jorge Alberto Marques Martins
______Mário Rui Rodrigues Matias
______Arnaldo José Nunes da Costa Figueiredo
______Luís Filipe Cardoso da Silva
______Luís Valadares Tavares
______Jorge Bento Ribeiro Barbosa Farinha
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