SFC Energy AG publishes figures for second quarter of 2016 and report for the first half - profitability significantly improved

DGAP-News: SFC Energy AG / Key word(s): Half Year Results

2016-08-03 / 07:30
The issuer is solely responsible for the content of this announcement.


SFC Energy AG - Corporate News - ISIN DE0007568578

SFC Energy AG publishes figures for second quarter of 2016 and report for the first half - profitability significantly improved

- Clear growth in the Security & Industry segment

- Consolidated sales of EUR 20.80 million in first half of 2016 (prior year: EUR 24.79 million)

- EBITDA improved to minus EUR 1.76 million (prior year: minus EUR 2.71 million)

- Outlook 2016: Management Board expects consolidated revenues of EUR 48-50 million and confirms significantly improved profitability over prior year.

Brunnthal/Munich, 3 August 2016 - SFC Energy AG (ISIN: DE0007568578), a leading international supplier of stationary and mobile hybrid-power supply solutions on the basis of fuel cells, today published its figures for the first half of 2016.

Management report

Dr. Peter Podesser, CEO of SFC Energy AG, comments: "SFC's performance in the first half of 2016 was in line with our expectations. Besides robust growth in the industry market SFC Energy benefited from signs of recovery of some economic fundamentals in the first half. For example, oil prices recovered from a 13-year low in the first quarter of 2016 and in the last months quoted consistently above USD 40 per barrel. This resulted in an initial stabilization in the oil & gas industry. However, an upturn of the oil & gas business is not expected before Q4/2016. In addition, the current increase in geopolitical uncertainty, intensified by terrorist attacks, has led to an increased willingness to spend on security and defense."

Sales

In the period from January to June 2016, SFC Energy generated revenues in the amount of EUR 20.80 million, as compared with EUR 24.79 million in the same period last year. The approximate 16 % decrease in sales is primarily attributable to the sluggish performance in the Oil & Gas segment, which usually generates the highest revenues for the Group. Sales amounted to EUR 10.50 million in the second quarter of 2016, as compared with EUR 12.18 million in the same period last year.

Sales by segment

Segment (in million EUR) H1 2016 H1 2015
Oil & Gas 8.84 14.44
Security & Industry 9.87 8.03
Consumer 2.09 2.32
Total 20.80 24.79
 

Segment performance

Oil & Gas

Sales in the Oil & Gas segment increased in the second quarter of 2016 by 19 % over the first quarter, from EUR 4.04 million to EUR 4.80 million. However, sales were down 39 % in the first six months of 2016 when compared with the first half of 2015, partially as a result of the relatively large order book at the beginning of 2015, falling from EUR 14.44 million to EUR 8.84 million. Wildfires in the Province of Alberta (Canada) in May 2016 caused significant loss of production for SFC Energy's customers. Fortunately, the situation had improved significantly by the end of the second quarter.

Even though oil prices clearly rebounded in the second quarter, SFC Energy's customers remain cautious and continue to limit their spending. However, cost-cutting measures have lowered the break-even point for new investments significantly. Initial larger capital expenditures are being discussed.

SFC Energy therefore expects additional orders in the Oil & Gas segment, particularly in the fourth quarter, when traditionally the highest sales are generated. Demand is slower in the summer months, and many companies are taking advantage of the summer lull to cut costs. The Oil & Gas segment remains focused on keeping costs under control.

Security & Industry

The Security & Industry segment performed well. Sales were up 23 %, from EUR 8.03 million in the first half of 2015 to EUR 9.87 million in the first half of 2016 (Q2 2016: EUR 4.89 million / Q2 2015: EUR 3.79 million). This positive trend is primarily attributable to positive organic growth in the defense industry and to more orders from new and existing customers in the field of power electronics, as well for fuel cells for industrial use. The latter market is especially driven by the increasing use of high-tech surveillance equipment to protect infrastructure and the environment. SFC Energy posted its largest single order from Asia for EFOY PRO fuel cells, with a value of EUR 0.5 million, at the end of the first half. Overall revenues in the industrial fuel cell business were up 11 % in the first half of 2016 when compared to the same period last year.

After delivering portable Jenny 1200 fuel cells to an international defense force in the first quarter of 2016, SFC Energy gained another NATO member as a new customer in the second quarter, for both portable and vehicle-based fuel cells as well as power managers. Overall, sales in the defense sector in the first half of 2016 more than doubled from the same period last year.

In the field of power electronics, with sales up by 15 % in the first half of 2016 as compared to the same period last year, PBF continued its successful start to the year 2016. The growth is attributable to a stable mix of existing and new customers. The laser platform, in particular, performed well, resulting in new development orders. After quarter end, PBF booked a framework agreement for EUR 4.7 million with a large industrial customer.

Consumer

Sales in the Consumer segment of EUR 2.09 million in the first half of 2016 were slightly lower than the prior year's figure of EUR 2.32 million (Q2 2016: EUR 0.81 million / Q2 2015: EUR 1.14 million). The decline was caused by the continuing weak demand in France and Norway. Growth in the Consumer segment in Germany and Sweden was unable to fully offset this decline. However, SFC Energy expects positive growth in the second half of 2016 and believes that the Company will outperform 2015 this year.

Profitability

Profitability improved significantly in the period under review from the same period last year, despite the decline in sales in the Oil & Gas segment. The measures to increase efficiency had an especially positive effect here.

SFC Energy generated an EBITDA of minus EUR 1.76 million in the first six months of 2016, as compared with minus EUR 2.71 million in the first half of 2015. EBITDA improved in the second quarter to minus EUR 1.31 million, versus minus EUR 1.81 million in the same period last year. Underlying EBITDA amounted to minus EUR 1.85 million in the first half of 2016 (Q2 2016: minus EUR 1.31 million), improving from the prior year's figure of minus EUR 1.99 million (Q2 2015: minus EUR 1.41 million).

EBIT amounted to minus EUR 2.89 million in the first six months, as compared with minus EUR 3.93 million in the same period last year (Q2 2016: minus EUR 1.89 million / Q2 2015: minus EUR 2.42 million). Underlying EBIT in the first six months of 2016 amounted to minus EUR 2.47 million, as compared with minus EUR 2.65 million in the previous year (Q2 2016: minus EUR 1.63 million / Q2 2015: minus EUR 1.74 million).

Earnings after taxes improved in the first half of 2016 to minus EUR 3.01 million, versus minus EUR 4.00 million in the same period last year. Accordingly, undiluted earnings per share under IFRS were minus EUR 0.35 in the first half of 2016, with diluted earnings at minus 0.32 per share. By way of comparison, the earnings per share per IFRS (undiluted and diluted) were minus EUR 0.46 in the prior year period.

Balance sheet

Cash on hand at June 30, 2016 amounted to EUR 1.42 million (December 31, 2015: EUR 3.28 million). The decrease by EUR 1.86 million is primarily related to the loss for the period and the final purchase price payment for the Simark acquisition. The equity ratio fell to 41 % at the end of Q2 2016 (December 31, 2015: 46 %).

Outlook 2016

The performance of SFC Energy in the first half of 2016 was in line with management's expectations. The defense industry in particular should provide strong momentum in the second half. In this regard, management expects large projects to be carried out in the fourth quarter of the year.

"The positive growth in the Security & Industry segment makes us confident on the whole for the second half. This expectation is based on solid fundamentals for sustainable growth in the defense industry and clear willingness to spend in the security sector. On the other hand, the trend in oil prices will be of material significance for the performance of our Oil & Gas segment at year end. If prices stabilize again at USD 50 or increase further, then business can be expected to pick up, particularly in the fourth quarter of 2016, says Dr. Peter Podesser, CEO of SFC Energy AG.

The typical seasonal effects in the Oil & Gas segment should result in a stronger fourth quarter. Due to cost cutting by oil & gas companies during the summer months, the third quarter tends to be a weaker period. In the Consumer segment, SFC Energy expects growth compared to last year.

Our confidence is also based on the order book of EUR 11.12 million at June 30, 2016, which is approximately 12 % over the prior year's figure of EUR 9.96 million. For the entire year 2016 SFC Energy expects consolidated revenues of EUR 48-50 million. As for operating results, management confirms its expectation of considerably improved profitability.

Key figures first six months of 2016

in million EUR 1/01/ - 30/06/2016 1/01/ - 30/06/2015
Sales 20.80 24.79
Gross profit 6.14 6.56
Gross margin 29.5% 26.5%
EBITDA -1.76 -2.71
EBITDA underlying -1.85 -1.99
EBITDA margin underlying -8.9% -8.0%
EBIT -2.89 -3.93
EBIT underlying -2.47 -2.65
EBIT margin underlying -11.9% -10.7%
Net result -3.01 -4.00
Order backlog 11.12 9.96
 

Detailed financial information

The complete half-year report of SFC Energy AG can be downloaded from the Company's website at http://www.sfc.com/de/investoren/finanzberichte#header.

SFC Energy AG will hold a telephone conference today, August 3, 2016, at 9:00 a.m., in English for interested investors and representatives of the press. To register please send an e-mail to  [email protected]

SFC Investor Relations

SFC Energy AG
Eugen-Sänger-Ring 7
D-85649 Brunnthal
Tel. +49 89 673 592-378
Fax +49 89 673 592-169
Email: [email protected]
Web: www.sfc.com

CROSS ALLIANCE communication GmbH
Susan Hoffmeister
Tel. +49 89 89827227
Email: [email protected]



2016-08-03 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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