Trading update Q3 2019
Sif Holding N.V. (Euronext symbol SIFG / ISIN code NL0011660485) - Regulatory news
- High tender and contracting activity:
- Contract win for Vineyard windfarm USA (84 monopiles, 103 Kton)
- Contract win for zones 2-4 of Hollandse Kust Zuid windfarm in The Netherlands and post- Q3 also the win of zone 1 of Hollandse Kust Zuid (total project 140 monopiles, 136 Kton)
- First contract with DEME for new Sif marshalling- service on Maasvlakte 2- hub and lease of additional 20 hectares
- Opening of sales- office Japan
- Delay by US federal authority BOEM of Vineyard project for undefined period of time
- Year-to-Date (YTD)1 contribution increased to €66.6 million (€57.0 million YTD 2018)
- EBITDA Year to Date increased to €14.6 million (€13.0 million YTD 2018)
- Operating Working Capital at end of Q3 2019 -€8.2 million (€28.4 million at end of Q3 2018)
- Net Debt excluding IFRS 16 at end of Q3 2019 €19.2 million (€43.1 million at end of Q3 2018)
- Throughput of 46 Kton brings Year to Date production to 140 Kton (100 Kton YTD Q3 2018)
- 95% for offshore wind
- 5% for offshore oil & gas & other
- Order book 47 Kton for Q4 2019, 245 Kton for 2020 (including 103 Kton for Vineyard) and 108 Kton for 2021.
|In € million||YTD 2019||YTD 2018||ChangeYoY||Q3 2019||Q3 2018|
|Order book in Kton at 7 November 2019||For remainder 2019||For 2020||For 2021 and beyond|
|Total for the year||47||2453||108|
Comment from Fred van Beers, CEO of Sif-Group:
Tender activity and order intake were strong in the third quarter of 2019 with large project- wins and satisfactory pricing- levels. Improved pricing levels also applied to the projects at hand at the start of the third quarter. However, both the pressure on this quarter’s production capacity as a consequence of the delayed Borssele 3+4 project and production issues, caused planning problems and a less efficient production. With multiple projects at hand and tight delivery schedules, production- lines repeatedly required conversion. This resulted in production of 46 Kton at much higher than precalculated manhours and overtime. This impacted this quarter’s contribution margin. For the final quarter of 2019 we expect an equal utilization with production anticipated at 47 Kton and contribution margins at least at Q2 2019 levels.
The outcome of 2020 remains uncertain with limited clarity on timing of the Vineyard project. We are still in talks with the client on different scenarios ranging from full delay of the project to manufacture of part of the order in 2020. Further news on timing is not expected before December 2019 but with the passing of time it becomes less likely that Vineyard will lead to production in 2020. For 2021 we already booked 108 Kton following the recent addition of the 4th part of Hollandse Kust Zuid in The Netherlands. With increasing ambitions of various countries and high tender activity, we expect good utilization from 2021 onwards.
1 Year-to-date (YTD) refers to the period 1 January- 30 September
2 Adjustments relate to IPO- expenses for which 2018 EBITDA- numbers are adjusted.
3 Including 103 Kton for Vineyard
Sif is a leading manufacturer of large steel tubulars, which are used as foundation components for the offshore wind and offshore oil & gas markets. The Company manufactures customised tubular components for offshore foundations, predominantly in the greater North Sea region. Sif combines a highly automated and flexible production facility with technology leadership in rolling and welding of heavy steel plates, which is based on over 70 years of experience and innovative in-house developed techniques and processes. Sif primarily produces monopiles, transition pieces and piles that are used to anchor jacket foundations in the seabed for offshore wind turbines, as well as legs, pile sleeves and piles of the larger jackets for oil & gas as well as tubular structures for various uses such as jetties.
Some of the statements contained in this release that are not historical facts are statements of future projections and other forward-looking statements based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those in such statements. Historical results are no guarantee for future performance. Forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of Sif’s business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “may”, “will”, “should”, “would be”, “expects” or “anticipates” or similar expressions, or the negative thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans, or intentions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this release as anticipated, believed, or expected. Sif does not intend, and does not assume any obligation, to update any industry information or forward- looking statements set forth in this release to reflect subsequent events or circumstances. The content of this trading update is for information purposes only and not intended as investment advise, or offer or solicitations for the purchase or sale in any financial instrument. Sif does not warrant or guarantee the completeness, accuracy, or fitness for any particular purposes in respect of the information included in this release.