Barcelona, July 27, 2017. - Ercros ended the first half of 2017 with profit of EUR 23.96 million, up 22% on the same period last year.
The increase in the profit obtained in the first half of 2017 in comparison to that obtained in the same period in 2016 is particularly relevant because it occurred against the backdrop of a sharp increase in the price of the raw materials and is indicative of the boom our markets are experiencing.
During the first six months of 2017, revenue amounted to EUR 355.86 million, 13.2% more than that obtained in the first half of 2016. This increase can be explained by the strong demand, especially in the domestic market, and improved margins.
Sales increased in general: the chlorine derivatives division grew 11.3 %, mainly due to the increase in the prices of caustic soda and PVC; the intermediate chemicals division grew 17.0 %, in part due to the increase in the price of methanol; and the pharmaceuticals division grew 10.2 %, due to the increase in the volume of sales, in large part as a result of the entry into service of the new sterile fosfomycin plant.
Expenses amounted to EUR 311.13 million, an 11.6% increase with respect to this first half of 2016. The main reason for this increase is the rise in the price of supplies which became 26.4% more expensive due to the increased cost of electricity, and procurements which grew 16.3% due to the increased cost of raw materials.
It is also important to highlight the 7% rise in staff costs due to the salary increase provided for in the collective agreement of the chemical industry and the cancellation of the obligations acquired with the company's inactive staff. The average headcount in the first half of 2017 was 1,366 people, 13 more than in the same period in 2016.
Ebitda increased from EUR 34.72 million in the first half of 2016 to EUR 38.54 million in the first half of 2017, representing an 11.0% increase.
Amortization expense, which amounted to EUR 8.98 million, fell 6.7%, while finance costs and exchange differences, which stood at EUR 2.96 million, dropped 9.8%. Income taxes increased to EUR 2.21 million, compared to EUR 1.48 million in the first half of 2016.
As a result of the foregoing, Ercros' profit in the first six months of 2017 amounted to EUR 23.96 million, compared to EUR 19.64 million in the same period in 2016 representing a 22.0% increase.
With regard to the balance sheet, the Company’s working capital is of particular note, increasing 34.0% between 2016 year-end and June 30, 2017, mainly due to the increase in customer receivables. In this period, total equity increased by EUR 10.15 million: this change is less than the profit generated due to the EUR 13.81 million reduction corresponding to the total amount of the shareholder remuneration measures applied: the share repurchase, the dividend payment agreement and the bonus for attending the shareholders' annual meeting.
At the end of the first half of the year, net financial debt was EUR 93.27 million, 27.0% more than at December 31, 2016 as a result of the investments made pursuant to the Act Plan. At June 30, 2017, investments had been made amounting to EUR 20.66 million (EUR 9.15 million at June 30, 2016).
Given the continued strength of demand, particularly in the domestic market which offers better returns, as well as the consolidation of the economy's recovery, the trend seen in the first half of the year is expected to continue throughout the remainder of 2017; although it is important to bear in mind that the second half of the year includes August and December, months in which business drops off significantly for seasonal reasons. Furthermore, throughout the second half of the year, Ercros must address the stoppage and dismantling of the chlorine production plants which operate with mercury technology and the simultaneous entry into service of the expansion of the facilities which operate with membrane technology.
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