Styrolution Group (IRSH) - Interim Financial Report Q3 2012 RNS Number : 4273R Styrolution Group GmbH 19 November 2012 Styrolution Group GmbH Unaudited Interim Financial Statements -three and nine months ended 30 September 2012 Forward Looking Statements The following report includes "forward-looking statements", based on our current expectations and projections about future events, including: · the cyclical nature of our businesses and their sensitivity to changes in supply and demand; · raw material availability and costs, as well as supply arrangements, including arrangements with principal feedstock suppliers; · the highly competitive nature of our principal industries; · current or future environmental requirements, including those related to greenhouse gas and other air emissions, and the related costs of maintaining compliance and addressing liabilities; · currency fluctuations and economic downturns in the countries in which we operate; · our ability to implement our business and cost reduction strategies; · our ability to successfully integrate our businesses and realize anticipated synergies and cost savings; and · our substantial indebtedness following the consummation of the Joint Venture Transaction may affect our ability to service our outstanding indebtedness, which would likely impact the way we operate our business. All statements other than statements of historical facts included in this report, without limitation, statements regarding our future financial position, risks and uncertainties related to our Company and the notes, strategy, capital expenditures, projected costs and our plans and objectives for future operations, may be deemed to be forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties. Words such as "believe," "expect," "anticipate", "may", "intend", "will", "should", "estimate" and similar expressions or the negatives of these expressions are intended to identify forward-looking statements. In addition, from time to time we or our representatives, acting in respect of information provided by us, have made or may make forward-looking statements orally or in writing and these forward-looking statements may be included in but are not limited to press releases (including on our website), reports to our security holders and other communications. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Styrolution Group GmbH - Unaudited Interim Financial Statements Consolidated Statement of Income for the three and nine months ended 30 September 2012 In millions of EUR 1 July - 30 September 1 January - 30 2012 September 2012 Revenue 1,484.0 4,553.9 Cost of sales (1,358.1) (4,113.1) Gross profit 125.9 440.8 Selling expenses (83.6) (244.9) General and administrative (14.5) (59.9) expenses Research and development (3.8) (9.5) expenses Other operating expenses (net) (12.7) (22.4) Result from operating 11.3 104.1 activities Interest income 2.9 4.9 Interest expense (12.9) (40.4) Other finance gain (loss) (net) (4.4) 0.7 Net finance costs (14.4) (34.8) Income (loss) before tax (3.1) 69.3 Income tax benefit (expense) 0.7 (22.6) Net income (loss) (2.4) 46.7 Attributable to: Non-controlling interests 0.4 0.7 Owners of the company (2.8) 46.0 Styrolution Group GmbH - Unaudited Interim Financial Statements Consolidated Statement of Comprehensive Income (loss) for the three and nine months ended 30 September 2012 In millions of EUR 1 July - 30 September 1 January - 30 2012 September 2012 Net income (loss) (2.4) 46.7 Other comprehensive loss: Foreign currency translation reserve (13.2) 15.9 Actuary gains and losses on defined - - benefit plans Total other comprehensive income (loss) (13.2) 15.9 Total comprehensive income (loss) (15.6) 62.6 Attributable to: Non-controlling interests 0.5 0.7 Owners of the company (16.1) 61.9 Styrolution Group GmbH - Unaudited Interim Financial Statements Consolidated Statement of Financial Position In millions of EUR 30 September 2012 31 December 2011 Assets Property, plant and equipment 780.2 809.4 Intangible assets and goodwill 1,236.2 1,241.1 Deferred tax assets 25.7 22.8 Other receivables and miscellaneous 6.7 7.1 non-current assets Non-current assets 2,048.8 2,080.4 Inventories 560.1 463.6 Accounts receivable, trade 767.1 756.3 Other receivables and miscellaneous 199.5 360.3 current assets Cash and cash equivalents 225.4 266.0 Assets held for sale - 13.2 Current assets 1,752.1 1,859.4 Total assets 3,800.9 3,939.8 Equity Share capital 10.0 10.0 Contributed Surplus 1,641.4 1,641.4 Other reserves 35.3 24.0 Accumulated deficit (23.2) (69.2) Equity attributable to owners of the 1,663.5 1,606.2 Company Non-controlling interest 7.1 8.4 Total equity 1,670.6 1,614.6 Liabilities Financial indebtedness 470.0 468.2 Employee benefits 45.6 42.8 Deferred tax liabilities 360.9 367.8 Other liabilities and other long term 67.5 124.4 provisions Non-current liabilities 944.0 1,003.2 Accounts payable, trade 674.3 728.0 Financial indebtedness 322.0 439.6 Current tax liabilities 0.8 13.1 Other liabilities and short term 189.2 137.6 provisions Liabilities held for sale - 3.7 Current liabilities 1,186.3 1,322.0 Total liabilities 2,130.3 2,325.2 Total equity and liabilities 3,800.9 3,939.8 Styrolution Group GmbH - Unaudited Interim Financial Statements Consolidated Statement of Changes in Equity Equity attributable In millions Share Accumulated Other to owners of Non-controlling Total of EUR Capital ContributedSurplus deficit Reserves the company interest Equity At 31 10.0 1,641.4 (69.2) 24.0 1,606.2 8.4 1,614.6 December 2011 Net income 46.0 46.0 0.7 46.7 Other 15.9 15.9 15.9 Comprehensive income Total 46.0 15.9 61.9 0.7 62.6 comprehensive income India share (4.6) (4.6) (2.0) (6.6) repurchase At 30 10.0 1,641.4 (23.2) 35.3 1,663.5 7.1 1,670.6 September 2012 Styrolution Group GmbH - Unaudited Interim Financial Statements Consolidated Statement of Cash Flows In millions of EUR 1 January - 30 September 2012 Cash flows from operating activities Income before tax 69.3 Adjustment for: Depreciation and impairment of property, plant and 84.6 equipment Amortization and impairment of intangible assets 43.2 Change in pension provisions, other liabilities and (18.7) charges Net finance cost 34.8 Current income tax paid (59.2) Working capital adjustments: - Inventories (94.5) )) - Trade receivables (9.4) - Other receivables 6.0 - Trade payables 64.7 Cash generated from operating activities 120.8 Interest paid (26.2) Net cash flows from operating activities 94.6 Cash flows from investing activities Investments in property, plant and equipment and (60.4) intangible fixed assets Proceeds from disposal of property, plant and - equipment and intangible assets Proceeds from sale of disposal group (ELIX) 22.1 Net cash flows used in investing activities (38.3) Cash flows from financing activities Share repurchase India (6.6) Repayment of asset securitization, net (29.1) )) Receipt from borrowings from related parties 29.5 Repayment of borrowings from related parties (106.5) Receipt of other borrowings 58.4 Repayment of other borrowings (40.8) Net cash flows used in financing activities (95.1) Net changes in cash and cash equivalents (38.8) Cash and cash equivalents at 31 December 2011 266.0 Effect of exchange rate fluctuations on cash held (1.8) Cash and cash equivalents at 30 September 2012 225.4 Styrolution Group GmbH - Unaudited Interim Financial Statements Notes 1. Reporting entity Styrolution Group GmbH ('Group' or the 'Company') is an intermediate holding Company which is wholly owned by Styrolution Beteiligungs GmbH, a wholly owned subsidiary of Styrolution Holding GmbH. Styrolution Holding GmbH is a joint venture ultimately owned by two shareholders, INEOS Industries Holdings Ltd., a subsidiary of INEOS AG, and BASF SE ("BASF"). INEOS Industries Holdings Ltd. ("INEOS") owns 50% of the shares of Styrolution Holding GmbH. BASF SE directly owns 15.95% of the shares of Styrolution Holding GmbH and indirectly through BASF Antwerpen N.V. (a wholly owned subsidiary) another 34.05%. The Company is domiciled in Germany and has its registered office at Erlenstrasse 2, 60325 Frankfurt am Main, Germany. The Company was incorporated on 19 April 2011. On 1 October 2011, BASF contributed the BASF Styrenics Business to the Company and INEOS contributed the INEOS Styrenics Business and the INEOS ABS Business to the Company by way of the Joint Venture Transaction. As used herein, the "Joint Venture Transaction" means the consummation of the Joint Venture and related financings by and among BASF SE and INEOS Industries Holdings Limited as described in the Styrolution Group GmbH Offering Memorandum dated May 12, 2011 (the "Offering Memorandum"). Also as used herein, the BASF Styrenics Business, the INEOS Styrenics Business and the INEOS ABS Business shall have the meanings set forth in the Offering Memorandum. BASF SE and INEOS Industries Holdings Limited are sometimes referred to herein as the "Joint Venture Partners". The Company accounts for these contributions as business combinations. The consolidated interim financial statements are not accompanied by comparative financial information preceding its formation as these businesses were previously not under common control. The consolidated interim financial statements of the Company comprise the Company and its subsidiaries (together referred to as the 'Group' and individually as 'Group entities'). The Group is the leading global producer, marketer and merchant seller of styrene monomer and styrenics polymers. 2. Basis for preparation (a) Statement of compliance These consolidated interim financial statements of Styrolution Group GmbH for the period ended 30 September 2012 have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not provide all of the information and disclosures included in complete consolidated financial statements and are therefore to be read in conjunction with the consolidated financial statements as of and for the period ending 31 December 2011. The consolidated interim financial statements were authorized for issue by the Managing Directors on 19 November 2012. (b) Basis of measurement The basis of measurement for the consolidated financial statements is generally the historical cost basis except for those financial instruments categories measured at fair value. On 1 October 2011 the Group engaged in the Joint Venture Transaction and acquired the BASF Styrenics Business, the INEOS Styrenics Business and the INEOS ABS Business from the respective Joint Venture Partners by means of a combination of contributions in kind and cash payments. The fair value of the consideration exchanged in the transaction has been allocated to the identified assets acquired and liabilities assumed. In particular, the following fair values had originally been determined on a provisional basis: intangible assets (including goodwill), property, plant and equipment, employee benefit obligations, liabilities related to unfavorable supply agreements with related parties, provisions and deferred taxes. As of 30 September 2012, the Company finalized the allocation for those assets contributed and liabilities assumed based on information obtained about facts and circumstances that existed at the acquisition date. The finalization of the allocation resulted in an increase of the goodwill of EUR 13.3 million and corresponding increases, primarily affecting deferred tax liabilities. These changes were not significant to the consolidated financial statements for the year ended 31 December 2011 and are reflected in the interim financial statements for the third quarter of 2012. The accounting and valuation methods disclosed in the notes to the consolidated financial statements as of and for the period ending 31 December 2011 have been applied consistently, except for the finalization of the allocation of the fair value of consideration exchanged. (c) Functional and presentation currency These consolidated interim financial statements are presented in EUR, which is the Company's functional currency. All financial information presented in EUR has been rounded to the nearest tenth of a million, except when otherwise indicated. (d) Use of estimates and judgments The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. (e) Segment reporting Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a basis considered reasonable. Unallocated items comprise mainly assets that are used across segments (primarily the Company's headquarters), head office expenses, and tax assets and liabilities. The Company has defined the following operating segments: - EMEA - Americas - Asia Detailed information by segment for the three months ended 30 September 2012 is presented in the following tables. In millions of EUR External sales Inter-segment sales EBITDA before Special Items EMEA 621.4 22.6 26.3 Americas 506.6 11.8 24.6 Asia 356.0 1.6 16.0 Corporate and eliminations (36.0) Total for the period 1,484.0 0.0 66.9 Detailed information by segment for the first nine months ended 30 September 2012 is presented in the following tables. In millions of EUR External sales Inter-segment sales EBITDA before Special Items EMEA 1,939.6** 66.4 108.0 Americas 1,564.6* 84.9* 112.8 Asia 1,049.7** 4.6 29.9 Corporate and eliminations (155.9)* Total for the period 4,553.9* 0.0 250.7 * In the first quarter 2012, the Company reported certain internal sales of styrene monomer sales in the Americas region as external sales. These sales have been properly reported in the tables above. ** In the first two quarters of 2012, the Company reported external sales for certain location and time swaps. These swaps are not included as external sales in the tables above. Management considers this to be a better presentation of the actual trading and revenue of the Company. Reconciliation of EBITDA before special items to Income (loss) before tax: In millions of EUR 1 July - 30 September 1 January - 30 2012 September 2012 EBITDA before special items 66.9 250.7 Special items (restructuring (15.3) (18.8) expenses) Depreciation and Amortization (40.3) (127.8) Results from operations 11.3 104.1 Net finance costs (14.4) (34.8) Income (loss) before tax (3.1) 69.3 The special items primarily include estimated contract termination costs. 3. Disposal group held for sale As part of the Joint Venture Transaction on 1 October 2011, the Group acquired shares in ELIXPolymers S.L. On June 1, 2011, the EU Commission gave its approval for the completion of the Joint Venture Transaction subject to the requirement that the Company divest its interest in ELIX Polymers S.L. In December 2011 the Group agreed to an agreement to sell ELIX Polymers S.L. for an amount of EUR 23 million in cash, subject to adjustment for any debt and certain working capital requirements defined in the agreement. The Company retained certain liabilities of the disposal group. The price obtained on the market was used as a basis for measuring the fair value of ELIX Polymers S.L. in the Joint Venture Transaction purchase price allocation. The sale of ELIX Polymers S.L. was completed on 30 March 2012. After adjustments, the Company received proceeds on 1 April 2012 from the sale of EUR 22.1 million in cash. 4. Income taxes Income tax expense is recognized based on management's best estimate of the income tax rate expected for the year 2012 applied to the income before taxes of the third quarter 2012. The Group's consolidated effective tax rate for the first three quarters of 2012 was 32.6%. 5. Equity As a result of the Joint Venture transactions the Company undertook and on 6 February 2012 completed a public offer to purchase the non-controlling interest in Styrolution ABS (India) Limited (formerly INEOS ABS (India) Ltd.). As a result of this process the Company increased its share in Styrolution ABS (India) Limited from 83.33% to 87.26%. The total amount paid from this increase was EUR 6.6 million. The reduction in the total value of the non-controlling interest is EUR 2.0 million. 6. Financial indebtedness In millions of EUR 30 September 2012 31 December 2011 Current liabilities Short term borrowings from related parties 0.8 106.5 Short term borrowings from asset 300.5 329.1 securitizations Short term borrowings other 20.3 1.8 Short term finance lease liabilities 0.4 2.2 Total 322.0 439.6 The Group repaid interest-bearing loans from shareholders that were due on 15 February 2012. The loans primarily originated in the contribution of the businesses under the capital increase resolution and represent excess cash balances contributed. 7. Related parties In millions of EUR Transaction value Balance outstanding 1 January - 30 September 2012 30 September 2012 Sale of products - BASF** 233.3 - INEOS 120.1 Purchase of raw materials - BASF** 1,413.1 - INEOS 741.4 Services received - BASF 51.3 - INEOS 27.5 Trade and other receivables - BASF 85.7 - INEOS 16.6 - Shareholder 56.6 Trade and other payables - BASF (300.8) - INEOS (79.9) ** In the first two quarters of 2012, the Company reported external sales for certain location and time swaps. To the extent that these swaps involve a shareholder of the Company, they are not included as sales of product in the table above - see also note 2. The Company completed a settlement agreement with its shareholder who assumed trade payable balances of EUR 119.6 million in exchange for the Company's receivable due from shareholder. The corresponding receivables and payables were extinguished as a result of the settlement agreement. On 19 March 2012 the Company announced the termination of tolling agreements with INEOS concerning the styrenics plant of INEOS in Marl, Germany. Supply of polystyrene and styrene from Marl continued through October 2012.As a result of the termination of the agreement, the Company will accelerate payments of approximately EUR 43.2 million under the contract of which EUR 33.5 million was identified as an unfavorable contractual agreement in accounting for the business combination. Presentation of the Styrolution third quarter 2012 business results of operation The Company prepared this discussion and analysis of its results of operations by comparing its unaudited consolidated interim financial statements of income and cash flows for the three and nine months ended 30 September 2012 to the pro forma information for the corresponding periods, i.e. the three and nine months ended 30 September 2011. The pro forma information is based on the combined performance of the businesses that were contributed to the Company by its shareholders in connection with the completion of the Joint Venture transaction on 1 October 2011, but do not include the effects of purchase accounting which affect the actual financial information for 2012. In millions of EUR 1 July - 30 Pro forma 1 July - % September 2012 30 September 2011 Revenue 1,484.0 1,540.8 (3.7) Cost of sales (1,358.1) (1,400.2) 3.0 Gross profit 125.9 140.6 (10.5) Selling expenses (83.6) (85.1) 1.8 General and administrative (14.5) (25.7) 43.6 expenses Research and development (3.8) (3.0) (26.7) expenses Other operating income (12.7) 1.6 >(100) (expenses) Result from operating 11.3 28.4 (60.2) activities Interest income 2.9 - - Interest expense (12.9) (11.6) (11.2) Other finance gain (loss) (4.4) 0.2 >(100) (net) Net finance costs (14.4) (11.4) (26.3) Income (loss) before tax (3.1) 17.0 >(100) Income tax benefit 0.7 (10.3) >100 (expense) Net income (loss) (2.4) 6.7 >(100) Attributable to: Non-controlling interests 0.4 - - Owners of the company (2.8) 6.7 >(100) Presentation of the Styrolution first nine months year 2012 business results of operation In millions of EUR 1 January - 30 Pro forma 1 Delta in % September 2012 January - 30 September 2011 Revenue 4,553.9 4,959.0 (8.2) Cost of sales (4,113.1) (4,399.8) 6.5 Gross profit 440.8 559.2 (21.2) Selling expenses (244.9) (248.5) 1.4 General and (59.9) (59.1) (1.4) administrative expenses Research and (9.5) (8.8) (8.0) development expenses Other operating income (22.4) (13.5) (65.9) (expenses) Result from operating 104.1 229.3 (54.6) activities Interest income 4.9 - - Interest expense (40.4) (35.0) (15.4) Other finance gain 0.7 (9.8) >100 (loss) (net) Net finance costs (34.8) (44.8) 22.3 Income before tax 69.3 184.5 (62.4) Income tax expense (22.6) (50.2) 55.0 Net income 46.7 134.3 (65.2) Attributable to: Non-controlling 0.7 - - interests Owners of the company 46.0 134.3 (65.7) Revenue: Revenue in the third quarter of 2012 amounts to EUR 1,484.0 million, a decrease of EUR (56.8) million or (3.7%) compared to EUR 1,540.8 million in the third quarter 2011. Revenue reduced mainly because of lower styrene monomer sales. The Company optimized its styrene balance by using more styrene internally, part of Styrolution's strategy. The Sarnia styrene plant was down due to a force majeure while Texas City and Antwerp were in turnaround for several weeks during the quarter which also reduced styrene sales volumes. This reduction was partly offset by the strengthened USD compared to the Euro. The polymer sales volumes slightly increased in the third quarter 2012 compared to third quarter 2011, mainly in Asia and EMEA. The Company benefited from low Inventory volumes in the industry and subsequent restocking of our customers. This increase was accelerated by the strengthened USD compared to the Euro. As of the fourth quarter 2011 Styrolution does not recognize any sales from the operations of the ELIX Polymers S.L. Tarragona ABS Specialties plant in Spain. This asset was sold on March 30 2012 and is treated in that way under IFRS accounting rules. This decreased the third quarter 2012 sales compared to previous quarter last year. Revenues by segment: In millions of EUR 1 July - 30 September Pro forma 1 July - 30 % 2012 September 2011 EMEA 621.4 731.6 (15.1) Americas 506.6 472.0 7.3 Asia 356.0 337.2 5.6 Revenue 1,484.0 1,540.8 (3.7) Revenues by product: In millions of EUR 1 July - 30 Pro forma 1 July - 30 September % September 2012 2011 Acrylonitrile Butadiene 227.0 217.2 4.5 Styrene Polystyrene 625.8 594.2 5.3 Styrene Monomer 318.4 347.3 (8.3) Specialties 312.8 382.1 (18.1) Revenue 1,484.0 1,540.8 (3.7) The Company has slightly revised the reporting structure of its portfolio. While the Company still has the same product groupings: styrene monomer, polystyrene and ABS, the Company has identified a number of ABS grades which will join copolymers to be classified as specialties in the future. This change is reflected in the reporting starting in Q1 2012. The comparative revenues for 2011 have been adjusted accordingly. Prior to the third quarter of 2012, the Company reported external sales for certain location and time swaps. These swaps are not included as external sales in the tables above. Management considers this to be a more representative presentation of the actual trading and revenue of the Company and adjusted comparative revenues accordingly. Cost of Sales: Cost of sales decreased by EUR 42.1 million, or 3.0%, to EUR (1,358.1) million compared to EUR (1,400.2) million in the previous year. This decrease is due to the reduction in third party styrene sales volumes, partly offset by improved margins for polymers mainly in Asia and Americas. As a result of the Purchase Price allocation the cost of sales increased by EUR 15.6 million in the third quarter of 2012. This was mainly higher depreciation and amortization costs. Cost of sales increased because of the strengthening of the US dollar against the Euro. Gross profit: Gross profit decreased by EUR (14.7) million, or (10.5%) to EUR 125.9 million compared to EUR 140.6 million in the previous year. This was mainly due to higher depreciation and amortization expenses of EUR 22.8 million in the third quarter 2012 compared to the third quarter 2011. The Company's cost of sales increased as a results of purchase price allocations by EUR 15.6 million. The Company was able to improve its polymer margins in the third quarter 2012 in Asia and the Americas. This and an improved supply demand balance resulted in improved gross profit compared to the third quarter 2011 in Asia and the Americas. Margins reduced in EMEA due to the uncertainty of the European economic climate. The gross profit of the styrene business reduced significantly due to a decrease in margins in EMEA, the turnaround at our Texas City and Antwerp styrene plants and the force majeure in the Sarnia plant in the Americas. Selling expenses: Selling expenses decreased by EUR 1.5 million or 1.8% to EUR (83.6) million compared to EUR (85.1) million in the previous year. The decrease mainly reflects lower freight and selling costs. Freight costs are not always related to external sales volumes, because of freight costs related to captive use. General and administrative expenses: General and administrative expenses decreased by EUR11.2 million, or 43.6%, to EUR(14.5) million compared to EUR(25.7) million in the previous year. The decrease is caused by several unusual items including a bad debts release of EUR 3.5 million in the Americas. Research and development expenses:Research and development expenses increased by EUR(0.8) million, or (26.7%), to EUR(3.8) million compared to EUR(3.0) million in the previous year. Other operating expenses:Other operating expenses were EUR (12.7) million, an increase of EUR (14.3) million compared to other operating income of EUR1.6 million in the previous year. The increase is mainly because of estimated contract termination and project integration costs. EBITDA before special items:EBITDA before special items increased by EUR20.0 million, or 42.6%, from EUR 46.9 million to EUR 66.9 million. The third quarter of 2012 was an acceptable volume and margin quarter in an uncertain economic environment. The increase is mainly due to improved performance of the polymers business, mainly in Asia and Americas. Special items were incurred in the context of the formation of the Joint Venture, the termination of certain contracts or the integration of activities. Reconciliation of EBITDA before special items to income (loss) before tax: In millions of EUR 1 July - 30 Pro forma 1 July - Delta in EUR September 2012 30 September 2011 EBITDA before special items (1) 66.9 46.9 20.0 Special items (restructuring (15.3) (1.0) (14.3) expenses) (40.3) (17.5) (22.8) Depreciation and Amortization Results from operations 11.3 28.4 (17.1) Net finance costs (14.4) (11.4) (3.0) Income (loss) before tax (3.1) 17.0 (20.1) (1) EBITDA represents income from operations plus depreciation of property, plant and equipment and amortization of intangible assets. EBITDA before special items represents EBITDA less special items. Although EBITDA and EBITDA before special items should not be considered substitute measures for profit and net cash flow from operating activities, we believe that they provide useful information regarding our ability to meet future debt service requirements. EBITDA and EBITDA before special items may not be comparable to similarly titled measures used by other companies. LIQUIDITY AND CAPITAL RESOURCES The cash flow statement is prepared in accordance with the indirect method. Cash and cash equivalents do not include deposits and guarantees that are not immediately available. These amounts are included in other receivables. Cash provided by operating activities Cash provided by operating activities by Styrolution in the first nine month of 2012, excluding interest payments was EUR 120.8 million. The cash flows generated by operations were significantly higher than the result from operations on the income statement due to material depreciation and amortization amounts included in the result from operations. The Company used cash to fund its working capital needs. By the end of the third quarter of 2012, feedstock prices had increased compared to the beginning of the year, which tends to have an increasing effect on the cash flow requirements of the Company. In addition, interest and income taxes paid reduced cash flows from operations. Cash used in investing activities The cash used in investing activities of EUR 38.3 million consists of two items. The cash used for capital expenditures was EUR 60.4 million. Capital expenditures relate to regular maintenance and new investments in our plants, including an extension of our plant in Ulsan, Korea, dedicated to the production of styrene acrylonitrile copolymers and inaugurated on 19 July 2012. Proceeds from sale of ELIX were EUR 22.1 million. Cash used in financing activities The Company used cash flow in financing activities primarily to repay loans from related parties of a net amount of EUR 77.0 million and reduce the balance from asset securitizations by EUR 29.1 million, offset by net additional borrowings of EUR 17.6 million. In addition, EUR 6.6 million was paid in connection with the tender offer in India. Financing of Styrolution The financing of the Company is through the issuance of Senior Secured Notes of EUR480 million, a Trade Receivables Securitization Facility (up to EUR 500 million) and ancillary lines for instruments such as guarantees and letters of credit. The financing of Styrolution and the use of funds at the end of September 2012 of the Company was as follows: In millions of EUR Senior secured bond 480.0 Short term borrowings from asset securitizations and other borrowings 322.0 Total Financing on 30 September 2012 802.0 Cash and cash equivalents (225.4) Net Debt on 30 September 2012 576.6 This announcement has been issued through the Companies Announcement Service of the Irish Stock Exchange. This information is provided by RNS The company news service from the London Stock Exchange END ISEEANFNFDXAFEF -0- Nov/19/2012 09:40 GMT
Styrolution Group IRSH Interim Financial Report Q3 2012
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