In the fourth quarter 2016 Hexagon Composites generated NOK 347.1 (371.4) million in operating income and made an operating profit before depreciation (EBITDA) of NOK 314.7 (40.9) million. Operating profit (EBIT) was NOK 288.7 (18.6) million and profit/loss before tax came to NOK 304.9 (14.7) million. The results include a one-off gain of NOK 348 million, with corresponding tax provision charges of NOK 122 million, recognized as a result of the Agility Fuel Solutions ("Agility") transaction executed at the start of the quarter. The results also include one-off costs and movement in accruals contained to the quarter of approximately NOK 46 million.
The financial statements for the fourth quarter 2016 include the impact of deconsolidating the previous Medium and Heavy-Duty CNG Automotive business unit results and instead accounting for Hexagon Composites' fifty-percent share of Agility results under the equity method for the first time. In addition, the fully consolidated financial results of the acquired xperion Energy & Environment ("xperion") and related group subsidiaries for the whole quarter is included for the first time. There are no restatements to previously reported figures as a result of the transactions.
The main impact to profit & loss is lower underlying revenue, EBITDA and EBIT levels versus immediately before the transaction, whereas the one-off gain as a result of the Agility transaction increases EBITDA and EBIT levels. The one-off gain is booked within EBITDA with a corresponding provision for deferred tax charges booked in the tax cost line.
The main impacts to the statement of financial position are materially higher total assets after recognition of the relevant investment value of both transactions, an inclusion of the earn-out provision forming part of the booked investment cost of the xperion acquisition and increased equity from recognition of the one-off gain from the Agility transaction.
Operating results in the fourth quarter, aside from the above mentioned effects, were impacted positively by a 19% growth in revenues within the Low-Pressure segment versus the same period last year. Despite strong sales volumes of Mobile Pipeline® in the quarter, profitability within the High-Pressure segment was hampered by one-off items, indirect impacts of M&A activities and movements in accruals totaling NOK 26 million, as well as the dilutive impacts of the Hydrogen business unit which is now in an early growth phase. Integration synergies from the acquisition of xperion have not yet been realized in the fourth quarter. However, the High-Pressure segment is expected to benefit from such synergies in 2017.
For the year 2016, Group operating income decreased to NOK 1,220.5 (1,443.9) million. Operating profit before depreciation (EBITDA) was NOK 374.9 (100.1) million. Operating profit (EBIT) was NOK 299.3 (37.5) million. Profit before tax for continuing operations was NOK 302.3 (0.3) million.
The lower revenues were driven principally by lower volumes of Mobile Pipeline®, US Heavy-Duty truck and Rest-of-the-world transit bus during the first three quarters of 2016. Profitability was negatively impacted by one-off items, movements in accruals and M&A related costs totaling approximately NOK 46 million, while positively impacted by the recognition of the gain on the Agility transaction.
For more information:
Solveig D Saether, Communication Manager, Hexagon Composites ASATelephone: +47 906 34 977 | firstname.lastname@example.org