Six months 2003 US GAAP interim financial results November, 2003 Moscow
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Transcript of Six months 2003 US GAAP interim financial results November, 2003 Moscow
11
Six months 2003 US GAAP interim financial results
November, 2003Moscow
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Income Statement HighlightsIncome Statement Highlights
$mlnSix months
2003Six months
2002%
Sales 215.7 202.9 106%
Gross margin 61.2 54.6 112%
EBITDA 24.5 35.4 69%
EBIT 10.4 24.8 42%
EBT 14.8 16.1 92%
Net Income 14.1 4.6 307%
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Analysis of changes in Income statementAnalysis of changes in Income statement
$mlnSix months
2003
including
Six months 2002
(excluding effect of
provisions)
Changes (organic
component-
Six months 2002)
Organic component
(excluding effect of provisions)
Acquisition component
Sales 215.7 182.1 33.6 202.9 (20.8)
Gross margin
61.2 54.6 6.6 54.6 -
EBITDA 24.5 23.7 (0.2) 27.5 (3.8)
EBIT 10.4 12.9 (3.5) 16.8 (3.9)
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Analysis of changes in EBITDAAnalysis of changes in EBITDA
$mlnSix
months 2003
including
Six months 2002
Changes (organic
component -
Six months 2002)
Organic component
Acquisition component
EBITDA 24.5 24.7 (0.2) 35.4 (10.7)
Gross margin 61.2 54.6 6.6 54.6 -
G&A and S&D (51.2) (41.7) (9.5) (37.7) (4.0)
Depreciation and amortization
14.0 10.8 3.2 10.6 0.2
Provisions 0.5 1 (0.5) 7.9 (6.9)
55
Segmentation – key resultsSegmentation – key results
$mln
OILE
Q
MIN
EQ
ST
EE
L
NP
PE
Q
SH
IP
MM
S
Other
Intersegment
sales
To
tal
Sales, six months 2003
37.8 23.9 50.2 37.0 44.7 62.1 23.9 (63.9) 215.7
Gross
Margin, six months 2003
31% 21% 22% 34% 16% 15% 19% 28%
Sales, six months 2002
39.1 18.1 61.5 37.1 24.0 105.6 26.0 (108.5) 202.9
Gross
Margin, six months 2002
25% 19% 15% 38% 13% 11% 13% 27%
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Change in sales by segmentChange in sales by segment$mln Six
months 2003
Six months
2002Change
Change, %
Change structure
O&G equipment
37.8 39.1 (1.3) (3.3%) (10.2%)
NPP equipment
37.0 37.1 (0.1) 0% (0.8%)
%Shipbuilding 44.7 24.0 20.7 86.3% 161.7%Mining equipment
23.9 18.1 5.8 32.0% 45.3%
Special Steel 50.2 61.5 (11.3) (18.4%) (88.3%)Machinery manufacturing services
62.1 105.6 (43.5) (41.2%) (339.8%)
Other 23.9 26.0 (2.1) (8.1%) (16.4%)
Intersegment sales
(63.9) (108.5) 44.6 41.1% 348.4%
Total 215.7 202.9 12.8 6.3% 100.0%
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Change in gross margin by segmentChange in gross margin by segment
$mln.
Six months
2003
Six months
2002Change
Change,%
Change structure
O&G equipment
11.9 9.7 2.2 22.7% 33.3%
NPP equipment
12.7 14.1 (1.4) (9.9%) (21.2%)
Shipbuilding 7.2 3.0 4.2 140.0% 63.6%
Mining equipment
4.9 3.4 1.5 44.1% 22.7%
Special Steel 10.9 9.0 1.9 21.1% 28.8%
Machinery manufacturing services
9.0 11.9 (2.9) (24.4%) (43.9%)
Other 4.6 3.5 1.1 (31.4%) 16.7%
Total 61.2 54.6 6.6 12.1% 100.0%
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Change in EBITDA by segmentChange in EBITDA by segment$mln. Six
months 2003
Six months
2002Change Change, %
Change structure
O&G equipment
3.2 7.1 (3.9) (54.9%) 35.8%
NPP equipment
7.1 7.3 (0.2) (2.7%) 1.8%
Shipbuilding 4.0 1.2 2.8 233.3% (25.7%)Mining equipment
0.7 0.5 0.2 40.0% (1.8%)
Special Steel 9.0 7.4 1.6 21.6% (14.7%)Machinery manufacturing services
5.1 14.1 (9) (63.8%) 82.6%
Other (4.6) (2.2) (2.4) (109.1%) 22.0%
Total 24.5 35.4 (10.9) (30.8)% 100.0%
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ProfitabilityProfitabilitySix months
2003Six months
2002
Sales, $ mln 215.7 202.9
Gross margin 28.4% 26.9%
EBITDA 11.4% 17.4%
EBIT 4.8% 12.2%
Net Income 6.5% 2.3%
1010
Balance Sheet HighlightsBalance Sheet Highlights
$mln Six months 2003
Six months 2002
Change %
Current Assets 477.3 346.0 131.3 38%
Total Assets 784.0 592.5 191.5 32%
Current Liabilities
381.6 283.7 97.9 35%
Total Liabilities 573.1 394.0 179.1 45%
NWC 95.7 62.3 33.4 54%
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Key RatiosKey RatiosSix months
2003Six months
2002
Current ratio 1.25 1.07Quick ratio 0.17 0.26NWC to Total Assets 12% 4%Total Liabilities to Total Assets
73% 73%
Turnover (days)Assets 582 472Inventories 215 200Trade accounts receivable 37 40NWC 67 15
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Income statement net of non-cash effectIncome statement net of non-cash effect$th
Six months 2003
Six months 2002
Income after taxes and minority interest 14 148 4 590
Minority interest (2 518) 2 586
Deferred tax 1 599 5 379
Operating provisions (475) (6 442)
Non-operating provisions (556) -
Deferred payment* 3 066 3 206
Minority interest on deferred payment (752) (786)
Total adjusted net income 14 472 8 533
Depreciation 13 001 11 305
Net income + Depreciation 27 473 19 838* represented payment for NPPE that is due upon the commissioning of the respective power plants
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SG&ASG&A
$th6 months
20036 months
2002Change
Selling 5 623 5 486 137 2.5%
G&A 45 625 32 233 13 392 41.5%
Total 51 248 37 719 13 529 36%
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G&A expenses ($th)G&A expenses ($th)Total 6 months 2003 G&A
expensesOrganic
componentAcquisition component
45 625 37 537 8 088
Organic component items
Six months
2003
Six months
2002Change
Change structure
Payroll 13 416 9 762 3 654 37% 69%Unified Social Tax 4 270 3 222 1 048 33% 20%Road User’s Tax - 2 096 (2 096) (100%) (40%)Rent of land (or land tax) 1 758 1 269 489 39% 9%Depreciation 829 577 252 44% 5%Property insurance 2 206 1 839 367 20% 7%Repairs & maintenance 2 543 2 159 384 18% 7%Utilities 9 348 8 350 998 12% 19%Other 3 164 2 958 206 7% 4%
Total organic component
37 537 32 233 5 303 16% 100%
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Selling expenses ($th)Selling expenses ($th)Total 6 months 2003 Selling
expensesOrganic
componentAcquisition component
5 623 4 243 1 380
Organic component items
Six months
2003
Six months
2002Change
Change structure
Transport / customs / packaging / commission
3 135 4 123 (988) (24%) 79%
Advertising 35 27 8 30% (1%)
Other 1 073 1 336 (263) (27%) 21%
Total organic component
4 243 5 486 (1 243) (23%) 100%
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Debt dynamicsDebt dynamics
$mlnSix months
2003Year-end
2002Six months
2002
Long-term debt(incl. non-convertible bonds)
88.4** 61.1* 32.2
Short-term debt 54.1 53.3 48.4
Current portion of long-term debt 4.1 3.7 5.2
Total debt 146.6 118.1 85.8
Interest expense 8.5 6.0
Capitalized interest 0.9 0.5
Interest coverageEBITDA / (Interest expense+Capitalized interest)
2.6 5.4
* Increase in long term debt due to CLN issuance** Increase in long term debt due to issuance of non-convertible bonds
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Effective interest rateEffective interest rate
$mln Six months 2003 Six months 2002
Average debt 131.1 74.8
Interest expense 8.5 6.0
Capitalized interest 0.9 0.5
Effective interest rate 14% 17%
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Trade a/c receivable, payable & advancesTrade a/c receivable, payable & advances
* Increase is due to advances for a diesel submarine for The Chinese Navy **Increase is due to advances received from Atomstroyexport* Increase is due to advances for a diesel submarine for The Chinese Navy **Increase is due to advances received from Atomstroyexport
$mlnYear 2002
ASE
adj
Year 2002
Adjusted
Six months
2003
Change
%
Short-term trade a/c
receivable54.6 (9.4) 45.2 34 (25%)
Due from related parties 2.9 9.4 12.3 19.5 59%
Long-term trade a/c
receivable13.5 (13.5) - 3.9 100%
Due from related parties, long-term
2.4 13.5 15.9 15.3 (4%)
Short-term trade a/c payable
32.3 (3.2) 29.1 33.4 15%
Advances received * 91.1 (40.6) 50.5 105.5 109%
Due to related parties** 5.1 43.8 48.9 78.5 61%
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InventoryInventory
$mlnSix
months 2003
Six months
2002Change
Change,
%Change
structure
Materials and spare parts
75.2 61.5 13.7 22% 35%
Work-in-progress 99 83.6 15.4 18% 39%
Finished goods 50.7 41.2 9.5 23% 24%
Total inventories, at cost
224.9 186.3 38.6 21% 97%
Provision for obsolete inventories
(23.5) (24.4) 0.9 (4%) 2%
Total inventories, net 201.4 161.7 39.7 25% 100%
2020
Other current assetsOther current assets
($mln) Six months 2003
Taxes receivable 54.7
Other current assets 29.3
Total 84.0
2121
Plant and equipmentPlant and equipment
($mln)
PPE as of December 31, 2002 201.4
Cumulative translation adjustment 9.1
PP&E of new subs (excl. effect of allocation of negative goodwill)
1.4
Additions 16.8
Disposals (8.3)
Depreciation for the year (13.0)
Other 0.5
PPE as of June 30, 2003 207.9
2222
Subsequent events - acquisitionsSubsequent events - acquisitions
CompanyAcquisition date, 2003
Consideration($th)
Ownership
Volgograd Shipbuilding
Plant
July and October
4 842
Increased from
18.96% to 69.23%
OAO CKB Korall
October 2 501
Increased from
30.40% to 92.91%