|Operating profit as reported||24.7||37.6|
|Investment property gain||(2.0)||(7.5)|
|Pension plan gain||-||(10.7)|
|Adjusted Operating profit||38.3||51.2|
|EBITDA adjusted for exceptional items||82.1||100.0|
Turnover decreased by 6% from €432.8 million to €406.2 million, a decrease of €26.6 million.
The key sales variances year on year were as follows:
Operating profit before exceptional items was €24.7 million in FY17 (FY16: €37.6 million). Operating profit adjusted for exceptional and once off items was €38.3 million in FY17 (FY16: €51.2 million). Exceptional and once off items in FY17 (€13.6 million charge in FY16) included:
The key items which impacted the underlying trading performance during the year compared to FY16 were:
EBITDA including exceptional and once off items was €79.3 million in FY17 (FY16: €111.0 million). EBITDA adjusted for exceptional items was €82.1 million in FY17 (FY16: €100.0 million).
Profit before tax was €12.2 million in FY17 (FY16: €22.2 million) reflecting all of the items previously outlined and a decrease in finance costs of €2.7 million following the repayment of €76.3 million debt during the year.
Profit for the year in FY17 was €5.2 million (FY16: €17.2 million) with a tax charge of €6.9 million (FY16: €5.8 million).
Total Assets at €636.8 million was €88.8 million lower than the prior year which reflected (i) a reduction in cash of €82.0 million - €76.3 million was utilised for debt repayments; (ii) lower carrying value in property, plant and equipment of €8.5 million due to excess of depreciation over additions; (iii) reduction in inventory levels of €4.8 million with lower coal and briquette inventories offset by other receivables and increase in investment property (assets held for resale).
|Net cash flow from operating activities||82.1||97.3|
|Working capital & provisions||(18.7)||(6.7)|
|Capital expenditure and investments||(47.7)||(65.8)|
|Financing costs paid||(15.3)||(17.3)|
|Cash received on derivatives||15||4.7|
|Income tax received (paid)||0.6||(4.6)|
|Funds advanced on RCF facility||11.6||-|
|(Decrease) in net cash||(53.2)||(2.5)|
|Non cash movement||(0.1)||(0.1)|
|Decrease in net debt||(53.3)||(2.6)|
The Group had a net cash outflow of €53.2 million in FY17 compared to €2.5 million in the prior year – largely due to the debt repayments of €76.3 million in FY17.
At year end, the Group had net debt of €170.5 million, a decrease of €2.2 million in the year.
The detailed cash flow statement is given on page 80 supported by Notes 19 and 23 to the Financial Statements.
Capital Expenditure and Financial Investment for FY17 amounted to €47.3 million (FY16:€71.8 million). The capital investment programme undertaken during the year included expenditure on: production plant for peat harvesting, transport equipment for the transport of milled peat, construction of engineered landfill cells for waste treatment facility, the purchase of refuse collection vehicles, skips and bins, upgrades at solid fuels facilities, and the implementation of new automated systems based on a financial shared services model. Acquisition costs of €12.9m were paid in acquiring White Moss Horticulture Limited and Pacon skip hire businesses. An investment of €0.5 million was made in the 50/50 Joint Venture with ESB in respect of the Oweninny wind farm and an investment of €0.8m was made in acquiring a 50% interest in Electricity Exchange, a demand side management business.
Research and Development: During FY17 Bord na Móna spent €9.3 million on research and development including business development, exclusive of grants (FY16: €7.5 million). The Group are developing new opportunities in areas such as: renewable fuels, smokeless coal, wind and solar farms, a US biomass pellet manufacturing plant, new products and markets in the horticultural sector and process improvements in all areas. Fourteen people are directly employed in the Process Improvement/Innovation Centre with a further twenty five people in business development and innovation embedded in the operational businesses of the Group.
The Treasury Policy for the Group is reviewed by the Board on an annual basis and is implemented and monitored by the Group Treasury function. The Policy aims to minimise overall Group funding costs and to maintain flexibility in volatile markets, subject to acceptable levels of treasury and counterparty risk.
The overall objective of the Treasury function in managing foreign exchange risk is to contribute to the achievement of the Group financial objective of stable Euro operating profit growth in a risk averse and cost effective manner and to use natural hedges across the Group wherever possible. Exposures in relation to foreign investments are hedged as far as possible by borrowings in the same currency as the underlying net assets.
The Treasury policy permits derivative instruments to be used to mitigate financial risks and derivatives are executed in compliance with the specification of the Minister for Finance issued pursuant to the ‘Financial Transactions of Certain Companies and Other Bodies Act 1992’.
The Group’s overall debt position is primarily fixed through swaps. Net borrowings in the current financial year reached a peak of €196 million in September 2016, compared with a peak in the previous year of €224 million. The peak borrowing occurred upon the the completion of the peat harvest. Finance costs at €16.4 million were €3.3 million lower than in the previous year due to debt repayment during the year. Finance income at €4.3 million was €0.5 million lower due to lower income on the cross currency swaps also due to debt repayment.
At year end, the Group had $188.0 million (€173.9 million) fixed rate debt raised on the U.S. private placement market. In order to hedge the associated U.S. dollar exchange rate exposures and convert the underlying interest rates to fixed, the Group entered into a number of cross currency swaps to match the maturity profile of this debt. A sum of $45.0 million (€32.2 million) is repayable in August 2017.
The maturity profile of debt at the financial year end was as follows: 23% repayable in FY2018, 37% repayable in FY2019 and 40% repayable in FY2020.
Gearing was 60% at year-end compared to 61% at the start of the year reflecting the small reduction in borrowings.
Chief Financial Officer