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- In comparison with Q4 2015/16: stable core business in the Mobile Devices segment, growth in the Automotive, Industrial, Medical segment
- In comparison with Q1 2015/16: expected seasonality with the corresponding start-up effects of the new plants in Chongqing
- Ramp-up of plant 1 currently flatter than expected; nevertheless, AT&S still expects full utilisation of the first production line towards the end of the calendar year 2016
- Plant 2 for substrate-like printed circuit boards was started in early July, ahead of schedule
- Further promissory note loans of EUR 150 million placed and OeKB investment financing transaction of EUR 75 million concluded
- Guidance for FY 2016/17 confirmed
AT&S starts the new financial year 2016/17 with the expected, usual seasonality of mobile devices and the corresponding start-up effects of the new plants in Chongqing. In the future, these plants will make a substantial contribution to the company’s growth course. Andreas Gerstenmayer, CEO of AT&S, commented: “Starting with the financial year 2016/17, we are beginning the next phase of transformation, which will result in a completely new positioning of AT&S in the market, but also in a new dimension of the company. Until the new plants in Chongqing, China, have been ramped up and reach the break-even, the start-up effects and higher depreciation will be clearly reflected in the results. We have already taken this into account in our guidance for the year, but we expect the effects in the first quarter to be stronger than in the coming quarters. However, we have to pursue this course in order to ensure the profitable growth of AT&S on a sustained basis in the future.”
He added: “Moreover, we see the usual seasonality in the first quarter, which was barely existent in the first quarter of last year. The ramp-up of the plant for IC substrates is technically highly demanding and is currently slightly flatter than expected. However, we still stick to our target of full utilisation of the first production line towards the end of the calendar year 2016. Ahead of schedule we started plant 2, with the first production line for substrate-like PCBs, with the first sub-processes.”
Asset, financial and earnings position
AT&S maintained the high revenue level of the fourth quarter of 2015/16. This was attributable to the stable revenue development in the Mobile Devices & Substrates segment and growth in the Automotive, Industrial, Medical segment.
Revenue of the first quarter of 2016/17 amounted to EUR 178.9 million and was lower than the value of EUR 194.4 million in the same period of the previous year, which hardly showed any seasonality due to the exceptionally strong demand for mobile devices, and maintained the level of the fourth quarter of 2015/16 (EUR 178.5 million).
Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 18.8 million vs. EUR 45.5 million in the comparative period of the previous year and were primarily based on start-up effects of the Chongqing project (Q1 2016/17: EUR 19.3 million). Adjusted for the start-up effects of the Chongqing project, EBITDA amounted to EUR 38.1 million
Consequently, the EBITDA margin dropped 12.9 percentage points compared with the prior-year period to 10.5%. Adjusted for the Chongqing effects, the EBITDA margin amounts to 21.9%, thus remaining at a very high level (comparative period of the previous year: 23.3%).
Depreciation of property, plant and equipment and amortisation of intangible assets amounted to EUR 28.0 million (prior-year period: EUR 21.7 million). EBIT reduced from EUR 23.8 million in the comparative period of the previous year to EUR -9.2 million. Adjusted for the Chongqing project, AT&S achieved EBIT of EUR 19.1 million.
The EBIT margin was -5.1% in the first quarter of 2016/17 and thus lower than in the comparative period, at 12.3%; the adjusted margin amounted to 11.0% (Q1 2015/16: 13.2%).
Finance costs dropped to EUR -5.7 million compared with EUR -0.2 million in the comparative period, due to currency valuation effects. The interest result remained at the level of the previous year despite higher net debt due to the optimisation measures implemented. The tax rate was 8.4%.
The net profit of EUR 19.6 million in the prior-year period fell to a loss for the current period of EUR -13.6 million due to the start-up effects of the Chongqing project and significantly higher negative finance costs. Earnings per share consequently decreased to EUR -0.35 vs. EUR 0.50 in the comparative period of the previous year.
Cash flow and statement of financial position
Cash flows from operating activities before changes in working capital amounted to EUR 8.6 million vs. EUR 44.7 million in the previous year. Cash flow from investing activities – investments in the plants under construction in Chongqing, technology investments in other locations and investments in financial assets – totalled EUR -101.5 million (prior-year period: EUR -40.3 million).
Equity declined from EUR 568.9 million to EUR 553.5 million due to the loss for the period and negative currency translation differences of EUR 1.8 million. The reduced equity, the issue of a promissory note loan and higher total assets, resulted in the equity ratio of 37.2%, which was lower than at 31 March 2016 (42.3%).
As expected, net debt rose from EUR 263.2 million to EUR 342.4 million due to the very high investment activities. Consequently, the net gearing ratio amounted to 61.9% at 30 June 2016 (31 March 2016: 46.3%).