HIGHLIGHTS
 


The recent trend of the economic indicators show a greater liveliness compared to the stagnation that characterized the first half of 2016. The international economic situation has strengthened above all due to the recovery of the production activities, improvement of confidence displayed by industrial enterprises and markets, as well as the increase of raw material prices, which registered a good recovery compared to the minimum levels reached at the beginning of 2016. Specifically, the recovery of energy commodities has revived the fate of producing countries and had a positive effect on the financial statements of companies in the energy sector, arriving from a period of deep crisis. On the other hand, it leads to a loss of terms of trade for consumer companies, primarily of oil.  Therefore, the lengthy period in which the low costs of the raw materials sustained the consumption of advanced economies has come to an end. Many macroeconomic, social and political factors remain in a phase of development, which makes the international situation uncertain and unstable.

With specific reference to coal prices, it is noted that, following the minimum levels reached in the first part of the year (the API2 and API4 indexes during the first quarter of 2016 recorded average values respectively equal to 45 USD/T and 52 USD/T) prices continued to show a significant strengthening trend, reaching an average value respectively in the fourth quarter amounting to 85 USD/T and 86 USD/T. It is noted that such values are also confirmed in the prices for Q1 2017.
In light of such trend, the average annual price for the indexes of reference, API2 and API4, registered an increase respectively for +5% and +12% (in absolute values for 60 USD/T and 64 USD/T) compared to 2015.  The main driver of this positive trend is attributable to the emission reduction program launched by the Chinese government that led to a massive reduction of coal production in China; the Asian giant is, therefore, forced to increase import of the raw material, with a consequent impact on international trade.

The Group has achieved important operating results over the year, proof being that losses booked by the Group for the previous year, other than reflecting a drop in commodity prices, were mainly the result of extraordinary and non-recurring events. The EBITDA and EBIT generated over the year respectively amounted to Euro 31.2 million and Euro 20.7 million (+13.7% and +44.9% compared to results achieved in 2015 before non-recurring events), while the net profit of the Group amounted to Euro 13.5 million (Euro -0.9 million in 2015 before non-recurring events). Furthermore, at the balance sheet level was confirmed the trend of improvement for the net financial position, which reached Euro129 million, down by Euro 19 million compared to 2015 and Euro 44 million compared to 2014.
These important results were achieved thanks to the good operating performances of all divisions of the Group.

 

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The Mining Division confirmed and improved the envisaged production and shipment plans, reaching a production of 1.4 million tons with an increase of 6% compared to the previous year. The reorganization is still on going and has included the hiring of international professionals within the sector, confirming the strategic interest of the Group towards its mining site in Kuzbass, in the region of Kemerovo. The main reasons that justify the significant improvement of the margin compared to the previous year are represented by the focus of the management in pursuing those organizational investments, with relevant improvements in the production costs; furthermore, in the 1st half of FY 2015, extraordinary events occurred relevant to the geological structure of the site determined a slow-down of production and increased operating costs. EBIT stands at Euro 6.3 million (Euro -2.3 million in 2015) and the Net Result for the sector amounts to Euro 6.2 million against the loss registered in 2015 for Euro -11.8 million.

 

The Trading Division, over the year, achieved good results in a market experiencing strong tension and difficulty and by constantly changing and volatile indices. Traded volumes, for 8.2 million tons of coal, are down by 16% compared to the previous year, this due to a strategy aimed at marketing products with higher added value, favoring profitability over volume, hence mitigating corporate risk, as well as the transfer of a part of the American subsidiary’s client portfolio to shale gas. The continuity of production at our mine in Russia has reduced the supply of raw material from outside suppliers with a positive impact on margins. Also noteworthy is the Asian activity, which has achieved good results in terms of strengthening and diversification of sources and clients. The organizational stability, achieved following an approximately two-year reorganization process, contributed in terms of commercial synergy and scale economies, as well as the achievement of objectives.
The EBIT generated over the year amounts to Euro 11.5 million (Euro 0.8 million in FY 2015). 

 

The Logistics Division confirmed the excellent results achieved during the previous year, owing to the financial and operational performance recorded by owned vessels: both the sister vessels Bulk Zambesi and Bulk Limpopo operating in Mozambique to the benefit of the mining giant Vale and the operating units in Indonesia, 4 units to the benefit of the client Berau and one operating for KPC, achieved excellent results with and EBITDA margin of 51%.
During the year, the certification pursuant to the BS OHSAS 18001:07 standard was successfully extended to the Indonesian companies and five vessels, hence completing the certification of the entire fleet and relevant shipping companies.
Rationalization of the organizational and corporate structures of the division continues.

 

As regards to the Shipping Division, over this year the last two Supramax sister ships were delivered, DACC Adriatico and DACC Atlantico. The delivery of the mentioned vessels allowed for the completion of the envisaged investment plan with an operating fleet of four 60,000 ton Supramax sister ships, which allowed for the joint venture with the d’Amico Group, called dACC Maritime d.a.c, to continue its operations in the shipping business for the transport of dry bulk cargo; this business is still affected by low charter rates but have recorded the first signs of recovery.
 
At an organizational level, Coeclerici Logistics S.p.A., through its commercial, technical business and dedicated staff, continued to coordinate and be the hub of the Logistics and Shipping Activities of the Group with full autonomy and capacity to meet current and future challenges.
Overall, the two divisions confirm the turnover levels of Euro 41 million, good profitability with an EBITDA and EBIT respectively for Euro 17.9 million and Euro 11.1 million and a net result of Euro 8.9 million (+5% compared to the previous period).

 

2016 was a particularly important year for the Group; in addition to achieving more encouraging economic results compared to previous years, due to changes such as the redesign and innovation of the business model, customer services and corporate organization, it represented the entry of the Group into a new business area. The Group, in line with the innovative capacity of its history and the enthusiasm to continue to take on new challenges, entered into the business of manufacturing high-technology automatic industrial machineries for the converting, packaging and automotive sectors by acquiring a majority stake in the IMS Deltamatic Group.
This investment represents a fundamental step, which launches us into a new dynamic and profitable market. The acquisition fits in the business diversification strategy and confirms the entrepreneurial and industrial nature of the Group.
 
IMS Deltamatic, with headquarters in Calcinate (Bergamo), boasts a long track record in the converting industry, with its first machine built by the subsidiary Goebel in 1851.  Through several acquisitions carried out in the last few years, the group has become a leading player with a steady growth rate on a global scale.  With four plants – two in Italy, one in Germany and one in the US – an office in China and over 300 employees, IMS Deltamatic has reached a consolidated turnover of about Euro 60 million in 2015, 90% generated abroad, and an EBITDA margin of approximately 7.5%.
The takeover, effective as of January 2017, of 67% of the capital by the Group entails an overall investment of about Euro 19 million, of which Euro 10 million to strengthen its net asset through a capital increase, aimed to support the future growth of the company also through further acquisitions.  
 
IMS Deltamatic’s founder Raffaele Ghilardi will hold the remaining 33% stake and he will support the management for the definition of strategies, ensuring business continuity and knowledge of the markets and the clients’ business.  In market terms, the target company operates in sectors that have been growing as a direct result of the increased use of plastic film, aluminium, paper and related compounds for the food and pharmaceutical industries as well as special applications, and automotive components (platforms, trunk coverings, parcel shelves), although, it reports different geographic trends in the above sectors.