|Operating profit as reported||37.6||69.6|
|Investment property gain||(7.5)||(14.5)|
|Pension plan gain||(10.7)||-|
|Impairments of property, plant and equipment and intangible assets*||24.5||0.2|
|Adjusted Operating profit||51.2||55.3|
|EBITDA adjusted for exceptionals and Investment property gains||100.0||101.3|
* included in administration expenses in FY15
Turnover increased by 6% from €406.7 million to €432.8 million, an increase of €26.1 million.
The key sales variances were as follows:
Operating profit before exceptional items was €37.6 million in FY16 (FY15: €69.6 million). Operating profit adjusted for exceptional items and investment property gain was €51.2 million in FY16 (FY15: €55.3 million). The following exceptional items and investment property gain, amounting to a net charge of €13.6 million to the Operating profit, included:
EBITDA including exceptional items was €111.0 million in FY16 (FY15: €115.4 million). As outlined in the table above the EBITDA adjusted for the exceptional items and Investment property gain was €100.0 million in FY16 (FY15: €101.3 million).
EBITDA pre exceptional items and Investment property gain was €100.0 million in FY16
The key items which impacted the underlying trading performance during the year compared to FY15 were:
Profit before tax was €22.2 million in FY16 (FY15: €56.4 million) reflecting all of the items previously outlined and an increase in finance costs of €2.1 million as the charge in FY15 was reduced by capitalised interest of €3.1 million on the construction of the wind farms;
Profit after tax and discontinued operations in FY16 was €17.3 million (FY16: €35.0 million) with a tax charge of €5.8 million (FY15: €13.8 million) reflecting lower taxable profits and a tax charge of €6.4 million on financial derivatives in FY15. FY15 also included a loss on discontinued operation, net of tax, of €7.5 million on the closure of the Anua operations.
Total Assets at €725.6 million was €10.4 million lower than the prior year which reflected the asset impairments of €24.5 million and an excess of depreciation charges over Property, plant and equipment additions.
|Net cash flow from operating activities||97.3||101.2|
|Working capital & provisions||(6.7)||(11.9)|
|Capital expenditure and financial investments||(65.8)||(113.3)|
|Financing costs paid||(17.3)||(16.7)|
|Cash received on derivatives||4.7||2.8|
|Income tax paid||(4.6)||(10.8)|
|Acquisition of and dividend payment to non-controlling interest||0.0||(0.4)|
|Decrease in net cash||(2.5)||(100.9)|
|Non cash movement||(0.1)||(0.1)|
|Movement in net debt||(2.6)||(101.0)|
The Group had a net cash outflow of €2.5 million in FY16 compared to €100.9 million in the prior year – an improvement of €98.4 million, largely due to the higher expenditure on wind farms and debt repayments in FY15.
At year end, the Group had net debt of €172.7 million, a decrease of €5.2 million in the year as a result of a foreign exchange gain on the US private placement loan notes.
Capital Expenditure and Financial Investment for FY16 amounted to €71.8 million (FY15: €113.7 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 the waste treatment facility, upgrades at the two briquette factories, refurbishment of the Baggot Street investment property and the implementation of new financial processes and systems based on a financial shared services model. An investment of €22.3 million was made in a 50/50 joint venture with Coillte in respect of the Sliabh Bawn wind farm. An investment of €1.7 million was made in the 50/50 joint venture with ESB in respect of the Oweninny wind farm.
An investment of €22.3 million was made in a 50/50 joint venture with Coillte in respect of the Sliabh Bawn wind farm.
Research and Development: During FY16 Bord na Móna spent €7.5 million on research and development including business development, exclusive of grants (FY15: €5.5 million). The Group are developing new opportunities in areas such as: renewable fuels, smokeless coal, wind and solar farms on our peatlands and opportunities in biomass pellet manufacturing plants. Nine people are directly employed in the Innovation Centre with a further twenty 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 €224 million in December 2015, compared with a peak in the previous year of €214 million. The peak borrowing occurred upon the investment in the Sliabh Bawn wind farm joint venture with Coillte. Finance costs at €19.6 million were €3.8 million higher than in the previous year as €3.1 million of interest was capitalised in FY15. Finance income at €4.7 million was €1.7 million higher due to increased income on the cross currency swaps of €1.9 million as the U.S. dollar was stronger in 2016 compared to 2015 partly offset by lower deposit interest due to reduced market rates of interest.
During FY16 Bord na Móna spent €7.5 million on research and development including business development, exclusive of grants
At year end, the Group had $273 million (€241.8 million) fixed rate debt raised on the US 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. Sums of $85 million (€75 million) are repayable in June (€53 million) and August (€22 million) 2016.
The maturity profile of debt at the financial year end was as follows: 31% repayable in FY17, 16% repayable in FY18, 24% repayable in FY19 and 29% repayable in FY20.
Gearing was 55% at year-end compared to 57% at the start of the year reflecting capital and joint venture investments.
Chief Financial Officer