ENEDO PLC PUBLISHES HALF YEAR FINANCIAL REPORT JANUARY 1 – JUNE 30,
2022
ENEDO PLC Half year financial report August 12th,
2022 at 9.45 a.m.ENEDO PLC PUBLISHES HALF YEAR FINANCIAL
REPORT JANUARY 1 – JUNE 30,
2022 January
– June
2022 in
brief
- Net sales increased 15% and was EUR 20,9 million (EUR 18,1
million)- Adjusted EBITDA positive with EUR 1,3 million (EUR -0,6
million)- Adjusted operating profit EUR -0,2 million (EUR -2,3
million)- Profit/loss for the period, EUR -1,3 million (EUR -0,4
million)*- Orderbook increased to EUR 35,4 million (EUR 16,0)-
Turnaround program executed, savings in expenses EUR 1,4 million
compared to H1 2021- On July 1, 2022 Inission AB has increased
ownership in Enedo to 80,43 % and is preparing a mandatory public
tender for remaining part of the shares in Enedo Plc.
The figures in the release are presented from continuing
operations unless otherwise noted.
|
1-6/22 |
1-6/21 |
1-12/21 |
Key indicators, EUR million |
6mo |
6mo |
12mo |
|
|
|
|
Net Sales |
20,9 |
18,1 |
36,4 |
Power Supplies |
13,0 |
11,4 |
23,4 |
Led Drivers |
5,2 |
4,5 |
9,2 |
Power Systems |
2,6 |
2,2 |
3,9 |
Adjusted
EBITDA |
1,3 |
-0,6 |
-0,8 |
EBITDA |
1,0 |
-1,2 |
-3,2 |
Adjusted
operating profit/loss |
-0,2 |
-2,3 |
-4,2 |
Operating
profit/loss |
-0,5 |
-2,9 |
-6,6 |
Profit/loss
before taxes* |
-1,3 |
-0,4 |
-4,6 |
Earnings per
share, EUR* |
-0,02 |
-0,01 |
-0,08 |
|
|
|
|
Solvency
ratio, % |
10,4 |
27,1 |
14,9 |
Net Gearing,
% |
337,7 |
58,5 |
173 |
Cash flow from
operating activities |
-3,1 |
-1,8 |
-3,3 |
*1-6/2021
figures include gross EUR 3,3 million benefit from loan
cancellation as part of the completed loan arrangement and related
transaction expenses EUR 0,4 million. Net impact EUR 2,9
million. |
|
|
|
|
|
|
|
Key indicators Half year, EUR million |
H1/2022 |
H2/2021 |
H1/2021 |
|
|
|
|
Net Sales |
20,9 |
18,3 |
18,1 |
Adjusted
EBITDA |
1,3 |
-0,2 |
-0,6 |
EBITDA |
1,0 |
-2,0 |
-1,2 |
Adjusted
operating profit/loss |
-0,2 |
-1,9 |
-2,3 |
Operating
profit/loss |
-0,5 |
-3,7 |
-2,9 |
|
|
|
|
|
|
|
|
|
1-6/22 |
1-6/21 |
1-12/21 |
ADJUSTED OPERATING PROFIT/LOSS, EUR million |
6mo |
6mo |
12mo |
Operating
profit/loss |
-0,5 |
-2,9 |
-6,6 |
Adjustments in operating profit/loss |
|
|
|
Resctructuring
costs related to personnel |
|
0,3 |
1,6 |
Cloud based
ERP implementation expenses |
|
|
0,3 |
Provision
related to a claim |
0,1 |
0,2 |
0,2 |
Sale of a
subsidiary |
|
|
0,3 |
Provision for
bad debt |
0,2 |
|
|
Adjustments in operating profit/loss Total |
0,3 |
0,6 |
2,4 |
Adjusted operating profit/loss Total |
-0,2 |
-2,3 |
-4,2 |
|
|
|
|
|
1-6/22 |
1-6/21 |
1-12/21 |
ADJUSTED EBITDA, EUR million |
6mo |
6mo |
12mo |
EBITDA |
1,0 |
-1,2 |
-3,2 |
Adjustments in EBITDA |
|
|
|
Resctructuring
costs related to personnel |
|
0,3 |
1,6 |
Cloud based
ERP implementation expenses |
|
|
0,3 |
Provision
related to a claim |
0,1 |
0,2 |
0,2 |
Sale of a
subsidiary |
|
|
0,3 |
Provision for
bad debt |
0,2 |
|
|
Adjustments in EBITDA Total |
0,3 |
0,6 |
2,4 |
Adjusted EBITDA Total |
1,3 |
-0,6 |
-0,8 |
Estimate of financial development in
2022
The company has decided to continue the policy of not to give an
estimate for 2022 financial development.
Mikael Fryklund, Enedo President and
CEO
Enedo’s first half net sales of EUR 20,9 million inreased EUR
2,8 million or 15% compared to last year. Our financial performance
improved according to plans and the Adjusted Ebitda was positive
with 1,3 million EUR, an improvement of 2,5 million EUR compared to
H1 2021. The improved financial performance is due to our high
order stock which enables the growth in net sales and due to the
executed turnaround program which has heavily decreased our
expenses. The order intake has continued strong during H1 2022. The
global shortage of components continues to impact our performance
negatively and has decreased the net sales due to missing
components and increased our inventories and thereby our liquidity
situation has remained challenging.
The Power Supplies product category’s net sales increased to EUR
13,0 million with an increase of EUR 1,6 million, 14%, compared to
net sales of EUR 11,4 million in H1 2021. The growth in orderbook
has continued strong.
The Led Drivers product category's net sales were EUR 5,2
million, an increase of EUR 0,7 million, 16%, compared to H1 2021.
The increase of the Led Drivers product category was mainly driven
by the continued strong demand by our customers in sport stadium
and public environment businesses.
The net sales of the Power Systems product category increased
with EUR 0,4 million and was EUR 2,6 million, 15%, compared to H1
2021 The order intake of Power Systems product category has
continued strong which has increased the orderbook from H1
2021.
Actions to improve our logistic procedures have continued
through H1 2022, and further actions will be taken during H2 2022.
The scouting for external EMS partners to improve the service to
our clients continues.
On July 1, 2022 Inission AB has increased ownership in Enedo to
80,43 % and is currently preparing a mandatory public tender for
remaining part of the shares in Enedo Plc. This transaction will
further improve the co-operation between Enedo & Inission and
will further enable synergies and co-operation. Becoming a
subsidiary of Inission will also strengthen our financial
capabilities.
January-June
net sales, ebitda
and operating profit
Net sales were EUR 20,9 million (EUR 18,1 million).
Ebitda turned positive during H1 2022 with EUR 1,0 million
compared to negative ebitda of EUR 1,2 million in the comparison
period. Operating loss decreased to EUR -0,5 million from EUR -2,9
in the comparison period, an improvement of EUR 2,4 million.
Business environment
The overall demand in the power supply services market continued
good despite the war in Ukraine and continued lock-downs in China
and other countries. This has affected electronics industry
globally. The rising inflation and cost of manufacturing as well as
shortages in component availability has continued through the
reporting period.
Enedo is working in close co-operation with the suppliers and
customers to keep adequate inventory levels to mitigate the risks
regarding the global component shortage. While growing inventories
decrease the risk of component availability, it has at the same
time caused challengies in our working capital financing.
Short-term risks and uncertainties
General economic developments may affect the company's business
environment. The war in Ukraine has led increasing risks on
economic growth which if continued may effect the demand for
Enedo’s products. Covid-19 is still effecting to uncertainty in the
industry and, depending on the development of the pandemic, may
have potential effects on our customers' ability to operate
Certain business risk are related to the success of key
customers' products in the market. The progress
of Enedo's product development projects depends in part
on the schedules of customers' own projects. In addition, the
fluctuations in demand typical of the market cause rapid changes
in Enedo's business.A substantial risk is the required
improvements of production planning and procurement procedures
in Tunis and capacity constraints in respect of machine
capacity, which in a growing market with shortage of components
makes the situation even more challenging. Improvement actions are
taking place in this respect.
Due to the nature of the business, Enedo is subject to
claims, of which the final solution cannot be predicted. Based on
current information, there are no claims that are expected to have
a material impact on the Group's financial position.
The delivery times of the components required by the company are
partly long and there may be difficulties in obtaining certain
components from time to time, which may affect the delivery
capacity. Covid-19 has also increased the level of uncertainty in
each country, which may affect our delivery capacity.
There are some risks related to the adequacy of financing, and
the company aims to manage these risks by actively planning and
implementing diverse options. In December 2021, the company signed
a EUR 5.0 million loan arrangement with a loan period of 9 months.
The company does not expect to be able to repay the loan by
maturity using its cash flow from operating activities. Due to the
current strong order backlog and the reduced expenses under the
turnaround program, the company will seek either to agree with the
lender on an extension of the loan period or negotiate a new loan
with another financial institution. According to the terms of the
loan arrangement, Inission AB has guaranteed the repayment of the
loan if none of the above two alternatives are implemented by
September 30, 2022. In May 2022 Enedo has signed a shareholderloan
with 3 biggest shareholders with a maturity date of 30 September
2022. Enedo is currently evaluating the alternatives regarding the
Eur 5,0 million loan and the shareholder loan of Eur 1,95 million
in co-operation with our new parent company Inission AB.
The war in
Ukraine
The war in Ukraine has caused economic and geopolitical
uncertainty globally. Economic bans concerning various goods and
components are restricting the availability of raw materials and
drive cost increases in supply chains all over the world.
As a consequence of the EU bans to Russia Enedo has suspended
all deliveries to Russia since the bans became effective. Enedo’s
export to Russia has earlier been around 1% of the total annual net
sales.
Due to significant uncertainties related to export and
receivables from Russia Enedo has recorded a write off of Eur 0,15
million on receivables from our customers in Russia.
Covid-19
Throughout the review period, we have continued to take active
internal measures to ensure the health of our employees and
continuity of business. We have implemented internal guidelines and
followed the guidelines of the local authorities in each country.
Our management team monitors the development of Covid-19 and
responds to changes immediately when necessary.
As the Covid-19 pandemic continues and business environment
adjusts to the situation, it is challenging to differentiate the
effects of the pandemic from other factors influencing business.
Global recovery from Covid-19 has resulted in a global shortage of
critical components in the market impacting lead-times and thereby
our business growth.
Investments and product
development Investments
in the Group's operations during the financial year were EUR 0,9
million (EUR 1,3 million), of which product development
capitalizations accounted for EUR 0,6 million (EUR 0,7 million). At
the end of the review period, capitalized product development costs
in the balance sheet were EUR 4,1 million (EUR 4,9 million). During
the review period, there was no impairment on the capitalized
product development costs (EUR 0,2 million).
In total, product development costs during H1 2022 were EUR 1,9
million (EUR 2,2 million), of which EUR 0,6 million (EUR 0,7
million) were capitalized in the balance sheet and EUR 1,3 million
(EUR 1,5 million) were recognized as expenses which was 6,1 % (8,3
%) of net sales.Financing The net interest-bearing
liabilities were EUR 12,1 million (EUR 5,1 million) at the end of
the financial period. The net interest-bearing liabilities include
EUR 0,5 million (EUR 0,8 million) of IFRS 16 lease liabilities.
Main reason for increased net interest bearing liabilities has been
the funds used to execute our restructuring program and the
increased levels of inventories due to high order stock and
measures to ensure component availability due to global component
shortage.
The cash flow from operating activities during the review period
was EUR -3,1 million (EUR -1,8 million). The negative cash flow was
mainly caused by increased need for working capital and payments
regarding the dismissal costs in Italy of around Eur 1,1 million.
The cash flow after investing activities was EUR -4,0 million (EUR
-3,1 million). The Group's solvency ratio was 10,4 % (27,1 %), net
gearing 337,7% (58,5%) and the closing balance sheet was EUR 32,3
million (EUR 32,5 million).
The cash position without undrawn credit facilities totaled EUR
1,4 million (EUR 3,6 million). At the end of the period, the Group
had EUR 0,1 million (EUR 1,0 million) of undrawn credit facilities
excluding factoring limits.
Enedo signed a new loan of EUR 5,0 million at the
end of December 2021 and the loan is fully raised by the
end of March 2022. Most of the MEUR 1,5 million raised during
H1 2022 was used to finance the Turnaround program and to amortize
other short term loans.
In May 20, 2022 Enedo signed a shareholder bridge loan
agreement in the amount of Eur 1 950 000 including a
convertible component in the total amount of EUR 650 000
to the Lenders. The due date of the loan is 30th
of September 2022 and the conversion right of Eur
0,10 per share can only be used if the loan is not repaid at
due date.
The above mentioned EUR 5,0 million and Eur 1,95
million loan arrangements have a maturity date of 30th
September 2022. The company has started a process to either prolong
the maturity dates or negotiate a new loan with another loan
provider to repay the loans with increased loan amount and longer
maturities. The company is currently evaluating the alternatives
with it’s new parent company Inission AB.
On May 20, 2022 Enedo informed about the plan to organize an
extraordinary shareholder’s meeting to arrange a share issue to
increase the liquidity and the equity of the company. After
becoming a subsidiary of Inission AB this plan has been removed and
the liquidity planning will be instead done as part of the Inission
Group.
ENEDO PLC Board of Directors
For further information please contact Mr. Mikael
Fryklund, CEO, tel. +358 40 500 6864,On 12th of August at
13:00–14:00
DISTRIBUTIONNasdaq Helsinki OyPrincipal mediaEnedo
Enedo is a European designer and producer of high-quality
electronic power supplies and systems for critical equipment even
in the most demanding environments. Enedo´s mission is to make
electricity better – more reliable, more secure, more energy
efficient – and just right to fit its purpose. Enedo´s three main
product categories are Led Drivers, Power supplies and Power
Systems. In 2021 the group´s revenue was EUR 36,4 million. Enedo
has 330 employees and its main functions are located in Finland,
Italy, Tunisia and USA. The group´s head office is in Finland and
parent company Enedo Oyj is listed on Nasdaq Helsinki Oy.
www.enedopower.com
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