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SOCEP S.A. - SOCP

H1 2018 report

Release Date: 8/16/2018 8:29:34 AM

IRIS Code: 1E80F

HALF-YEARLY REPORT SYNTHESIS

Complying to CNVM REGULATION NO.1/2006

For the first semester of 2018

Name of Shares Issuer                         : SOCEP SA

Registered Office                                  : CONSTANTA, INCINTA PORT Dana 34

Phone/fax                                                  : 0241/693856; 0241/693759

Fiscal Code                                                          : RO 1870767

Company Number in the Trade Register     : J 13/643/1991

Trading Market                                     : B.V.B. Standard category, symbol SOCP

Subscribed Share Capital                  : 34,342,574.4 lei split in 343,425,744 registered dematerialized shares with a nominal value of  0.10 lei/share

      

1. SOCEP S.A. BUSINESS

            1.1. OVERVIEW

             a) The main business of the company is port services providing, namely: loading operations, unloading operations, storage, forwarding of general cargo and containers and also other operations/services connected to maritime transport.

            These services are defined as "handlings" under "5224" NACE (CAEN) Code.

             b) COMPANY FOUNDATION DATE is 02/01/1991 under and according to H.G. (Government Decision) No.19/1991 based upon which the former operating company (the entire Port of Constanta) belonging to Ministry of Transport split up.

As result of splitting of this state company, several companies have been set up, with their share capital entirely state property, including SOCEP SA.

            In 1996 SOCEP SA was fully privatized, 60% based on mass privatization program (free coupons awarded to Romanian citizens) and 40% based on buying the shares from the state by company employees, the Employee Association.

Presently, the Association was disbanded and the shares have been nominally distributed to association members.

c) MERGERS, SUBSIDIARIES, and REORGANIZATIONS: In 2012, SOCEP S.A. founded as sole shareholder the limited liability company - SOCEFIN S.R.L. Constanta, having as main business CAEN code 6420 – activities of the holdings and a share capital in an amount of 30,000,000 lei.

           I.2. FINANCIAL AND ECONOMIC STATE 

a) The main elements of the Balance Sheet and of the Profit and Loss Account, compared to the same time period of the previous year, are below listed:

 

 

ECONOMIC INDICATORS

UNIT

06/30/2017

06/30/2018

I.         TOTAL ASSETS

lei

174,316,690

179,964,044

1.1.

Fixed Assets

124,905,489

128,722,690

1.2.

Stocks

779,635

2,013,875

1.3.

Receivables

14,124,064

12,942,618

1.4.

Cash and Bank Accounts

10,480,438

20,916,678

1.5.

Accruals and prepaid expenses

356,513

404,960

1.6.

Short Term Investments

23,670,551

14,963,223

II.        TOTAL LIABILITIES

lei

174,316,690

179,964,044

2.1.

Shareholders’ Equity

135,833,069

144,844,937

2.2.

Total Debts

38,001,220

34,601,215

2.3.

Upfront Revenues

25,722

31,535

2.4.

Provisions

456,679

486,357

 

b) Profit and Loss Account

 

 

INDICATORS

UNIT

06/30/2017

06/30/2018

I.

TURNOVER

lei

32,783,247

36,929,607

II.

TOTAL REVENUES

34,453,012

38,866,128

III.

TOTAL EXPENSES

31,722,937

31,408,090

IV.

GROSS PROFIT

2,730,075

7,458,038

 

 

Following items are the assets with a minimum 20% share – out of total assets: buildings (21,36%) and installations&equipment (29,09%). Expense items with a minimum 20% share – out of net sales (turnover) - are the personnel expense (35,37%) and the external services expense (20,36%).

         At the end of first semester of 2018, company recorded provisions in a total amount of lei 486,357, as follows:

- Provisions for employees benefits                          = 480,573 lei

- Other types of provisions                                        =     5,784 lei.

 

            Provision for employees benefits in an amount of lei 480,573 has been created for the bonuses granted to the employees at the retirement date – according to SOCEP Collective Labor Contract (Contract Colectiv de Munca la nivel de societate) – meaning the equivalent of three basic wages.

 c) Cash flow                                                                                      

 

 

First Semester  2018

CASH FLOWS FROM PORT OPERATION BUSINESS                                                                                                           = lei =

Receipts from customers

37,010,804

Payments to suppliers and employees

(27,722,638)

Paid interests

0

VAT and other taxes (income tax excluded)

(2,150,556)

Paid income tax

(758,192)

Other receipts

319,225

Other payments

(557,826)

I. NET CASH FROM PORT OPERATION BUSINESS

6,140,818

CASH FLOWS FROM INVESTMENTS

Payments for intangible assets acquisition

(1,742)

Payments for tangible assets acquisition

(1,465,866)

Payments for capital instruments acquisition

0

Receipts from tangible assets sale

720,176

Interest receipts

78,916

Receipts from dividends

100,158

II. NET CASH FROM INVESTMENTS

(568,359)

CASH FLOWS FROM FINANCING

Payments related to long term loans

(3,081,621)

Receipts from long term loans

0

Interest on long term loans

(369,001)

Paid dividends

(4,137,105)

III. NET CASH FROM FINANCING

7,587,727

IV. NET INCREASE OF CASH AND CASH EQUIVALENT (I+II+III)

(2,015,269)

V. VARIANCE FREQUENCY OF CURRENCY EXCHANGE RATE

212,727

VI. CASH AND CASH EQUIVALENT AT THE BEGINNING OF FIRST SEMESTER

37,682,443

VII. CASH AND CASH EQUIVALENT AT 06/30/2018

35,879,901

 

d) Financial and Economic Indicators

 

INDICATORS

CALCULATION PROCEDURE

RESULTS

06/30/2017

06/30/2018

1.

Current liquidity

Current assets/Current debts

4.53

4.52

2.

Indebtedness degree

Borrowed capital

--------------------------------- x 100

 

Equity

Borrowed capital

------------------------------ x 100

Committed capital

 

20.30

 

 

 

16.87

 

16.43

 

 

 

14.11

3.

Rotation speed of customers debts

Average balance of customers

----------------------------               x 180

Turnover

 

 

82.16

 

53.96

4.

Rotation speed of fixed assets

Turnover/Fixed assets

0.26

0.29

 

I.3. BUSINESS ANALYSIS

I.3.1. During the reported period the harbor cargo traffic increased with 16% compared to same period of previous year, meaning 253 thousand tons of cargo.  The benchmarking on different types of cargo is below listed:

                                                                                             

 

TYPES OF CARGO

UNIT

06/30/2017

06/30/2018

I.     HARBOR CARGO TRAFFIC

thousand tons

1,566

1,819

1.1.

General Cargo

thousand tons

942

744

1.2.

Containerized Cargo

thousand tons

421

539

1.3.

Bauxite

thousand tons

203

536

II.    TOTAL NUMBER OF CONTAINERS

pcs.

38,887

42,154

III.  TOTAL TEU-s

TEU

69,587

72,272

 

From the above mentioned benchmarking on different types of cargo, it is noticeable that bauxite ratio has been regained, reaching a traffic of 536 thousand tons, a significant increase by 164% compared to the first semester of 2017.

 Containerized cargo recorded a considerable increase of 28% compared to 2017, meaning an amount of 539 thousand tons.

 The benchmarking on different types of services is below presented:

 

TYPES OF SERVICES

UNIT

06/30/2017

06/30/2018

I.         TOTAL CIFRA DE AFACERI

lei

32,783,247

36,929,607

1.1.

Handling operation

30,539,814

32,445,878

1.2.

Storage operation

2,064,428

4,111,240

1.3.

Other types of services

179,005

372,489

 

In the first semester of current year the turnover increased by 12.6%, compared to the first semester of last year. Within the total turnover, each service type maintained – more or less – its share, namely the handlings have a 88% share  and the storage has an 11% share in the total turnover amount.

 

I.3.2.  In the first semester of 2018 investments amounting a total of 625,423 lei were put into operation.

 Main acquisitions put into operation during this first semester were:

®     Lifting beam with hook           lei   65,603

®     Mobile belt conveyer               lei 163,983

®     2 vehicles – FORD                  lei 120,407

®     Fuel supply tank (station type) lei 141,082

®     Self-propelling platform          lei   69,873

®     Printers (XEROX)                    lei   51,122.   

 

Compared to the same period of the previous year, capital expenditure state is below presented:

 

ASSETS

Unit

06/30/2017

06/30/2018

I.         TOTAL EXPENSES

lei

45,975,945

1,778,774

1.1.

Intangible Assets

-

1,464

1.2.

Buildings

6,578,975

-

1.3.

Vehicles and Transportation equipment

39,314,008

639,292

1.4.

Other assets

82,962

5,322

1.5.

Re-treatment of estate investment

-

1,134,160

 

In the next two years an important investment is being considered (a grain silo) and this requires a special financial effort. In 2015 the PACECO Project started, for which following purchases were made: one 22 rows-POSTPANAMAX type container crane, two RTG-s and one TOS (software). PACECP Project has been completed at the end of 2017.

 

I.3.3. We estimate that in the near future there will be no events, transactions, economic changes that might significantly affect revenues coming from port operation - the main business.

 I.4. MANAGEMENT OF SOCEP S.A.

According to General Meeting of Shareholders’ Decision issued on 14-th of December 2012, the company is managed in a dual system, by a Supervisory Board and an Executive Board. Both Managing Boards carry out their activity in absolute compliance with the law in force.

 

Until June 11-th 2018, the Supervisory Board consisted of 5 members. They are below presented:

- DUSU NICULAE - President, age 62 years, economist, over 25 years experience in leading positions, owning 14,590,858 SOCEP shares;

- DUSU ION - Vice-president, age 60 years, engineer, over 25 years experience in leading positions, owning 1,382,853 SOCEP shares;

- SAMARA STERE - Member, age 65 years, economist, over 25 years experience in leading positions, owning 36,114,550 SOCEP shares;

- CARAPITI DUMITRU - Member, age 52 years, legal adviser, over 15 years experience in leading positions, does not own SOCEP shares;

- STANCIU ION - Member, age 56 years, economist, over 10 years experience in leading positions, does not own SOCEP shares.

As per this date on, as result of OGMS decision dated 04/26/2018, the Supervisory Board has following structure:

- DUSU NICULAE - President, age 62 years, economist, over 25 years experience in  leading positions, owning 14,590,858 SOCEP shares;

- DUSU ION - Vice-president, age 60 years, engineer, over 20 years experience in leading positions, owning 1,382,853 SOCEP shares;

- SAMARA STERE -  Vice-president, age 65 years, economist, over 20 years experience in leading positions, owning 36,114,550 SOCEP  shares.

The Executive Board consists of 4 members.

As at 06/30/2018 structure of  SOCEP SA Executive Board is:

·         Dorinel Cazacu     -           General Manager and Chairman of Executive Board;

·         Ramona Pavlicu    -           Member of the Executive Board

·         Lucian Teodorescu  -         Member of the Executive Board

·         Gabriel Codet       -           Member of the Executive Board

 Members of the Executive Board have been appointed according to the provisions of the Constitutive Act of SOCEP SA, based on Supervisory Board decisions.

Members of the Executive Board carry out their activity based on mandate contracts approved by the Supervisory Board.

Mr. Dorinel Cazacu holds the position of chairman of the Executive Board. Managers carry out their activity based on mandate contracts agreed in total compliance with the legislation in force. They have not been and are not involved in court litigations or administrative proceedings.

 I.5. CHANGES AFFECTING COMPANY CAPITAL AND MANAGING PROCESS

Within the reporting period there were no events of infringement of company payment obligations towards creditors or employees.

Compared to 06/30/2017, the status of major significant shareholders or groups of shareholders, as at 06/30/2018 is as follows:

 

SHAREHOLDERS (GROUPS)

 

06/30/2017

06/30/2018

1.

GRUPUL DD SA CONSTANTA

%

32.3737

32.3737

2.

CELCO SA

%

24.6427

24.6427

3.

SAMARA STERE

%

10.5160

10.5160

4.

INDIVIDUALS

%

21.6677

25.8833

5.

LEGAL ENTITIES

%

10.7999

6.5843

TOTAL

%

100.0000

100.0000

 

 



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