Financial Statement Analysis for SIDENOR S.A. Efstratios Patsatzis MBA Canditate Supervisor Dr....

Financial Statement Analysis for SIDENOR S.A.

Efstratios PatsatzisMBA Canditate

SupervisorDr. Nicos Sykianakis

Presentation key points

Sector – Main Competitors The Company

(History, Products, Shareholders, Structure) Financial Statements of SIDENOR S.A. Financial Statement Analysis

Presentation key points

Liquidity Ratios Turnover Ratios Return Ratios Capital Structure Ratios Investor Ratios Conclusions

Sector – Main Competitors

SectorSteel production and trading sector

Main Competitors“HELLENIC HALYVOURGIA”“HALYVOURGIKI”

SIDENOR S.A. - History

1962 - Establishment of the Company with the name “VIOHALCO - SANITAS SA”

1971 - The corporate name is changed into “STEEL INDUSTRY OF NORTHERN GREECE SA”

1974 - ERLIKON SA and SIDENOR SA commence co-operating

1977 - The corporate name is changed to “SIDENOR - STEEL INDUSTRY OF NORTHERN GREECE SA”

1979 - The corporate name is changed to “SIDENOR Steel Products Manufacturing Company SA” 

SIDENOR S.A. - History

1994 - ERLIKON SA lists its stock through public offering in the Main market of Athens Stock Exchange

1997 - Absorption of SIDENOR SA by ERLIKON SA and change of corporate name into SIDENOR SA

1999 - Commencement of production by rolling mill of SOVEL SA (subsidiary)

2001 - The electrode production sector is split-off from the Company and incorporated into ERLIKON Wire Processing SA. SIDENOR takes over 75% of the Bulgarian STOMANA INDUSTRY SA. The new steel mill of SOVEL SA commences production.

SIDENOR S.A. - History

2003 - The holding of SIDENOR SA in the subsidiary STOMANA INDUSTRY SA increases to 79.50%. KEM SA and ATTICA METAL PROCESSING SA was finalized by SOVEL SA. Sidenor’s Quality Management System is certified according to ISO 9001:2008. SIDENOR launches High Ductility grade C concrete reinforcing steel into the

market. 2004 - SIDENOR acquires majority holding in CORINTH

PIPEWORKS SA. 2006 - SIDENOR establishes new subsidiary DOJRAN

STEEL.

SIDENOR S.A. - Products

SD Integrated Concrete Reinforcing System

Merchant Bars Wire Rod Pipes - Hollow Sections Hot-Rolled Steel Plates Special Steels

SIDENOR S.A. - Structure

SIDENOR S.A. - Shareholders

Financial StatementsStatement of Financial Position

Financial StatementsStatement of Comprehensive Income

Financial StatementsCash Flow Statement

Financial StatementsCash Flow Statement

Financial StatementsStatement of Financial Position

Fixed Assets / Total Assets360.770.511 / 593.401.564 = 0,6080 or 60,80%

Current Assets / Total Assets232.631.053 / 593.401.564 = 0,3920 or 39,20%

(Note: Intangible Assets / Total Assets equals zero)

Financial StatementsLiquidity Ratios

Current RatioCR = Current Assets / Current Liabilities232.631.053 / 274.675.258 = 0,846Quick RatioQR = Current Assets - Inventories / Current

Liabilities150.967.120 / 274.675.258 = 0,549

Financial StatementsLiquidity Ratios

Acid RatioAR = Cash / Current Liabilities

8.320.061 / 274.675.258 = 0,030

Financial StatementsTurnover Ratios

Inventory Turnover Ratio

ITR = Cost of Sales / Avg. Inventory232.381.323 / 111.739.687 = 2,1times / year

Days in Inventory = 365 / 2.1 = 174days

Financial StatementsTurnover Ratios

Receivables Turnover Ratio

RTR = Sales / Avg. Receivables276.530.121 / 49.460.084 = 5,57times / year

Days in Accounts Receivables = 365 / 5,57 = 66days

Financial StatementsTurnover Ratios

Accounts Payable Turnover Ratio(Purchases = Cost of Sales - Ending Inventory + Starting Inventory)

PTR = Purchases / Avg. Payable235.730.038 / 98.467.193,5 = 2,39times / year

Days in Suppliers = 365 / 2,83 = 153days

Financial StatementsTurnover Ratios

Inventory Conversion Cycle240 days

Net Cash Conversion Cycle87 days

Financial StatementsCash Flow Analysis

Cash Flow from Operating Activities

CF(OA) = - 49.589.580

(CFoa < Current Liabilities)

Financial StatementsCash Flow Analysis

Cash Flow from Investing Activities

CF(IA) = - 5.818.290

Cash flow from Financing Activities

CF(FA) = 33.497.870

Financial StatementsCash Flow Analysis

Net decrease in cash & cash equivalents for the period

-21.910.000 Cash & cash equivalents at the end of the

period

8.320.061

Financial StatementsReturn Ratios

Return on Total Assets Ratio

ROTA = Net Earnings / Avg. Total Assets

-25.443.969 / 598.607.226 = -0,043 or -4,3% Return on Equity Ratio

ROE = Net Earnings / Avg. Equity

-25.443.969 / 265.185.196,5 = -0,096 or -9,6%

Financial StatementsReturn Ratios

Return on Sales Ratio

Net Earnings / Sales

-25.443.969 / 276.530.121 = -0,092 or -9,2% Total Assets Turnover Ratio

Sales / Avg. Total Assets

276.530.121 / 598.607.226 = 0,462 or 46,2%

Financial StatementsCapital Structure Ratios

Financial Leverage

– Avg. Total Assets / Avg. Equity

598.607.226 / 265.185.196,5 = 2,26

(equity = 1, liabilities = 1,26)

Financial StatementsCapital Structure Ratios

– Equity / Assets

252.463.212 / 593.401.564 = 42,5%

– Liabilities / Assets

340.938.352 / 593.401.564 = 57,5%

– Debt / Equity

340.938.352 / 252.463.212 = 1,35

Financial StatementsInvestor Ratios

Nominal Value per Share

Share Capital / No of Shares

39.460.002 / 96.243.908 = 0,41 euro

Net Accounting Value per Share

Equity / No of Shares

540.166.817 / 96.243.908 = 5,61 euro

Financial StatementsInvestor Ratios

Earnings per Share

Net Earnings / No of Shares

-55.898.679 / 96.243.908 = -0,51 euro

P / E – P / BV

Price / Earnings per Share

2,42 / -0,51 = -4,75 times

Price / Book Value

2,42 / 5,61 = 0,43 times

Financial Statement AnalysisConclusions

Disability to cover short-term debt Large amount of Inventory held Long period in Accounts Receivables Negative Cash Flow from OA

Financial Statement AnalysisConclusions

Negative ROTA, ROE, Return on Sales Losses per Share Financing Conflict