Duro Felguera
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The company presents results for 2019 and first quarter of 2020

Duro Felguera reports profits in 2019 and wins new contracts for 31 million Euros in first quarter of 2020

In line with the company's Strategic Plan, the EBITDA amounted to 4 million Euros in 2019 as opposed to losses of 124.4 million Euros in the previous year, putting an end to the negative trend of FY 2017 and 2018.

The Group's net debt was also turned around in 2019, and at the end of the year showed a surplus liquidity of 22.9 million Euros as opposed to the deficit of 3.5 million in 2018.

As for the first quarter of 2020, the company reached 30.5 million Euros in order intake, closing the quarter with a backlog of 423 million Euros.

At the end of March 2020 the treasury position amounted to 91 million Euros.

Friday 22 May 2020. The Board of Directors of Duro Felguera (DF), a Spanish company specializing in the energy, mining & handling, oil & gas and renewable energy sectors, has drawn up the accounts for FY 2019 and reported the results for the first quarter of 2020.

The annual results confirm that the EBITDA is still on the rise which started early in 2019 in comparison to the previous years, and amounted to 4 million Euros at the end of 2019, more than the target fixed in the Strategic Plan.

The main difference in comparison to the preliminary results reported in February is due to an accounting adjustment with no impact on the cash flow, which is positive again in the results for the first quarter of 2020.

Duro Felguera's order intake in 2019 increased from 78.8 million Euros in 2018 to 105.5 million Euros as of December 2019. In 2019, Duro Felguera won contracts with traditional top-level clients: Endesa, Cepsa, Arcelor, British Petroleum, Exxon and Petronor.

Ordinary revenue from sales was up to 392.9 million Euros. 89% of this amount is from overseas: Europe (38%), Africa and the Middle East (28%) and Latam (22%).

The net profit attributed to the Parent Company amounted to 1.4 million Euros. In 2018 the profit was € 99.4 million but this included the extraordinary revenue of €218.7 million from the refinancing. Without this extraordinary revenue, the net loss attributed to the parent company in 2018 would have been 119 M€.

The National Court, in the sentence dated 13 February 2020, found in favour of Duro Felguera and annulled the embargos practiced by the Tax Authorities. Likewise, the criteria fixed in another recent sentence from the National Court concerning the crux of the controversy in a similar case confirms the criteria held to date by Duro Felguera regarding the Tax Authorities.

José María Orihuela, CEO of the company, stated that "both the Board of Directors and the management team are working towards a viable future for DF, a company we came to when it was in an exceedingly complicated situation, but we believe in its feasibility and are now starting to see the first results".

Management 2019

The Group's new management team focused its efforts in 2019 on solving the problems inherited from the previous administrators and redirecting the company's activity towards the principles of the strategic plan approved in May 2019: self-financing in each project, exhaustive monitoring of the cash flow, prioritizing profitability over growth, working efficiently and controlling costs, reducing risk and defining the geographical perimeter.

Under the essential premise of generating cash, this result has been achieved by implementing a new organizational model focused on rigorous cost control and reducing exposure to risk. A new Management Committee was appointed and the cost structure was reduced.

Different agreements were reached with different clients to renegotiate the contractual terms of ongoing projects, including transactional agreements which have generated liquidity for the Group. This has enabled the recovery of project bonds for 142 M€ from January 2019 to the date when the accounts were drawn up, including the bonds from the Termocentro project issued in 2009.

Results for the first quarter of 2020 and Covid-19

Duro Felguera's order intake amounted to 30.5 million Euros and the backlog was 423 million Euros at the close of the first quarter, while the treasury at the close of March 2020 amounted to 91 million Euros.

Due to the emergency situation caused by Coronavirus (COVID-19), the Group designed and implemented an Action and Contingency Protocol in order to protect employees, clients and suppliers and guarantee the same level of efficiency and quality within the Group.

In this situation, the Group provisioned 10 million Euros from the results of the first quarter of 2020, applying criteria of prudence in the face of uncertainty in the current scenario due to the pandemic.

The Group is still analysing the effects of the pandemic and is working with a scenario of delays in order intake against the Strategic Plan. The Group is taking steps to guarantee its treasury until the consequences of the crisis have all been overcome.

Specific plans have been set in motion to make the most of the commercial opportunities provided by the current situation and Duro Felguera's capacities in the field of hydrocarbon storage, smart systems and renewable energies.

According to José María Orihuela, "employee behaviour, even with the pandemic and the temporary layoff, is proving to be excellent. We are still working on the traditional lines which are considered essential in the state of alarm, such as pressure vessels, services and smart systems. We are also boosting the new strategic lines defined in the industrial plan, such as renewable energies and new security technologies (encryption) and digital services for industry (logistics services)".

The Board of Directors would like to take advantage of this press release to thank Acacio Faustino Rodríguez García for the work he did while in the company.





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