Exhibit 99.2
Financial Information for the Three Months Ended June 30, 2018 of Kenon, OPC and Qoros and
Reconciliation of Certain Non-IFRS Financial Information
Table of Contents
Summary Kenon consolidated financial information
Kenon Holdings Ltd and subsidiaries
Consolidated Statements of Financial Position as of June 30, 2018 and December 31, 2017
Consolidated Statements of Financial Position as of June 30, 2018 and December 31, 2017
As of June 30, | As of December 31, | |||||||
2018 | 2017 | |||||||
$ millions | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 429 | 1,417 | ||||||
Short-term investments and deposits | - | 7 | ||||||
Trade receivables, net | 31 | 44 | ||||||
Other current assets, including derivatives | 18 | 36 | ||||||
Total current assets | 478 | 1,504 | ||||||
Non-current assets | ||||||||
Investments in associated companies | 272 | 122 | ||||||
Deposits, loans and other receivables, including derivative instruments | 226 | 107 | ||||||
Deferred payment receivable | 182 | 175 | ||||||
Property, plant and equipment, net | 609 | 616 | ||||||
Intangible assets, net | 2 | 2 | ||||||
Total non-current assets | 1,291 | 1,022 | ||||||
Total assets | 1,769 | 2,526 | ||||||
Current liabilities | ||||||||
Loans and debentures | 79 | 448 | ||||||
Trade payables | 49 | 59 | ||||||
Other payables, including derivative instruments | 9 | 83 | ||||||
Investment obligation to Qoros | 93 | - | ||||||
Provisions | - | 44 | ||||||
Income tax payable | 4 | 173 | ||||||
Total current liabilities | 234 | 807 | ||||||
Non-current liabilities | ||||||||
Loans, excluding current portion | 485 | 504 | ||||||
Debentures, excluding current portion | 79 | 85 | ||||||
Deferred taxes, net | 57 | 52 | ||||||
Income tax payable | 27 | 27 | ||||||
Total non-current liabilities | 648 | 668 | ||||||
Total liabilities | 882 | 1,475 | ||||||
Equity | ||||||||
Share capital | 602 | 1,267 | ||||||
Shareholder transaction reserve | - | 4 | ||||||
Translation reserve | (11 | ) | (2 | ) | ||||
Capital reserve | 18 | 19 | ||||||
Accumulated profit / (loss) | 211 | (305 | ) | |||||
Equity attributable to owners of the Company | 820 | 983 | ||||||
Non-controlling interests | 67 | 68 | ||||||
Total equity | 887 | 1,051 | ||||||
Total liabilities and equity | 1,769 | 2,526 |
2
Kenon Holdings Ltd and subsidiaries
Consolidated Statements of Profit & Loss
Consolidated Statements of Profit & Loss
For the six months ended June 30, | For the three months ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
$ millions | $ millions | |||||||||||||||
Revenue | 185 | 177 | 84 | 84 | ||||||||||||
Cost of sales and services (excluding depreciation) | (127 | ) | (131 | ) | (63 | ) | (67 | ) | ||||||||
Depreciation | (15 | ) | (16 | ) | (8 | ) | (8 | ) | ||||||||
Gross profit | 43 | 30 | 13 | 9 | ||||||||||||
Selling, general and administrative expenses | (11 | ) | (22 | ) | (5 | ) | (15 | ) | ||||||||
Operating profit / (loss) | 32 | 8 | 8 | (6 | ) | |||||||||||
Financing expenses | (17 | ) | (44 | ) | (11 | ) | (24 | ) | ||||||||
Financing income | 12 | 4 | 10 | 4 | ||||||||||||
Financing expenses, net | (5 | ) | (40 | ) | (1 | ) | (20 | ) | ||||||||
Gain on third party investment in Qoros | 504 | - | - | - | ||||||||||||
Fair value loss on derivative asset | (13 | ) | - | (13 | ) | - | ||||||||||
Write back of financial guarantee | 63 | - | - | - | ||||||||||||
Share in losses of associated companies, net of tax | (50 | ) | (22 | ) | (22 | ) | - | |||||||||
Profit / (loss) before income taxes | 531 | (54 | ) | (28 | ) | (26 | ) | |||||||||
Income taxes | (7 | ) | (4 | ) | (1 | ) | - | |||||||||
Profit / (loss) for the period from continuing operations | 524 | (58 | ) | (29 | ) | (26 | ) | |||||||||
Profit for the period from discontinued operations (after tax) | - | 69 | - | 47 | ||||||||||||
Profit / (loss) for the period | 524 | 11 | (29 | ) | 21 | |||||||||||
Attributable to: | ||||||||||||||||
Kenon's shareholders | 517 | (11 | ) | (29 | ) | 9 | ||||||||||
Non-controlling interests | 7 | 22 | - | 12 | ||||||||||||
Profit / (loss) for the period | 524 | 11 | (29 | ) | 21 | |||||||||||
Basic/diluted (loss)/profit per share attributable to Kenon's shareholders (in dollars): | ||||||||||||||||
Basic/diluted profit/(loss) per share | 9.60 | (0.21 | ) | (0.53 | ) | 0.17 | ||||||||||
Basic/diluted profit/(loss) per share from continuing operations | 9.60 | (1.11 | ) | (0.53 | ) | (0.47 | ) | |||||||||
Basic/diluted profit per share from discontinued operations | - | 0.90 | - | 0.64 |
3
Kenon Holdings Ltd and subsidiaries
Consolidated Statements of Cash Flows
For the six months ended June 30, 2018 and 2017
Consolidated Statements of Cash Flows
For the six months ended June 30, 2018 and 2017
For the six months ended June 30, | ||||||||
2018 | 2017 | |||||||
$ millions | ||||||||
Cash flows from operating activities | ||||||||
Profit for the period | 524 | 11 | ||||||
Adjustments: | ||||||||
Depreciation and amortization | 15 | 92 | ||||||
Financing expenses, net | 5 | 117 | ||||||
Share in losses of associated companies, net | 50 | 22 | ||||||
Write back of financial guarantee | (63 | ) | - | |||||
Gain on third party investment in Qoros | (504 | ) | - | |||||
Fair value loss on derivative asset | 13 | - | ||||||
Write back of other payables | (3 | ) | - | |||||
Impairment of assets | - | 20 | ||||||
Bad debt expense | - | 2 | ||||||
Other capital gains, net | - | (9 | ) | |||||
Share-based payments | 1 | - | ||||||
Income taxes | 7 | 51 | ||||||
45 | 306 | |||||||
Change in inventories | - | 9 | ||||||
Change in trade and other receivables | 17 | 6 | ||||||
Change in trade and other payables | (14 | ) | (83 | ) | ||||
Changes in provisions and employee benefits | - | (2 | ) | |||||
48 | 236 | |||||||
Income taxes paid, net | (169 | ) | (34 | ) | ||||
Net cash (used in)/provided by operating activities | (121 | ) | 202 |
4
Kenon Holdings Ltd and subsidiaries
Consolidated Statement of Cash Flows, continued
For the six months ended June 30, 2018 and 2017
Consolidated Statement of Cash Flows, continued
For the six months ended June 30, 2018 and 2017
For the six months ended June 30, | ||||||||
2018 | 2017 | |||||||
$ millions | ||||||||
Cash flows from investing activities | ||||||||
Proceeds from sale of property, plant and equipment and intangible assets | - | 2 | ||||||
Short-term deposits and loans, net | - | (22 | ) | |||||
Investment in long term deposits, net | (1 | ) | - | |||||
Cash paid for businesses purchased, less cash acquired | (2 | ) | - | |||||
Acquisition of property, plant and equipment | (29 | ) | (96 | ) | ||||
Acquisition of intangible assets | - | (2 | ) | |||||
Interest received | 2 | 3 | ||||||
Proceeds from dilution of third party investment in Qoros | 260 | - | ||||||
Receipt/(payment) to release financial guarantee | 18 | (72 | ) | |||||
Payment of transaction cost for sales of subsidiaries | (49 | ) | - | |||||
Energuate purchase adjustment | - | 10 | ||||||
Sale of subsidiary, net | - | 1 | ||||||
Net cash provided by/(used in) investing activities | 199 | (176 | ) | |||||
Cash flows from financing activities | ||||||||
Dividend paid to non-controlling interests in a subsidiary | (6 | ) | (15 | ) | ||||
Capital distribution | (665 | ) | - | |||||
Receipt of long-term loans and issuance of debentures | 3 | 661 | ||||||
Repayment of long-term loans and debentures | (101 | ) | (397 | ) | ||||
Repayment of short-term credit from banks and others, net | (276 | ) | (142 | ) | ||||
Bond issuance expenses | - | (11 | ) | |||||
Payment of consent fee and early prepayment fee | - | (6 | ) | |||||
Interest paid | (14 | ) | (91 | ) | ||||
Net cash used in financing activities | (1,059 | ) | (1 | ) | ||||
(Decrease)/Increase in cash and cash equivalents | (981 | ) | 25 | |||||
Cash and cash equivalents at beginning of the period | 1,417 | 327 | ||||||
Effect of exchange rate fluctuations on balances of cash and cash equivalents | (7 | ) | 14 | |||||
Cash and cash equivalents at end of the period | 429 | 366 |
5
Information regarding reportable segments
The following table sets forth selected financial data for Kenon’s reportable segments for the periods presented:
For the six months ended June 30, 2018 | ||||||||||||||||||||
OPC | Quantum1 | Other2 | Adjustments3 | Consolidated Results | ||||||||||||||||
(in millions of USD, unless otherwise indicated) | ||||||||||||||||||||
Sales | 185 | - | - | - | 185 | |||||||||||||||
Depreciation and amortization | (15 | ) | - | - | - | (15 | ) | |||||||||||||
Financing income | 1 | 1 | 39 | (29 | ) | 12 | ||||||||||||||
Financing expenses | (15 | ) | (2 | ) | (29 | ) | 29 | (17 | ) | |||||||||||
Write back of financial guarantee | - | 63 | - | - | 63 | |||||||||||||||
Gain on third party investment in Qoros | - | 504 | - | - | 504 | |||||||||||||||
Fair value loss on derivative asset | - | (13 | ) | - | - | (13 | ) | |||||||||||||
Share in losses of associated companies | - | (28 | ) | (22 | ) | - | (50 | ) | ||||||||||||
Profit / (Loss) before taxes | 22 | 526 | (17 | ) | - | 531 | ||||||||||||||
Income taxes | (6 | ) | - | (1 | ) | - | (7 | ) | ||||||||||||
Profit / (Loss) from continuing operations | 16 | 526 | (18 | ) | - | 524 |
____________________________________
(1) | Quantum is a wholly-owned subsidiary of Kenon and holds Kenon's interest in Qoros. |
(2) | Includes the results of Primus; the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses. |
(3) | “Adjustments” includes inter-segment financing income and expenses. |
For the six months ended June 30, 20171 | ||||||||||||||||||||
OPC | Quantum2 | Other3 | Adjustments4 | Consolidated Results | ||||||||||||||||
(in millions of USD, unless otherwise indicated) | ||||||||||||||||||||
Sales | 177 | - | - | - | 177 | |||||||||||||||
Depreciation and amortization | (16 | ) | - | - | - | (16 | ) | |||||||||||||
Financing income | - | - | 10 | (6 | ) | 4 | ||||||||||||||
Financing expenses | (22 | ) | (7 | ) | (21 | ) | 6 | (44 | ) | |||||||||||
Share in profits / (losses) of associated companies | - | (23 | ) | 1 | - | (22 | ) | |||||||||||||
Profit / (Loss) before taxes | 4 | (30 | ) | (28 | ) | - | (54 | ) | ||||||||||||
Income taxes | (3 | ) | - | (1 | ) | - | (4 | ) | ||||||||||||
Profit / (Loss) from continuing operations | 1 | (30 | ) | (29 | ) | - | (58 | ) |
____________________________________
(1) | Results during this period have been reclassified to reflect the results of the Inkia power generation and distribution business (which was sold on December 31, 2017) as discontinued operations. |
(2) | Quantum is a wholly-owned subsidiary of Kenon and holds Kenon's interest in Qoros. |
(3) | Includes the results of Primus; the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses. |
(4) | “Adjustments” includes inter-segment financing income and expenses. |
6
For the three months ended June 30, 2018 | ||||||||||||||||||||
OPC | Quantum1 | Other2 | Adjustments3 | Consolidated Results | ||||||||||||||||
(in millions of USD, unless otherwise indicated) | ||||||||||||||||||||
Sales | 84 | - | - | - | 84 | |||||||||||||||
Depreciation and amortization | (8 | ) | - | - | - | (8 | ) | |||||||||||||
Financing income | 1 | 1 | 21 | (13 | ) | 10 | ||||||||||||||
Financing expenses | (10 | ) | (1 | ) | (13 | ) | 13 | (11 | ) | |||||||||||
Fair value loss on derivative asset | - | (13 | ) | - | - | (13 | ) | |||||||||||||
Share in losses of associated companies | - | (13 | ) | (9 | ) | - | (22 | ) | ||||||||||||
Profit / (Loss) before taxes | 1 | (26 | ) | (3 | ) | - | (28 | ) | ||||||||||||
Income taxes | (1 | ) | - | - | - | (1 | ) | |||||||||||||
Profit / (Loss) from continuing operations | - | (26 | ) | (3 | ) | - | (29 | ) |
____________________________________
(1) | Quantum is a wholly-owned subsidiary of Kenon and holds Kenon's interest in Qoros. |
(2) | Includes the results of Primus; the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses. |
(3) | “Adjustments” includes inter-segment financing income and expenses. |
For the three months ended June 30, 20171 | ||||||||||||||||||||
OPC | Quantum2 | Other3 | Adjustments4 | Consolidated Results | ||||||||||||||||
(in millions of USD, unless otherwise indicated) | ||||||||||||||||||||
Sales | 84 | - | - | - | 84 | |||||||||||||||
Depreciation and amortization | (8 | ) | - | - | - | (8 | ) | |||||||||||||
Financing income | - | - | 7 | (3 | ) | 4 | ||||||||||||||
Financing expenses | (16 | ) | (2 | ) | (9 | ) | 3 | (24 | ) | |||||||||||
Share in losses of associated companies | - | (3 | ) | 3 | - | - | ||||||||||||||
Profit / (Loss) before taxes | (10 | ) | (5 | ) | (11 | ) | - | (26 | ) | |||||||||||
Income taxes | - | - | - | - | - | |||||||||||||||
Profit / (Loss) from continuing operations | (10 | ) | (5 | ) | (11 | ) | - | (26 | ) |
____________________________________
(1) | Results during this period have been reclassified to reflect the results of the Inkia power generation and distribution business (which was sold on December 31, 2017) as discontinued operations. |
(2) | Quantum is a wholly-owned subsidiary of Kenon and holds Kenon's interest in Qoros. |
(3) | Includes the results of Primus; the results of ZIM, as an associated company; as well as Kenon’s and IC Green’s holding company and general and administrative expenses. |
(4) | “Adjustments” includes inter-segment financing income and expenses. |
Information regarding associated companies
Carrying amounts of investment in associated companies | Equity in the net (losses) / earnings of associated companies | |||||||||||||||||||||||
as at | For the six months ended | For the three months ended | ||||||||||||||||||||||
June 30, 2018 | December 31, 2017 | June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | |||||||||||||||||||
$ millions | $ millions | $ millions | ||||||||||||||||||||||
ZIM | 97 | 120 | (22 | ) | 1 | (9 | ) | 3 | ||||||||||||||||
Qoros | 175 | 2 | (28 | ) | (23 | ) | (13 | ) | (3 | ) | ||||||||||||||
272 | 122 | (50 | ) | (22 | ) | (22 | ) | - |
7
Summary OPC consolidated financial information1
OPC’s Consolidated Statement of Profit
For the six months ended June 30, | For the three months ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(in millions of USD) | (in millions of USD) | |||||||||||||||
Sales | 185 | 177 | 84 | 84 | ||||||||||||
Cost of sales (excluding depreciation and amortization) | (127 | ) | (130 | ) | (62 | ) | (67 | ) | ||||||||
Depreciation and amortization | (15 | ) | (16 | ) | (8 | ) | (8 | ) | ||||||||
Gross profit | 43 | 31 | 14 | 9 | ||||||||||||
General, selling and administrative expenses | (7 | ) | (5 | ) | (4 | ) | (3 | ) | ||||||||
Operating profit | 36 | 26 | 10 | 6 | ||||||||||||
Financing expenses | (15 | ) | (22 | ) | (10 | ) | (16 | ) | ||||||||
Financing income | 1 | - | 1 | - | ||||||||||||
Financing expenses, net | (14 | ) | (22 | ) | (9 | ) | (16 | ) | ||||||||
Profit / (loss) before taxes | 22 | 4 | 1 | (10 | ) | |||||||||||
Taxes on income | (6 | ) | (3 | ) | (1 | ) | - | |||||||||
Net profit / (loss) for the period | 16 | 1 | - | (10 | ) | |||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the company | 12 | (1 | ) | - | (9 | ) | ||||||||||
Non-controlling interest | 4 | 2 | - | (1 | ) | |||||||||||
Net profit for the period | 16 | 1 | - | (10 | ) |
(1) | Translations of NIS amounts into US Dollars use a rate of 3.59: 1 for 2018 and 3.58: 1 for 2017. |
8
Summary Data from OPC’s Consolidated Statement of Cash Flows
For the six months ended June 30, | For the three months ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(in millions of USD) | (in millions of USD) | |||||||||||||||
Cash flows provided by operating activities | 66 | 50 | 39 | 15 | ||||||||||||
Cash flows used in investing activities | (39 | ) | (62 | ) | (17 | ) | (25 | ) | ||||||||
Cash flows provided by (used in) financing activities | (33 | ) | 102 | (28 | ) | 64 | ||||||||||
(Decrease) / Increase in cash and cash equivalents | (6 | ) | 90 | (6 | ) | 54 | ||||||||||
Effect of exchange rate fluctuations on balances of cash and cash equivalents | (8 | ) | (4 | ) | (6 | ) | - | |||||||||
Cash and cash equivalents at end of the period | 133 | 114 | 133 | 114 | ||||||||||||
Investments in property, plant and equipment | (29 | ) | (38 | ) | (14 | ) | (22 | ) | ||||||||
Total depreciation and amortization | 15 | 16 | 8 | 8 |
Summary Data from OPC’s Consolidated Statement of Financial Position
As of | ||||||||
June 30, 2018 | December 31, 2017 | |||||||
(in millions of USD) | ||||||||
Total financial liabilities1 | 587 | 618 | ||||||
Total monetary assets2 | 133 | 147 | ||||||
Total equity attributable to the owners | 177 | 173 | ||||||
Total assets | 901 | 941 |
1. | Including loans from banks and others and debentures |
2. | Including cash and cash equivalents, short-term deposits and restricted cash. |
9
Definition of OPC’s EBITDA and non-IFRS reconciliation
This press release, including the financial tables, presents EBITDA, which is considered to be a “non-IFRS financial measure.”
OPC defines “EBITDA” as for each period as net profit before depreciation and amortization, financing expenses, net, and income tax expense. EBITDA is not recognized under IFRS or any other generally accepted accounting principles as a measure of financial performance and should not be considered as a substitute for net profit or loss, cash flow from operations or other measures of operating performance determined in accordance with IFRS. EBITDA is not intended to represent funds available for dividends or other discretionary uses because those funds may be required for debt service, capital expenditures, working capital and other commitments and contingencies. There are limitations that impair the use of EBITDA as a measure of OPC's profitability since it does not take into consideration certain costs and expenses that result from OPC's business that could have a significant effect on net profit, such as financial expenses, taxes, depreciation, capital expenses and other related items.
OPC believes that the disclosure of EBITDA provides transparent and useful information to investors and financial analysts in their review of the company’s, or its subsidiaries’ operating performance and in the comparison of such operating performance to the operating performance of other companies in the same industry or in other industries that have different capital structures, debt levels and/or income tax rates.
Set forth below is a reconciliation of OPC’s net profit to EBITDA for the periods presented. Other companies may calculate EBITDA differently, and therefore this presentation of EBITDA may not be comparable to other similarly titled measures used by other companies.
For the six months ended June 30, | ||||||||
2018 | 2017 | |||||||
(in USD millions) | ||||||||
Net profit for the period | 16 | 1 | ||||||
Depreciation and amortization | 15 | 16 | ||||||
Financing expenses, net | 14 | 22 | ||||||
Income tax expense | 6 | 3 | ||||||
EBITDA | 51 | 42 |
For the three months ended June 30, | ||||||||
2018 | 2017 | |||||||
(in USD millions) | ||||||||
Net profit /(loss) for the period | - | (10 | ) | |||||
Depreciation and amortization | 8 | 8 | ||||||
Financing expenses, net | 9 | 16 | ||||||
Income tax expense | 1 | - | ||||||
EBITDA | 18 | 14 |
10
Summary Financial Information of OPC’s Subsidiaries
The tables below set forth debt, cash and cash equivalents, deposits and restricted cash for OPC’s subsidiaries as of June 30, 2018:
OPC-Rotem | OPC-Hadera | Tzomet | OPC Energy & Others | Total OPC | ||||||||||||||||
Debt (excluding accrued interest) | 356 | 147 | - | 84 | 587 | |||||||||||||||
Cash and cash equivalents | 38 | 12 | - | 83 | 133 | |||||||||||||||
Short- and long-term deposits and restricted cash (including debt service reserves) | 51 | 2 | - | 22 | 75 | |||||||||||||||
Debt service reserves | 29 | - | - | 12 | 41 |
The tables below set forth debt, cash and cash equivalents, deposits and restricted cash for OPC’s subsidiaries as of December 31, 2017:
OPC-Rotem | OPC-Hadera | OPC Energy & Others | Total OPC | |||||||||||||
Debt (excluding accrued interest) | 381 | 144 | 91 | 616 | ||||||||||||
Cash and cash equivalents | 28 | 30 | 79 | 147 | ||||||||||||
Short- and long-term deposits and restricted cash (including debt service reserves) | 48 | 2 | 26 | 76 | ||||||||||||
Debt service reserves | 26 | - | 5 | 31 |
11
Summary Operational Information of OPC
The tables below set forth details of sales, generation and purchases of electricity by OPC and availability and net generation of OPC split by the Rotem plant and the Hadera energy center (kWh in millions):
For the six months ended June 30, | For the three months ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Sales to private customers | 1,973 | 1,932 | 1,000 | 956 | ||||||||||||
Sales to the system administrator | 47 | 62 | 9 | 23 | ||||||||||||
Total sales | 2,020 | 1,994 | 1,009 | 979 |
For the six months ended June 30, | For the three months ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net generation of electricity | 1,930 | 1,790 | 954 | 799 | ||||||||||||
Purchase of electricity from the system administrator | 90 | 204 | 55 | 180 | ||||||||||||
Total volume of electricity generated and purchases from the system administrator | 2,020 | 1,994 | 1,009 | 979 |
For the six months ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
Availability (%) | Net generation (kWh in millions) | Availability (%) | Net generation (kWh in millions) | |||||||||||||
Rotem | 100 | % | 1,888 | 90 | % | 1,745 | ||||||||||
Hadera | 96 | % | 42 | 95 | % | 45 |
For the three months ended June 30, | ||||||||||||||||
2018 | 2017 | |||||||||||||||
Availability (%) | Net generation (kWh in millions) | Availability (%) | Net generation (kWh in millions) | |||||||||||||
Rotem | 100 | % | 936 | 81 | % | 778 | ||||||||||
Hadera | 93 | % | 18 | 99 | % | 21 |
12
Summary of Qoros’ Unaudited Condensed Consolidated Financial Information
For the six months ended June 30, | For the three months ended June 30, | |||||||||||||||
In millions of RMB | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | 2,886 | 677 | 1,827 | 272 | ||||||||||||
Cost of sales | (3,220 | ) | (850 | ) | (1,955 | ) | (374 | ) | ||||||||
Gross loss | (334 | ) | (173 | ) | (128 | ) | (102 | ) | ||||||||
Other income | 28 | 308 | 25 | 298 | ||||||||||||
Research and development expenses | (66 | ) | (79 | ) | (40 | ) | (42 | ) | ||||||||
Selling, general and administrative expenses | (257 | ) | (201 | ) | (156 | ) | (101 | ) | ||||||||
Other expenses | (1 | ) | (9 | ) | (1 | ) | (1 | ) | ||||||||
Loss from operation | (630 | ) | (154 | ) | (300 | ) | 52 | |||||||||
Finance income | 19 | 6 | 17 | 1 | ||||||||||||
Finance costs | (130 | ) | (177 | ) | (39 | ) | (95 | ) | ||||||||
Net finance cost | (111 | ) | (171 | ) | (22 | ) | (94 | ) | ||||||||
Loss for the period | (741 | ) | (325 | ) | (322 | ) | (42 | ) |
13
Qoros’ Consolidated Statement of Financial Position
As of June 30, | As of December 31, | |||||||
In millions of RMB | 2018 | 2017 | ||||||
Assets | ||||||||
Property, plant and equipment | 3,723 | 3,875 | ||||||
Intangible assets | 3,832 | 4,011 | ||||||
Prepayments | 22 | 22 | ||||||
Lease prepayments | 193 | 195 | ||||||
Trade and other receivables | 91 | 91 | ||||||
Equity-accounted investees | 1 | 2 | ||||||
Non-current assets | 7,862 | 8,196 | ||||||
Inventories | 208 | 389 | ||||||
VAT recoverable | 702 | 828 | ||||||
Other financial assets | 300 | - | ||||||
Trade and other receivables | 1,563 | 38 | ||||||
Prepayments | 169 | 173 | ||||||
Pledged deposits | 75 | 26 | ||||||
Cash and cash equivalents | 1,206 | 77 | ||||||
Current assets | 4,223 | 1,531 | ||||||
Total assets | 12,085 | 9,727 | ||||||
Equity | ||||||||
Paid-in capital | 10,425 | 10,425 | ||||||
Reserves | 53 | 54 | ||||||
Accumulated losses | (12,459 | ) | (11,645 | ) | ||||
Total deficit | (1,981 | ) | (1,166 | ) | ||||
Liabilities | ||||||||
Loans and borrowings | 3,803 | 4,228 | ||||||
Deferred income | 155 | 161 | ||||||
Trade and other payables | 4,061 | 1,208 | ||||||
Provisions | 97 | 65 | ||||||
Non-current liabilities | 8,116 | 5,662 | ||||||
Loans and borrowings | 2,675 | 2,511 | ||||||
Trade and other payables | 3,248 | 2,704 | ||||||
Deferred income | 27 | 16 | ||||||
Current liabilities | 5,950 | 5,231 | ||||||
Total liabilities | 14,066 | 10,893 | ||||||
Total equity and liabilities | 12,085 | 9,727 |
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Definition of Qoros’ Adjusted EBITDA and non-IFRS Reconciliation
This press release presents the Adjusted EBITDA of Qoros, which is a financial metric considered to be a “non-IFRS financial measure.” Non-IFRS financial measures should be evaluated in conjunction with, and are not a substitute for, IFRS financial measures. The non-IFRS financial information presented herein should not be considered in isolation from or as a substitute for operating profit, net profit or per share data prepared in accordance with IFRS.
Qoros defines “Adjusted EBITDA” for each period as net loss for the period, excluding net finance costs and depreciation and amortization and Other Income-license rights. Adjusted EBITDA is not recognized under IFRS or any other generally accepted accounting principles as a measure of financial performance and should not be considered as a substitute for net profit or loss, cash flow from operations or other measures of operating performance or liquidity determined in accordance with IFRS. Adjusted EBITDA is not intended to represent funds available for dividends or other discretionary uses because those funds may be required for debt service, capital expenditures, working capital and other commitments and contingencies. Adjusted EBITDA presents limitations that impair its use as a measure of our profitability since it does not take into consideration certain costs and expenses that result from our business that could have a significant effect on our net profit, such as financial expenses, taxes, depreciation, capital expenses and other related charges.
Qoros believes that the disclosure of Adjusted EBITDA provides transparent and useful information to investors and financial analysts in their review of Qoros’ operating performance and in the comparison of such operating performance to the operating performance of other companies in the same industry or in other industries that have different capital structures, debt levels and/or income tax rates.
Set forth below is a reconciliation of Qoros’ net loss to Adjusted EBITDA for the periods presented. Other companies may calculate Adjusted EBITDA differently, and therefore this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.
For the six months ended June 30, | For the three months ended June 30, | |||||||||||||||
In millions of RMB | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net loss for the period | (741 | ) | (325 | ) | (322 | ) | (42 | ) | ||||||||
Net finance costs | 111 | 171 | 22 | 94 | ||||||||||||
Depreciation and Amortization | 388 | 203 | 164 | 86 | ||||||||||||
Other income – license rights | - | (270 | ) | - | (263 | ) | ||||||||||
Adjusted EBITDA | (242 | ) | (221 | ) | (136 | ) | (125 | ) |
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