eei corporation & subsidiaries...eei corporation & subsidiaries statement of financial...
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EEI Corporation & Subsidiaries Consolidated Statement of Income
(In Million Pesos)
(Paste Income statement from 17Q filing)
JULY TO SEPTEMBER JANUARY TO SEPTEMBER
2016 2015 2016 2015
REVENUE
Construction contracts 3,496.87 5,033.04 10,284.53 13,431.32
Services 213.43 251.87 617.60 804.90
Merchandise sales 30.57 76.33 142.02 223.05
Real estate sales - - 8.92 8.00
3,740.87 5,361.24 11,053.07 14,467.27
Equity in net losses of associates (748.17) (816.25) (942.42) (722.48)
Interest income 12.19 6.63 35.95 19.54
Other income (loss) 12.19 (24.76) 35.86 (0.68)
3,017.08 4,526.86 10,182.46 13,763.65
COSTS
Construction contracts 3,020.09 4,350.77 8,953.30 11,966.23
Services 183.94 184.07 520.42 555.22
Merchandise sales 33.97 65.02 128.25 184.60
Real estate sales - - 7.44 5.65
3,238.00 4,599.86 9,609.41 12,711.70
SELLING AND ADMINISTRATIVE EXPENSES 265.88 226.60 780.66 678.77
INTEREST EXPENSE 35.36 33.94 125.70 98.65
3,539.24 4,860.40 10,515.77 13,489.12
INCOME (LOSS) BEFORE INCOME TAX (522.16) (333.54) (333.31) 274.53
PROVISION FOR (BENEFITS FROM) INCOME TAX (84.46) (19.35) (19.48) 153.67
NET INCOME (LOSS) (437.70) (314.19) (313.83) 120.86
EARNINGS (LOSS) PER SHARE (0.422) (0.303) (0.303) 0.117
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EEI Corporation & Subsidiaries Statement of Financial Position
(In Million Pesos)
(Paste Balance Sheet - Asset from 17Q filing)
September 30, December 31,
2016 2015
(Unaudited) (Audited)
ASSETS
Current Assets
Cash and cash equivalents 645.19 1,270.24
Receivables 6,783.66 6,339.95
Due from related parties 94.35 74.55
Costs and estimated earnings in excess of billings
on uncompleted contracts 5,775.33 5,946.50
Inventories 494.10 448.32
Other current assets 636.51 720.82
Total Current Assets 14,429.14 14,800.38
Noncurrent Assets
Investments in associates and joint ventures 1,438.60 2,097.51
Available-for-sale securities 369.53 370.46
Property & equipment 4,529.02 4,357.14
Investment properties 203.50 231.23
Deferred tax assets 474.79 278.12
Other noncurrent assets 576.69 329.61
Total Noncurrent Assets 7,592.13 7,664.07
TOTAL ASSETS 22,021.27 22,464.45
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EEI Corporation & Subsidiaries Statement of Financial Position
(In Million Pesos)
(Paste Balance Sheet (Liabilities and
Equity) from 17Q filing)
September 30, December 31,
2016 2015
(Unaudited) (Audited)
LIABILITIES & EQUITY
Current Liabilities
Bank loans 3,065.00 3,330.00
Accounts payable & accrued expenses 4,780.47 5,404.10
Due to related parties 26.80 37.35
Billings in excess of costs and estimated earnings
on uncompleted contracts 6,182.29 5,002.22
Current portion of long-term debt 285.71 285.72
Total Current Liabilities 14,340.27 14,059.39
Noncurrent Liabilities
Long-term debt - net of current portion 1,285.72 1,500.00
Retirement liabilities 92.65 123.82
Total Noncurrent Liabilities 1,378.37 1,623.82
Total Liabilities 15,718.64 15,683.21
Equity
Capital stock 1,036.40 1,036.40
Additional paid-in capital 477.04 477.04
Cumulative translation adjustments 221.70 178.30
Retained earnings 4,680.45 5,201.53
Actuarial losses on retirement liability (114.79) (114.79)
Net unrealized gains on available-for-sale securities 5.55 6.48
Treasury stock (3.72) (3.72)
Total Equity 6,302.63 6,781.24
TOTAL LIABILITIES AND EQUITY 22,021.27 22,464.45
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Status of Domestic Construction Business
• Revenues dropped by 24% due to the following:
The Skyway project encountered right of way issue with utility companies and a few residents
MRT line 7 project could not start on time as EEI’s client had to address inquiries and demands from the Quezon City Government
Panglao airport project’s progress was hindered by a mandate to change design and materials during construction phase
The FDC’s large power plant project in Misamis Oriental, a large contributor to revenue in 2015, have reached completion in 2016
• Operating cash flow remains stable due to cash deposits collected from new projects
P14.47B P11.05B
2015 (YTD Q3) 2016 (YTD Q3)
Revenue
P1.25B
P1.36B
2015 (YTD Q3) 2016 (YTD Q3)
Operating Cash Flow
5
(In Million Pesos) 2016 (As of Q3)
2015 (Full Year)
2014 (Full Year)
Income from Domestic
Operations 503 877 364
Income (Loss) from ARCC (817) (674) 554
NET INCOME (Loss) (314) 203 918
Breakdown of Net Income
EEI’s reported losses in 2016 are due to provisions for losses for its Saudi Arabia
operations. These losses are net of taxes. The equivalent gross figures in 2016 are
P688 for domestic operations and (P1,021) for ARCC.
EEI Corporation’s Saudi Arabia Operations
• EEI Corporation operates in Saudi Arabia through Al Rushaid Construction Company (ARCC), a joint venture between EEI and ARPIC
• ARCC has 9 active projects in Saudi Arabia
• ARCC’s financial challenges in Saudi Arabia come only from one project: The mechanical works for the Naphtha and Aromatic Package of the Rabigh II Refining and Petrochemical project owned by a joint venture between Saudi Aramco and Sumitomo Chemical Co.
• ARCC serves as a subcontractor of Saipem, an Italian-based company and the project’s main contractor, to deliver mechanical work services
• The P1.02 billion loss represents 49% of ARCC’s total net loss for the first 9 months of 2016
ARCC
Total Net Loss: P2.08B (SAR163.4m)
ARPIC (51%)
Share of net loss: P1.06B (SAR83.3m)
EEI Corp. (49%)
Share of net loss P1.02B (SAR80.1m)
ARCC Structure and
Partners’ Share of Losses
7
Note: The reported losses are gross of taxes. The equivalent net
amounts are P817m for EEI Corp. and P829m for ARPIC.
EEI Corporation’s Debt service capability still very strong
• Debt-Equity ratio of 2.5:1 is manageable
• Never defaulted with creditors in the last 10 years
• Very low borrowing cost of 2.5% for short term and 4.8% for long term – the lowest rates in the industry
• Current available credit lines of P13.3 billion, with good potential for increase in credit lines when needed
8
Positive Outlook for EEI Corporation
1.02 1.14
1.29 1.44
1.62 1.81
2016 2017 2018 2019 2020 2021
Construction Industry Value Forecast (PHP Trillion)
200.0 219.6 239.4 259.5 280.0 301.2
2016 2017 2018 2019 2020 2021
Energy and Utilities Infrastructure Industry Value Forecast
(PHP Billion)
• Bright prospects for Philippine construction and energy & utilities industries for the next 5 years
8.32% y-o-y average growth rate for construction industry
8.54% y-o-y average growth for energy and utilities infrastructure industry
• Duterte administration to spend P8.2 Trillion for infrastructure over his 6-year term, or 5.2% of GDP
• Increasing opportunities in East Asia region:
Japan opened doors to foreign contractors to prepare for 2020 Olympics
Demand coming from Brunei, Malaysia, and Indonesia
• EEI Corporation possess the highest workable contract in its history (P55B)
Source: Business Monitor International 9
Backlog of Workable Contracts
Workable Contracts
As of Sept 30, 2015
44.77 B
24%
(P48 Billion for Domestic Projects)
Workable Contracts
As of Sept 30, 2016
55.55 B (P34 Billion for Domestic Projects)
Workable Contracts - Domestic
Client Project
Universal LRT Corporation MRT 7
Citra Central Expressway Corporation
Metro Manila Skyway 3
SM Development Corp. Air Residences Fame Residences Coast Residences
Megaworld Corporation Bayshore 6 Cluster One Eastwood Tower 1 & 2 Noble Place
Galing Power & Energy Construction Co., Inc.
Therma Visayas Energy - Building and Mechanical
Daichi Properties, Inc. The Finance Centre
Global Gateway Devt. Corp. Quad 1 Aeropark Phase 1
Daelim Philippines Inc. Pagbilao Power Plant
Petron Corporation Petron Power Distribution
Others Others
P48.0 Billion
Workable Contracts – International (Saudi Arabia)
Client Project
Daewoo Jazan Refinery & Terminal Package 12 SMP and E&I
E-TEC Arabia Limited Co. SAFCO IV Reliability and Improvement Yanpet U10 Furnace Convection Section
Snamprogetti Saudi Arabia Co. Limited (Saipem)
RR2 Mechanical Works
Others Others
P7.55 Billion
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