Call conference risultati Q1:
La cosa cruciale per me e' che durante la call conference hanno confermato una buona performance a livello di cassa (fondamentale) anche in aprile e maggio (il periodo peggiore COVID).
1Q20 results
Cash retention is much better than expected.
Sarens’ revenue was up by 7% yoy in 1Q20. This was mainly driven by the key global projects (TCO and HPC), which are fully operational, as well as to the increase of smaller global projects. Regional projects continued to be strong in Eastern Europe and North America, with also the APAC region picking up thanks to contracts won across several jurisdictions. This was partially offset by continued softness in Africa mainly due to slowdowns in Northern and Southern Africa, partially offset by contracts won in Mozambique and Botswana. In 1Q20, impacts from Covid-19 were limited to China (fully recovered now), notably in February, and to Western Europe and the rest of Asia over the last week of March.
Free cash flow as reported by the company was -€25m in 1Q20, compared to -€51m in 1Q19. This was mainly due to slightly lower capex (€13m in 1Q20 vs €15m in 1Q20) and significantly lower change in working capital outflows (-€23m in 1Q20 vs -€56m in 1Q19) mainly thanks to lower higher payments to suppliers. Net leverage increased to 4.7x at end-March vs 4.5x at YE19. As of end-March, the company reported cash in hand of €87m and €10m and €7.6m of cash available under its RCF and lease facility, respectively.
Management also took the opportunity to give an update on the Covid-19 crisis. Although there have been no material changes since the company published its FY19 results earlier in May (see report
here), key projects have remained fully operational while operations in the most impacted regions (Western Europe, Asia and Africa) have started to improve, while the other regions continue to be operational with impacts varying across geographies. According to management, operations should be back to normal levels between June and July, which seems in line with the recovery experienced in China and which is likely given the easing of certain country lockdowns and mobility restrictions. Although the company is exposed to the Oil & Gas sector (44% of revenues),
its projects are mainly linked to expansions and maintenance of existing refineries, which are likely to prove more resilient than extraction projects amid the current low oil prices. Furthermore, the company is carrying out a diversification strategy towards more resilient sectors such as civil construction and wind power.
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