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Financial Statement Analysis for SIDENOR S.A.

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Financial Statement Analysis for SIDENOR S.A.
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Financial Statement Analysis for SIDENOR S.A.

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

  2. Presentation key points • Sector – Main Competitors • The Company (History, Products, Shareholders, Structure) • Financial Statements of SIDENOR S.A. • Financial Statement Analysis

  3. Presentation key points • Liquidity Ratios • Turnover Ratios • Return Ratios • Capital Structure Ratios • Investor Ratios • Conclusions

  4. Sector – Main Competitors Sector • Steel production and trading sector Main Competitors • “HELLENIC HALYVOURGIA” • “HALYVOURGIKI”

  5. 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” 

  6. 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.

  7. 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.

  8. SIDENOR S.A. - Products • SD Integrated Concrete Reinforcing System • Merchant Bars • Wire Rod • Pipes - Hollow Sections • Hot-Rolled Steel Plates • Special Steels

  9. SIDENOR S.A. - Structure

  10. SIDENOR S.A. - Shareholders

  11. Financial StatementsStatement of Financial Position

  12. Financial StatementsStatement of Comprehensive Income

  13. Financial StatementsCash Flow Statement

  14. Financial StatementsCash Flow Statement

  15. Financial StatementsStatement of Financial Position • Fixed Assets / Total Assets 360.770.511 / 593.401.564 = 0,6080 or 60,80% • Current Assets / Total Assets 232.631.053 / 593.401.564 = 0,3920 or 39,20% (Note: Intangible Assets / Total Assets equals zero)

  16. Financial StatementsLiquidity Ratios • Current Ratio CR = Current Assets / Current Liabilities 232.631.053 / 274.675.258 = 0,846 • Quick Ratio QR = Current Assets - Inventories / Current Liabilities 150.967.120 / 274.675.258 = 0,549

  17. Financial StatementsLiquidity Ratios • Acid Ratio AR = Cash / Current Liabilities 8.320.061 / 274.675.258 = 0,030

  18. Financial StatementsTurnover Ratios • Inventory Turnover Ratio ITR = Cost of Sales / Avg. Inventory 232.381.323 / 111.739.687 = 2,1times / year Days in Inventory = 365 / 2.1 = 174days

  19. Financial StatementsTurnover Ratios • Receivables Turnover Ratio RTR = Sales / Avg. Receivables 276.530.121 / 49.460.084 = 5,57times / year Days in Accounts Receivables = 365 / 5,57 = 66days

  20. Financial StatementsTurnover Ratios • Accounts Payable Turnover Ratio (Purchases = Cost of Sales - Ending Inventory + Starting Inventory) PTR = Purchases / Avg. Payable 235.730.038 / 98.467.193,5 = 2,39times / year Days in Suppliers = 365 / 2,83 = 153days

  21. Financial StatementsTurnover Ratios • Inventory Conversion Cycle 240days • Net Cash Conversion Cycle 87 days

  22. Financial StatementsCash Flow Analysis • Cash Flow from Operating Activities CF(OA) = - 49.589.580 (CFoa < Current Liabilities)

  23. Financial StatementsCash Flow Analysis • Cash Flow from Investing Activities CF(IA) = - 5.818.290 • Cash flow from Financing Activities CF(FA) = 33.497.870

  24. 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

  25. 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%

  26. 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%

  27. 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)

  28. 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

  29. 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

  30. 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

  31. Financial Statement AnalysisConclusions • Disability to cover short-term debt • Large amount of Inventory held • Long period in Accounts Receivables • Negative Cash Flow from OA

  32. Financial Statement AnalysisConclusions • Negative ROTA, ROE, Return on Sales • Losses per Share • Financing Conflict