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Net finance costs were stable compared to 2018, at EUR 22.2 million. If one excludes foreign exchange effects, they are actually slightly lower (-2%) for the year, as a result of improved interest rates.

Profit before income tax in 2019 was a healthy EUR 26.1 million, compared to a loss of EUR 4.5 million recorded in 2018. Finally, net profit after tax followed the same trend and reached EUR 18.5 million versus losses after tax of EUR 1.3 million in 2018.

The investments in the cables segment amounted to EUR 42.5 million in 2019, largely attributable to:

• the expansion and upgrade of the high voltage submarine cables unit to meet future demand levels;works started during 2018 and were concluded by the end of 2019.
•  the initiation of a new investment plan, also in submarine cables, aiming at expanding the inter-array cables production capacity in order to supply offshore wind developers worldwide with a wide range of cables and, more generally, support the growing offshore wind market.The above capital expenditure was financed through the segment’s inflows from operating activities. Free cash flow generated throughout the year was also used to push down the segment’s net debt by more than 12% y-o- y from EUR 291 million on 31.12.2018 to EUR 256 million on 31.12.2019. The determination to restructure long- term debt, securing lower financing costs for the future, continued with measures including, among others, the issuance of EUR 21.4 million bond loans for the submarine cables plant.During 2019, Hellenic Cables has sold its 100% subsidiary Cablel Wires, which had absorbed its enamelled wires sector during the year.Finally, Hellenic Cables consolidated its presence in the USA offshore wind market with the establishment of Hellenic Cables America Inc., a wholly owned subsidiary, providing USA customers with direct support and expertise throughout the entire lifetime of their project.Steel pipesDuring 2019, Corinth Pipeworks produced pipes for Karish, its first deep sea offshore project and an important breakthrough for the steel pipes segment. This was a strategic project in the SE Mediterranean, at a maximum depth of 1,750m, a highly complex work only a few companies worldwide could have accomplished.

  In 2019, Corinth Pipeworks was also awarded other major projects, such as:

• Energinet, Baltic Pipe, a 114 km gas pipeline of 32-36” pipes;
• Midia Gas Development Project, a 145 km of 8” & 16” offshore pipeline in Romania;
•  Snam, 150 km of gas pipeline of 26” pipes in Italy;
• G.I.G.B. (Gas Interconnector Greece-Bulgaria) project, a 187km gas pipeline of 32” pipes in Bulgaria andGreece.Nevertheless, a difficult USA market, with tariffs on large diameter welded steel pipes exceeding 30% did not allow the segment to reach 2018’s turnover levels. Revenue fell by about 20%, to EUR 378 million, whereas gross profit increased to EUR 31.8 million in 2019, compared to 2018 (EUR 30.8 million) as gross margin, attained in other markets, improved (8.4% in 2019 vs. 6.5%). Adjusted EBITDA remained at the same level, at EUR 26.8 million, as a long-dated impaired receivable was fully provided for with a final charge of EUR 1.65 million.

Profit before income tax was down to EUR 4 million from EUR 7.2 million last year, mainly attributable to higher net finance costs of EUR 2.4 million.

Operating profits produced strong free cash flows, financing entirely the segment’s yearly capital expenditure of EUR 10.9 million. This was largely attributable to:

•  the initiation of a new investment plan for a “double jointing” project that will position Corinth Pipeworks in the 500 k Tns USA pipe market of 24m length pipes; this will be completed in 2020.
• selected strategic and operational investments in logistics to enhance safety, optimise cost basis and improve quality.
• selected productivity improvements and cost reduction schemes, across all bare and coating / lining production lines.As turnover was reduced, so was working capital, contributing to a decline in net debt from EUR 183 million as of 31.12.18, to EUR 160 million. Finally, long-term debt was partially refinanced with more favourable terms, through the issuance of a EUR 12.6 million bond loan with a major Greek bank.Subsequent eventsThere are no subsequent events affecting the Consolidated Financial Information presented in this Press Release.OutlookGiven the strong forecast of new projects and the potential of expanding to new markets, the considerable backlog of orders and the growth potential of the offshore cables sector, the overall outlook for the cables segment remains positive for 2020, despite the volatility noticed in the global economic environment. The Corinth plant is expected to retain the high utilisation capacity throughout 2020 and this will be the main driver for the segment’s profitability. The Thiva plant is also expected to operate at high utilisation levels throughout 2020.

  Furthermore, in the cable products unit, there are signs of stability in the low and medium voltage cables markets in our main markets in Western Europe, as demand from the construction and industrial use markets has recovered. Such markets, however, continue to experience competitive challenges and the segment will actively seek to geographically diversify its revenue streams through expansion to new markets, such as the Nordic countries and the Middle East.

  Finally, the main focus remains the successful execution of existing projects, the award of new ones in existing and new markets and the optimisation of internal processes in order to take advantage of any arising market opportunity.

  In the steel pipes segment, the global economic environment in which Corinth Pipeworks operates remains volatile. The imposition of tariffs and antidumping duties by the USA triggered severe competition pressure from local mills to worldwide pipe makers, such as Corinth Pipeworks. Despite these headwinds, the subsidiary remains focused on maintaining its leading position, through new investments and the penetration of new geographical and product markets. It intensifies its efforts to enhance competitiveness and qualify for tenders offered from major Oil & Gas companies. This effort involves, among other projects, the “Manufacturing Excellence” program, an attempt to process digitisation and schemes to introduce Industry 4.0 into its production lines. The transformation of the subsidiary to a more diversified product profile is an essential part of its innovation agenda throughout 2019 and 2020. Corinth Pipeworks maintains its positive outlook for 2020, with the execution of the G.I.G.B. pipeline (Gas Interconnector Greece-Bulgaria) and other major, offshore and onshore, project awards expected.

Despite the current market volatility, Cenergy Holdings expects to maintain the positive momentum gained in 2019. For 2020, there is cautious optimism that the operating environment will improve further as European markets continue to grow and both demand and prices in our operating markets demonstrate positive trends. Conversely, the pandemic of Covid-19 is expected to disturb supply chains around the world, so the subsidiaries closely monitor the developments in regards to the outbreak and are ready to address any short-term demand fluctuations. International political factors will continue to weigh heavily on performance in 2020 while global population growth and urbanisation continue to ensure positive long-term prospects of our industry. Looking ahead, Cenergy Holdings will benefit from the solid order backlog generated and remains well placed to take advantage of improving market conditions in the energy sector and further its companies’ ambitions of remaining significant world players in energy transfer and data transmission solutions.

Statement of the Auditor

The statutory auditor, PwC Réviseurs d’Entreprises SRL / Bedrijfsrevisoren BV, represented by Marc Daelman, has confirmed that the audit, which is substantially completed, has not to date revealed any material misstatement in the draft consolidated accounts and that the accounting data reported in this press release is consistent in all material respects with the draft consolidated accounts from which it has been derived.