SICIT Group approved the Consolidated Half-Yearly Report as at 30 June 2019, prepared in accordance with Italian accounting standards. Despite a six-month period in which the management was deeply committed to the Business Combination between SPAC SprintItaly and SICIT 2000 (completed on May 20) and a less brilliant market context for agricultural products in Asia and the Americas, and in Asia for retardants, the Company’s performance was, once again, positive.
Consolidated Revenues from products and services amounted to €32.5 million, a slight increase (0.1%) compared to the first half of 2018 pro-forma (€32.4 million).
It should also be noted that SICIT Group is implementing those strategic actions aimed at introducing new products and new production technologies (such as, first of all, the production of hair protein hydrolysate and, from the second half of 2020, the significant improvement in the quality of the fat extracted) that should allow to resume its path of strong growth.
Adjusted EBITDA for the first half of 2019 amounted to Euro 12.1 million (39.3% of revenues from products), compared to Euro 12.9 million in the first half of 2018 pro-forma (41.1% of revenues) as a result of: (i) higher selling expenses (due to a slightly different mix of clients); (ii) the inclusion of new professional figures (primarily the CFO), to strengthen the structure and (iii) the strengthening of the Board of Directors and internal control committees, necessary in view of the status of listed company (which has the objective of listing on the Mercato Telematico Azionario organized and managed by Borsa Italiana S.p.A., possibly in the STAR segment) to accelerate the growth in the period 2019-2022.
In the first half of 2019, the Company recorded an Adjusted Net Result of Euro 6.8 million (down 6.3% compared to the first half of 2018 pro-forma – Euro 7.3 million), equal to more than 22% of revenues from products.
Net Cash decreased from Euro 34.7 million as at 31 December 2018 pro-forma to Euro 32.1 million as at 30 June 2019 (-2.6 million), as the operating cash flows generated in the half-year (Euro 6.8 million) were absorbed by the planned investments in plant and equipment (Euro 3 million) and by the ordinary dividends distributed in June 2019 (Euro 6.4 million).
In this regard, it should be noted that in 2019 the Company continued its investments aimed at improving the efficiency of its processes and products as well as expanding its production capacity. Among the most important are the following:
- completion of the Arzignano cogeneration plant, which, when fully operational, is expected to result in energy savings;
- the completion of the new plants for the concentration and centrifugation of defecation gypsum; – completion of the trimmings grinding plant.
Investments are also continuing during the second half of the year, mainly with:
- the expansion of the existing the tank warehouse, to guarantee greater flexibility in responding to clients;
- completion of the hair production plant – which was scheduled to start fully operational in 2020 and was brought forward to 2019 for the test stage
- an animal by-product with very high protein yield (40% compared to an average of 12% of the other by-products currently used) which, when fully operational, will result in an increase in production capacity of 33% (from 12,000 tons/year to 16,000 tons/year of protein hydrolysate produced in the Arzignano plant) and a reduction in the average cost of production of the total protein hydrolysate produced by the Company estimated at about 10%-15%;
- the start of the design stage of the new plant for special products and the execution of the first tests;
- the start of the expansion of the sales offices and quality control laboratory, as well as the construction of the new agronomic laboratories at the Arzignano site.
SICIT Group also intends to continue its strategy of development and growth on foreign markets while maintaining strict control over its core processes. The Company intends to accelerate the growth process also with the opening of a foreign plant, which evaluation is planned to be completed in the second half of 2019 (with the start of work in 2020). Finally, in order to pursue its strategy of developing new products – in close collaboration with its clients, in order to respond adequately to the different needs of the agricultural and industrial companies to which they are dedicated – the Company does not exclude the possibility of potential external acquisitions or partnerships with other industrial groups.
Massimo Neresini, CEO of SICIT Group, commented: “The first half of 2019 marked a watershed for SICIT, as we were successfully engaged in the business combination, in the process of listing on the AIM, as well as and in the implementation of those structural changes necessary to enable us to reach the MTA (possibly the STAR segment), with 3 the approval of the 2019 financial statements. In the past few months we have built a solid foundation that will allow us to continue our important plan of significant growth and internationalization, oriented towards the medium-long term. Overall, in a six-month period characterized also by a less brilliant market context in some regions, revenues have seen a slight growth, reflecting the solid positioning of the Company”.