TIDMTGE
RNS Number : 5817O
TGE Marine AG
10 March 2009
TGE Marine AG
("TGE" or "the Company")
10 March 2009
Interim Results
TGE Marine AG (AIM: TGE), a leading provider of engineering services for the
design and construction of gas carriers and offshore units, today announces
interim results for the six months ended 31 December 2008.
As was reported in TGE Marine's Trading Update on 26 November 2008, during the
second half of 2008 market conditions became increasingly challenging. With the
onset of the global economic crisis, new build activity declined significantly
as ship owners held back from new projects in anticipation of building costs
continuing to fall dramatically.
Summary
Financial
§ Revenue for the period EUR36.8m (H1 2008: EUR46.7m)
§ Adjusted PBT EUR6.4m (H1 2008: EUR8.6m)
§ Earnings per share EUR3.50 (H1 2008; Loss per share -EUR1.84)
§ Cash at 31 December 2008 was EUR54.9m, or EUR18.5m net of advance payments and 3rd
party cash
Operating
§ 8 ships delivered during the period (H1 2008: 5), all on time and to budget
§ 4 cargo tanks delivered (H1 2008: 5)
§ 25 contracts in execution at period end with scheduled deliveries from April
2009 until April 2011
§ Overhead cost reduction achieved through introduction of German government
'Short Time' compensation scheme
§ Stefan Schober has been selected to replace Roland Fisher as CFO in May 2009
Outlook
§ Key demand drivers for new builds in petrochemical sector are unchanged - eg.
ageing fleet, growing distance between production and consumption. Investment
decisions delayed while new build prices fall and financing remains constrained
§ Demand drivers for new markets in LNG and CO2 weakened by financial crisis and
falling oil prices with investment decisions delayed. However, potential new
projects in both areas continue to be discussed
§ The ongoing market weakness is likely to impact medium term performance
Commenting on today's announcement, Manfred Kuver, CEO, said:
"As was set out by the Board of TGE Marine at the end of 2008, the current
global economic crisis is presenting particularly challenging market conditions
for the gas carrier sector. Ship owners continue to be extremely cautious before
placing new orders and are generally reluctant to commit in these unstable
conditions.
"However, raw material costs are falling with steel prices being down
significantly, shipyard capacity is coming free and lead times are falling. As
such, with no debt and a tight control on costs TGE remains confident that,
given the company's market leading position in the design and construction of
small gas carriers and offshore units, when the markets improve we will be well
placed to capture new opportunities."
Enquiries:
+------------------------------------+----------------------+-----------------------+
| TGE Marine AG | | +49 (0)228 604 480 |
+------------------------------------+----------------------+-----------------------+
| Dr Manfred Küver | Chief Executive | |
| | Officer | |
+------------------------------------+----------------------+-----------------------+
| Roland Fisher | Chief Financial | |
| | Officer | |
| | | |
+------------------------------------+----------------------+-----------------------+
| Singer Capital Markets Limited | +44 (0)20 3205 7500 |
+-----------------------------------------------------------+-----------------------+
| Jos Trusted | | |
+------------------------------------+----------------------+-----------------------+
| James Maxwell | | |
+------------------------------------+----------------------+-----------------------+
| | | |
+------------------------------------+----------------------+-----------------------+
| Pelham Public Relations | | +44(0)20 7337 1500 |
+------------------------------------+----------------------+-----------------------+
| Mark Antelme | | |
| Henry Lerwill | | |
| | | |
+------------------------------------+----------------------+-----------------------+
| | | |
+------------------------------------+----------------------+-----------------------+
There will be a conference call for analysts at 11am hosted by Manfred Küver,
CEO. Dial in details are +44 (0)20 85152302.
Notes to editors
TGE is a leading provider of engineering services for the design and
construction of gas carriers and offshore units. The Company provides a turnkey
solution for the engineering design, procurement and construction supervision of
marine gas handling and storage systems as well as vessel designs.The Company
specialises in the containment and handling of cryogenically stored gases (often
these are both highly toxic and flammable), and has a market leading position in
the ethylene carrier segment.
The majority of TGE's customers are commercial shipyards building gas carrier
ships. To date, the Company has supplied gas handling and storage systems for in
excess of 100 gas carriers in more than 20 shipyards in Europe, Asia and South
America. In particular, the Group has been active in China since 1989 and acted
as the engineering provider to every Chinese-built semi-refrigerated gas carrier
delivered.The Company is headquartered in Bonn, Germany with a representative
office in Shanghai, China.
www.tge-marine.com
Chief Executive's Report
Summary
Group revenue for the six months was EUR36.8m (H1 2008: EUR46.7m). Adjusted profit
before tax was EUR6.4m (H1 2008: EUR8.6m), and earnings per share were EUR3.50 (H1
2008: Loss per share -EUR1.84) Cash generated from continuing operations was
approximately EUR3.7m (H1 2008: EUR16.1m). Following the divestment of its onshore
business and the IPO in 2008, TGE Marine has the financial strength to support
its ongoing operations for the medium term.
Operational Overview:
During the period TGE completed delivery gas trials on 8 new ships (H1 2008: 5),
and delivered 4 cargo tanks (H1 2008: 5). At period end the company had 25 ship
contracts in execution (30.6.2008: 33) with delivery dates scheduled between
April 2009 and April 2011.
During the second half of 2008, as was reported in TGE Marine's Trading Update
on 26 November 2008, market conditions became increasingly challenging. With the
onset of the global economic crisis, new build activity significantly declined
as ship owners held back from new projects in anticipation of building costs
continuing to fall dramatically.However, in light of the ongoing order
discussions with existing and new clients the Directors remain confident that
TGE will continue to lead the sector when the market recovers.
Ethylene:
TGE's leading position in the ethylene sector should not be affected by the
delay in new market orders. During the first half of the financial year, the
Company was busy with the execution of the existing order book, in particular
achieving delivery acceptance of 8 new vessels. With each ship TGE is able to
improve both its designs and its sourcing efficiency to ensure that the
company's products remain the most technically advanced and cost efficient.
It is reassuring that, in this core sector , charter rates for existing vessels
have not been materially affected by the new capacity delivered to the fleet or
by the market turbulence. This would imply that there is limited overcapacity in
the fleet and that ethylene orders may recover quickly if financial conditions
stabilize.
LPG:
Order activity in the smaller LPG carrier market has been almost as quiet as the
ethylene market during the period with only two conversion contracts signed in
the global market (TGE alone signed 9 contracts in H2 2008). TGE's focus has
therefore been on execution of the 12 vessels currently under construction, and
although none were delivered during the period, these projects continue to
progress according to plan.
Smaller LPG charter rates remain relatively strong. Once markets settle, since
the demand driver is likely to be ship replacement rather than fleet growth,
strong rates should encourage further new building.
LNG and New Markets
The key new markets for TGE are expected to be in LNG and CO2.
In LNG, the company has been active during the period both with new shipping
proposals and with floating LNG storage projects. Further patents have been
applied for surrounding TGE's LNG tank designs and through further development
work the company has improved market understanding for the products it can offer
and has developed new relationships with leading players.
In CO2, further work has been commissioned for project developments in Europe
and elsewhere. The volumes involved in any CO2 project are likely to require TGE
delivering much larger ships than required in the petrochemical market, and as
such these should be valuable contracts. However, while environmental issues
remain high on the political agenda, financial pressures are expected to cause
project delays.
Organisation:
In response to the current stagnation in the market, TGE Marine has implemented
a tight review of its cost base. The company has made use of a German government
funded scheme whereby employees who accept reduced hours and reduced pro-rata
salaries receive compensation for up to 70% of any salary sacrificed. This
scheme was extended by the government in response to the recent economic
downturn and is now available for 18 months (from January 2009), it has been
formally accepted by all employees at TGE. It allows the company to reduce its
fixed cost burden without excessive disruption to employees.
Financial Review
Revenue for the period fell 20% to EUR37.9m when compared to the 2008 period (H1
2008; EUR47.1m). This figure was adversely affected by reduced activity levels due
to the reduced order intake and by two deliveries of ship sets to Korea falling
just after the period end (this in turn explains the high inventories at period
end). Operating expenses were 16% higher than the equivalent period in 2007.
This was largely due to the prior-period pre-dating the demerger of the Onshore
business, and not capturing the full costs of TGE as a separate, and later
listed, entity.
Adjusted profit before tax fell to EUR6.4m (H1 2008; EUR8.6m). The adjustments
made during the period were to add back non-recurring items. These were the
amortisation of goodwill, interest paid on loans repaid during the period, and a
charge for share grants to employees and ex-employees that pre dated the IPO. On
this last point, the charge is recognised due to a change in the grant structure
such that these share grants are now treated as options and accounted for in
accordance with IFRS. This charge is credited to equity and has no effect on net
assets.
Cash and cash equivalents at 31 December 2008 were EUR54.9m, or EUR18.5m net of
advance payments and 3rd party cash. Of this balance EUR19m was held as long term
restricted cash although almost half of this relates to bonds issued on behalf
of third parties. The company was debt free at period end and will remain so
for the foreseeable future. For continuing operations the company has bonding
facilities in place for in excess of EUR50m which should be more than sufficient
for the medium term. The company's net cash position and limited reliance on
banking support puts it in a strong position to endure the market turmoil.
Outlook
In order to service the ongoing global demand for petrochemical gases, there
remains a requirement for both extra capacity and fleet replacement. The current
strength of time charter rates, further supports the belief that the overall
demand for petrochemical gas carriers remains strong.
Meanwhile, the costs associated with building new ships are falling, driven by
both the significant decline in input commodity prices and keener pricing from
the shipyards. Shipyard capacity, having been very tight, is becoming available
and lead times for new builds are shortening.
This balance of strong charter rates and lower build costs allows the Board to
be firmly of the view that TGE Marine's niche markets will recover, potentially
in advance of the broader shipbuilding market.As such, with no debt and a tight
control on costs TGE remains confident that, given the company's market leading
position in the design and construction of small gas carriers and offshore
units, when the markets improve TGE will be well placed to build upon its
dominance in this highly specialised market
As indicated, the deterioration of conditions within in our core markets has had
a material impact on the Company's financial performance during the first six
months. Despite management's confidence in the Company's long term prospects,
it remains likely that until such time as financing and confidence returns to
the new build market, the Company will continue to experience difficult trading
conditions
Management Board Change
TGE Marine also announces today that Chief Financial Officer, Roland Fisher, is
to step down from the Board and resign from the company during May 2009. On
completion of the ongoing handover, Mr Fisher will be replaced by Steffen
Schober. Mr Schober, a chartered accountant, joined TGE Marine as Head of
Finance in November 2007 following a twelve year career at Deloitte, Germany.
Mr Schober will join the Board on assuming the role of CFO.
CONDENSED Consolidated interim Financial statements
consolidated INTERIM income statement
+--------------+--------+------------+--------+--------+------------+
| | | | | | |
+--------------+--------+------------+--------+--------+------------+
| in EUR | | 1/7/2008 | | | 1/7/2007 |
| ´000 | | - | | | - |
| | |31/12/2008 | | |31/12/2007 |
+--------------+--------+------------+--------+--------+------------+
| Revenue | | 36,833 | | | 46,737 |
+--------------+--------+------------+--------+--------+------------+
| Other | | 1,059 | | | 371 |
| operating | | | | | |
| income | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Cost | | -25,726 | | | -34,151 |
| of | | | | | |
| materials | | | | | |
| and | | | | | |
| services | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Personnel | | -3,028 | | | -2,660 |
| expenses | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Depreciation | | -125 | | | -477 |
| of property, | | | | | |
| plant and | | | | | |
| equipment | | | | | |
| and | | | | | |
| amortization | | | | | |
| of | | | | | |
| intangible | | | | | |
| assets | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Other | | -3,390 | | | -2,840 |
| operating | | | | | |
| expenses | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Operating | | 5,623 | | | 6,980 |
| profit of | | | | | |
| continuing | | | | | |
| operations | | | | | |
| before | | | | | |
| interest, | | | | | |
| taxes and | | | | | |
| expenses | | | | | |
| relating | | | | | |
| to share | | | | | |
| options | | | | | |
+--------------+--------+------------+--------+--------+------------+
| | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Expenses | | -1,341 | | | 0 |
| for | | | | | |
| share | | | | | |
| options | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Operating | | 4,282 | | | 6,980 |
| profit of | | | | | |
| continuing | | | | | |
| operations | | | | | |
| before | | | | | |
| interest, | | | | | |
| taxes and | | | | | |
| expenses | | | | | |
| relatingto | | | | | |
| share | | | | | |
| options | | | | | |
+--------------+--------+------------+--------+--------+------------+
| | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Finance | | 960 | | | 1,174 |
| income | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Finance | | -387 | | | -1,562 |
| costs | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Profit | | 4,855 | | | 6,592 |
| of | | | | | |
| continued | | | | | |
| operations | | | | | |
| before | | | | | |
| taxes | | | | | |
+--------------+--------+------------+--------+--------+------------+
| | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Income | | -593 | | | -74 |
| tax | | | | | |
| expense | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Net | | 4,262 | | | 6,518 |
| result | | | | | |
| of | | | | | |
| continuing | | | | | |
| operations | | | | | |
| (Offshore) | | | | | |
+--------------+--------+------------+--------+--------+------------+
| | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Net | | 0 | | | -8,372 |
| result | | | | | |
| of | | | | | |
| discontinued | | | | | |
| operations | | | | | |
| (Onshore) | | | | | |
+--------------+--------+------------+--------+--------+------------+
| | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Consolidated | | 4,262 | | | -1,854 |
| net result | | | | | |
+--------------+--------+------------+--------+--------+------------+
| | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Earnings | | 3.50 | | | -1.84 |
| per | | | | | |
| share | | | | | |
| (in EUR; | | | | | |
| diluted | | | | | |
| and | | | | | |
| undiluted) | | | | | |
+--------------+--------+------------+--------+--------+------------+
| Earnings | | 3.50 | | | 6.47 |
| per | | | | | |
| share of | | | | | |
| continuing | | | | | |
| operations | | | | | |
| (in EUR) | | | | | |
+--------------+--------+------------+--------+--------+------------+
| | | | | | |
+--------------+--------+------------+--------+--------+------------+
consolidated INTERIM balance sheet
+--------------+--------+------------+--------+--------+-----------+
| | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| in EUR | |31/12/2008 | | |30/6/2008 |
| ´000 | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Assets | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Goodwill | | 7,758 | | | 7,758 |
+--------------+--------+------------+--------+--------+-----------+
| Other | | 145 | | | 204 |
| intangible | | | | | |
| assets | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Property, | | 459 | | | 440 |
| plant and | | | | | |
| equipment | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Long-term | | 19,309 | | | 30,136 |
| restricted | | | | | |
| cash | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Non-current | | 27,671 | | | 38,538 |
| assets | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Inventories | | 3,717 | | | 2,403 |
+--------------+--------+------------+--------+--------+-----------+
| Trade | | 5,650 | | | 5,181 |
| receivables | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Other | | 3,803 | | | 16,578 |
| assets | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Cash | | 35,606 | | | 48,324 |
| and | | | | | |
| cash | | | | | |
| equivalents | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| | | 48,776 | | | 72,486 |
+--------------+--------+------------+--------+--------+-----------+
| Current | | 48,776 | | | 72,486 |
| Assets | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Total | | 76,447 | | | 111,024 |
| assets | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Equity | | | | | |
| and | | | | | |
| liabilities | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Subscribed | | 1,217 | | | 1,217 |
| capital | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Capital | | 36,571 | | | 36,411 |
| reserve | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Reserve | | 1,341 | | | 0 |
| for | | | | | |
| granted | | | | | |
| share | | | | | |
| options | | | | | |
| to | | | | | |
| emplyees | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Retained | | -35,176 | | | -11,731 |
| earnings | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Profit/ | | 4,262 | | | -23,445 |
| Loss | | | | | |
| for the | | | | | |
| year | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Total | | 8,215 | | | 2,452 |
| equity | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Deferred | | 4,626 | | | 6,138 |
| tax | | | | | |
| liabilities | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Non-current | | 4,626 | | | 6,138 |
| liabilities | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Current | | 3,026 | | | 1,117 |
| income | | | | | |
| tax | | | | | |
| liabilities | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Other | | 6,311 | | | 9,334 |
| current | | | | | |
| provisions | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Advance | | 23,733 | | | 36,679 |
| payments | | | | | |
| received | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Bank | | 44 | | | 0 |
| liabilities | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Trade | | 12,601 | | | 10,055 |
| payables | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Liabilities | | 403 | | | 27,765 |
| against | | | | | |
| shareholders | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Other | | 17,488 | | | 17,484 |
| current | | | | | |
| liabilities | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| Current | | 63,606 | | | 102,434 |
| liabilities | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| | | 63,606 | | | 102,434 |
+--------------+--------+------------+--------+--------+-----------+
| Current | | 76,447 | | | 111,024 |
| liabilities | | | | | |
+--------------+--------+------------+--------+--------+-----------+
| | | | | | |
+--------------+--------+------------+--------+--------+-----------+
Consolidated INTERIM CashFlow-Statement
+-------------------+--------+------------+--------+--------+------------+
| | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| in EUR | | 1/7/2008 | | | 1/7/2007 |
| ´000 | | - | | | - |
| | |31/12/2008 | | |31/12/2007 |
+-------------------+--------+------------+--------+--------+------------+
| | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Net | | 4,262 | | | -1,854 |
| result | | | | | |
| for | | | | | |
| the | | | | | |
| half-year | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Adjustment | | | | | |
| of | | | | | |
| loss/profit | | | | | |
| after taxes | | | | | |
| for the | | | | | |
| reconciliation | | | | | |
| to cash flows | | | | | |
| from operating | | | | | |
| activities: | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Amortization | | 125 | | | 3,344 |
| of | | | | | |
| intangible | | | | | |
| assets, | | | | | |
| depreciation | | | | | |
| of property, | | | | | |
| plant and | | | | | |
| equipment | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Other | | 1,341 | | | 5 |
| non-cash | | | | | |
| transactions | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Increase/decrease | | | | | |
| in assets and | | | | | |
| liabilities, | | | | | |
| after effects | | | | | |
| from changes in | | | | | |
| companies to be | | | | | |
| included in the | | | | | |
| consolidated | | | | | |
| group | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Increase/decrease | | -1,314 | | | 1,749 |
| in inventories | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Increase/decrease | | -469 | | | 11,224 |
| in trade | | | | | |
| receivables | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Decrease/increase | | -2,619 | | | 3,900 |
| in provisions | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Increase/decrease | | 2,546 | | | -2,288 |
| in trade payables | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Increase | | -12,947 | | | -1,850 |
| in | | | | | |
| advance | | | | | |
| payments | | | | | |
| received | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Increase/decrease | | 12,739 | | | 1,900 |
| in other assets | | | | | |
| and liabilities | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Net | | 3,664 | | | 16,130 |
| cash | | | | | |
| from | | | | | |
| operating | | | | | |
| activities | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Investments | | -85 | | | -92 |
| in | | | | | |
| property, | | | | | |
| plant and | | | | | |
| equipment | | | | | |
| and in | | | | | |
| intangible | | | | | |
| assets | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Cash | | -85 | | | -92 |
| flows | | | | | |
| used | | | | | |
| in | | | | | |
| investing | | | | | |
| activities | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Repayment | | -27,386 | | | 0 |
| of | | | | | |
| shareholder | | | | | |
| loan | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Changes | | 10,827 | | | -29,523 |
| in | | | | | |
| long-term | | | | | |
| restricted | | | | | |
| cash | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Increase | | 160 | | | 160 |
| in | | | | | |
| equity | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Cash | | -16,399 | | | -29,363 |
| flows | | | | | |
| used | | | | | |
| in | | | | | |
| financing | | | | | |
| activities | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Foreign | | 102 | | | -312 |
| exchange | | | | | |
| rate | | | | | |
| differences | | | | | |
| in cash and | | | | | |
| cash | | | | | |
| equivalents | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Net | | -12,718 | | | -13,637 |
| increase | | | | | |
| in cash | | | | | |
| and cash | | | | | |
| equivalents | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Cash | | 48,324 | | | 55,350 |
| and | | | | | |
| cash | | | | | |
| equivalents | | | | | |
| at July 1 | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Cash | | 35,606 | | | 41,713 |
| and | | | | | |
| cash | | | | | |
| equivalents | | | | | |
| at December | | | | | |
| 31 | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Interest | | 3,586 | | | 0 |
| payments | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| Tax | | 0 | | | 0 |
| payments | | | | | |
+-------------------+--------+------------+--------+--------+------------+
| | | | | | |
+-------------------+--------+------------+--------+--------+------------+
consolidated INTERIM statement of changes in shareholders' equity
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| in EUR | |Subscribed | |Capital | | Reserve | |Currency | |Retained | |Consolidated | | Total |
| ´000 | | capital | |reserve | | for | | Reserve | |Earnings | | profit/ net | |Equity |
| | | | | | | granted | | | | | |loss for the | | |
| | | | | | | share | | | | | | year | | |
| | | | | | | options | | | | | | | | |
| | | | | | | to | | | | | | | | |
| | | | | | |employees | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| As of | | 1,000 | | 7,000 | | 0 | | 0 | | 20 | | -11,751 | | -3,731 |
| June | | | | | | | | | | | | | | |
| 30, | | | | | | | | | | | | | | |
| 2007/ | | | | | | | | | | | | | | |
| July | | | | | | | | | | | | | | |
| 1, 2007 | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| Increase | | 20 | | 140 | | 0 | | 0 | | 0 | | 0 | | 160 |
| of | | | | | | | | | | | | | | |
| equity | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| Carry-forward | | 0 | | 0 | | 0 | | 0 | | -11,751 | | 11,751 | | 0 |
| of prior year | | | | | | | | | | | | | | |
| net result | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| Consolidated | | 0 | | 0 | | 0 | | 0 | | 0 | | -1,854 | | -1,854 |
| net result | | | | | | | | | | | | | | |
| for the | | | | | | | | | | | | | | |
| period | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| Changes | | 0 | | 0 | | 0 | | 5 | | 0 | | 0 | | 5 |
| in | | | | | | | | | | | | | | |
| Currency | | | | | | | | | | | | | | |
| reserves | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| As of | | 1,020 | | 7,140 | | 0 | | 5 | | -11,731 | | -1,854 | | -5,420 |
| December | | | | | | | | | | | | | | |
| 31, 2007 | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| As of | | 1,217 | | 36,411 | | 0 | | 0 | | -11,731 | | -23,445 | | 2,452 |
| June | | | | | | | | | | | | | | |
| 30, | | | | | | | | | | | | | | |
| 2008/ | | | | | | | | | | | | | | |
| July | | | | | | | | | | | | | | |
| 1, 2008 | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| Increase | | 0 | | 160 | | 0 | | 0 | | 0 | | 0 | | 160 |
| of | | | | | | | | | | | | | | |
| equity | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| Carry-forward | | 0 | | 0 | | 0 | | 0 | | -23,445 | | 23,445 | | 0 |
| of prior year | | | | | | | | | | | | | | |
| net result | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| Share | | 0 | | 0 | | 1,341 | | 0 | | 0 | | 0 | | 1,341 |
| options | | | | | | | | | | | | | | |
| to | | | | | | | | | | | | | | |
| employees | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| Consolidated | | 0 | | 0 | | 0 | | 0 | | 0 | | 4,262 | | 4,262 |
| net result | | | | | | | | | | | | | | |
| for the | | | | | | | | | | | | | | |
| period | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
| As of | | 1,217 | | 36,571 | | 1,341 | | 0 | | -35,176 | | 4,262 | | 8,215 |
| December | | | | | | | | | | | | | | |
| 31, 2008 | | | | | | | | | | | | | | |
+---------------+--------+------------+--------+---------+--------+-----------+--------+----------+--------+----------+--------+--------------+--------+--------+
NOTES
1. General remarks
The consolidated interim financial statements have been prepared in accordance
with IAS 34 "Interim Financial Reporting" according to the International
Financial Reporting Standards (IFRS). The IFRS cover all standards
(International Financial Reporting Standards or International Accounting
Standards) announced by the International Accounting Standards Board (IASB),
London, and interpretations of the International Financial Reporting
Interpretations Committee (prior Standing Interpretations Committee), as adopted
by the EU.
The interim financial statements are unaudited. They cover the period July 1 to
December 31 2008 and are stated in Euro. Financial information is stated in
thousands of Euro (EUR ´000).
The presentation of the notes is condensed as allowed under IAS 34. The
consolidated financial statements as at June 30, 2008 contain the accounting
policies applied for the interim financial statements and should be referred to
for further information.
2. Accounting and valuation principles
In the course of the preparation of the interim financial statements all
accounting, valuation and consolidation principles were applied which were used
in the consolidated financial statements as at June 30, 2008, except for:
Hedge accounting
Effective July 1, 2008, some derivatives are designated as hedging instruments
for the securing of the fair values of certain assets and liabilities (fair
value hedge).
The change in the accounting principles improves the true and fair view as it
more realistically reflects the TGE-policy, according to which derivatives are
acquired for currency hedging purposes only.
In case of the designation of derivatives to underlying transactions the group
documents the relationship between the underlying and the hedging instrument at
the point of time the transaction is initiated. In addition, the group documents
at the beginning of a hedging relationship and from then on continuously,
whether the derivatives, which are used for hedging purposes, are effective for
compensating changes in the fair value of the underlying. The fair value of the
derivative is stated under other assets or other liabilities.
Changes in the fair value of the derivative, which are designated for the
securing of the fair value of an underlying, are stated in the income statement
together with the changes of the fair value of the hedged asset or liability.
The change of the accounting policy led to expenses of TEUR 2,333 compared to
the prior accounting principle. Without this effect earnings per share would
have been EUR 1.59 as at December 31, 2008.
Share based payments to employees/ third parties
TGE has granted share options to current and former employees in connection with
the de-merger of the Onshore-business and the IPO in May 2008.
The share option scheme has been accounted for according to IFRS 2. On each
closing date, the fair value of the share options calculated as at the date of
issue is booked as personnel expense over the vesting period against a special
equity reserve.
As far as share options have been granted to former employees the fair value of
the options has been accounted for against a special reserve in the equity as at
the granting date in one sum. In the same amount personnel expenses have been
accounted for.
The fair value of the options was calculated by using general accepted valuation
models.
Accounting provisions not applied at earlier dates
The International Accounting Standards Board (IASB) and International Financial
Reporting Interpretations Committee (IFRIC) have adopted further standards and
interpretations, which are mandatory from the business year 2008/ 2009. These
standards will be adopted by TGE - if applicable - but have no effect on the TGE
half year financial statements.
IFRIC 11 "IFRS 2 - Group and Treasury Share Transactions" provides guidance on
how to apply IFRS 2 to share-based payments involving a company's own equity
instruments or equity instruments of a company from the same group.
IFRIC 12 "Service Concession Arrangements" governs the accounting for
arrangements in which a public agency concludes a contract with a private
company for the supply of public services. In order to provide these services,
the private company uses infrastructure which remains under public control. The
private company is responsible for the construction, operation and maintenance
of the infrastructure.
IFRIC 13 "Customer Loyalty Programmes" addresses the accounting of revenue in
connection with loyalty award credit programmes granted by manufacturers or
service providers directly, or via third parties. This Interpretation becomes
effective for the first time for fiscal years starting on or after July 1, 2008.
IFRIC 14 "IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction" addresses detailed issues related to the
accounting treatment of pension plans.
Amendments to IAS 39 'Financial Instruments: Recognition and Measurement' and
IFRS 7 'Financial Instruments: Disclosures' clarify the effective date and
transition requirements of reclassifying of Financial Assets from fair value
accounting to accounting on historical cost basis.
The International Accounting Standards Board (IASB) and the IFRIC have
adopted further standards and interpretations, which are not yet mandatory.
These IFRSs can only be applied if they are endorsed by the EU, which is still
pending in some cases.
Collection of amendments to various IFRSs (2008) "Improvements to IFRSs" is the
first standard issued as part of the IASB's "Annual Improvement Process" and
includes a number of minor changes to various IFRSs. The amendments are made to
specify the contents of the rules and eliminate unintended inconsistencies among
the standards. Most of the amendments become effective for fiscal years starting
on or after January 1, 2009. The amendments will have no impact on the TGE´s
consolidated financial statements.
IFRS 1 (2008) and IAS 27 (2008) "Cost of an Investment in a Subsidiary, Jointly
Controlled Entity or Associate" simplifies the initial recognition of
investments in the separate financial statements of entities applying IFRS for
the first time. The amendments become effective for fiscal years starting on or
after January 1, 2009. Their first-time application will have no impact on the
TGE Group's consolidated financial statements.
Amendment of IFRS 2 (2008) "Vesting Conditions and Cancellations" clarifies the
definition of vesting conditions in share-based payments and stipulates that all
cancellations of share-based payments should receive identical accounting
treatment, regardless of the party responsible for cancellation. Published on
January 17, 2008, this amendment of IFRS 2 becomes effective for the first time
for fiscal years starting on or after July 1, 2009. The impact of the first-time
application of these amendments on the TGE Group's consolidated financial
statements is currently being reviewed.
IFRS 3 (2008) "Business Combinations" contains amended regulations on the
accounting of business combinations. In particular, these changes involve the
scope of application and the treatment of successive share purchases and the
introduction of an option allowing non-controlling interests to be measured at
fair value or at the proportionate share of net assets. Depending on which
option a company exercises, any goodwill is recognized in full or only in
proportion to the majority owner's interest. IFRS 3 (2008), published on January
10, 2008, becomes effective for the first time for fiscal years starting on or
after July 1, 2009. The amendments will have no impact on the TGE´s consolidated
financial statements.
IAS 1 (2007) "Presentation of Financial Statements" contains new regulations on
the presentation of financial statements. Above all, future non-owner changes in
equity are to be strictly separated from owner changes in equity, and disclosure
on other comprehensive income is to be extended. IAS 1 (2007) becomes effective
for the first time for fiscal years starting on or after July 1, 2009. The
first-time application of IAS 1 (2007) will result in additional notes to the
financial statements.
IAS 23 (2007) "Borrowing Costs": By revising IAS 23, the IASB abolished the
option for the treatment of borrowing costs directly incurred in connection with
the acquisition, construction or production of qualified assets. In the future,
these borrowing costs must be assigned to the asset's cost and capitalized. IAS
23 (2007) becomes effective for the first time for fiscal years starting on or
after July 1, 2009. The amendments will have no impact on the TGE´s consolidated
financial statements.
IAS 27 (2008) "Consolidated and Separate Financial Statements": By revising IAS
27, the IASB changed the regulations on treatment of transactions between the
non-controlling and controlling interests of a group and the treatment in the
event of loss of control over a subsidiary. Transactions which result in the
parent company changing its ownership interest in a subsidiary without a loss of
control over the subsidiary are to be accounted for as equity transactions
without an effect on profit or loss. Moreover, the standard regulates how
deconsolidation gains are to be calculated and how residual ownership interest
in the former subsidiary is to be measured. The amendments will have no impact
on the TGE´s consolidated financial statements.
IAS 32 (2008) and IAS 1 (2008) "Puttable Financial Instruments and Obligations
Arising on Liquidation" include amended rules for differentiating between
liabilities and equity. The change stipulates above all that certain financial
instruments that were previously classified as liabilities are to be recognized
as equity in the future. The amended rules become effective for the first time
for fiscal years starting on or after July 1, 2009. They will not have impact on
TGE´s financial statements.
IAS 39 Amendments (2008) "Eligible Hedged Items" provides clarification on
issues in relation to hedge accounting. The amendments supplement the principles
for designating inflation risks as an underlying transaction and for designating
hedging instruments used to hedge a one-sided risk. These amendments become
effective for the first time for fiscal years starting on or after July 1, 2009.
The amendments will have no impact on the TGE´s consolidated financial
statements.
IFRIC 15 "Agreements for the Construction of Real Estate" addresses the
accounting treatment of real estate sales in cases where a contract is entered
into with the purchaser prior to the completion of the construction work.
Published on July 3, 2008, this interpretation primarily determines the
conditions under which IAS 11 and IAS 18 are applicable and the point in time at
which the corresponding revenue is realized. This interpretation becomes
effective for the first time for fiscal years starting on or after January 1,
2009. The amendments will have no impact on the TGE´s consolidated financial
statements.
IFRIC 16 "Hedges of a Net Investment in a Foreign Operation" clarifies
uncertainties relating to hedges of a net investment in a foreign operation.
Above all, the interpretation, which was published on July 3, 2008, determines
the risks that can be hedged, the group companies that are allowed to hold the
hedging instrument, and the accounting treatment applicable in the event that
the foreign entity is divested. This Interpretation becomes effective for the
first time for fiscal years starting on or after October 1, 2008. The impact of
the first-time application of IFRIC 16 on TGE's consolidated financial
statements is currently being assessed.
IFRIC 17 "Distributions of Non-cash Assets to Owners" includes rules for the
accounting of dividends in kind. The first-time adoption will have no effect on
the consolidated financial statements of TGE.
IFRIC 18 "Transfers of Assets from Customers"clarifies the treatment of IFRS,
particularly IAS 18 'Revenue' for agreements in which an entity receives an item
of property, plant and equipment from a customer to connect to an ongoing supply
of goods and services. IFRIC 18 is particularly relevant for the utilty sector
and will have no effect on the consolidated financial statements of TGE.
3. Segment sales and results
The Company distinguishes between the business segments Onshore and Offshore, as
follows:
Offshore - Rendering technical engineering services in the field of
construction of turn-key largescale plants for the transport of liquid gas and
chemicals per ship as well as their refitting.
Onshore - Rendering technical engineering services in the field of
construction of turn-key largescale plants on land for the storage of liquid gas
and chemicals as well as their refitting.
Major parts of the business segment "Onshore" were de-merged as at July 1, 2007
and sold to a third party company as at May 8, 2008. The business activities
relating to "Onshore" which have not been de-merged and the business segment
Offshore are the segments in place. The Onshore-activities, which have not been
de-merged as at July 1, 2007, are shown from July 1, 2008 on in Offshore.
Sales and net results of the business segments in place have developed as
follows:
+--------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+
| | | Offshore | | Onshore | | Total |
+--------+--------+----------------------------------+--------+----------------------------------+--------+----------------------------------+
| in EUR | | 1/7/2008 | | 1/7/2007 | | 1/7/2008 | | 1/7/2007 | | 1/7/2008 | | 1/7/2007 |
| ´000 | | - | | - | | - | | - | | - | | - |
| | |31/12/2008 | |31/12/2007 | |31/12/2008 | |31/12/2007 | |31/12/2008 | |31/12/2007 |
+--------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+
| | | | | | | | | | | | | |
+--------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+
| Sales | | 36,833 | | 46,737 | | 0 | | 36,084 | | 36,833 | | 82,821 |
+--------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+
| | | | | | | | | | | | | |
+--------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+
| Net | | 4,262 | | 6,518 | | 0 | | -8,372 | | 4,262 | | -1,854 |
| result | | | | | | | | | | | | |
+--------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+--------+------------+
Income and expenses are allocated on the basis of useful keys.
Sales are allocated on the basis of projects.
4. Seasonal and cyclical developments
Seasonal developments
The business of TGE is generally not influenced by seasonal developments.
Cyclical developments
In the last quarter of 2008 considerable turbulence affected the international
finance markets.
This crisis has influenced the business sphere of TGE significantly. Customers
of TGE, both shipyards and shipowners are faced with financing problems for new
projects. For TGE this weakened market leads to a delay in signing of new
project orders. The management board has initiated measures to reduce overhead
costs to sustain profitability through the crisis. Meanwhile, due to the
existing order backlog and the reserves in place, management believe the company
is well placed to remain viable through the crisis.
5. Liquid funds and long-term restricted cash
The company presents cash and cash equivalents of TEUR 54.914 (June 30, 2008:
TEUR 78.460).
Cash and cash equivalents (Euro and foreign currency accounts) are restricted in
the amount of TEUR 38,891 (June 30, 2008: TEUR 41,286) through bank guarantees
mainly for letters of credit towards customers for advance payments received.
An amount of TEUR 12,273 thereof refers to liquid funds that have been pledged
as securities at banks for projects of TGE Gas Engineering GmbH. As of 31
December 2008, corresponding payables in the same amount are reported.
6. Share-Option-Plan "IPO"
TGE has granted share options as at August 27, 2008 to current and former
employees. According to the option scheme the employees are entitled to acquire
an individually determined number of shares for 1 EUR/ share. In total, 13,784
shares are offered to the employees. The acquisition of the shares by the
employees is possible as at August 28, 2009 earliest.
The share options have been granted to the employees under the condition that
the employees stay with TGE and TGE Gas Engineering GmbH until the exercise
date.
The number of share-options granted to employees is as follows:
+-----------+--------+--------+--------+--------+
| Number | | 2008/ | | Prior |
| | | 2009 | | year |
+-----------+--------+--------+--------+--------+
| Total | | 0 | | 0 |
| as at | | | | |
| July 1 | | | | |
+-----------+--------+--------+--------+--------+
| Granted | | 13.784 | | 0 |
+-----------+--------+--------+--------+--------+
| Exercised | | 0 | | 0 |
+-----------+--------+--------+--------+--------+
| Expired | | 0 | | 0 |
+-----------+--------+--------+--------+--------+
| Total | | 13.784 | | 0 |
| 31.12. | | | | |
+-----------+--------+--------+--------+--------+
The shares for the option plan will be acquired by TGE by the exercise date from
third parties.
The total expenses of the option scheme have been estimated at TEUR 574 (own
employees) respectively TEUR 1,144 (former employees) as at the granting date.
As far as share options have been granted to current employees the amount is
booked pro-rata over the vesting period as personnel expenses (as at December
31, 2008: TEUR 198). The amount referring to share options granted to former
employees has been accounted for as personnel expenses in one sum (TEUR 1,144).
The estimation is based on a risk-free interest rate of 3.5%, a fluctuation of
10% and a volality of 20%.
6. Deferred Taxes
Deferred taxes in detail refer to the following balance sheet positions:
+-------------+--------+----------+--------+-------------+--------+----------+--------+-------------+
| | | 31/12/2008 | | 30/06/2008 |
+-------------+--------+---------------------------------+--------+---------------------------------+
| in EUR | | Deferred | | Deferred | | Deferred | | Deferred |
| ´000 | | tax | | tax | | tax | | tax |
| | | assets | |liabilities | | assets | |liabilities |
+-------------+--------+----------+--------+-------------+--------+----------+--------+-------------+
| Intangible | | 0 | | 11 | | 0 | | 22 |
| and | | | | | | | | |
| tangible | | | | | | | | |
| fixed | | | | | | | | |
| assets | | | | | | | | |
+-------------+--------+----------+--------+-------------+--------+----------+--------+-------------+
| Percentage | | 0 | | 4,532 | | 0 | | 8,423 |
| of | | | | | | | | |
| completion | | | | | | | | |
| Method | | | | | | | | |
+-------------+--------+----------+--------+-------------+--------+----------+--------+-------------+
| Working | | 0 | | 65 | | 0 | | 266 |
| Capital | | | | | | | | |
+-------------+--------+----------+--------+-------------+--------+----------+--------+-------------+
| Pension | | 0 | | 0 | | 33 | | 0 |
| provisions | | | | | | | | |
+-------------+--------+----------+--------+-------------+--------+----------+--------+-------------+
| Liabilities | | 0 | | 18 | | 0 | | 0 |
+-------------+--------+----------+--------+-------------+--------+----------+--------+-------------+
| Tax | | 0 | | 0 | | 2,540 | | 0 |
| losses | | | | | | | | |
| carried | | | | | | | | |
| forward | | | | | | | | |
+-------------+--------+----------+--------+-------------+--------+----------+--------+-------------+
| | | 0 | | 4,626 | | 2,573 | | 8,711 |
+-------------+--------+----------+--------+-------------+--------+----------+--------+-------------+
| Offset | | 0 | | 0 | | -2,573 | | -2,573 |
+-------------+--------+----------+--------+-------------+--------+----------+--------+-------------+
| | | 0 | | 4,626 | | 0 | | 6,138 |
+-------------+--------+----------+--------+-------------+--------+----------+--------+-------------+
Percentage of Completion
Deferred taxes on Percentage of Completion refer to future tax liabilities due
to anticipated gains on fixed price contracts according to IAS 11. The decrease
compared to June 30, 2008 refers on the one hand to the decline of the total
work in progress, on the other hand to the final acceptance of a number of
projects by the customers and the realization of the sales in due course
according to German accounting standards.
Tax losses carried forward as at December 31, 2008
Deferred tax assets on tax loss carry-forwards relate to future tax deductions
resulting from future offsetting of tax loss carry-forwards and positive future
taxable income. As of December 31, 2008, the German fiscal unity has no
unutilized tax loss carry-forwards for which an offset with taxable income is
expected. The major reason for the decline of tax losses carried forward is the
high taxable income of the company according to German tax law.
The following table shows the expected tax loss carry-forwards incurred up to
December 31, 2008.
+------------+--------+------------+--------+------------+
| in EUR | |31/12/2008 | |31/12/2007 |
| ´000 | | | | |
+------------+--------+------------+--------+------------+
| To be | | 0 | | 19,811 |
| carried | | | | |
| forward | | | | |
| for an | | | | |
| unlimited | | | | |
| period of | | | | |
| time | | | | |
+------------+--------+------------+--------+------------+
| Tax | | 3,519 | | 4,785 |
| losses | | | | |
| carried | | | | |
| forward | | | | |
| for | | | | |
| which | | | | |
| no | | | | |
| deferred | | | | |
| tax | | | | |
| assets | | | | |
| have | | | | |
| been | | | | |
| recognized | | | | |
+------------+--------+------------+--------+------------+
Group tax rate
The tax on the group's income before taxes deviates from the theoretical amount
resulting from the application of the weighted average group tax rate on the
result before taxes, as follows:
+------------+--------+------------+--------+------------+
| in EUR | | 1/7/2008 | | 1/7/2007 |
| ´000 | | - | | - |
| | |31/12/2008 | |31/12/2007 |
+------------+--------+------------+--------+------------+
| Profit/ | | 4,855 | | -20,766 |
| Loss | | | | |
| before | | | | |
| taxes | | | | |
+------------+--------+------------+--------+------------+
| Average | | 31.58% | | 39.90% |
| group | | | | |
| income | | | | |
| tax (%) | | | | |
+------------+--------+------------+--------+------------+
| Expected | | -1,533 | | 8,286 |
| tax | | | | |
| expenses/ | | | | |
| income | | | | |
+------------+--------+------------+--------+------------+
| Expenses | | -423 | | 0 |
| related | | | | |
| to share | | | | |
| options | | | | |
+------------+--------+------------+--------+------------+
| Difference | | -380 | | -423 |
| from | | | | |
| foreign | | | | |
| tax rates | | | | |
+------------+--------+------------+--------+------------+
| Losses, | | 0 | | -1,049 |
| for | | | | |
| which | | | | |
| no | | | | |
| deferred | | | | |
| taxes | | | | |
| have | | | | |
| been | | | | |
| accounted | | | | |
| for | | | | |
+------------+--------+------------+--------+------------+
| Tax effect from | 1,164 | | 0 |
| the change of | | | |
| tax losses | | | |
| carried forward | | | |
+---------------------+------------+--------+------------+
| Taxes | | 551 | | 0 |
| for | | | | |
| prior | | | | |
| years | | | | |
+------------+--------+------------+--------+------------+
| Others | | 22 | | -139 |
+------------+--------+------------+--------+------------+
| Income | | -599 | | 6,675 |
| tax | | | | |
| expense | | | | |
| (prior | | | | |
| year: | | | | |
| income) | | | | |
+------------+--------+------------+--------+------------+
| Effective | | 12% | | 32% |
| tax rate | | | | |
| (%) | | | | |
+------------+--------+------------+--------+------------+
7. Related parties
Compared to June 30, 2008 Gas Fin S.A., Strassen/ Luxembourg, has increased
directly and indirectly their shares in TGE Marine Gas Engineering GmbH from
12.3% as at July 1, 2008 to 25.1% until the date of completion the half-year
financial statements. Gas Fin S.A., Strassen/ Luxembourg, directly holds 12.3%
(June 30, 2008: 12.3%) of shares, and indirectly over Gas Fin Investments S.A.,
Strassen/ Luxembourg, 11.6% and over Gas Fin GbR, Bonn, 1.2% . The shares of
these companies are considered in the judgement whether Gas Fin S.A., Strassen/
Luxembourg, is a related party according to IAS 24 or not.
Gas Fin S.A., Strassen/ Luxembourg, indirectly holds 40% of shares in TGE Gas
Engineering GmbH, Bonn. This company is also classified as related party
according to IAS 24.
As at December 31, 2008 Caledonia Invesments plc, London/ Great Britain, is
still a related party, as it still holds 35.4% of shares in TGE.
In the period July 1 to December 31, 2008 the following transactions with
related parties took place:
* As at July 1, 2008 a loan granted by Caledonia Invesments plc, London/ Great
Britain , amounting to TEUR 24,000 was repaid including accumulated interest, in
total TEUR 27,386 was repaid.
* With effect as of July 1, 2008 a contract between TGE and Gas Fin S.A.,
Strassen/ Luxembourg, was signed regarding the operative handling of
Onshore-contracts, which have not been transferred in connection with the
de-merger as of July 1, 2007. Based on this contract TGE assigns Gas Fin S.A.
with the operating handli8ng of such contracts. It has been agreed that Gas Fin
S.A. receives for the services rendered compensations, which are in line with
arms length principles. In case that at the end of such projects a positive
income effect remains for TGE, Gas Fin S.A. receives a profit sharing according
to a defined scheme.
* Based on a contract signed as at July 1, 2007, TGE Gas Engineering GmbH, Bonn,
indemnifies TGE from all financial risks coming from Onshore-projects, which
remained at TGE in the course of the de-merger as at July 1, 2008.
8. Events after balance sheet date
The management board has implemented measures to reduce personnel expenses. It
is planned to introduce reduced working hours for a part of TGE´s employees.
Compensation for reduced working hours is granted by the German Federal
employment agency for a maximum time period of 18 months, if companies intend to
reduce the weekly working hours due to economic reasons or a loss-incurring
event. TGE is planning to ask for short-time compensation due to the effects of
the financial crisis.
The management board estimates to reduce personnel expenses by this measure to a
large extent in the fiscal years 2008/ 2009 and 2009/ 2010.
Bonn, 10th March, 2009
TGE Marine AG
The Management Board
This information is provided by RNS
The company news service from the London Stock Exchange
END
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