Press Room
Prosegur reports a consolidated net profit of €81 million for the first six months of 2016
Prosegur maintains the upward trend in profits across all of its geographical regions, with an overall increase of 4.1% in its consolidated net profit against the same period of the previous year.
Madrid, 28th July 2016. - Prosegur has reported a consolidated net profit of €81 million for the first six months of 2016, which is up 4.1% on the same period of the previous year. As it was mentioned in the previous quarter, the company has maintained the upward trend in its operations’ profitability thanks to the measures it has implemented to protect margins as well as its new sales offering, where technology has had a greater influence.
Prosegur has also maintained its organic growth rate in sales, with an increase of almost 13% compared to the same period of the previous year. In this respect, it is worth noting the strong performance of operations in the company’s three main markets: Argentina area, Spain and Brazil, with increases of 36.0%, 7.2% and 4.7% respectively. However, due to the depreciation of currencies in countries throughout the LatAm region, the group’s turnover decreased to €1.837 million, which is 5.9% less than the same period of the previous year.
Prosegur maintains the upward trend in its profitability
Likewise, the company’s EBITDA was also affected by the exchange rate and fell 3.0% to €203 million. Nevertheless, it is worth mentioning that its EBIT saw positive growth of 3.9%, reaching €148 million. These figures show an increase in profit margin from 7.3% in the same period of the previous year to 8.1% in the first six months of 2016. This significant improvement in profitability for the period strengthens the trend seen at the beginning of the year. Furthermore, the organisational changes that the company has undertaken are producing very satisfactory results, showing that they are structural in nature and are sustainable over time.
Looking at results for individual business lines, Integrated Security Solutions reported total sales revenue of €937 million for the first six months of 2016, down by 4% compared to the same period of the previous year. In LatAm, the business unit reported a turnover of €451 million, down by 12%. However, in local currency the turnover of Integrated Security Solutions recorded significant organic growth of 17%. Within Europe and the rest of the world, the unit maintained positive growth of 4%, reaching €486 million. The growth of operations in this geographical area can be attributed to two factors: the deployment activity of cybersecurity systems, and the provision of services that combine in increasingly sophisticated ways to respond to customer demands using remote monitoring technology.
Cash in Transit division reported revenues for the period of €795 million, which is 9% less than the same period of the previous year. In LatAm, its sales grew in local currency by 17.5%, having improved on the first quarter of the year. However, due to the negative performance of the exchange rates, this region recorded a turnover of €528 million, which is 13% down on the figure for the first six months of 2015. Within Europe and the rest of the world, sales were boosted by 2% up to €266 million. In particular, most notable in this area was the strong performance of operations in Germany and the increase in BPO (Business Process Outsourcing) activity.
Alarms business line has maintained its rising growth rate and has now made over 465,000 connections which is up 6% compared to the end of 2015. In total, Alarms recorded positive growth of 2% up to €106 million for the period. In particular, strong performance was notable in Europe and the rest of the world, where the Alarms business unit grew by 18% to €63 million in the first six months of the year. In LatAm, it maintained its growth rate in terms of the number of connections made, despite its turnover falling by 15% to €43 million due to the negative impact of the currency market.
Prosegur reports significant organic growth in all regions
Prosegur recorded overall sales of €1.022 million for the LatAm area, which is a decrease of 13% that can be entirely attributed to the depreciation of currencies in the countries of the region. However, the company was able to maintain the organic growth rates that were seen during the first quarter, achieving growth of 17.8% across the region. Worth highlighting is the growth of activity in Brazil, which comes at a time when the company is implementing measures to protect its profit margins. Beyond this, organic growth in the Argentina region (Argentina, Uruguay and Paraguay) was 36%. Finally, Chile, Colombia and Peru also reported a very positive performance with organic growth of 11.1%, 9.4% and 7.6% respectively.
In Europe and the rest of the world, turnover for the three business units reached €815 million - an increase of 4.7% compared to same period 2015, which is in line with the figures reported for the first quarter of the year. The strong performance of the activity in France stands out thanks to the measures taken in the previous quarters. Likewise, Germany grew by 4.6% at a time when operations in the country are also improving in terms of their profitability. Finally, Spain maintained a level of growth above the country’s GDP by increasing its sales by 7.2% in relation to the same period of the previous year.
Strength of Prosegur’s financial position
During the first six months of 2016, operating cash flow recovered a positive trajectory after the impact at the start of the year of the removal of capital control and trade restrictions in Argentina. During this period, Prosegur’s business activity generated €112 million, which represents growth of 7.7%. This development reflects the continuous improvement in the management of working capital and reaffirms the company’s commitment to continue applying and reinforcing the measures put in place to generate cash flows.
Total net debt was reduced by €38 million compared with the first quarter of the year, thanks to the substantial cash flows generated. This brings the company’s debt to €598 million as at the end of June 2016. Consequently, the leverage ratio was restored to a comfortable level of 1.3 times EBITDA. The reduced leverage and the solid liquidity position demonstrate the financial strength of Prosegur and its ability to take on projects for further growth in the future - for both organic and inorganic growth.
The financial strength of Prosegur has been endorsed with the rating of Baa2 with a stable outlook being confirmed by the credit rating agency Moody’s, which revised its credit opinion during the month of July, ratifying the company’s position two notches higher than investment grade.