FLS Industries has today received close to DKK 1,150m (including interest) as payment for its interests in Secil, the Portuguese cement company, from the buyer, Semapa, S.A., a Portuguese company (see also Stock Exchange Message No. 40 released on 23 December 2002).
In the FLS Industries accounts, the participating interest in Secil is treated as an associated undertaking, so the FLS Industries earnings before interest and tax (EBIT) are not affected by the sale.
The sale generates a tax-free profit in excess of DKK 700m which was not included in the year's estimated earnings. In the previously announced earnings forecast for 2003, Secil's contribution to earnings before tax amounted to approximately DKK 150m. Including the effect on interest payments, the transaction in itself will improve earnings before tax (EBT) by nearly DKK 600m. Shareholders' equity will increase by slightly more than DKK 350m.
The sale marks the fulfilment of an important goal for the FLS Group, in that its net interest-bearing debt now amounts to approximately DKK 2bn. This means at total debt reduction by some DKK 4bn over the past two years.
The sale also plays a significant role in the FLS Group's focusing strategy, which is expected to lead to additional divestments during 2003. The results, the sequence and the timing of these divestments may significantly influence the announced earnings prospects, both positively and negatively. FLS Industries maintains its latest projections for 2003 with consolidated turnover at more than DKK 15bn, earnings before interest and tax of DKK 300m - 400m and earnings before tax (EBT) at DKK 250m - 350m (see Stock Exchange Message No. 04-2003). In itself the sale of Secil boosts earnings before tax (EBT) by nearly DKK 600m. As mentioned in the Stock Exchange Message No. 04-2003 the earnings forecast entails special risks with regard to the sequence and timing of the planned divestments and their effect on earnings.
FLS Industries A/S
Jørgen Worning
Chairman of the Board
Poul Erik Tofte
Group Chief Financial Officer