31
30
installation and commissioning of an open cycle gas turbine power
plant of 1250 ΜW, with General Electric turbines, in the area Basra of
South Iraq. Further to the client’s call and in order to optimize the unit’s
flexibility, ΜΕΤΚΑ undertook with the 12/06/2014 contract the engi-
neering, installation and commissioning of equipment which will allow
the Unit to operate also with HFO (Heavy Fuel Oil). The contractual
value is $166,5 million.
Significant information for other subsidiary companies and Parent
Company
Οn 31/03/2014, subsidiary company of MYTILINEOS Group, KORIN-
THOS POWER S.A. has issued a
€
155,0 mio long-term bond loan in
order to refinance the existing ,since 20/07/2010,
€
157.5 mio short-term
bond loan. On 01/04/2014, the amount of
€
155,0 mio was drawn and
contributed to the fully repayment of the short-term
€
157.5 mio loan.
On 29/04/2014, 100% subsidiary company of MYTILINEOS Group,
PROTERGIA S.A., announced its entry in the electricity retail market
with a view to supplying electricity to businesses, professionals and
households. Protergia is the largest independent electricity producer
in Greece. The company’s portfolio of energy assets exceeds 1,200
MW of installed capacity, corresponding to more than 10% of the
country’s total electricity production.
MYTILINEOS HOLDINGS S.A. announces that the Company’s Board
of Directors, pursuant to a relevant resolution adopted on 29.05.2014,
resolved to initiate the procedure for the merger by absorption of its
wholly-owned subsidiary THORIKI – PRODUCTION AND TRADE OF
METALS INDUSTRIAL S.A. with the Company. The aforementioned
resolution also set 31.05.2014 as the Transformation Balance Sheet
date and appointed the independent auditors to assess the book
value of the absorbed company’s assets. The transformation will
take place in accordance with the provisions of articles 67-68 of C.K.
2190/1920 and articles 1-5 of Law 2166/1993.
On 17/10/2014, MYTILINEOS HOLDINGS S.A. announces that the
merger by absorption of the Company’s wholly-owned subsidiary un-
der the business name “THORIKI – PRODUCTION AND TRADE OF
METALS INDUSTRIAL S.A.” with the Company was approved by Deci-
sion no. K2-4873/14.10.2014 of the Deputy Minister for Development
and Competitiveness, which was registered with the General Com-
mercial Register (GEMI) under Registration No. 260475 on 14.10.2014.
ΙΙΙ. PROSPECTS – RISKS AND UNCERTAINTIES FOR
THE YEAR AHEAD
Α. Prospects for 2015
Metallurgy & Mining Sector
In the Metallurgy Sector, the growth rate of global aluminium demand
is expected to remain strong during 2015, standing at above 7% and
helping support aluminium prices.
Nevertheless, the beginning of the year
is characterised by a drop in premia from
their record-high levels, which to a large
extent is offset by the decline in produc-
tion costs and especially by the drop in oil
prices, as well as by the sustained strong
performance of the US Dollar.
Aluminium prices in the LME currently
stand at nearly $1,800/tn, posing signifi-
cant challenges for producers and thus
presaging a further drop in aluminium
stocks, which have been steadily declining
since early 2013.
The developments regarding the market
fundamentals, the performance of emerg-
ing economies and especially of the Chi-
nese economy, the energy costs and the
evolution of the Euro/USD parity, as well as
the monetary policy to be adopted by the
Central Banks, are expected to be the key
factors that will drive developments in the
sector in the months to come.
In this international environment, MYTILI-
NEOS Group, relying primarily on its strict
control of production costs, focuses on fur-
ther strengthening the competitiveness of
its Metallurgy Sector and expects it to post
a strong financial performance for 2015.
EPC Sector
Despite the continuing uncertainties in
the domestic and international environ-
ment, METKA is expected to continue on
a positive course in 2015. The company
will maintain its focus on EPC projects and
on penetrating markets with strong energy
needs. At the same time, it will continue to
pursue the enhancement of its domestic
projects’ portfolio, capitalizing on the com-
petitive advantages it has gained through
the successful execution of demanding in-
ternational projects, even in areas with an
unstable political and institutional environ-
ment.
METKA will keep being driven by the clear
strategy of dynamic and extrovert growth,
which it has been successfully implement-
ing during the previous years, through the
common efforts of its Management and
employees. Having as main advantages
the experience, the expertise and the international prestige that
it now enjoys, the company will continue to generate value for its
shareholders, its customers and the national economy.
Energy Sector
Protergia Group operates in a continuously changing environ-
ment, regarding both the electricity market and the country’s
fiscal situation. Despite that, and given the fact of the necessity
of Gas Fired plants for the assurance of stability and efficiency
of the national electricity system, the prospects remain posi-
tive in a medium to long term horizon. The decrease in pipeline
Gas prices due to the respective decrease in Oil prices and
along with the capacity of Mytilineos Group to procure Lique-
fied Natural Gas (LNG) in very competitive terms, are expected
to enhance the operation of the Group’s CCGTs compared to
2014. To be noted that in 31/12/2014 the transitional mecha-
nism for the Capacity Remuneration expired and regarding the
new Flexibility Remuneration Mechanism, which is expected to
come into force from 1/1/2015, the public consultation process
has been completed –as at the date of the Group’s Financial
Statements of 2014- and pending the approval of the DG Com-
petition of EU in order for the Regulatory Authority for Energy
(RAE) to issue its relevant decision.
Within 2015 3 new Wind Farms are expected to commence
commercial operation.
With the critical mass of installed capacity currently in full op-
eration, the Group is now firmly established as the largest in-
dependent energy producer in Greece and expects to take the
full benefit from the complete deregulation of the Greek Energy
market. In this context, the Group has already started and will
enhance its activity in the electricity retail aiming to supply com-
mercial customers and households offering competitive prices
and reliable services. Finally, it will reinforce its position in the
cross border electricity trading.
IV Business Risk Management
Financial risk management aims and policies
The Group’s activities give rise to multiple financial risks, includ-
ing the current and interest rate related risks; the volatility in
market prices; credit risks; and liquidity risks. The Group’s risk
management program aims at containing potential negative in-
fluence to its financial results, as this may arise from the inability
to predict financial markets and the volatility with respect to cost
and sales variables.
The essential risk management policies are
determined by the Group’s Management.
The risk management policy is applied by
the Corporate Treasury Department. The
latter acts as a service center, operating
under specific Management - approved
lines.
Credit Risk
The Group does not exhibit any considera-
ble concentration of credit risk in any of the
contracted parties. Credit risk originates
from available cash and cash equivalents,
derivative financial instruments and depos-
its at banks and financial institutions; also
from exposure to client derived credit risk.
Regarding commercial and other claims,
the Group is not theoretically exposed to
significant credit risks; as of the multifac-
eted nature of the Group’s activities, there
is no significant concentration of credit
risk with respect to its commercial require-
ments, as this is allocated over a high num-
ber of clients. However, the atypical condi-
tions that dominate the Greek market and
several other markets in Europe are forcing
the Group to constantly monitor its busi-
ness claims and also to adopt policies and
practices to ensure that such claims are
collected. By way of example, such poli-
cies and practices include insuring credits
where possible; pre-collection of the value
of product sold to a considerable degree;
safeguarding claims by collateral loans on
customer reserves; and receiving letters of
guarantee.
To minimize credit risk on cash reserves
and cash equivalents; in financial derivate
contracts; as well as other short term finan-
cial products, the Group specifies certain
limits to its exposure on each individual
financial institution and only engages in
transactions with creditworthy financial in-
stitutions of high credit rating.
BOARD OF DIRECTORS ANNUAL REPORT
