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Schlieren/Switzerland, 11 August 2020 - July revenue and liquidity update July trading continues to improve in line with expectations Liquidity position better than expected - ARYZTA has seen further improvement in the revenue trend of the business in July, currently tracking to an organic revenue evolution of c.(18)%1 for month to date to 25 July 2020, versus (23)% in June, (36)% in May and (49)% in April. - In Europe most economies are re-emerging from lockdown but there is concern about a second wave of restrictions in some countries. The monthly revenue evolution is now tracking at c.(20)%. QSR and Retail are gradually improving whilst Foodservice is still significantly down. - In North America, sales are improving but are still experiencing volatility as some States and major cities reinstate restrictions. The monthly revenue evolution is tracking at c.(15)%. QSR and Retail remain relatively strong whereas Foodservice is still heavily impacted by COVID-19 related restrictions. - In Rest of World, the monthly revenue evolution is tracking at c.(20)%. Similar to all other regions, Foodservice remains negatively impacted. The performance in Brazil is improving but remains challenging whilst there is growing concern over impact of a second wave of infections in Australia and Japan. - Management has taken decisive action to protect and maximise liquidity since the consequences of COVID-19 became visible in mid-March. This included pausing productions in bakeries to reduce capacity in line with demand, furloughing headcount, availing of government relief initiatives, suspending capital expenditure and eliminating discretionary cost to the maximum extent possible. - While restrictions are loosening in markets and more localized regulations appear, ARYZTA has adjusted production upward using adapted shift patterns. However many lines are still operating at reduced capacity: » In Europe only one bakery is still fully paused compared to three as of 30 April while 69 out of 83 lines are currently operational. » In North America only one bakery is still fully paused compared to five as of 30 April while 63 out of 70 lines are currently operational. » Overall ARYZTA has c.14% of staff furloughed versus c.30% as of 30 April. - ARYZTA continues to actively manage production capacity to match demand as it improves over time. The company continues to expect a bumpy recovery over the coming months. Liquidity Reflecting the Group’s focus on cash conservation, ARYZTA maintains liquidity in excess of €415m on 31 July compared to €370m on 25 June, ahead of previous expectations. This is consistent with our expectations that the Group would finish the year with a good overall liquidity position. ARYZTA has no material debt maturities over the coming 13 month period (€17m due March 2021).
Freedom is driven by determination
HIGHLIGHTS:
- TransGlobe is focused on conserving cash to proactively manage its balance sheet in the current low commodity price environment. The Company ended the second quarter with positive working capital of $35.1 million, including cash and cash equivalents of $34.8 million;
- Second quarter production averaged 14,300 boe/d (Egypt 11,990 bbls/d, Canada 2,310 boe/d), a decrease of 697 boe/d (5%) from the previous quarter;
- Production in July averaged ~12,439 boe/d (Egypt ~10,145 bbls/d, Canada ~2,294 boe/d), a decrease of 13% from Q2-2020, in line with revised budget expectations due to natural declines;
- Sales averaged 12,470 boe/d including 312.6 mbbls sold to EGPC for net proceeds of $7.2 million in Q2-2020. Average realized price for Q2-20 sales of $21.63/boe; Q2-2020 average realized price on Egyptian sales of $23.96/bbl and Canadian sales of $11.01/boe;
- Full year 2020 production guidance range narrowed to 13,300 to 13,800 boe/d to reflect deferred well interventions in Egypt (previously 13,300 to 14,300 boe/d);
- Negative funds flow from operations of $2.8 million ($0.03 per share) in the quarter;
- Second quarter net loss of $13.4 million ($0.19 per share), inclusive of a $3.3 million unrealized loss on derivative commodity contracts;
- Consistent with the revised 2020 budget previously disclosed, there has been no drilling activity in Egypt or Canada during Q2-2020;
- Business continuity plans remain effective across our locations in response to COVID-19 with no health and safety impacts or disruption to production;
- Hedged TransGlobe’s remaining unhedged forecasted 2020 Egypt entitlement oil production with dated Brent collars (costless), protecting a floor price of $30.00 purchased puts against $40.70 sold calls;
- Despite restrictions on travel, constructive negotiations with EGPC to amend, extend and consolidate the Company’s Eastern Desert concession agreements continued throughout the quarter; and
- TransGlobe continues to actively evaluate M&A opportunities, with a view to not only better position the Company to weather the current downturn but also rebound strongly once commodity prices begin to strengthen.
Freedom is driven by determination