Published: 2019-06-12 13:47:08 CEST
Magnetic MRO
Annual report

CONSOLIDATED AUDITED REPORT 2018

Translation of the Estonian original

GENERAL INFORMATION

Magnetic MRO is a Total Technical Care maintenance and asset management organization with a global presence and more than two decades of worldwide experience. The company has a well-established reputation in innovative aviation solutions and proven track record as a one-stop shop for airlines, asset owners, OEMs and operators. It offers a wide range of services varying from asset management and engineering, to line and base maintenance.

 

2018 OPERATIONS AND ACTIVITIES

  • In January 2018, as a technologically advanced, innovative, know-how and capital driven service and asset management organization, Magnetic MRO has welcomed its new strategic investors, following a private equity firm BaltCap, together with minority shareholders, selling 100% of their shares in Magnetic MRO to Guangzhou Hangxin Aviation Technology (Hangxin). Consequently, Magnetic MRO has expanded into Asia, the highest growth market in aviation, with the goal of expanding its global presence and enhancing service portfolio.
  • In the last quarter of the 2018 Subsidiary of Magnetic MRO - MAC Aero Interiors, a commercial aircraft cabin interiors arm of a global provider of Total Technical Care for aircraft operators and lessors, Magnetic MRO, enters the Chinese aircraft cabin interiors market by establishing a Joint Venture with Benniao Aviation. The newly launched MAC Sichuan will be providing total cabin technical care support to Chinese aircraft owners and operators.
  • Magnetic MRO and Enter Air, Poland’s largest and Eastern Europe’s second largest charter carrier, have signed a three-year contract for PBH support for the airline's 19 Boeing 737-800s.
  • MMRO is step by step digitalizing its maintenance activities and moving towards paperless environment. In 2018 digital fingerprint signatures for maintenance related documents was introduced, which reduces significant amount of time related to documents sign off administration.

Subsequent events

  • On the 21.12.2018 Magnetic MRO issued bonds, which were listed on First North on 14.02.2019.
  • In March 2019 Magnetic MRO has completed the acquisition of Direct Maintenance, an Amsterdam-based independent MRO provider that’s specialized in Line Maintenance for narrow- and wide-body aircraft. The deal adds Airbus A380 and Boeing 787 to Magnetic MRO group’s capabilities, and doubles its global line stations network while allowing the Dutch company to keep the Direct Maintenance brand.
  • At the end of second quarter of 2019 Magnetic MRO AS has reached an agreement with investors to raise additional capital by up to 8.95 million euros.

The total share capital of Magnetic MRO AS (“MMRO”) will be increased from 1,090,188.80 euros to 1,283,200 euros by way of issuing up to 30,158 new shares with the nominal value of 6.4 euros each for the aggregate issue price of up to 8,950,000 euros.

According to the agreements, Shenzhen Yongtai Trading Co., Limited, a limited liability company registered under the laws of  P.R. China, is authorised to subscribe for up to 26,957 new shares of MMRO granting it a shareholding of up to 13.44% in MMRO for the total issue price of up to 8,000,000 euros and Sapphire Investment Holding Limited, a limited liability company registered under the laws of Hong Kong, is authorised to subscribe for up to 3,201 new shares of MMRO granting it a shareholding of up to 1.60% in MMRO for the  total issue price of up to 950,000 euros. The investors may subscribe for the new shares within a one-year period in multiple tranches. The subscription of new shares by Shenzhen Yongtai Trading Co., Limited is subject to certain regulatory approvals of P.R. China.

 

After the subscription of the new shares in full, the registered share capital of MMRO shall be 1,283,200 euros and the total number of shares of MMRO shall be 200,500. The shareholding of Hangxin Aviation Services Co., Limited, the existing sole shareholder, may decrease as a result of the issue of new shares from 100% to 84.96%.

 

Financial Results

Magnetic MRO AS Group consolidated turnover in 2018 is 87,1M euros, 36% was related to Spare Parts, 25% to Engine Management, 24% to Base Maintenance and 15% to other business units.

In 2018 Group’s main financial results are:

k 2018 2017
Net sales (EUR) 87 093 90 887
Net sales growth   -3% +79%
Net profit (EUR) 5 079 3 969
Net profit margin 6% 4%
Current ratio 1,41 1,03
ROA        13% 12%

Revenue growth (%) = (net sales 2017 - net sales 2016) / net sales 2016 * 100

Net profit margin (%) = net profit / revenue * 100

Current ratio (times) = current assets / current liabilities

ROA = Net profit / total assets * 100

 

Investments

During 2018 Magnetic MRO AS Group invested 3M Euros in tangible and intangible assets including purchase of engines.

 

CONSOLIDATED FINANCIAL STATEMENTS, kEUR

The financial statements are for the group: Magnetic MRO AS and its subsidiaries MAC Aero Interiors Ltd, MAC Sichuan and Arrowhead Assistance UAB

 

CONSOLIDATED INCOME STATEMENT        
    2018   2017
Revenue   87,093   90,887
Cost of sales   -74,907   -78,988
Gross profit (loss)   12,186   11,899
Distribution costs   -569   -488
Administrative expense   -9,169   -8,729
Other income   709   1,675
Other expense   -122   -6
Operating profit (loss)   3,034   4,352
Profit (loss) from associates   1,662    
Interest income   631   121
Interest expenses   -242   -157
Other financial income and expense   -7   -341
Profit (loss) before tax   5,079   3,974
Income tax expense       -5
ANNUAL PERIOD PROFIT (LOSS)   5,079   3,969
Profit (loss) from shareholders and partners in parent company   5,079   3,969

 Associates: Magnetic Parts Trading Limited (MPTL) - Magnetic MRO and US-based Crestline Investors joint venture for aviation asset investments

 

BALANCE SHEET CONSOLIDATED        
    31.12.2018   31.12.2017
ASSETS        
Current assets        
Cash and cash equivalents   929   1,110
Receivables and prepayments   17,441   10,733
Inventories   7,392   8,488
Total current assets   25,762   20,331
Non-current assets        
Investments in subsidiaries and associates   1,663   1
Receivables and prepayments   4,922   4,436
Property, plant and equipment   6,221   5,408
Intangible assets   749   766
Total non-current assets   13,555   10,611
TOTAL ASSETS   39,316   30,942
         
LIABILITIES AND EQUITY        
LIABILITIES        
Current liabilities        
Loan liablities   6,881   7,766
Payables and prepayments   11,354   11,797
Total current liabilities   18,235   19,563
Non-current liabilities        
Loan liablities   4,830   201
Payables and prepayments   1   1
Total non-current liabilities   4,831   202
TOTAL LIABILITIES   23,066   19,765
Equity        
Equity held by shareholders and partners in parent company        
Issued capital   1,090   1,090
Share premium   6,619   6,619
Statutory reserve capital   79   79
Unrealised exchange rate   -63   -58
Retained earnings (loss)   3,446   -524
Annual period profit (loss)   5,079   3,969
Total equity held by shareholders and partners
in parent company
  16,250   11,177
Total equity   16,250   11,177
TOTAL LIABILITIES AND EQUITY   39,316   30,942

 

CASHFLOW CONSOLIDATED        
    2018   2017
CASH FLOWS FROM OPERATING ACTIVITIES        
Operating profit (loss)   3,034   4,352
Adjustments        
Depreciation and impairment loss (reversal)   1,663   2,096
Profit (loss) from sale of non-current assets   -344   -1,440
Total adjustments   1,319   656
Changes in receivables and prepayments related to operating activities   -6,399   -1,191
Changes in inventories   1,097   -1,648
Changes in payables and prepayments related to operating activities   -455   -5,534
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES   -1,403   -3,364
 CASH FLOWS FROM INVESTING ACTIVITIES        
Purchase of property, plant and equipment and intangible assets   -2,917   -7,735
Proceeds from sales of property, plant and equipment and intangible assets   1,108   5,140
Other cash payments to acquire subsidiaries   -283   -
Loans givens       -4,156
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES   -2,092   -6,751
CASH FLOWS FROM FINANCING ACTIVITIES        
Loans received   7,222    
Repayments of loans received   -83   -1,949
Proceeds from overdraft   -3,489   5,781
Proceeds from finance lease   -213   -225
Interest paid   -230   -157
Proceeds from government grants   120    
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES   3,327   3,450
TOTAL CASH FLOWS   -168   -6,665
Cash and cash equivalents at beginning of period   1,110   8,053
Change in cash and cash equivalents   -168   -6,665
Effect on exchange rate changes on cash and cash equivalents   -13   -278
Cash and cash equivalents at end of period   929   1,110

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY          
    Issued capital Share premium Statutory
reserve capital
Unrealised
exchange rate
Retained
earnings (loss)
  Total
31.12.2016   1,090 6,619 79 -45 -524   7,220
Annual period profit (loss)         -12 3,969   3,957
31.12.2017   1,090 6,619 79 -58 3,446   11,177
Annual period profit (loss)         -5 5,079   5,073
31.12.2018   1,090 6,619 79 -63 8,524   16,250

 

         Astrit Viisma-Kass
         
         CFO
         Astrit.Viisma@magneticmro.com


Annual Report 2018 ENG.pdf