Annual report 2015

TRANSMESA and TAP Thanks to their product portfolio, TRANSMESA and TAP (Spanish companies) strengthen the international position of the ŽP GROUP as regards the production and sales of pre - cision cold-drawn steel tubes. The year 2015 can be considered positive in terms of pro - duction and economic results.On 30 March 2015, a two- year project involving the transfer of production into the company’s production plant in Arenys de Mar was complet - ed by the planned deadline. The companies also prepared to implement a new information system, covering production planning and management, and ERP modules, which was deployed in early 2016. Given the relocation and continued investment in the resto - ration of the production facilities, production continued in a limited operating mode throughout 2015. In the past year, both TRANSMESA and the subsidiary TAP produced 7 377 tonnes of precision steel tubes and profiles. In 2015, both companies supplied their customers with tubes in the total amount of 11 031 tonnes (of which 7 033 tonnes were of own production) and the consolidated rev - enues from the sale of merchandise, products and services totalled EUR 32 997 thousand (of which EUR 8 033 thou - sand represented the sale of merchandise from Železiarne Podbrezová a.s.) Under the aforementioned conditions, the consolidated profit after tax amounted to EUR 743 thou - sand (separately, TRANSMESA: EUR 512 thousand and TAP: EUR 231 thousand). Investments totalling EUR 3 044 thou - sand were made in 2015, and the consolidated assets as at 31 December 2015 totalled EUR 41 424 thousand, of which current assets amounted to EUR 16 490 thousand. Of the 36 countries to which TRANSMESA shipped its prod - ucts in the past year, the domestic Spanish market covers 17.5% of the sale of own products and 30% of the total realised revenues. EU Member States, North America and Australia continue to hold their dominant market shares. In order to access markets in North America and to meet the requirements of its customers, TRANSMESA established a subsidiary, Transmesa USA Inc., in 2015 in New Jersey, USA. Transmesa USA only sells the products of its parent compa - ny and its turnover in 2015 amounted to EUR 788 thousand. Given the completion of the production relocation process and optimisation of the production process in the second half of 2015, the goal for 2016 is a 7% increase in production to the level of previous years. The increased share of own products in total sales is expected to improve profitability. We intend to increase the share of entry rod purchasing and keep the sale of merchandise from Železiarne Podbrezová a.s. in order to make a maximum use of all the synergies. The sales plan counts with a 3% increase in revenues. ŽĎAS, a.s. and TS Plzeň a.s. In the long term, ŽĎAS, a.s. and TS Plzeň a.s. are leading producers in the Czech heavy industry; in 2015 they kept their positions compared to their European and global competitors. The global recession in heavy engineering and metallurgy in traditional sales territories also continued in 2015, and negatively impacted both companies’ operations. By signing new contracts, the competition triggered exces - sive downward pressure on sales prices. Czech producers are also continuously exposed to foreign exchange risk, de - spite financial hedging operations. The production programme of ŽĎAS, a.s. comprises the supplies of inspection and parting lines, forming machines for smith and drop forging, flat and volume moulding, scrap metal processing equipment, cast iron and ductile cast iron, ingots and free forged products, and pressing tools for hot and cold flat and volume moulding. Renovations and mod - ernisations, from complete production sets to single ma - chines, rank the company among the leading Czech and European producers in this production range. All supplies to customers are made by the company’s own external as - sembly and high-quality servicing. The company’s exports in 2015 amounted to 51.1% of total revenues. Foreign cus - tomers include major companies from Germany, Slovakia, France, Italy, Romania, Israel, Slovenia, Poland, United King - dom, Netherlands, Spain, Australia, USA, Austria and other countries. In 2015, ŽĎAS, a.s. reported total revenues from the sale of merchandise, products and services in the amount of EUR 105 889 thousand (CZK 2 861million), of which metallurgical production amounted to EUR 54 909 thousand (52%), form - ing machines to EUR 23 661 thousand (22%), rolling mills to EUR 6 387 thousand (6%) and other production –- energy, tools and cooperation to EUR 20 932 thousand (20%). A cen - tral feature of business activities was the development of business relations with China and South America. In terms of capital expenditure, ŽĎAS a.s. performed the modernisation of technology equipment in the total amount 30 Report by the Board of Directors on Business Activities, Assets, and Financial Performance in 2015 and Information on the Business Plan