Financing, cash flow and balance sheet

The company’s cash situation remained tight during the financial period. The company applied for restructuring proceedings on March 5, 2015, which the District Court of Espoo confirmed on November 15, 2016, in accordance with the amended restructuring programme.

Tecnotree’s working capital decreased during the period by EUR 3.5 million:

CHANGE IN WORKING CAPITAL, MEUR
(increase - / decrease +)
2016 2015
Change in trade receivables -1.7 2.1
Change in other short-term receivables 2.2 4.2
Change in inventories -0.3 0.0
Change in trade payables 3.6 -1.4
Change in other current liabilities -0.2 -1.9
CHANGE IN WORKING CAPITAL, TOTAL 3.5 2.9

 Project revenue is recognized in other receivables. When the agreement allows the customer to be invoiced, the receivables are regrouped in trade receivables.

In other receivables in the company’s balance sheet was EUR 6.0 million unbilled revenue from the remaining large project in Latin America, to be repatriated during 2017.

Tecnotree’s cash and cash equivalents totalled EUR 3.5 (6.4) million. Cash flow after investments for the financial period ended up EUR 0.9 million negative. The change in cash and cash equivalents for the financial period was EUR 3.0 million negative. The company received EUR 0.5 million short-term loan from the bank, which it amortized by EUR 0.1 million in October.

The balance sheet total on 31 December 2016 stood at EUR 59.8 (74.6) million. Tecnotree’s gross capital expenditure during the financial period was EUR 0.3 (1.2) million or 0.5% (1.5%) of net sales. Interest-bearing liabilities were EUR 24.4 (32.3) million. The net debt to equity ratio (net gearing) was 195.6% (145.2%) and the equity ratio was 17.9% (23.9%). During the period, total equity was affected by negative translation differences of EUR 0.7 million, mainly from Indian rupees (INR).

The financing agreement signed by Tecnotree in August 2013 included covenants, but they expired after the District Court of Espoo confirmed the restructuring programme on 15 November 2016.