Financial situation

(EUR 000’s) 31.12.2008 31.12.2007
Short-term borrowings 8,713 11,491
Medium/long-term borrowings 3,315 4,371
Cash and cash equivalents (71,536) (63,385)
Bank debt (59,508) (47,523)
Financial receivables from related parties (139,509) (140,705)
Other financial receivables -
Financial receivables (139,509) (140,705)
Borrowings to related parties 152 -
Other short-term borrowings 563 1,110
Other medium/long-term borrowings 2,432 2,597
Other borrowings 3,147 3,707
Net financial debt (liquidity) (195,870) (184,521)

The Ansaldo STS Group’s net financial liquidity at 31 December 2008 was EUR 195,870 thousand. The main events involved in the change in the Group’s fi nancial position are summarised below:

  • principal collections of the Signalling Business Unit paid to: the Italian subsidiary, ASF, for the Wayside and On Board SCMT (EUR 75,170 thousand) and the Milan-Bologna and Novara-Milan high-speed rail lines (EUR 92,875 thousand); the Australian subsidiary for the WCCL, KFW and ETCS projects (EUR 70,300 thousand); the American subsidiary for the CTA Dearborn, CTA Loop, and UPCADX projects (EUR 18,278 thousand); and the French subsidiary for the Shitai Line and Madrid Lerida projects (EUR 23,557 thousand);
  • principal collections of the Transport Systems Business Unit from the following projects: Copenhagen (EUR 49,751 thousand), Genoa Metro, Brescia Metro, Rome Metro and Milan Metro (EUR 119,704 thousand) and high-speed train lines (EUR 36,641 thousand); payment of the dividends approved by the shareholders’ meeting on 1 April 2008 (EUR 19,992 thousand);
  • payment of taxes, including advance payment of corporate income taxes (IRES) (EUR 53,771 thousand);
  • payments for investments in property, plant and equipment, and intangible assets (EUR 14,600 thousand);
  • receipt of fi nancial income (EUR 4,900 thousand). The cash and cash equivalents at 31 December 2008 came to EUR 71,536 thousand. The Cash Flow Statement at 31 December 2008 is presented below:

Cash flow

(EUR 000’s) 31.12.2008 31.12.2007
Cash and cash equivalents - opening balance 63,385 48,580
Gross cash flow from operating activities 131,484 112,295
Changes in other operating items (58,638) (40,982)
Funds From Operations 72,846 71,313
Change in working capital (16,265) (26,629)
Cash flow from (used in) operating activities 56,581 44,684
Cash flow from ordinary investing activity (13,339) (17,788)
Free operating cash-flow 43,242 26,896
Strategic investments (2,075) (2,380)
Other changes in investing activities - 57
Cash flow from (used in) investing activities (15,414) (20,111)
Dividends paid (19,992) -
Cash flow from financing activities (13,486) (8,878)
Cash flow from (used in) financing activities (33,478) (8,878)
Foreign exchange translation differences 462 (890)
Cash and cash equivalents - closing balance 71,536 63,385

The year of 2008 closed with a net increase in cash and cash equivalents equal to EUR 8,151 thousand. The principal changes in cash fl ow are the following:

  • cash fl ow generated by operating activities equal to EUR 56,581 thousand, an increase of EUR 11,897 thousand compared with the prior year mainly attributable to the change in working capital as already evidenced in the balance sheet;
  • cash fl ow used in investing activities in the amount of EUR 15,414 thousand, most of which relates to investments in property, plant and equipment and intangible assets during the period, for a decrease of EUR 4,697 thousand with respect to the prior year (EUR 20,111 thousand at 31 December 2007); the decrease is mainly attributable to the lower ordinary investments during the period;
  • cash fl ow used in fi nancing activity in the amount of EUR 33,478 thousand compared with EUR 8,878 thousand of cash fl ow used at 31 December 2007; the change is principally linked to the reduction of certain lines of credit and to the payment of dividends for EUR 19,992 thousand.

The free operating cash fl ow (FOCF) before strategic investments for 2008 refl ects cash fl ow generated of EUR 43,242 thousand compared with the generated cash fl ow of EUR 26,896 thousand reported at 31 December 2007; this change is mainly attributable to the change in working capital and to fewer ordinary investments in 2008.