Vaahto Group Interim Report for September 1, 2009 – February 28, 2010
VAAHTO GROUP PLC OYJ INTERIM REPORT 9.4.2010 at 10.00
VAAHTO GROUP INTERIM REPORT FOR SEPTEMBER 1, 2009 – FEBRUARY 28, 2010
Vaahto Group’s turnover for September 1, 2009, to February 28, 2010, was 18.2 million euros (compared with 32.3 million euros for the corresponding period in the previous fiscal year), with an operating loss of 3.7 million euros (comparative: operating loss of 2.8 million euros). The turnover saw a decrease of 44% from that of the reference period, undermining the result. Vaahto Group’s order book decreased by 30% during the period under review; it was 17.1 million euros at the beginning of the period and 12.0 million euros at the end.
Pulp & Paper Machinery
The Pulp & Paper Machinery division’s turnover for the period under review was 12.1 million euros (18.7 million euros), with an operating loss of 3.5 million euros (operating loss of 3.5 million euros). The turnover decreased by 35% from that of the reference period, and the division’s result was unprofitable.
The market for the Pulp & Paper Machinery division’s Projects unit picked up during the period, and the number of significant projects in the offer phase has been on the increase. After the end of the period under review, the division received a headbox order from the Chinese Taishan Gypsum Co. Ltd.
The market situation has improved for this division’s Vaahto Service unit, and the period saw its order book increase. The product selection for paper machine servicing expanded in line with objectives during the period under review, contributing to the increase in Vaahto Service’s order book.
During the period under review, the Board of Directors of the parent company decided to establish a production unit for the Pulp & Paper Machinery division in China. According to the objective set, this production unit is to start operations during the 2010–2011 fiscal year.
Process Machinery
The Process Machinery division’s turnover for the period under review was 6.2 million euros (14.2 million euros), with an operating loss of 0.3 million euros (operating profit of 0.7 million euros). The turnover decreased by 56% from that of the reference period, and the division’s result was unprofitable.
During the period under review, Vaahto Ltd. has entered into an agreement with Kavika Oy to sell the HVAC-business of Process Machinery division. The transaction has not a material impact on Process Machinery division’s net sales for the period 2009 – 2010. During the period under review Vaahto Ltd. booked a light profit from the sale.
The Process Machinery division’s market situation is still weak. However, slight improvement was detected in the market during the period under review, and the division’s order book increased slightly for both tanks and agitators. The upturn in the order book in the face of the poor market situation was facilitated by the division’s strong competitiveness in the energy and environmental sectors.
Research and development
The Group’s research and development activities during the period under review concentrated for the most part on improving the competitiveness of the Pulp & Paper Machinery division’s key components for paper and board machines, and on expansion of the roll servicing product selection. The scope of the Group’s R&D activities remained the same as in the previous fiscal period.
Investments
The Group’s capital expenditure for the period came to 0.3 million euros (2.4 million euros). The investments consisted mainly of smaller machinery and equipment acquisitions and of investments in information systems.
Financing
The decrease in debt, including interest, was 3.1 million euros. The total of the consolidated balance sheet was 36.9 million euros (50.1 million euros at the end of previous fiscal period). The Group’s equity ratio decreased to 22.3% (compared with 23.2% at the end of the previous fiscal year).
The decrease of the balance sheet during the period under review is mostly because of a payment received at the end of the previous fiscal year for delivery of a significant project, but payments for to suppliers have been made, for the most part, during the current fiscal year. This is also reflected in the operating cash flow in the cash flow calculation and key figures.
Personnel
The number of the Group’s personnel averaged 376 over the period (410 in the previous fiscal year).
Share issue authorizations
The Board of Directors has no authority to issue new shares, convertible bonds, or bonds with warrants, nor the authorization to obtain or surrender shares.
International financial reporting standards
The interim report was drawn up in accordance with the International Financial Reporting Standards (IFRS) standard IAS 34 (“Interim Financial Reporting”).
Forecast of developments
The international market situation has remained weak for the most part, although significant improvement has been detected lately. During the period under review, Vaahto Group took extensive measures to improve its competitiveness, and these measures, along with the improved market situation, are expected to result in growth in the Group’s order book.
Vaahto Group’s order book decreased significantly in the previous fiscal year, and the starting point for the current fiscal year therefore was highly challenging. In spite of the cost-adjustment procedures performed, the first half of the fiscal year showed a clearly negative result. Although the Group’s profitability is expected to increase toward the end of the financial year, the full-year result will still be clearly negative.
Interim management statement
In the second half of the September 1, 2009, to August 31, 2010, financial year, Vaahto Group Plc Oyj will publish an interim management statement instead of an interim report on operations during a nine-month period. The interim management statement will be published on July 2, 2010.
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, IFRS 1000 EUR |
Interim |
Interim |
Annual |
| Net sales |
18 234 |
32 280 |
75 694 |
| Change in finished goods and work in progress |
927 |
-1 085 |
-3 109 |
| Production for own use |
244 |
566 |
834 |
| Other operating income |
524 |
35 |
401 |
| Share of profits of affiliated companies |
9 |
25 |
13 |
| Material and services |
-9 417 |
-17 369 |
-43 503 |
| Employee benefit expenses |
-8 570 |
-10 962 |
-19 708 |
| Depreciations |
-1 246 |
-1 467 |
-2 423 |
| Other operating expenses |
-4 423 |
-4 781 |
-10 520 |
| Operating profit |
-3 717 |
-2 758 |
-2 320 |
| Financing income |
10 |
54 |
86 |
| Financing expenses |
-379 |
-540 |
-1001 |
| Profit or loss before taxes |
-4 086 |
-3 244 |
-3 235 |
| Tax on income from operations |
899 |
843 |
857 |
| Profit or loss for the period |
-3 187 |
-2 401 |
-2 378 |
| Other comprehensive income: | |||
| Translation differences |
-5 |
25 |
21 |
| Cash flow hedging |
23 |
-292 |
-223 |
| Income tax relating to components of other comprehensive income |
-6 |
76 |
58 |
| Other comprehensive income, net of tax |
12 |
-191 |
-144 |
| Total comprehensive income |
-3 176 |
-2 592 |
-2 522 |
| Net profit or loss attributable: | |||
| To equity holders of the parent |
-3 016 |
-2 372 |
-2 316 |
| To minority interest |
-171 |
-28 |
-62 |
| Total |
-3 187 |
-2 401 |
-2 378 |
| Total comprehensive income attributable: | |||
| To equity holders of the parent |
-3 004 |
-2 564 |
-2 460 |
| To minority interest |
-171 |
-28 |
-62 |
| Total |
-3 176 |
-2 592 |
-2 522 |
| Earnings per share calculated on profit attributable to equity holders of the parent: | |||
| EPS undiluted, euros/share |
-1,05 |
-0,83 |
-0,81 |
| EPS diluted, euros/share |
-1,05 |
-0,83 |
-0,81 |
| Average number of shares (1000 shares) |
2 872 |
2 872 |
2 872 |
| CONSOLIDATED BALANCE SHEET, IFRS 1000 EUR |
Interim |
Interim |
Annual |
| Assets | |||
| Intangible assets |
2 086 |
2 441 |
2 495 |
| Goodwill |
1 702 |
1 702 |
1 702 |
| Tangible assets |
15 431 |
15 803 |
16 012 |
| Shares in affiliated companies |
54 |
62 |
50 |
| Non-current trade and other receivables |
12 |
13 |
12 |
| Other long-term investments |
44 |
44 |
44 |
| Deferred tax asset |
2 233 |
1 446 |
1 225 |
| Non-current assets |
21 562 |
21 510 |
21 540 |
| Inventories |
4 850 |
7 993 |
4 627 |
| Trade receivables and other receivables |
10 224 |
15 724 |
11 519 |
| Tax receivable, income tax |
0 |
1 017 |
0 |
| Cash and bank |
217 |
440 |
12 400 |
| Current assets |
15 291 |
25 174 |
28 546 |
| Total assets |
36 853 |
46 684 |
50 086 |
| Equity and liabilities | |||
| Share capital |
2 872 |
2 872 |
2 872 |
| Share premium account |
6 |
6 |
6 |
| Other reserves |
1 849 |
1 787 |
1 835 |
| Translation differences |
20 |
40 |
20 |
| Retained earnings |
1 923 |
4 865 |
4 941 |
| Equity attributable to equity holders of the parent |
6 669 |
9 570 |
9 673 |
| Minority share |
1 057 |
1 262 |
1 229 |
| Shareholders’ equity |
7 726 |
10 832 |
10 902 |
| Deferred tax liability |
580 |
725 |
528 |
| Long-term liabilities, interest-bearing |
5 760 |
7 429 |
6 928 |
| Non-current provisions |
268 |
271 |
355 |
| Non-current liabilities |
6 607 |
8 425 |
7 812 |
| Short-term liabilities, interest-bearing |
9 716 |
11 164 |
6 679 |
| Trade payables and other liabilities |
12 672 |
16 197 |
24 628 |
| Tax liability |
132 |
67 |
65 |
| Current liabilities |
22 520 |
27 427 |
31 372 |
| Liabilities |
29 127 |
35 852 |
39 184 |
| Total equity and liabilities |
36 853 |
46 684 |
50 086 |
| KEY FIGURES, IFRS |
Interim |
Interim |
Annual |
| Operating profit or loss 1000 EUR |
-3 717 |
-2 758 |
-2 320 |
| Operating profit or loss % of turnover |
-20,4 |
-8,5 |
-3,1 |
| Return on equity % |
-34,2 |
-19,5 |
-19,3 |
| Return on investment % |
-15,6 |
-9,4 |
-8,5 |
| Earnings per share EUR |
-1,05 |
-0,83 |
-0,81 |
| Shareholders’ equity per share EUR |
2,32 |
3,33 |
3,37 |
| Solidity % |
22,3 |
25,1 |
23,2 |
| Gearing |
197,5 |
167,6 |
11,1 |
| Order backlog 1000 EUR |
12 015 |
43 194 |
17 098 |
| Gross investments 1000 EUR |
258 |
2 385 |
3 656 |
| Total average number of personnel |
376 |
417 |
410 |
| CONSOLIDATED FLOW OF FUNDS STATEMENT, IFRS 1000 EUR |
Interim |
Interim |
Annual |
| Profit or loss before taxes |
-4 086 |
-3 244 |
-3 235 |
| Adjustments |
1 065 |
1 947 |
3 422 |
| Change in working capital |
-10 794 |
142 |
17 229 |
| Financial income and expenses and taxes |
-434 |
-553 |
-961 |
| Flow of funds from operations |
-14 249 |
-1 707 |
16 456 |
| Investments in tangible and intangible assets |
-258 |
-2 385 |
-3 656 |
| Income from sales of tangible and intangible assets |
457 |
7 |
61 |
| Repayments of loans |
0 |
0 |
1 |
| Flow of funds from investments |
198 |
-2 378 |
-3 595 |
| Increase of the interest-bearing liabilities |
3 199 |
6 135 |
7 349 |
| Decrease of the interest-bearing liabilities |
-1 331 |
-2 007 |
-8 207 |
| Dividends |
0 |
-333 |
-333 |
| Flow of funds from financial items |
1 868 |
3 795 |
-1 191 |
| Change of liquid funds |
-12 183 |
-290 |
11 670 |
| STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, IFRS 1000 EUR |
Share |
Hedg- |
Other |
Re- |
Mino- |
Total |
| Interim Report 1.9.2009 – 28.2.2010 |
|
|||||
| Shareholders’ equity 1.9.2009 |
2878 |
-258 |
2093 |
4960 |
1229 |
10902 |
| Cash flow hedging: increase/ decrease (hedging reserve) |
|
23 |
23 |
|||
| Deferred taxes’ share of period movement |
-6 |
-6 |
||||
| Change in translation difference |
|
-5 |
-5 |
|||
| Reclassifi- cations between items |
|
-3 |
3 |
0 |
||
| Net profits/losses recognized directly to shareholders’ equity |
0 |
17 |
-3 |
-2 |
0 |
12 |
| Profit/loss for the period |
-3016 |
-171 |
-3187 |
|||
| Total profits and losses |
0 |
17 |
-3 |
-3018 |
-171 |
-3175 |
| Dividend distribution |
0 |
|||||
| Shareholders’ equity 28.2.2010 |
2878 |
-242 |
2090 |
1942 |
1057 |
7726 |
| STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, IFRS 1000 EUR |
Share |
Hedg- |
Other |
Re- |
Mino- |
Total |
| Interim Report 1.9.2008 – 28.2.2009 |
|
|||||
| Shareholders’ equity 1.9.2008 |
2878 |
-93 |
2100 |
7537 |
1336 |
13757 |
| Cash flow hedging: increase/ decrease (hedging reserve) |
|
-292 |
-292 |
|||
| Deferred taxes’ share of period movement |
76 |
76 |
||||
| Change in translation difference |
|
25 |
25 |
|||
| Reclassifi- cations between items |
|
-3 |
3 |
0 |
||
| Net profits/losses recognized directly to shareholders’ equity |
|
-216 |
-3 |
28 |
-191 |
|
| Profit/loss for the period |
-2372 |
-28 |
-2401 |
|||
| Total profits and losses |
-216 |
-3 |
-2344 |
-28 |
-2592 |
|
| Dividend distribution |
-287 |
-46 |
-333 |
|||
| Shareholders’ equity 28.2.2009 |
2878 |
-310 |
2097 |
4905 |
1262 |
10832 |
| STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, IFRS 1000 EUR |
Share |
Hedg- |
Other |
Re- |
Mino- |
Total |
| Annual Report 1.9.2008 – 31.8.2009 |
|
|||||
| Shareholders’ equity 1.9.2008 |
2878 |
-93 |
2100 |
7537 |
1336 |
13757 |
| Cash flow hedging: increase/ decrease (hedging reserve) |
|
-223 |
-223 |
|||
| Deferred taxes’ share of period movement |
58 |
58 |
||||
| Change in translation difference |
|
21 |
21 |
|||
| Reclassifi- cations between items |
|
-6 |
6 |
0 |
||
| Net profits/losses recognized directly to shareholders’ equity |
|
-165 |
-6 |
27 |
-144 |
|
| Profit/loss for the period |
-2316 |
-62 |
-2378 |
|||
| Total profits and losses |
-165 |
-6 |
-2289 |
-62 |
-2522 |
|
| Dividend distribution |
-287 |
-46 |
-333 |
|||
| Shareholders’ equity 31.8.2009 |
2878 |
-258 |
2093 |
4960 |
1229 |
10902 |
SEGMENT INFORMATION, IFRS
In the 2009-2010 fiscal year, the Group has start applying the IFRS 8 “Operating segments“ standard. The operating segments have been defined according to the new standard. The business of Vaahto Group is reported as two operating segments: Pulp & Paper Machinery and Process Machinery. The operating segments are corresponding to the business segments defined according to the previous standard IAS 14 “Segment information”.
| NET SALES BY OPERATING SEGMENTS, IFRS 1000 EUR |
Interim |
Interim |
Annual |
| Pulp & Paper Machinery |
12 148 |
18 748 |
52 092 |
| Process Machinery |
6 183 |
14 155 |
24 655 |
| Net sales between segments |
-96 |
-623 |
-1 053 |
| Group total |
18 234 |
32 280 |
75 694 |
| OPERATING PROFIT OR LOSS BY OPERATING SEGMENTS, IFRS 1000 EUR |
Interim |
Interim |
Annual |
| Pulp & Paper Machinery |
-3 464 |
-3 450 |
-2 369 |
| Process Machinery |
-255 |
684 |
50 |
| Other |
0 |
-1 |
-1 |
| Operating profit or loss between segments |
2 |
9 |
-1 |
| Group total |
-3 717 |
-2 758 |
-2 320 |
| TOTAL AVERAGE NUMBER OF PERSONNEL BY OPERATING SEGMENTS |
Interim |
Interim |
Annual |
| Pulp & Paper Machinery |
241 |
269 |
263 |
| Process Machinery |
135 |
148 |
147 |
| Group total |
376 |
417 |
410 |
| NET SALES BY MARKET AREAS, IFRS 1000 EUR |
Interim |
Interim |
Annual |
| Finland |
9 051 |
12 012 |
22 267 |
| Other Europe |
7 628 |
16 170 |
45 208 |
| North America |
92 |
252 |
299 |
| Asia |
982 |
3 839 |
6 513 |
| Africa |
128 |
0 |
0 |
| Other |
353 |
7 |
1 407 |
| Group total |
18 234 |
32 280 |
75 694 |
Figures are in thousand euros unless stated otherwise. Figures are unaudited.
NOTES REQUIRED BY IAS 34
Accounting principles
The Interim Report was drawn up according to the same accounting principles and calculation methods as the previous financial statement, for the fiscal period that ended on August 31, 2009.
Dividends paid
In the period under review, Vaahto Group Plc Oyj paid no dividends
Lahti, April 9, 2010
VAAHTO GROUP PLC OYJ
Board of Directors
Information:
Anssi Klinga
CEO
Vaahto Group Plc Oyj
tel. +358 50 4661470