Vaahto Group Interim Management Statement for September 1, 2008 – June 26, 2009
VAAHTO GROUP PLC OYJ COMPANY RELEASE 26.6.2009 at 10.00
VAAHTO GROUP INTERIM MANAGEMENT STATEMENT FOR SEPTEMBER 1, 2008 – JUNE 26, 2009
Vaahto Group’s turnover for September 1, 2008, to May 31, 2009, was 56.6 million euros (compared with 60.3 million euros for the corresponding period in the previous fiscal year), with an operating loss of 2.9 million euros (comparative: operating profit of 0.6 million euros). Most of the loss accumulated during the first half of the fiscal year, when the turnover was clearly below the previous year’s levels. More positive developments were achieved at the end of the period under review, thanks to the increased turnover and the cost-adjustment procedures performed. The Group’s turnover for the third quarter (March 1 to May 31, 2009), was 24.4 million euros (compared with 18.4 million euros for the corresponding period in 2008), with an operating loss of 0.1 million euros (comparative: operating profit of 0.4 million euros). Vaahto Group’s order book at the end of the period under review totaled 31.0 million euros (24.8 million euros).
Pulp & Paper Machinery
The Pulp & Paper Machinery division’s turnover for September 1, 2008, to May 31, 2009, was 37.2 million euros (33.7 million euros), with an operating loss of 3.4 million euros (operating loss of 2.7 million euros). The division’s loss in the period under review was accumulated mostly in the first half of the fiscal year. Toward the end of the period, more positive developments were achieved, thanks to the increased turnover and the above-mentioned adjustment procedures. The division’s result for the third quarter was slightly to the positive.
The most significant orders for the Pulp & Paper Machinery division during the period were for the tissue machine rebuild at Metsä Tissue’s Mänttä mill, the board machine rebuild for Stora Enso’s Inkeroinen mill, and the headbox project for the Stora Enso board machine in Imatra. Also, the division received an additional order from the Kama paper mill in Russia. This order is related to the contract made in August 2008 for paper machine modernization, which involves conversion of the machine in question from newsprint to LWC paper production.
In the period under review, the division merged Vaahto Roll Service Oy, part of the division, with Vaahto Ltd. The purpose of the merger was to simplify the Group’s structure, reduce costs, and streamline the operations of the Pulp & Paper Machinery division. Following the merger, the division has two operational profit centers: Vaahto Projects and Vaahto Service.
The Process Machinery division’s turnover for September 1, 2008, to May 31, 2009, was 20.4 million euros (26.6 million euros), with an operating profit of 0.6 million euros (2.8 million euros). The turnover decreased by 23% from that of the reference period, making the result lower than the comparative figure.
The division’s market situation was very weak during the period under review, and the order backlog was adversely affected for both vessels and agitators. The division has a significant number of customer projects in the offer phase, but decisions on the realization of these projects have been heavily delayed in view of the current economic climate.
Outlook for the September 1, 2008 – August 31, 2009, fiscal year
The international financial climate has led to great insecurity in the market and to postponement of investment decisions. The market situation is thus highly challenging. The period under review saw the Group companies take significant action to adjust their operations to the current demand and market situation.
With the adjustment procedures, and as the projects in the order book are entered in the accounts, the result for the second half of the fiscal year will improve from those of the first half, but the result for the full fiscal year will remain unprofitable.
Lahti, June 26, 2009
VAAHTO GROUP PLC OYJ
Board of Directors
CEO, Vaahto Group Plc Oyj
Tel.: +358 50 466 1470