Vaahto Group Interim Report for September 1, 2007 – February 29, 2008
VAAHTO GROUP PLC OYJ STOCK EXCHANGE RELEASE 18.4.2008 at 10.00 a.m.
VAAHTO GROUP INTERIM REPORT FOR SEPTEMBER 1, 2007 – FEBRUARY 29, 2008
Vaahto Group’s turnover for the period under review was 41.8 million euros (comparative: 37.6 million euros), with an operating profit of 0.2 million euros (1.0 million euros). The turnover saw an increase of 11.2% from that of the reference period. In spite of the increased turnover, the Group’s result was lower than the equivalent figure for the reference period. The main reason for decreased profits was the poor profitability of the Pulp & Paper Machinery division’s project deliveries completed during the period under review. Vaahto Group’s order backlog decreased during the period; it was 42.9 million euros at the beginning of the period and 33.5 million euros at the end.
Pulp & Paper Machinery
The Pulp & Paper Machinery division’s turnover for the period under review was 23.3 million euros (23.3 million euros), with an operating loss of 1.8 million euros (operating profit of 0.8 million euros). The division’s result was significantly lower than in the reference period and became negative. The result was undermined by the poor profitability of project deliveries completed during the period and the low turnover experienced in the latter half of the period.
The market situation for the Pulp & Paper Machinery division remained challenging. The forest industry’s investment rate in Finland and the rest of Europe is low, and the competitive situation in Asia has tightened. In spite of the fairly significant volume of offers, the division’s sales in the period under review were low, resulting in a decreased order backlog.
Operations of the subsidiary company established in Shanghai in the previous fiscal year have gotten off to a good start, and the new company is expected to improve the division’s competitive position in the Chinese market.
Process Machinery
The Process Machinery division’s turnover for the period under review was 18.5 million euros (14.3 million euros), with an operating profit of 2.0 million euros (0.2 million euros). The turnover increased in both the tank and agitator fields; the profitability of both product groups was clearly better than that of the reference period.
The Process Machinery division’s sales were good during the period under review. The most significant orders for Japrotek Oy Ab, part of the division, were an absorption tower for Uhde GmbH in Germany and a leaching autoclave for Norilsk Nickel Harjavalta Oy in Finland. Stelzer Rührtechnik International GmbH, a German company in the division, achieved good sales in the period under review, and the company received significant orders from, e.g., North America and China, in addition to its strong local market area in Central Europe.
During the period under review, Vaahto Oy signed an agreement to sell its spiral heat exchanger business, which belonged to the Process Machinery division, to the German HES Heat Exchanger Systems GmbH. The sale includes the spiral heat exchanger production line and its machinery and equipment, with related intangible rights. Under the agreement, Vaahto Oy is responsible for the manufacture and delivery of the existing order backlog. The production machinery and equipment will be transferred to the buyer in spring 2008. The annual turnover for spiral heat exchanger business has fluctuated between two and four million euros. Vaahto Oy is expected to recognize some profit for the sale in the latter half of the fiscal year.
The Process Machinery division’s market situation has remained excellent, and the order backlog is good for both tanks and agitators.
Research and development
The Group’s research and development activities concentrate for the most part on improving the competitiveness of the Pulp & Paper Machinery division’s key components for paper and board machines, and that of roll servicing. The scope of the Group’s R&D activities remained the same as in the previous fiscal period.
Investments
The Group’s gross investment for the review period came to 1.1 million euros (0.8 million euros). The most significant investments were Vaahto Roll Service Oy’s polyurethane and composite equipment and Japrotek Oy Ab’s water treatment equipment. Other investments consisted mainly of small machinery and equipment acquisitions.
Financing
The group’s liquidity remained at a satisfactory level. Net financial expenses came to 0.3 million euros (0.3 million euros), which is 0.6% of the turnover. The equity ratio increased slightly from that of the reference period, to 35.4% (34.5%).
Personnel
The number of group personnel averaged 427 (408) over the period.
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 International Financial Reporting Standard (IFRS) IAS 34 (“Interim Financial Reporting”).
Forecast of developments
Vaahto Group’s order backlog decreased in the period under review, and the turnover for the fiscal year is expected to decrease from the previous year’s level. This poses clear challenges for profitability development in the rest of the fiscal year.
Interim management statement
Vaahto Group Plc Oyj will disclose the interim management statement during the last half-year of the current fiscal period 1.9.2007 – 31.8.2008 instead of the interim report for the nine months of the accounting period. The interim management statement will be published on June 27, 2008.
| CONSOLIDATED INCOME STATEMENT, IFRS 1000 EUR |
Interim Report |
Interim |
Annual Report |
|
|
|
||
| Net sales |
41 528 |
37 612 |
88 161 |
| Change in finished goods and work in progress |
245 |
1 438 |
696 |
| Production for own use |
264 |
251 |
377 |
| Other operating income |
61 |
30 |
303 |
| Material and services |
-23 750 |
-21 807 |
-50 629 |
| Employee benefit expenses |
-11 519 |
-10 405 |
-20 241 |
| Depreciations |
-887 |
-905 |
-1 840 |
| Other operating expenses |
-6 051 |
-5 205 |
-11 015 |
| Operating profit |
190 |
1 007 |
5 812 |
| Financing income and expenses |
-261 |
-278 |
-611 |
| Share of profits of affiliated companies |
14 |
0 |
24 |
| Profit or loss before taxes |
-57 |
729 |
5 226 |
| Tax on income from operations |
86 |
-184 |
-1 313 |
| Profit or loss for the period |
29 |
545 |
3 913 |
|
|
|||
| Net profit or loss attributable: |
|
||
| To equity holders of the parent |
-19 |
355 |
3 639 |
| To minority interest |
47 |
190 |
274 |
| Total |
29 |
545 |
3 913 |
|
|
|
||
| Earnings per share calculated on profit attributable to equity holders of the parent: |
|
|
|
| EPS undiluted, euros/share |
-0,01 |
0,12 |
1,27 |
| EPS diluted, euros/share |
-0,01 |
0,12 |
1,27 |
| Average number of shares (1000 shares) |
2 872 |
2 872 |
2 872 |
|
|
|
||
| CONSOLIDATED BALANCE SHEET, IFRS 1000 EUR |
Interim Report |
Interim Report |
Annual Report |
|
|
|||
| Assets |
|
|
|
|
|
|
||
| Intangible assets |
651 |
654 |
621 |
| Goodwill |
1 702 |
1 702 |
1 702 |
| Investment properties |
0 |
299 |
0 |
| Tangible assets |
14 847 |
14 878 |
14 644 |
| Shares in affiliated companies |
38 |
0 |
24 |
| Non-current trade and other receivables |
13 |
14 |
13 |
| Other long-term investments |
44 |
46 |
44 |
| Deferred tax asset |
332 |
13 |
120 |
| Non-current assets |
17 627 |
17 608 |
17 169 |
|
|
|||
| Inventories |
8 466 |
9 025 |
8 188 |
| Trade receivables and other receivables |
17 373 |
16 689 |
25 276 |
| Tax receivable, income tax |
100 |
16 |
23 |
| Cash equivalents |
950 |
0 |
960 |
| Cash and bank |
1 405 |
1 302 |
574 |
| Current assets |
28 293 |
27 031 |
35 021 |
|
|
|||
| Total assets |
45 921 |
44 639 |
52 190 |
|
|
|
||
| Equity and liabilities |
|
|
|
|
|
|
||
| Share capital |
2 872 |
2 872 |
2 872 |
| Share premium account |
6 |
6 |
6 |
| Other reserves |
2 173 |
2 113 |
2 128 |
| Retained earnings |
7 277 |
5 256 |
8 436 |
| Equity attributable to equity holders of the parent |
12 328 |
10 247 |
13 442 |
| Minority share |
1 302 |
1 308 |
1 393 |
| Shareholders’ equity |
13 630 |
11 555 |
14 835 |
|
|
|||
| Deferred tax liability |
997 |
880 |
928 |
| Long-term liabilities, interest-bearing |
4 130 |
3 623 |
4 923 |
| Non-current provisions |
394 |
250 |
684 |
| Non-current liabilities |
5 521 |
4 754 |
6 536 |
|
|
|||
| Short-term liabilities, interest-bearing |
7 757 |
4 848 |
6 331 |
| Trade payables and other liabilities |
19 013 |
23 482 |
24 489 |
| Current liabilities |
26 770 |
28 330 |
30 819 |
|
|
|||
| Liabilities |
32 291 |
33 084 |
52 190 |
|
|
|||
| Total equity and liabilities |
45 921 |
44 639 |
67 025 |
|
|
|
||
| KEY FIGURES, IFRS |
Interim Report |
Interim |
Annual Report |
|
|
|
||
| Earnings per share EUR |
-0,01 |
0,12 |
1,27 |
| Shareholders’ equity per share EUR |
4,25 |
3,57 |
4,68 |
| Solidity % |
35,4 |
34,5 |
35,5 |
| Order backlog 1000 EUR |
33 464 |
54 697 |
42 894 |
| Gross investments 1000 EUR |
1 120 |
800 |
1 502 |
| Total average number of personnel |
427 |
408 |
414 |
|
|
|
||
| CONSOLIDATED FLOW OF FUNDS STATEMENT, IFRS 1000 EUR |
Interim Report |
Interim |
Annual Report |
|
|
|
||
| Profit or loss before taxes |
-57 |
729 |
5 226 |
| Adjustments |
891 |
1 175 |
2 698 |
| Change in working capital |
2 073 |
-5 046 |
-11 797 |
| Financial income and expenses and taxes |
-318 |
-398 |
-1 917 |
| Flow of funds from operations |
2 590 |
-3 539 |
5 792 |
|
|
|||
| Investments in tangible and intangible assets |
-1 120 |
-800 |
-1 502 |
| Income from sales of tangible and intangible assets |
5 |
0 |
405 |
| Granted loans |
0 |
-11 |
-11 |
| Flow of funds from investments |
-1 115 |
-811 |
-1 109 |
|
|
|||
| Increase of the interest-bearing liabilities |
2 061 |
1 380 |
6 544 |
| Decrease of the interest-bearing liabilities |
-1 428 |
-1 048 |
-3 429 |
| Dividends |
-1 287 |
-671 |
-671 |
| Flow of funds from financial items |
-654 |
-339 |
2 444 |
|
|
|||
| Change of liquid funds |
-821 |
-4 689 |
-4 457 |
| STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, IFRS 1000 EUR |
Share capi- |
Share prem- |
Hedg- |
Other res- |
Re- |
Mino- |
Total |
| Interim Report 1.9.2007 – 29.2.2008 |
|
|
|
|
|
||
|
|
|
|
|
|
|||
| Shareholders’ equity 1.9.2007 |
2872 |
6 |
22 |
2106 |
8438 |
1393 |
14835 |
| Cash flow hedging: amount transferred to the hedged purchasing price |
|
|
49 |
|
|
49 |
|
| Change in translation difference |
|
|
|
|
5 |
5 |
|
| Reclassifications between items |
|
|
|
-3 |
3 |
0 |
|
| Net profits/losses recognized directly to shareholders’ equity |
|
|
49 |
-3 |
8 |
53 |
|
| Profit/loss for the period |
|
|
-19 |
47 |
29 |
||
| Total profits and losses |
|
49 |
-3 |
-11 |
47 |
82 |
|
| Dividend distribution |
|
|
-1149 |
-138 |
-1287 |
||
| Shareholders’ equity 29.2.2008 |
2872 |
6 |
70 |
2103 |
7277 |
1302 |
13630 |
|
|
|
|
|||||
| STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, IFRS 1000 EUR |
Share capi- |
Share prem- |
Hedg- |
Other res- |
Re- |
Mino- |
Total |
| Interim Report 1.9.2006 – 28.2.2007 |
|
|
|
|
|
||
|
|
|
|
|
|
|||
| Shareholders’ equity 1.9.2006 |
2872 |
6 |
6 |
2112 |
5479 |
1215 |
11689 |
| Cash flow hedging: amount transferred to the hedged purchasing price |
|
|
-1 |
|
|
-1 |
|
| Change in translation difference |
|
|
|
|
-7 |
-7 |
|
| Reclassifications between items |
|
|
|
-3 |
3 |
0 |
|
| Net profits/losses recognized directly to shareholders’ equity |
|
|
-1 |
-3 |
-4 |
-8 |
|
| Profit/loss for the period |
|
|
355 |
190 |
545 |
||
| Total profits and losses |
|
-1 |
-3 |
352 |
190 |
537 |
|
| Dividend distribution |
|
|
-574 |
-97 |
-671 |
||
| Shareholders’ equity 28.2.2007 |
2872 |
6 |
4 |
2109 |
5256 |
1308 |
11555 |
|
|
|||||||
| STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, IFRS 1000 EUR |
Share capi- |
Share prem- |
Hedg- |
Other res- |
Re- |
Mino- |
Total |
| Annual Report 1.9.2006 – 31.8.2007 |
|
|
|
|
|
||
|
|
|
|
|
|
|||
| Shareholders’ equity 1.9.2006 |
2872 |
6 |
6 |
2112 |
5479 |
1215 |
11689 |
| Cash flow hedging: amount transferred to the hedged purchasing price |
|
|
16 |
|
|
16 |
|
| Deacrease of the revaluation |
|
|
|
|
-106 |
-106 |
|
| Change in translation difference |
|
|
|
|
-7 |
-7 |
|
| Reclassifications between items |
|
|
|
-6 |
6 |
0 |
|
| Net profits/losses recognized directly to shareholders’ equity |
|
|
16 |
-6 |
-106 |
97 |
|
| Profit/loss for the period |
|
|
3639 |
274 |
3913 |
||
| Total profits and losses |
|
16 |
-6 |
3532 |
274 |
3816 |
|
| Dividend distribution |
|
|
-574 |
-97 |
-671 |
||
| Shareholder’ equity 31.8.2007 |
2872 |
6 |
22 |
2106 |
8437 |
1393 |
14835 |
| SEGMENT INFORMATION, IFRS | |||
| The business of Vaahto Group is reported as two business segments: | |||
| Pulp & Paper Machinery and Process Machinery. | |||
| NET SALES BY BUSINESS SEGMENTS, IFRS 1000 EUR |
Interim Report |
Interim |
Annual Report |
|
|
|||
| Pulp & Paper Machinery |
23 336 |
23 295 |
54 156 |
| Process Machinery |
18 493 |
14 323 |
34 050 |
| Net sales between segments |
-1 |
-7 |
-45 |
| Group total |
41 828 |
37 612 |
88 161 |
|
|
|||
|
|
|||
| OPERATING PROFIT OR LOSS BY BUSINESS SEGMENTS, IFRS 1000 EUR |
Interim Report |
Interim |
Annual Report |
|
|
|||
| Pulp & Paper Machinery |
-1 778 |
816 |
3 721 |
| Process Machinery |
1 976 |
220 |
1 992 |
| Other |
-2 |
-22 |
113 |
| Operating profit or loss between segments |
-6 |
-7 |
-14 |
| Group total |
190 |
1 007 |
5 812 |
|
|
|||
|
|
|||
| AVERAGE NUMBER OF PERSONNEL BY BUSINESS SEGMENTS |
Interim Report |
Interim |
Annual Report |
|
|
|||
| Pulp & Paper Machinery |
252 |
238 |
243 |
| Process Machinery |
175 |
170 |
171 |
| Group total |
427 |
408 |
414 |
|
|
|||
|
|
|||
| NET SALES BY MARKET AREAS, IFRS 1000 EUR |
Interim Report |
Interim |
Annual Report |
|
|
|||
| Finland |
14 234 |
10 656 |
26 361 |
| Other Europe |
19 964 |
16 772 |
40 525 |
| North America |
2 919 |
135 |
3 718 |
| Asia |
4 589 |
8 779 |
14 125 |
| Africa |
120 |
0 |
197 |
| Other |
1 |
1 270 |
3 235 |
| Group total |
41 828 |
37 612 |
88 161 |
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, 2007.
Dividends paid
In the period under review, Vaahto Group Plc Oyj paid a dividend of 0.40 euros per share (for both A and K shares) – i.e., a total of 1,148,920.80 euros.
Lahti, April 18, 2008
VAAHTO GROUP PLC OYJ
Antti Vaahto
CEO
Information:
Antti Vaahto
CEO, Vaahto Group Plc Oyj
tel. +358 40 8232835