Vaahto Group’s Interim Management Satement for January 1 – May 13, 2015



Vaahto Group’s turnover from continuing operations during the period January 1 to March 31, 2015, was 4.6M euros (reference period: 4.4M euros), and the operating loss was 0.9M euros (comparative: a profit of 0.1M euros). The financial result before taxes for the first quarter came to 2.7M euros (2.6M euros).The order book for the Group’s continuing operations as of March 31, 2015, totaled 8.6M euros (5.6M euros). While the turnover of continuing operations increased slightly from the reference period’s level, the operating result fell and turned negative. The negative result was due to the weaker-than-anticipated performance of delivery projects. The operating result was further undermined by the fact that all overheads of discontinued operations are allocated to the continuing operations. The Group has adopted a cost adjustment program aimed at cutting annual expenditure by more than 0.8M euros. As the market situation presents a continuing challenge, Vaahto Group Plc Oyj announced on May 8, 2015, that its subsidiary Japrotek Oy Ab will initiate co-determination negotiations in order to adapt its operations to the weakened demand and market situation.


Vaahto Process Technology

The operations of Vaahto Process Technology encompass the continuing operations of the Group in their entirety. The turnover for the period from January 1 to March 31, 2015, came to 4.6M euros (4.4M euros), and the operating loss was 0.9M euros (as compared to the profit of 0.1M euros for the reference period).


The operations of Vaahto Process Technology are divided into two business units: Japrotek Vessels and Stelzer Mixing Technology. Japrotek Vessels designs and manufactures tanks and other vessels for demanding applications of process-based industries along with complete tank–agitator combinations. Stelzer Mixing Technology focuses on agitator systems for process-based industries and their maintenance.


In the early months of 2015, the order book for Japrotek Vessels was weaker than anticipated, because investment decisions have been deferred in the customer industries. It has, however, increased in comparison to the reference period. The investment outlook in the forest industry is expected to have a positive effect on the market situation, and at the end of April, a fairly sizeable order was received from a Nordic client for tanks to be delivered as prefabricated units.


In consequence of deferred purchasing decisions in the fall of 2014, Stelzer Mixing Technology’s output in the first quarter did not reach the expected level. Since December 2014, the market situation has been more positive. In the early months of 2015, the order book has been better than anticipated and, in particular, clients that did not place orders in the previous year have become more active.

Financing and liquidity

On February 16, 2015, Vaahto Group Plc Oyj announced of an arrangement concluded with its key financiers, intended to strengthen the company’s financial position and guarantee its continued operation. With this agreement, the company’s financiers committed to waive loans totaling 3.9M euros; to convert loan receivables in the amount of 1.2M euros into a subordinated loan; and to grant a grace period for their receivables, continuing until June 30, 2016.


As part of the financial stabilization program, the Group has adopted a cost and operations adjustment plan that is aimed at reducing annual expenditure by more than 0.8M euros. The adjustment plan is to be implemented in the course of 2015 and is expected to cause a one-time adjustment cost of 0.4M euros.

The weak result for the first quarter and the challenging markets strain the company’s liquidity. The Group’s financial position continues to be challenging.

Private placement 

In connection with the arrangement with the company’s financiers, the board of directors on February 15, 2015, decided on a private placement, offering no more than 10,000,000 new shares for subscription. The share subscriptions were as follows: 3,000,000 shares for Mr. Mikko Laakkonen, 3,000,000 shares for HML Finance Oy, 3,000,000 shares for the Nemea Credit Opportunities Fund (a sub-fund of Nemea Alternative Investment Fund (SICAV) Ltd), and 1,000,000 shares for Lombard International SA’s PCP 34443. The issue price of all the shares issued was 0.25 euros per share.


The new shares were entered in the trade register on March 31, 2015. Upon registration of the new shares, the number of Vaahto Group Plc Oyj shares and the associated votes came to 15,977,360 (from March 31, 2015).

The company has applied for listing of its unlisted shares on the stock exchange as of March 30, 2015. In the application process, the company will issue a prospectus in accordance with the Securities Markets Act and the terms specified by the Finnish Financial Supervisory Authority.   

Equity capital

Group equity according to the 2014 financial statements was 8.6M euros negative. The arrangement completed with the financiers over the first quarter of 2015 had a positive effect on the equity. The arrangement included a waiver of loans in the amount of 3.9M euros, conversion of loan receivables of 1.2M euros into a subordinated loan, and new equity in the form of a private placement of 2.5M euros. However, as of March 31, 2015, the Group’s equity was still negative.


Japrotek Oy Ab’s first quarter of 2015 brought a loss, which resulted in negative equity. That loss can be attributed to the higher-than-expected cost of some delivery projects and a weaker-than-anticipated order book for the first quarter. The company will take immediate action to improve its operations, including the Japrotek Oy Ab co-determination negotiations already announced.


Authorization for a share issue

The general meeting of April 14, 2015, voted to authorize the Board of Directors to decide on issuing of new shares and options and other special entitlements to shares pursuant to Chapter 10, Section 1 of the Companies Act, in one or more installments. The maximum number of new shares that may be issued is 10,000,000, including shares issued on the basis of special entitlement. This authorization is valid until May 31, 2016, unless a general meeting amends or revokes the authorization before that date.


Personnel and management of the Group

The average number of personnel employed by the Group during the period under review was 176 (228).

The acting CEO of the company from September 1, 2014, until March 31, 2015, was Mr. Topi Karppanen, M.Sc. From April 1, 2015 Mr. Kalle Rasinmäki, M.Sc., was nominated to serve as CEO.


Forecast for the January 1 – December 31, 2015, financial year 

Demand for Vaahto Group’s products and its financial situation both are highly dependent on global economic developments and other trends affecting its customer industries. The market situation remains challenging for Japrotek Vessels operations, with its order book developing less strongly than expected. Stelzer Mixing Technology’s order book improved in the first quarter of 2015, and its market position is expected to continue fairly well.


The Group’s cost and operations adjustment plan is moving ahead as planned, with the cost savings projected to become evident toward the end of 2015 and enter full effect at the beginning of 2016. The Group’s financial position continues to be challenging.


Interim report January 1 – June 30, 2015

Vaahto Group will publish an Interim Report covering six months of operations on August 28, 2015.


In Lahti, on May 13, 2015



Board of Directors


Additional information:

Sami Alatalo, Chairman of Board of Directors, Vaahto Group Plc Oyj, Tel. +358 40 826 2066

Kalle Rasinmäki, CEO, Vaahto Group Plc Oyj, Tel. +358 40 566 4250