STOCKHOLM, Sweden, July 22, 2002 (PRIMEZONE) -- Sapa:
-- Profit recovery strengthened during the second quarter
-- Profit before tax increased by 6 per cent to MSEK 204 (193)
-- Earnings per share increased to SEK 3.75 (3.50)
-- Continued strong cash flow after investments 157 (11)
-- Elkem announces an offer for the remaining shares no later than
2 August
Sapa in brief Apr- Apr- Jan- Jan-
June June June June
2002 2001 2002 2001
Net sales, MSEK(1) 2,937 3,022 5,759 6,147
Operating profit, 136 137 237 300
MSEK(1)(2)
Profit before tax, 122 95 204 193
MSEK(1)(2)
Operating margin,
%(1)(2) 4.6 4.5 4.1 4.9
Deliveries, tonnes(1) 75,300 72,870 145,960 150,860
Cash flow after 98 86 157 11
investments, MSEK(3)
Debt/equity ratio 0.42 0.83
1. Excluding Eurofoil and Autoplastics which were divested in 2001
2. Excluding non-recurring items (see note, page 7)
3. Excluding company divestment/acquisition
Comparisons according to the legal structure can be seen from the tables on pages 6 and 7
"Sapa's programmes of measures are now on the whole realised and the main part of the effects from them are visible in the profit recovery. This recovery has been achieved despite a continued difficult market situation with strong price pressure. However, the market condition varies among countries. The German market is still under pressure. In France Sapa has continued its strong performance even though the market for extrusions has weakened somewhat. It is satisfying to see that our market efforts in US have resulted in increased sales," commented Staffan Bohman, President and CEO of Sapa.
"We expect the positive profit trend seen in the first half year to continue during the second half of this year, even with the current weak market situation. Provided a normal business cycle we expect a profit level in line with Sapa's historically highest levels. The current market situation has led to extensive restructuring discussions within the industry. Sapa, with its very strong balance sheet, is taking an active part in this process, which can lead to a considerable growth for the company."
For further information please contact Staffan Bohman, CEO, tel. +46-8- 459 59 11, Bo Askvik, CFO, tel. +46-8-459 59 18 or Gabriella Pihl, Communications Manager, tel. +46-8-459 59 62.
This report is also available on Sapa's website: www.sapagroup.com. A slide presentation of this release can be downloaded as a PDF-file. Select Investors Relations/Presentations.
First half year 2002
(Excluding Eurofoil and Autoplastics which were divested in 2001)
Net sales for the Group during the period amounted to MSEK 5,759 (6,147), a decrease of 6 per cent, mainly caused by lower raw material price of aluminium metal. Improved value added margin and product mix compensated for the 3 per cent decline in volumes. The volume decline is fully attributable to the first quarter, whilst volumes in the second quarter exceeded last year's by 3 per cent. Currency effects from translation of foreign subsidiaries have had only a marginal effect on net sales and operating result.
The first half years profit recovery was strengthened during the second quarter. Operating profit for the first six months was MSEK 237 (300), corresponding to an operating margin of 4.1 per cent (4.9). Despite continued price pressure on several markets, margins improved and were during the second quarter higher than last year. The recovery in profit is principally explained by lower costs from the realisation of the group's extensive programmes of measures. Close down of the factories in Torsby, Skultuna and Kungalv has been pursued according to the plan and are now completed. Costs for these closures have been met by reserves provided in 2001. In addition a factory in Portugal was closed down during the second quarter.
Profit before tax, which increased by 6 per cent to MSEK 204 (193), was positively impacted by the group's strong financial position. The net debt to equity ratio is down to 0.42 (0.83), which resulted in a strongly improved financial net. Earnings per share increased to SEK 3.75 (3.50).
The market situation was difficult during the first half year, especially at the beginning of the year. Low capacity utilisation in the industry has led to price pressure on several markets, but the situation varies considerably between individual geographical markets.
Sapa's Portuguese operation has experienced a weakened demand on the Iberian Peninsula, particularly from the construction market. Combined with an increasing import competition, this has led to an unsatisfying development for the company. The German market continues to be week with strong price pressure.
U.K. market was stable with some strengthening in demand during the later part of the period. Also Scandinavia saw an improvement in the order situation, but with sales volumes still below last year. Sapa's operations in Holland experienced a similar situation.
Sapa's extrusion company in France had good sales with volumes exceeding last year, this despite a somewhat weaker market for extrusions. The Polish extrusion operation has managed to meet a weaker domestic market with increased export and thereby continued its strong development in sales volumes.
In the U.S. market, which is showing signs of growth, Sapa increases sales and extends its market share.
This information was brought to you by Waymaker http://www.waymaker.net
The following files are available for download:
www.waymaker.net/bitonline/2002/07/22/20020722BIT00200/wkr0001.doc The full report www.waymaker.net/bitonline/2002/07/22/20020722BIT00200/wkr0002.pdf The full report