- The fourth quarter result improved from the corresponding period in
the previous year.
- Net sales of the fourth quarter increased slightly from the
previous year and were EUR 288.2 (282.7) million.
- The fourth quarter EBIT was EUR 18.2 (8.8) million and EBIT
excluding the effect of unrealized gas derivatives and non-recurring
items was EUR 0.3 (17.5) million.
- Earnings per share were EUR 0.52 (0.06) for the fourth quarter and
EUR 1.26 (-0.12) for the whole year.
- January - December net sales were EUR 1,294.7 (1,168.7) million.
- January - December EBIT was EUR 83.0 (13.2) million and EBIT
excluding the effect of unrealized gas derivatives and non-recurring
items was EUR 63.6 (11.5) million.
- European Commission approved on 21 September 2007 the acquisition
of shares in Kemira GrowHow Oyj by Norwegian Yara International ASA
through a public tender offer. The completion date of the tender
offer was 4 October 2007, and the ownership of those shares, for
which the tender offer was accepted, was transferred to Yara on 9
October 2007.
- After the completion of the tender offer, Yara owned 97.46 percent
of the shares and votes in Kemira GrowHow Oyj, excluding the shares
held by Kemira GrowHow Oyj. Yara announced on 11 October 2007 that it
had initiated the redemption proceeding of the remaining shares in
accordance with the Finnish Companies' Act.
- Kemira GrowHow Oyj applied in November 2007 delisting of its share
from the Helsinki Stock Exchange.
Key figures Q4/2007 Q4/2006 Q1 - Q4/2007 Q1- Q4/2006
Net sales, EUR million 288.2 282.7 1,294.7 1,168.7
EBIT, EUR million 18.2 8.8 83.0 13.2
EBIT excluding unrealized
gas derivatives and
non-recurring items, EUR
million 0.3 17.5 63.6 11.5
Result before taxes, EUR
million 15.5 5.2 71.6 2.1
Net result attributable to
equity holders of the parent
company, EUR million 28.9 3.2 69.7 -6.8
Earnings per share, EUR 0.52 0.06 1.26 -0.12
Equity ratio,% 47.5 41.1
Gearing, % 33.4 54.0
Kemira GrowHow Group in October - December
Kemira GrowHow's fourth quarter was better than in the previous year.
Net sales increased by 2 percent and were EUR 288.2 (282.7) million
despite the fact that the operations in the UK were transferred to a
joint venture in the last quarter of 2007. Comparable net sales, the
effect of the UK operations excluded, increased by 18 percent.
Consolidated operating profit during the fourth quarter of 2007 was
EUR 18.2 (8.8) million. The last quarter operating profit was
improved by non-recurring items, totalling EUR 21.3 million. The most
significant non-recurring item, EUR 30.8 million, is related to the
establishing of the joint venture in the UK. Operating profit
includes the share of the results of joint ventures and associated
companies, totalling EUR -8.9 (-0.2) million.
Net sales, EUR million Q1 Q2 Q3 Q4 Q1 - Q4
2007 351.2 333.3 322.0 288.2 1,294.7
2006 273.7 305.7 306.6 282.7 1,168.7
EBIT, Q1 Q2 Q3 Q4 Q1 - Q4
EUR million
2007 23.0 18.4 23.4 18.2 83.0
2006 -16.0 3.6 16.8 8.8 13.2
A table of net non-recurring items is presented in the financial
statements part of this release (page 36).
Kemira GrowHow's net financial expenses of the fourth quarter,
excluding the expected return on defined benefit plan assets and
interest on defined benefit obligations, were EUR -2.7 (-3.5)
million. Net foreign exchange losses were EUR -2.1 (-1.2) million.
Income taxes for the fourth quarter were EUR +13.3 (-1.8) million and
result attributable to equity holders of the parent company was EUR
28.9 (3.2) million. Kemira GrowHow recognized EUR 13.2 million
deferred tax assets from confirmed tax losses.
Earnings per share in October - December were EUR 0.52 (0.06).
Kemira GrowHow Group in January - December
Kemira GrowHow's consolidated net sales in 2007 were EUR 1,294.7
(1,168.7) million.
Consolidated operating profit for the financial year was EUR 83.0
(13.2) million. Operating profit excluding the effect of unrealized
gas derivatives and non-recurring items was EUR 63.6 (11.5) million.
Operating profit includes the share of the results of joint ventures
and associated companies, totalling EUR -5.9 (0.1) million.
Operating profit for 2007 was particularly impacted by the more
stable prices for the most important raw material, natural gas,
compared with the strong gas price volatility particularly during the
first half of 2006. Moreover, the capacity utilization of plants and
fertilizer prices were higher than in 2006. Fair value changes of gas
derivatives, EUR -16.2 (-6.9) million, weakened operating profit. The
majority of the fair value changes were unrealized. Operating profit
was improved by non-recurring items, totalling EUR 31.8 (9.6)
million.
Kemira GrowHow's net financial expenses, excluding the expected
return on defined benefit plan assets and interest on defined benefit
obligations, were EUR -12.2 (-11.0) million. Net foreign exchange
losses were EUR -5.3 (-2.0) million.
Income taxes for the financial year were EUR -0.3 (-7.6) million.
Income tax expense is calculated separately for each country in which
the Group operates. Kemira GrowHow recognized EUR 13.2 million
deferred tax assets from confirmed tax losses during the last quarter
of 2007.
The profit attributable to equity holders of the parent company for
the 2007 financial year was EUR 69.7 million (loss of EUR -6.8
million in 2006).
Earnings per share were EUR 1.26 (-0.12). Kemira GrowHow Oyj has not
issued options, warrants, convertible bonds or similar instruments
that would dilute the earnings per share.
Dividend
The distributable funds of Kemira GrowHow Oyj, the parent company of
Kemira GrowHow Group, are EUR 168,547,304 of which EUR 30,019,270
represents the net profit for the financial year.
The Board of Directors proposes to the Annual General Meeting that
EUR 0.35 per share be distributed as dividend from the distributable
funds. The total dividend would amount to EUR 20,023,100. EUR
16,193,900 would be left in retained earnings and EUR 132,330,304 in
other non-restricted equity. The dividend paid for 2006 was EUR 0.15
per share.
Kemira GrowHow Oyj's distributable funds (FAS), EUR 2007
Other non-restricted equity 142,184,338
Paid-up unrestricted equity reserve 721,408
Treasury shares -10,575,442
Retained earnings 6,197,730
Net profit for the year 30,019,270
Total 168,547,304
The financial position of the company has not materially changed
after the balance sheet date, and it is the Board of Directors'
opinion that the proposed distribution of funds does not compromise
the company's liquidity.
The fourth quarter of the strategic business units
Crop Cultivation
Net sales of the Crop Cultivation business unit increased slightly
during the fourth quarter compared with the corresponding period in
2007 and were EUR 210.3 (207.5) million despite the fact that the
operations in the UK were transferred to a joint venture in the last
quarter of 2007 and thus they no longer belonged to Kemira GrowHow
Group. Comparable net sales, excluding the effect of the UK
operations, increased by 22 percent.
The fourth quarter operating profit was EUR 4.8 (5.8) million. EBIT
excluding the effect of unrealized gas derivatives and non-recurring
items was EUR 13.3 (12.3) million. The 2007 fourth quarter operating
profit was improved especially by higher sales prices of fertilizers.
In addition, the last quarter result of 2006 was burdened by the
losses of the operations in the UK. Operating profit includes the
share of the results of joint ventures and associated companies, EUR
-3.2 (-0.4) million.
Net sales, EUR million Q1 Q2 Q3 Q4 Q1 - Q4
2007 278.2 262.5 245.9 210.3 997.0
2006 209.5 242.6 238.9 207.5 898.4
EBIT, Q1 Q2 Q3 Q4 Q1 - Q4
EUR million
2007 17.4 14.3 21.6 4.8 58.1
2006 -16.0 0.9 10.6 5.8 1.3
The fourth quarter sales volumes, excluding the UK volumes, were up
by nearly 10 percent compared with the corresponding period in the
previous year. The sales volumes increased in almost all the market
areas.
The fourth quarter sales prices of nitrogen fertilizers as well as
NPK fertilizers were higher than during the last quarter of 2006. The
price of natural gas was higher than in the corresponding period in
the previous year.
Industrial Solutions
The fourth quarter net sales of the Industrial Solutions business
unit remained at the same level as in 2006 and were EUR 84.0 (84.4)
million. The main reason for the development of the net sales in the
fourth quarter was the fact that the operations in the UK were
transferred to a joint venture in the last quarter of 2007 and thus
they no longer belonged to Kemira GrowHow Group. Comparable net
sales, excluding the effect of the UK operations, increased by 6
percent.
The fourth quarter operating profit was EUR 4.0 (6.3) million. EBIT excluding
the effect of unrealized gas derivatives and non-recurring items was
EUR 5.0 (6.9) million. Operating profit includes the share of the results of
joint ventures and associated companies, EUR 0.1 (0.2) million.
Net sales, EUR million Q1 Q2 Q3 Q4 Q1 - Q4
2007 81.1 79.8 85.6 84.0 330.6
2006 76.0 72.0 75.9 84.4 308.3
EBIT, Q1 Q2 Q3 Q4 Q1 - Q4
EUR million
2007 7.6 7.7 8.5 4.0 27.7
2006 1.7 5.8 6.7 6.3 20.5
During the fourth quarter, feed phosphate volumes in Europe were
above the previous year's level and prices continued to improve.
The major contributors to improvement of operating profit were higher
phosphoric acid and feed phosphates prices as well as higher sales
volumes. This positive impact was, however, not enough to offset the
negative effect of the fact that UK operations no longer belonged to
Kemira GrowHow Group in the last quarter, and that the maintenance
shutdown of the mining operations in Siilinjärvi in 2007 was
postponed to the fourth quarter, while in 2006 it took place during
the third quarter.
January - December of the strategic business units
Crop Cultivation
Net sales of the Crop Cultivation business unit increased in January
- December by 11 percent compared with 2006 and were EUR 997.0
(898.4) million. Operations in the UK were transferred to a joint
venture in the last quarter of 2007 and thus they no longer belonged
to Kemira GrowHow Group. Comparable net sales, excluding the effect
of the UK operations, increased by 13 percent.
January - December operating profit was EUR 58.1 (1.3) million.
Operating profit includes the share of the results of joint ventures
and associated companies, totalling EUR -0.2 (0.1) million. Operating
profit excluding the effect of unrealized gas derivatives and
non-recurring items was EUR 65.9 (-3.9) million.
The operating profit of 2007 compared with the previous year was
improved in particular by less expensive natural gas and thanks to
that, higher utilization rate of ammonia plants, as well as by higher
fertilizer sales volumes. Non-recurring items improved operating
profit by EUR 2.9 (12.4) million.
One of the three nitric acid factories of Kemira GrowHow's plant at
Tertre, Belgium, suffered from a fire in early February. There were
no human casualties or environmental damages. The production shutdown
in the nitric acid plant lasted approximately 4 months during which
the fertilizer production at Tertre fell by approximately 25 percent.
The nitric acid plant is insured for property damage and business
interruptions. Impairment losses of tangible assets, totalling EUR
0.9 million, were recorded due to the fire. EUR 0.7 million of the
impairment losses were allocated to the Crop Cultivation business
unit. In total EUR 7.9 million of insurance compensation was
recognized due to the fire in 2007, and EUR 7.1 million of the
compensation was allocated to the Crop Cultivation business unit.
Sales volumes in thousands of metric tons
Q1 Q2 Q3 Q4 Total
2007 1,125 1,023 978 782 3,908
2006 881 1,013 1,045 875 3,814
The total sales volumes in 2007 were higher than in the previous year
even though the last quarter sales volumes of the UK market were no
longer included. The total sales volumes in the other market areas in
January - December were up by approximately 6 percent compared with
the corresponding period in the previous year. The sales volumes grew
in all the market areas except in Continental Europe.
The sales prices of nitrogen fertilizers were in January - December
slightly higher in Continental Europe than in 2006. The sales prices
of NPK fertilizers were significantly higher in Continental Europe
than in the last year.
The price of natural gas was on average less expensive than in 2006
due to lower prices particularly in the first half of the year.
Thanks to less expensive natural gas and the higher price of ammonia,
ammonia plants were, unlike in 2006, in full production throughout
the winter, and there were no additional costs due to shutdowns and
restarts of ammonia plants in 2007. There was also no need to
purchase as much ammonia as in 2006. Lower natural gas prices, stable
operation of the ammonia plants and lower ammonia purchases together
with higher sales volumes contributed the most to the improvement in
operating profit.
At the end of October, Kemira GrowHow signed an agreement to sell 100
percent of the shares in Verdera Oy to the Canadian Lallemand Group.
The closing of the agreement took place in February 2008. Verdera Oy
produces biological plant protection products for forestry,
horticulture and amenity needs. Verdera's turnover was approximately
EUR 2.2 million in 2007 and the company has 13 employees.
Industrial Solutions
Net sales of the Industrial Solutions business unit grew by
approximately 7 percent in 2007 compared with the previous year and
were EUR 330.6 (308.3) million. Comparable net sales, excluding the
effect of the UK operations, increased by 8 percent.
Operating profit was EUR 27.7 (20.5) million. Operating profit
excluding the effect of unrealized gas derivatives and non-recurring
items was EUR 27.0 (20.8) million. Operating profit includes the
share of the results of joint ventures and associated companies, EUR
0.1 (0.0) million.
EUR 0.2 million of impairment losses due to the fire at Tertre plant
were allocated to Industrial Solutions business unit. The allocated
insurance compensation was EUR 0.8 million.
During January - December, feed phosphate volumes in Europe were
above the previous year's level and prices increased clearly.
The major contributors to the improvement in operating profit were
higher phosphoric acid and feed phosphates prices, less expensive
natural gas and higher utilization rate of ammonia plants.
Kemira GrowHow sold in May its Danish hydrochloric acid, sulphuric
acid and canning businesses to Gropa A/S. Kemira GrowHow will,
however, continue to supply its nitric acid and ammonia-based
products in Denmark. The sale had no material effect on Kemira
GrowHow's net sales or operating profit.
Kemira GrowHow and Thermphos Trading GmbH, a fully owned subsidiary
of the Dutch company Thermphos International B.V., signed a contract
in June to set up a joint venture company, Crystalis Oy, to produce
purified phosphoric acid (PPA). The joint venture is located at
Kemira GrowHow's site in Siilinjärvi, Finland.
Crystalis Oy's production facility will be integrated into Kemira
GrowHow's Siilinjärvi operations and the new company will use
Thermphos and Kemira GrowHow's proprietary production technology. The
basic raw material for PPA is the phosphoric acid produced at
Siilinjärvi by Kemira GrowHow. Crystalis' production process will be
closely integrated into existing operations at Siilinjärvi, which
will result in improved competitiveness of Kemira GrowHow's
phosphoric acid production at the Siilinjärvi plant. Crystalis Oy has
started the preparations to build the production facilities in
Siilinjärvi and it will start operations in the fourth quarter of
2008. The planned annual production of PPA is 30.000 tons (P2O5).
Kemira GrowHow, the Finnish energy company Fortum and the local
energy company Savon Voima Lämpö agreed in May that Fortum would
provide district heat in Siilinjärvi from the beginning of 2008. Heat
generated at Kemira GrowHow's Siilinjärvi plant by Fortum's sulphur
burning unit and Kemira GrowHow's sulphuric acid plant processes will
be utilized in district heating. The project utilizes the investment
to increase production of sulphuric acid and energy at Kemira
GrowHow's Siilinjärvi plant, which was decided in autumn 2006 by
Kemira GrowHow and Fortum.
In December 2007, Kemira GrowHow acquired the remaining 26 percent of
the shares in the South-African subsidiary Kemira Phosphates (Pty)
Ltd. from the minority owner.
Financing
At 31 December 2007, the Group's net interest-bearing liabilities
amounted to EUR 130.5 (185.9) million. The proportion of the total
amount of the Group's interest-bearing loans represented by fixed
interest loans was about 11 (34) percent at the end of the financial
year. Pension loans are considered to be floating rate loans.
The Group's equity ratio was 47.5 (41.1) percent at the end of the
financial year, 31 December 2007. The gearing ratio was 33.4 (54.0)
percent.
Kemira GrowHow's main liquidity reserve is a syndicated revolving
credit facility. The EUR 150 million credit facility is in place
until the year 2010. At the end of 2007, the EUR 150 million
revolving credit facility was in not use. At the end of 2006, EUR 80
million of the credit facility was in use. Kemira GrowHow also has a
EUR 300 million domestic commercial paper program, a long-term
bilateral bank loan and pension loans. Other funding sources are
financial leasing arrangements and credit facilities with local house
banks.
At the end of the financial year, 31 December 2007, liquid funds
amounted to EUR 53.9 (20.0) million.
Cash flow during 2007 was significantly better than in the previous
year, with cash flow from operations amounting to EUR 123.9 (3.9)
million and to EUR 69.0 (-36.2) million after investing activities.
The main reasons for the increase in cash flow compared with the
previous year were improved profitability and a decrease in net
working capital.
Capital expenditure and research and development
Gross capital expenditure was EUR 56.9 (58.9) million during 2007.
The most significant investments made during the review period were
related to automation of the fertilizer plant and building a sulphur
burning unit at the Siilinjärvi site in Finland.
In 2007, depreciation and amortization were EUR 41.4 (44.2) million
and impairment losses were EUR 3.1 (0.2) million net. Impairment
losses totalling EUR 1.3 million, consisting of impairment of
goodwill and intangible assets allocated to ZAO Agroprochimija,
Russia, were recorded in the second quarter due to redirection of
business. Other impairment losses were recognized mainly of property,
plant and equipment and they are mainly related to assets destroyed
at the fire at the Tertre plant. In addition, impairment losses were
recognized of a building and machinery no longer in use.
Proceeds from sales of fixed assets were EUR 6.9 (25.0) million. Net
gains from the sales of assets were EUR 4.4 (12.5) million. In
addition, a net gain of EUR 30.8 million was recognized from the
transfer of the UK subsidiary to the joint venture.
Cash flow from investing activities in January - December was EUR
-54.9 (-40.1) million.
The primary task of Kemira GrowHow's research and development is to
develop products, services and solutions. The most important research
and development efforts during 2007 were focused on expanding product
applications for animal nutrition, improving production and quality
of Greenox® AdBlue, fertilizer raw material cost savings and
developing products for decreasing phosphorus leaching from farms to
waterways. Research and development expenses were EUR 4.0 (3.4)
million and 0.3 (0.3) percent of net sales.
Personnel
As at 31 December 2007 Kemira GrowHow had 2,093 (2,507) employees.
The average number of personnel during 2007 was 2,435 (2,600). The
number of personnel has decreased mainly due to the transfer of the
UK operations to a joint venture during the last quarter.
The number of personnel in Finland was 1,041 (1,043) at the end of
December and 1,066 (1,080) on average during 2007.
Environmental issues
A new environmental and water management permit was issued in October
2006 to Kemira GrowHow's Siilinjärvi (Finland) mine and plants. The
enforcement of the permit is pending due to appeal. The current
permit is valid until the appeal process ends. The new permit, after
being enforced, will be valid until further notice and the terms of
the permit will be reviewed in 2015. Kemira GrowHow estimates that
the new environmental permit will not create any new material
obligations.
Kemira GrowHow carbon dioxide emission right allowances for 2008 are
11 percent less compared with 2007. Kemira GrowHow estimates that it
has to purchase a small amount of emission rights in 2008, but that
the emission right quotas for the 2009 - 2012 are sufficient to cover
the emissions.
Board of Directors, Management Team and Auditor
The Annual General Meeting held at 2 April 2007 re-elected Ossi
Virolainen, Lauri Ratia, Arto Honkaniemi, Satu Raiski, Helena Terho
and Esa Tirkkonen as members of the Board of Directors and Maija
Torkko as a new member. The Annual General Meeting re-elected Ossi
Virolainen as the Chairman and Lauri Ratia as the Vice Chairman of
the Board of Directors.
KPMG Oy Ab was re-elected as auditor, with Petri Kettunen, APA, as
responsible auditor, and Pekka Pajamo, APA, as deputy auditor.
The Extraordinary General Meeting of Kemira GrowHow Oyj held at 22 October 2007
amended the Articles of Association so that the number of members in the Board
of Directors was reduced to three and that the office of Vice Chairman of the
Board of Directors no longer exists.
The previous Board of Directors resigned on 22 October 2007, and the Extraordinary
General Meeting elected a new Board of Directors. Thorleif Enger was elected as
the chairman and Sven Ombudstvedt and Ken Wallace as members of the Board of Directors.
The Extraordinary General Meeting granted discharge from liability to the resigned
members of the Board of Directors.
Kemira GrowHow's Management Team consisted in 2007 of the following
persons: Heikki Sirviö, Chief Executive Officer; Kaj Friman, Deputy
Chief Executive Officer; Timo Lainto, President, Crop Cultivation
Business Unit; Antti Orkola, President, Industrial Solutions Business
Unit; Ilkka Kruus, Senior Vice President, Research and Development
(until 31 December 2007); Olavi Määttä, Senior Vice President, Crop
Cultivation Business Unit; Michael Christensson, Senior Vice
President, Industrial Solutions Business Unit and Jukka-Pekka
Nieminen, Senior Vice President, Strategic Planning (until 31
December 2007).
The persons responsible for steering Kemira GrowHow's support processes were:
Heikki Liukas, Senior Vice President, Finance and Treasury; Pirjo Nordman,
Senior Vice President, Human Resources; Tuomo Orpana, Senior Vice President,
Information Technology; Annica Söderström, Senior Vice President,
Risk Management and Veli-Matti Tarvainen, General Counsel.
Shares and share capital
At the end of the year, 31 December 2007, the share capital of Kemira
GrowHow Oyj amounted to EUR 155,973,000 consisting of 57,208,857
shares (before the deduction of treasury shares). Each share, with
the exception of the treasury shares, entitles its holder to one vote
at the General Meetings of Shareholders of Kemira GrowHow Oyj. The
share has no nominal value.
The Board of Directors of Kemira GrowHow Oyj used the authorizations
issued by the Annual General Meeting of 2006 to dispose of the
Company's own shares. Based on the Board of Directors' decision,
Kemira GrowHow Oyj surrendered on 15 March 2007 77,320 shares to
persons involved in the 2004 share-based incentive plan.
At 31 December 2007, Kemira GrowHow Oyj held 1,783,380 own shares,
representing 3.12 percent of the number of issued shares.
At the end of the year, the quoted price for Kemira GrowHow Oyj shares stood
at EUR 12.20. The highest quoted price in January - December 2007 was EUR 12.51
and the lowest was EUR 6.67. The volume weighted average quoted price in
January - December 2007 was EUR 10.81. The share capital had a market value
of EUR 676.2 million at the end of December 2007. The volume of shares traded
during the January - December period was equivalent to 248 percent of the average
number of shares outstanding.
Equity attributable to equity holders of the parent company was EUR
6.98 (6.18) per share at 31 December 2007. The number of shares used
in calculating this key ratio has been reduced by the number of
treasury shares.
Yara's tender offer for shares in Kemira GrowHow Oyj
Yara Nederland B.V., a fully owned subsidiary of Yara International
ASA, acquired 17,188,480 shares in Kemira GrowHow Oyj from the
Government of Finland on 24 May 2007. The purchase price paid for the
shares was EUR 12.12 per share. The acquired shares represented 30.05
percent of all shares and votes in Kemira GrowHow.
As a result of the acquisition of the shares Yara was under the
obligation to launch a mandatory tender offer under the Chapter 6
Section 10 of the Finnish Securities Markets Act for the remaining
shares in Kemira GrowHow. The tender offer began on 20 July and
expired on 7 September 2007. However, the tender offer period was
extended until 27 September 2007. Yara received the approval from the
European Commission on 21 September 2007 to acquire Kemira GrowHow
shares. The tender offer was completed on 4 October 2007 and the
ownership of the shares was transferred on 9 October 2007. After the
completion of the tender offer Yara Nederland B.V.'s ownership,
54,019,653 shares, represented 97.46 percent of the shares and votes
in Kemira GrowHow Oyj, excluding the shares held by Kemira GrowHow
Oyj.
European Commission approval was subject to certain conditions which
Yara International ASA is committed to fulfil. The approval of the
European Commission is subject to the following commitments, that in
aggregate correspond to less than 3 percent of Kemira GrowHow's
revenues:
- Divestment of part of Yara's nitrogen chemicals business in Köping,
Sweden
- Divestment of part of Kemira GrowHow's nitrogen chemicals business
in Tertre, Belgium
- Dissolution of Yara's Fertisupply distribution joint venture in
Denmark
- Sale of Yara's share in the Zemnor distribution joint venture in
Latvia
- Divestment of the CO2 liquefaction plant in Billingham, UK,
currently owned and operated by Kemira GrowHow's newly established
joint venture GrowHow UK Ltd.
Yara International ASA / Yara Nederland B.V. has elected to fulfil
the above-mentioned commitments within six months from the completion
date in order to finalize the tender offer.
The tender offer was completed with respect to all Kemira GrowHow's
shareholders who had validly accepted the tender offer by the end of
the offer period. The offered cash consideration in the tender offer
was EUR 12.12 per share. The offer valued Kemira GrowHow at EUR 671.8
million on an equity value basis. The cash consideration corresponded
to a premium of 30.7 percent over the closing price of EUR 9.27 per
share on 23 May 2007, the last trading day prior to the tender offer
obligation, and a premium of 30.8 percent over the volume-weighted
average price during the previous 3 months preceding the tender offer
obligation, i.e. from 24 February to 23 May 2007. The offer price
also represented a premium of 17.1 percent over Kemira GrowHow's
all-time high traded share price prior to the tender offer, EUR 10.35
per share. Additionally Yara paid interest accruing at an annual rate
of 5 percent from date on which an account operator or a custodian
had received the acceptance of the tender offer by a shareholder of
Kemira GrowHow until and including the payment day of the offer price
pursuant to the tender offer to such shareholder.
On 11 October 2007, Yara Nederland B.V. announced that it had
initiated a redemption proceeding concerning the remaining minority
shares in Kemira GrowHow Oyj in accordance with the Finnish Companies
Act. Yara Nederland B.V. may also acquire more Kemira GrowHow Oyj
shares from the market.
On 2 November 2007, Kemira GrowHow Oyj filed an application with the Helsinki Stock
Exchange listing committee for the purpose of ending the quotation of its shares
and delisting its shares from the Helsinki Stock Exchange main list. The listing
committee approved in its meeting on 16 November 2007 the delisting as conditional
and subject to the fact that as a result of the redemption proceeding in according
with the Companies Act, Yara International B.V. owns 100 percent of Kemira GrowHow's
shares.
Shareholders and authorizations of the Board of Directors
As of 31 December 2007, Kemira GrowHow's ownership structure was:
Yara International B.V. 95.1%
Kemira GrowHow Oyj 3.1%
Finnish households 0.9%
International institutions and nominee registered shareholders 0.8%
Finnish institutions 0.2%
The Board of Directors of Kemira GrowHow Oyj has no authorization to issue
convertible bonds or warrants or options.
The Annual General Meeting held on 3 April 2007 authorized the Board of Directors
to dispose of the Company's own shares through a share issue and to issue new shares
through a subscribed issue. The Board of Directors is authorized to dispose
a maximum number of 1,860,700 Company's own shares through a share issue.
The authorization is effective until 31 May 2008. The Board of Directors is also
authorized to issue a maximum of 6,000,000 new shares through one or more subscribed
issues. In accordance with the authorization, the Board of Directors may deviate from
the shareholders' pre-emptive rights to subscribe for Company shares if there is
a persuasive economic reason for the company to do so. The authorizations are
effective until 31 May 2008. These authorizations have not been used.
The joint venture in the UK with Terra Industries
In October 2006, Kemira GrowHow Oyj and Terra Industries Inc. entered
into a Memorandum of Understanding that set out their agreement to
create a joint venture to operate the fertilizer and associated
process chemicals businesses of both companies in the United Kingdom.
The Competition Commission (UK) gave final approval to the joint
venture in September and the operations began on 1 October 2007.
The joint venture, GrowHow UK Ltd., is held 50/50 by Kemira GrowHow
and Terra and will own and operate the site of Kemira GrowHow UK
Limited at Ince and the sites of Terra Nitrogen (UK) Limited on
Teesside and Severnside. The annual net sales of the combined
operations included in the joint venture exceeded EUR 500 million in
2006. Through the joint venture, Kemira GrowHow and Terra expect to
create significant cost and operational synergies that would enhance
their ability to service and compete in increasingly challenging
markets.
GrowHow UK Ltd. announced in early October that it will close its
Severnside manufacturing facility. Production at the site ended at
the end of January 2008, affecting 127 jobs.
Other events during the review period
The Finnish Ministry of Trade and Industry made in June a decision
concerning mining rights in Sokli and issued Kemira GrowHow a two
year time period to start the mining operations in the Sokli area. If
the period of two years is not long enough and Kemira GrowHow
believes that it is possible to develop the deposit and pursue the
opening of the mine. Kemira GrowHow may again apply for the mining
rights. Yara announced in February 2008 that the Sokli feasibility
study has been started. Yara is interested to opening the Sokli mine
if a commercially sustainable means of implementation will be found.
The Sokli mine area is located in Eastern Lapland in Finland, where
it is possible to extract niobium and phosphorus.
Events after the balance sheet date
Yara International ASA announced in February 2008 that it intends to
expand Siilinjärvi phosphate rock mining. During phase one, capacity
will be increased by 150,000 tons of rock per year to 1,000,000 tons,
whereas today the annual capacity of Siilinjärvi is 850,000 tons of
rock per year. This increase can be achieved with the modification of
the existing grinding and flotation facilities. The expansion is
expected to be operational during the second half of 2009.
The second phase is planned for 2010 - 2011. It is planned to
increase the potential capacity by 300,000 tons of rock per year,
raising the total capacity to 1.3 million tons per year. If phase two
is carried out, it will require also investment in new crushers,
grinding and flotation facilities.
Kemira GrowHow's operations in Germany were sold in the beginning of
2008 to Yara GmbH at arm's length price.
Market overview
During the latter half of 2007, fertilizer deliveries of European
fertilizer producers grew by up to 14 percent compared with the
previous season. This was due mainly to a shift of 2006 autumn's
fertilizer purchases to the spring 2007. Globally fertilizer
consumption is estimated to have grown by nearly 5 percent during the
2006/07 season and it is expected to further increase by 4 percent in
the new 2007/08 season. In a longer term, the average annual growth
in global consumption is expected to remain at about 2 - 3 percent.
The decline in consumption in the western part of the European Union
is partly compensated for by increasing consumption in the eastern
part of the Union. Global nitrogen fertilizer production capacity is
estimated to have increased last year at a slower pace than
anticipated. European fertilizer supply has decreased due to plant
closures.
The European Commission has agreed to abolish the 10 percent
mandatory set aside agricultural area for the 2007/08 season. This is
expected to increase fertilizer consumption.
Global cereal stocks continue to be the main driver of the fertilizer
market. The recovery of world meat production, the surge in
bio-ethanol production in the United States and the currently
prevailing rather favourable global economic conditions are expected
to result in continuous growth in global cereal demand. Cereal
stocks, which were already at historically low levels, are estimated
to have decreased further during the 2006/07 season by more than 10
percent. Due to increasing demand, the stocks are now expected to
continue decreasing during this season by up to 5 per cent.
Global market prices of commodity fertilizers such as urea and
diammonium phosphate (DAP) have strengthened substantially during
this year, decreasing the pressure of fertilizer imports from outside
of Europe.
The prices of wheat and other cereals have increased to record high
levels during last summer and autumn. High cereal prices improve the
farmers' financial situation. Historically, improving cereal prices
have increased fertilizer consumption.
The feed phosphate market in Europe has remained stable. The supply
and demand balance of phosphoric acid has lately tightened further.
Market prices are substantially influenced by the price of phosphoric
acid annually agreed with India. This price in US dollars is expected
to increase further. The price of DAP has also risen strongly
supporting the price of phosphoric acid.
Current outlook
Fertilizer demand is expected to continue on a good level during the
first half of 2008. All raw materials for fertilizers are expected to
be significantly more expensive than in 2007, but higher fertilizer
prices are expected to compensate for the increase in costs.
The operations of the Industrial Solutions business unit are expected
to continue to develop favourably mostly based on higher phosphoric
acid prices.
Kemira GrowHow's operating profit for 2008, excluding non-recurring
items, is estimated to continue at a good level.
All forecasts and estimates mentioned in this report are based on
current judgments of the economic environment and the actual result
may be significantly different.
Material risks and uncertainties
Operational and strategic risks
Kemira GrowHow's business is cyclical in nature due to the general
economic conditions of the fertilizer business and the cyclical
nature of the end-user markets. In addition, seasonal weather
conditions can have a negative effect on Kemira GrowHow's operations
and result. Adverse changes in the supply and prices of natural gas
and other essential raw materials can also negatively affect Kemira
GrowHow's result if the cost increases cannot be passed on to end
product prices.
Kemira GrowHow aims to decrease the negative impact of natural gas
price volatility by improving the efficiency of those production
units that use natural gas. Increasing efficiency reduces consumption
of natural gas. In addition, Kemira GrowHow aims to increase the
relative share of the Group's operations accounted for by businesses
that do not use natural gas and to enter into contracts in which the
price of future natural gas purchases is partly indexed to the oil
price.
The fluctuation between natural gas and oil derivative prices has an
effect on the market value of the contracts for the Group's natural
gas purchases. As Kemira GrowHow does not apply hedge accounting - as
defined in IFRS - to these contracts, changes in their market value
are recognized in the income statement immediately, which can lead tosignificant result volatility as the contracts are mainly related to
future years. In the long run, however, the use of oil indexation in
natural gas pricing decreases price volatility.
Continuously increasing competition can have a negative effect on
Kemira GrowHow. The sourcing of traded products might become more
difficult, decreasing the Group's net sales and margin of the traded
products. Imports from Russia and Eastern Europe could create an
imbalance in supply and demand in Western European fertilizer markets
unless the EU maintains adequate protective measures especially to
compensate for the price differences of natural gas. Urea or other
nitrogen products manufactured in the low-price natural gas area can
replace part of the nitrate fertilizers traditionally used in Europe.
A possible decrease in EU agricultural subsidies in Western Europe
may reduce fertilizer consumption. In addition, certain fertilizers
contain components that, under specific conditions, can cause damage
and lead to a liability for damages.
The identified risks also include retaining key employees in the
Group as well as the project management of large investments. Changes
in legislation can cause additional costs or limit operations in the
future.
Hazard risks
Kemira GrowHow's production is capital-intensive meaning that a major
part of the Group's capital is tied up in the production sites.
Kemira GrowHow's production is a continuous process. Therefore, a
fire, explosion or machinery breakdown can cause material
interruption damages and other indirect losses. Kemira GrowHow
manages these risks by evaluating production sites and processes
within the framework of Enterprise Risk Management.
The Group takes out insurance policies against risks for which it is
prudent to do so for either financially or other reasons. The Group's
insurance programs are reviewed regularly. Kemira GrowHow dedicates
constant attention and consideration also to other risk management
actions.
Litigations with material claims for compensation and other potential
risks related to legal risks or risks arising from the actions of
public authorities are disclosed in the Notes to the consolidated
financial statements.
Environmental risks
The nature of Kemira GrowHow's businesses exposes Kemira GrowHow to
risks of environmental costs and liabilities arising from the
manufacture, use, storage, transport and sale of materials that may
be considered to be harmful to nature or health and safety when
released into the environment. Many of Kemira GrowHow's operations
require environmental and other regulatory permits that are subject
to modification, renewal or revocation by issuing authorities.
Financial risk management and financing with special conditions
The management of financial risks at Kemira GrowHow Group is based on
the treasury policy accepted by the Board of Directors of Kemira
GrowHow Oyj. The policy outlines operating principles and sets limits
for maximum open risk positions. The objective of financial risk
management is to protect Kemira GrowHow Group from adverse changes in
the financial markets. The Group uses various derivative instruments
in order to manage financial risks in accordance with the limits set
by the treasury policy. Derivative instruments are used only for
hedging purposes. Fair value changes of derivative instruments are
mainly recorded immediately in the income statement, but the Group
has some derivative contracts that have been classified as cash flow
hedges and which fulfil hedge accounting criteria.
The international nature of its operations exposes Kemira GrowHow to
foreign exchange rate risks, which affect the income statement and
balance sheet. The foreign exchange rate risk arises when Group
companies both within and outside the euro-area have net currency
flows in a currency other than their domestic currency. The Group is
also exposed to foreign exchange rate risk when income statement and
balance sheet items are translated into euros from other currencies.
Currency flow risk is hedged using currency options and forwards.
The Group measures interest rate risk with duration and sensitivity
analysis. The Group's floating rate loans are exposed to cash flow
interest rate risk that the Group can hedge with swaps, options and
forwards.
Financial credit risk arises when the counterparty of a financial
transaction cannot fulfil its obligations. The Group hedges its
financial credit risk by accepting only such counterparties that have
an acceptable credit rating and by investing liquidity into money
market instruments with low risk and good liquidity.
The Group's trade receivables are spread among numerous clients and
different geographical areas. Customers' credit limits are monitored
systematically. Commercial credit risk is also minimized with the use
of document payments such as Letters of Credit.
To hedge itself against liquidity risk the Group has spread its
funding into different sources.
EUR 170 million of the committed credit facilities of Kemira GrowHow,
whether drawn or undrawn, include covenants or other terms and
conditions. These terms and conditions do not restrict the use of the
respective credit facilities but they can affect financing of the
Group in the future or may require negotiations with the providers of
funds. These credit facilities also include a condition that allows
the lenders to cancel the facilities and declare outstanding loans
due and payable if there is a change of control in Kemira GrowHow
Oyj. Based on the information received, the fact that Yara Nederland
B.V. has gained control of Kemira GrowHow Oyj does not cause the
loans to be declared due and payable and does not change the terms of
the facilities.
Kemira GrowHow Oyj
Board of Directors
Additional information:
Kemira GrowHow Oyj
Heikki Sirviö. CEO
tel. +358 10 215 2442
Kemira GrowHow Oyj
Kaj Friman. Deputy CEO. CFO
tel. +358 (0)50 62 626
Distribution:
Helsinki Stock Exchange
Media
KEMIRA GROWHOW GROUP
FINANCIAL STATEMENTS 1 JANUARY - 31 DECEMBER 2007
The financial information in this stock exchange release is based on
the audited financial statements of Kemira GrowHow. The Auditor's
Report has been issued on 21 February, 2008. The quarterly
information is unaudited.
As a result of rounding differences, the figures may not add up to
the total. Previous year figures have been adjusted due to
restatement.
The consolidated financial statements of Kemira GrowHow Group have
been prepared in conformity with IFRS standards.
Condensed income statement
EUR million 10-12/2007 10-12/2006 1-12/2007 1-12/2006
Net sales 288.2 282.7 1,294.7 1,168.7
Other operating income 34.5 3.2 55.4 20.9
Cost of sales -282.7 -258.5 -1,200.5 -1,125.3
Net result of realized
commodity derivatives 0.0 0.8 -3.8 1.0
Fair value changes of
unrealized commodity
derivatives, net -3.5 -8.4 -12.4 -7.9
Share of the net result of
associated companies and
joint ventures -8.9 -0.2 -5.9 0.1
Depreciation, amortization
and impairment -9.4 -10.9 -44.5 -44.4
Operating profit/loss 18.2 8.8 83.0 13.2
Financial income and
expenses -2.7 -3.6 -11.3 -11.0
Result before income taxes 15.5 5.2 71.6 2.1
Income taxes +13.3 -1.8 -0.3 -7.6
Net result 28.8 3.4 71.3 -5.4
Attributable to minority
interests 0.0 0.2 1.6 1.3
Attributable to equity
holders of the parent
company 28.9 3.2 69.7 -6.8
Total 28.8 3.4 71.3 -5.4
Earnings per share, EUR 0.52 0.06 1.26 -0.12
Operating profit/loss, % of
net sales 6.3 3.1 6.4 1.1
Net result attributable to
equity holders of the
parent company, % of net
sales 10.0 1.1 5.4 -0.6
Condensed balance sheet
EUR million 31.12.2007 31.12.2006
Assets
Non-current assets
Intangible assets and goodwill 11.6 14.8
Property, plant and equipment and biological
assets 233.0 306.6
Holdings in associated companies and joint
ventures 130.5 20.4
Available-for-sale shares 15.3 15.3
Other investments 4.5 4.5
Deferred tax assets 18.5 24.8
Defined benefit pension assets 21.9 25.1
Total non-current assets 435.3 411.6
Current assets
Inventories 149.3 211.5
Receivables
Interest-bearing receivables 32.7 3.2
Accounts receivable and other interest-free
receivables 179.0 195.6
Tax receivables 4.8 0.6
Total receivables 216.5 199.3
Securities 5.2 3.3
Cash and bank 18.4 16.7
Assets held for sale 0.8 -
Total current assets 390.2 430.8
Total assets 825.5 842.3
EUR million 31.12.2007 31.12.2006
Equity and liabilities
Equity
Share capital 156.0 156.0
Share premium account 8.5 8.5
Other reserves 0.5 0.5
Other non-restricted equity 142.2 142.2
Paid-up unrestricted equity reserve 0.7 -
Treasury shares -10.6 -11.0
Hedging reserve 0.4 1.5
Retained earnings and translation difference 19.5 51.3
Net result for the period attributable to
equity holders of the parent company 69.7 -6.8
Attributable to equity holders of the parent
company 386.9 342.2
Minority interest 3.5 2.2
Total equity 390.4 344.3
Non-current liabilities
Non-current interest-bearing liabilities 47.4 103.9
Non-current interest-free liabilities - 0.3
Provisions for liabilities and charges 15.4 2.7
Deferred tax liabilities 14.9 17.3
Defined benefit pension and other long-term
employee benefit liabilities 12.3 60.5
Total non-current liabilities 90.1 184.8
Current liabilities
Current interest-bearing liabilities 136.8 102.0
Short-term provisions 7.6 5.4
Accounts payable and other current
interest-free liabilities 198.8 199.5
Income tax payables 1.5 6.3
Liabilities held for sale 0.4 -
Total current liabilities 345.1 313.2
Total liabilities 435.1 498.0
Total equity and liabilities 825.5 842.3
Consolidated Statement of Recognized Income and Expense
EUR million
1-12/2007 1-12/2006
Profit / loss for the period 71.3 -5.4
Other comprehensive income:
Total exchange differences on translating
foreign operations -12.9 0.3
Hedging of net investment in foreign
operations 0.0 0.3
Effective portion of changes in fair value of
cash flow hedges recorded in equity 0.4 1.8
Change in fair value of cash flow hedges
transferred to income statement, effective
portion -1.9 0.1
Change in fair value of available-for-sale
shares - 0.1
Change in fair value of available-for-sale
shares, transferred to income statement - -0.1
Share of other comprehensive income of
associates and joint ventures 0.4 1.1
Actuarial gains (losses) on defined benefit
plans -4.9 22.7
Other reclassifications 0.5 0.0
Income tax on income and expense recognised
directly in equity 1.7 -7.0
Other comprehensive income for the year, net
of tax -16.7 19.4
Total comprehensive income for the year 54.6 13.9
Attributable to:
Equity holders of the parent company 52.9 12.6
Minority interest 1.7 1.3
Total comprehensive income 54.6 13.9
Statement of changes in equity
EUR million
Paid-up
Share Other unrestr. Fair
Share premium Other non-restricted equity Hedging value
EUR million capital account reserves equity reserve reserve reserve
Equity at 1
January, 2006 156.0 8.5 0.5 154.4 - 0.1 -
Total
comprehensive
income for
the year - - 0.0 - - 1.4 0.0
Acquisition /
disposal of
treasury
shares - - - - - - -
Changes in
minority
interest - - - - - - -
Divested
subsidiaries - - 0.0 - - - -
Share-based
incentive
plan - - - - - - -
Share-based
incentive
plan, tax
effect - - - - - - -
Dividends
paid - - - -12.2 - - -
Equity at 31
December,
2006 156.0 8.5 0.5 142.2 0.0 1.5 -
Paid-up
Share Other unrestr. Fair
Share premium Other non-restricted equity Hedging value
capital account reserves equity reserve reserve reserve
Equity at 1
January, 2007 156.0 8.5 0.5 142.2 - 1.5 -
Total
comprehensive
income for
the year - - 0.0 - - -1.1 -
Acquisition /
disposal of
treasury
shares - - - - 0.7 - -
Changes in
minority
interest - - - - - - -
Divested
subsidiaries - - - - - - -
Share-based
incentive
plan - - - - - - -
Share-based
incentive
plan, tax
effect - - - - - - -
Dividends
paid - - - - - - -
Equity at 31
December,
2007 156.6 8.5 0.5 142.2 0.7 0.4 -
Attributable
to equity
Cumulative holders of
Treasury Retained translation the parent Minority Total
shares earnings difference company interest equity
Equity at 1
January, 2006 -1.7 37.9 -0.2 355.4 1.0 356.4
Total
comprehensive
income for
the year - 10.5 0.7 12.6 1.3 13.9
Acquisition /
disposal of
treasury
shares -9.4 - - -9.4 - -9.4
Changes in
minority
interest - - - - 0.0 0.0
Divested
subsidiaries - 0.0 - - - -
Share-based
incentive
plan - 0.1 - 0.1 - 0.1
Share-based
incentive
plan, tax
effect - 0.0 - 0.0 - 0.0
Dividends
paid - -4.4 - -16.6 -0.1 -16.7
Equity at 31
December,
2006 -11.0 44.1 0.4 342.2 2.2 344.3
Attributable
to equity
Cumulative holders of
Treasury Retained translation the parent Minority Total
shares earnings difference company interest equity
Equity at 1
January, 2007 -11.0 44.1 0.4 342.2 2.2 344.3
Total
comprehensive
income for
the year - 67.0 -13.0 52.9 1.7 54.6
Acquisition /
disposal of
treasury
shares 0.5 -0.5 - 0.7 - 0.7
Changes in
minority
interest - - - - - -
Divested
subsidiaries - - - - - -
Share-based
incentive
plan - -0.7 - -0.7 - -0.7
Share-based
incentive
plan, tax
effect - 0.2 - 0.2 - 0.2
Dividends
paid - -8.3 - -8.3 -0.4 -8.7
Equity at 31
December,
2007 -10.6 101.8 -12.5 386.9 3.5 390.4
Cash flow statements
EUR million 1-12/2007 1-12/2006
Cash flows from operating activities
Cash flows from operating activities before
change in net working capital 69.0 29.0
Change in net working capital 54.9 -25.1
Net cash flow from operating activities 123.9 3.9
Cash flows from investing activities
Acquisition of subsidiary shares -1.3 -0.8
Acquisition of associated company and joint
venture shares -12.6 -3.4
Other purchases of non-current assets -47.9 -60.9
Proceeds from sale of non-current assets 6.9 25.0
Net cash used in investing activities -54.9 -40.1
Cash flow before financing 69.0 -36.2
Cash flows from financing activities
Changes in non-current liabilities (increase + /
decrease -) -87.2 -37.5
Changes in non-current loan receivables (increase
- / decrease +) 0.0 -1.8
Short-term financing, net (increase + / decrease
-) 38.1 65.3
Dividends paid -8.7 -16.7
Acquisition of own shares - -11.0
Other financing -2.9 0.4
Net cash used in financing activities -60.7 -1.3
Effect of exchange rate fluctuations -0.1 0.5
Net change in cash and cash equivalents 8.2 -37.0
Cash and cash equivalents at the beginning of the
period 20.0 57.0
Decrease due to establishment of a joint venture
(a subsidiary was transferred to a joint venture) 4.6 -
Transfer to assets held for sale 0.0 -
Cash and cash equivalents at the end of the
period 23.6 20.0
Net change in cash and cash equivalents 8.2 -37,0
Key figures
31.12.2007 31.12.2006
EBITDA, % of net sales (1 9.8 4.9
Operating profit/loss, % of net sales 6.4 1.1
Net result for the period attributable to
equity holders of the parent company, % of net
sales 5.4 -0.6
Gross capital expenditure, EUR million 56.9 58.9
Gross capital expenditure, % of net sales 4.4 5.0
Equity ratio, % 47.5 41.1
Gearing, % 33.4 54.0
Interest-bearing net liabilities, EUR million 130.5 185.9
Invested capital, EUR million 575.1 550.2
Return on equity, % 19.4 -1.6
Return on investment, % 15.4 2.6
Number of personnel during the period, average 2,435 2,600
Number of personnel at the end of the period 2,093 2,507
1) EBITDA = Profit before depreciation, amortization and impairment,
share of joint ventures' and associates' result included
Per share data
31.12.2007 31.12.2006
Number of shares at the end of the period,
treasury shares excluded (1,000) 55,245 55,348
Weighted average number of shares, treasury
shares excluded (1,000) 55,410 55,519
Dividend / share, EUR (* 0.35 0.15
Earnings/share (EPS), EUR (** 1.26 -0.12
Equity attributable to equity holders of the
parent company / share, EUR 6.98 6.18
Cash flow from operations/share, EUR 2.24 0.07
Dividend payout ratio, % (* 27.8 -123.3
Dividend yield, % (* 2.9 2.2
P/E ratio, price per earnings per share of the
review period 9.69 -55.80
Market capitalization, EUR million 676.2 375.8
Number of shares traded, % of average number of
shares 248 102
Number of shares traded, (1,000) 137,228 56,797
Closing price for the share, EUR 12.20 6.79
Highest quoted price, EUR 12.51 6.82
Lowest quoted price, EUR 6.67 4.11
Volume weighted average quoted price, EUR 10.81 5.59
(* Proposal by the Board of Directors
(** Kemira GrowHow Oyj has not issued options or warrants or similar
instruments which would dilute the earnings per share.
Definitions of key ratios
Financial ratios
Operating profit = Profit after depreciation, amortization and
impairment, share of joint ventures' and associates' results included
EBITDA = Profit before depreciation, amortization and impairment,
share of joint ventures' and associates' results included
Liquid funds = Cash and bank + current investments + interest-bearing
receivables from Yara
Interest-bearing net liabilities = Interest-bearing liabilities -
cash and bank - current investments - interest-bearing receivables
from Yara
Equity = Equity attributable to equity holders of the parent company
+ minority interest
Invested capital = Balance sheet total - interest-free liabilities
Equity ratio,% = Equity x 100 / (Balance sheet total - advance
payments received)
Gearing,% = Net liabilities x 100 / Equity
Return on investments,% (ROI) = (Profit before taxes + interest
expenses + other financial expenses) x 100 / (Balance sheet total -
interest-free liabilities) (average of 1 January and end of the
review period)
Return on equity, (ROE) = (Profit before income taxes - income taxes)
x 100 /
Equity (average of 1 January and end of the review period)
Per share data
Earnings per share (EPS) = Net result attributable to equity holders
of the parent company for the review period / Adjusted average number
of shares during the review period
Cash flow from operations = Cash flow from operations, after change
in net working capital and before capital expenditure
Cash flow from operations per share = Cash flow from operations /
Adjusted average number of shares
Equity attributable to equity holders of the parent company per share
= Equity attributable to equity holders of the parent company at the
end of the review period / Adjusted number of shares at the end of
the review period
Price per earnings per share (P/E) = Share price at the end of the
review period / Earnings per share (EPS) for the review period
Share turnover = The proportion of number of shares traded during the
review period to weighted average number of shares
Market capitalization = Number of shares at the end of the review
period x share price at the end of review period
Number of shares at the end of review period = Number of issued
shares - treasury shares
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
Accounting policies
Kemira GrowHow has changed its accounting principles in 2007.
Changes in accounting principles and in presentation of financial
statements
Because Kemira GrowHow Oyj became a subsidiary of Yara International
ASA in October 2007, Kemira GrowHow had to change the accounting
principles of its consolidated financial statements to correspond
those of Yara Group.
The most significant changes apply to defined benefit pension plans.
Currently, in accordance with the revised accounting principles, the
actuarial gains and losses of those plans are recorded net of tax in
equity instead of using the corridor -method which was applied
previously. Expected return of plan assets and interest on obligation
is recorded below operating profit in financial income and expenses.
Previously these items were included in pension and other personnel
costs.
In accordance with the revised presentation principles of financial
statement, all foreign exchange differences are recorded in financial
income and expenses. Previously exchange rate differences arising
from accounts receivable were recorded as adjustment of net sales and
exchange rate differences arising from accounts payable were recorded
as adjustment of purchases. In addition, fair value changes of the
currency derivatives which hedge sales or purchases and for which
hedge accounting is not applied, are recorded in financial income and
expenses. Previously they were recorded as a separate item above
operating profit.
Gains and losses from sale of shares classified as available for sale
are presented in financial income and expenses. Previously gains were
presented in other operating income and losses in other expenses.
Share of net results of joint ventures and associated companies is
presented in operating profit. Previously it was presented in
financial items.
Previously Kemira GrowHow applied so-called gross method in
recognition and measurement of carbon dioxide emission right
allowances. Both received emission right allowances and the
obligation to deliver allowances equal to emissions made were
measured initially at their fair value and recorded in the balance
sheet. If the obligation to deliver allowances equal to emissions
made exceeded the received emission right allowances, this difference
was recorded at fair value at the balance sheet date. Currently
Kemira GrowHow applies the so-called net method in recognition and
measurement of carbon dioxide emission right allowances received as
government grant. The so-called net method is described in more
detail in the accounting principles in "Government Grants".
Government grants received to acquire property, plant and equipment
have been reduced from the acquisition cost of the assets in
question. From 1 January 2008, received government grants are
recorded as deferred income in liabilities in the balance sheet and
are recognized as income over the useful life of the related asset.
Previous years' figures have not been restated.
Capitalization of borrowing costs in the acquisition cost of tangible
assets begins on 1 January 2008.
New and revised IFRS standards and interpretations
Kemira GrowHow has applied the following new or revised or amended
standards and interpretations from 1 January 2007:
- IFRS 7 Financial Instruments: Disclosures
- Amendment to IAS 1 Presentation of Financial Statements:
Capital Disclosures
- IFRIC 9 Reassessment of Embedded Derivatives
- IFRIC 10 Interim Financial Reporting and Impairment
- IFRIC 11 IFRS 2 Group and Treasury Share Transactions
The new and amended standards or interpretations will mainly have an
effect on the disclosures of the consolidated financial statements.
Other new or amended standards or interpretations are not material
for Kemira GrowHow Group.
Kemira GrowHow will apply the following new or revised or amended
standards and interpretations from 1 January 2008:
- IAS 23 (revised) Borrowing Costs
- IFRIC 12 Service Concession Arrangements
- IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction
Applying revised IAS 23 Borrowing Costs will change Kemira GrowHow's
accounting principles from 1 January 2008. From that date on the
borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset will be capitalized
to the acquisition cost of the asset. The capitalization will apply
mainly to property, plant and equipment.
Other new or amended standards or interpretations are not material
for Kemira GrowHow Group.
Kemira GrowHow will apply the following new or revised or amended
standards and interpretations from 1 January 2009:
- IAS 1 (revised) Presentation of Financial Statements
- IFRS 8 Operating Segments
- IFRIC 13 Customer Loyalty Programmes
Applying revised IAS 1 standard will change the presentation of
income statement, balance sheet and statement of changes in equity in
the financial statements.
Kemira GrowHow estimates that applying IFRS 8 as such will not have
any material effect on the financial information of Kemira GrowHow.
However, Kemira GrowHow's segments will change from 1 January 2008 to
correspond Yara's segments. For this reason Kemira GrowHow's
financial information will change materially from 1 January 2008.
Other new or amended standards or interpretations are not material
for Kemira GrowHow Group.
The effect of changes in accounting principles and presentation of
financial statements to previously published figures
Restated condensed income statement
1 January - 31 December 2006
Before Effect of
Condensed income statament restatement restatement Restated
1-12/ 1-12/
EUR million 2006 2006
Net sales 1,166.2 2.5 1,168.7
Other operating income 29.6 -8.7 20.9
Cost of sales -1,134.2 9.0 -1,125.2
Fair value changes of currency
derivatives, net 0.8 -0.8 0.0
Fair value changes of commodity
derivatives, net -6.9 - -6.9
Depreciation, amortization and
impairment -44.4 - -44.4
Share of the net result of
associated companies and joint
ventures - 0.1 0.1
Operating profit / loss 11.1 2.0 13.2
Financial income and expenses -11.0 -0.1 -11.0
Share of the net result of
associated companies and joint
ventures 0.1 -0.1 -
Net financial items -10.8 -0.2 -11.0
Result before income taxes 0.3 1.8 2.1
Income taxes -6.8 -0.7 -7.6
Net result -6.5 1.1 -5.4
Attributable to minority interests 1.3 - 1.3
Attributable to equity holders of
the parent company -7.8 1.1 -6.8
Total -6.5 1.1 -5.4
Earnings per share, EUR -0.14 0.02 -0.12
Operating profit / loss, % of net
sales 1.0 0.2 1.1
Net result for the period
attributable to equity holders of
the parent company, % of net sales -0.7 0.1 -0.6
Equity ratio, % 37.2 3.9 41.1
Gearing, % 59.5 -5.5 54.0
Restated condensed balance sheet
31 December 2006
Before Effect of
Condensed balance sheet restatement restatement Restated
EUR million 31.12.2006 31.12.2006
Assets
Non-current assets
Intangible assets and goodwill 14.9 -0.1 14.8
Property, plant and equipment and
biological assets 306.6 - 306.6
Holdings in associated companies
and joint ventures 20.4 - 20.4
Available-for-sale shares 15.3 - 15.3
Other investments 4.5 - 4.5
Deferred tax assets 33.1 -8.3 24.8
Defined benefit pension assets 19.1 5.9 25.1
Total non-current assets 414.0 -2.4 411.6
Current assets
Inventories 211.5 - 211.5
Receivables
Interest-bearing receivables 3.2 - 3.2
Accounts receivable and other
interest-free receivables 195.6 - 195.6
Tax receivables 0.6 - 0.6
Total receivables 199.3 - 199.3
Securities 3.3 - 3.3
Cash and bank 16.7 - 16.7
Total current assets 430.8 - 430.8
Total assets 844.7 -2.4 842.3
Before Effect of
restatement restatement Restated
31.12.2006 31.12.2006
Equity and liabilities
Equity
Share capital 156.0 - 156.0
Share premium account 8.5 - 8.5
Other reserves 0.5 - 0.5
Other non-restricted equity 142.2 - 142.2
Treasury shares -11.0 - -11.0
Hedging reserve 1.5 - 1.5
Retained earnings and translation
difference 20.3 31.0 51.3
Net result for the period
attributable to equity holders of
the parent company -7.8 1.1 -6.8
Attributable to equity holders of
the parent company 310.1 32.1 342.2
Minority interest 2.2 - 2.2
Total equity 312.2 32.1 344.3
Non-current liabilities
Non-current interest-bearing
liabilities 103.9 - 103.9
Non-current interest-free
liabilities 0.3 - 0.3
Provisions for liabilities and
charges 2.7 - 2.7
Deferred tax liabilities 15.9 1.4 17.3
Defined benefit pension and other
long-term employee benefit
liabilities 96.3 -35.8 60.5
Total non-current liabilities 219.2 -34.4 184.8
Current liabilities
Current interest-bearing
liabilities 102.0 - 102.0
Short-term provisions 5.4 0.0 5.4
Accounts payable and other current
interest-free liabilities 199.6 -0.1 199.5
Income tax payables 6.3 - 6.3
Total current liabilities 313.3 -0.1 313.2
Total liabilities 532.5 -34.5 498.0
Total equity and liabilities 844.7 -2.4 842.3
Effect of restatement on cash flow
statement
1 January - 31 December 2006
Before Effect of
Cash flow statement restatement restatement Restated
1-12/ 1-12/
EUR million 2006 2006
Cash flows from operating activities
Cash flows from operating activities
before
change in net working capital 28.9 0.2 29.0
Change in net working capital -25.1 - -25.1
Net cash flow from operating
activities 3.7 0.2 3.9
Net cash flow from investing
activities -39.9 -0.2 -40.1
Cash flow before financing
activities -36.1 0.0 -36.2
Net cash flow from financing -1.3 0.0 -1.3
Effect of exchange rate fluctuations 0.5 0.0 0.5
Net change in cash and cash
equivalents -37.0 - -37.0
Cash and cash equivalents at the
beginning of the period 57.0 - 57.0
Cash and cash equivalents at the end
of the period 20.0 - 20.0
Net change in cash and cash
equivalents -37.0 - -37.0
Effect of
restatement
quarterly and by
segment
EUR million
Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/ Q1-Q4/
Net sales 2007 2007 2007 2006 2006 2006 2006 2006
Crop Cultivation
Before restatement 244.1 261.8 276.7 206.7 238.7 240.9 208.9 895.3
Effect of
restatement 1.8 0.8 1,5 0.8 0.1 1.6 0.6 3.2
Net sales 245.9 262.5 278.2 207.5 238.9 242.6 209.5 898.4
Industrial
Solutions
Before restatement 85.9 79.8 80.9 84.9 76.0 72.2 75.8 309.0
Effect of
restatement -0.2 0.0 0.2 -0.5 -0.1 -0.2 0.2 -0.7
Net sales 85.6 79.8 81.1 84.4 75.9 72.0 76.0 308.3
Internal
eliminations -9.6 -9.0 -8.1 -9.1 -8.2 -8.9 -11.8 -38.0
Kemira GrowHow
total net sales
Before restatement 320.4 332.6 349.5 282.5 306.6 304.2 272.9 1,166.2
Effect of
restatement 1.6 0.8 1.7 0.2 0.0 1.5 0.8 2.5
Net sales 322.0 333.3 351.2 282.7 306.6 305.7 273.7 1,168.7
Operating profit / Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/ Q1-Q4/
loss 2007 2007 2007 2006 2006 2006 2006 2006
Crop Cultivation
Before restatement 19.3 14.1 16.3 5.4 13.3 -0.7 -18.4 -0.4
Effect of
restatement 2.3 0.2 1.1 0.5 -2.7 1.6 2.3 1.7
Operating profit /
loss 21.6 14.3 17.4 5.8 10.6 0.9 -16.0 1.3
Industrial
Solutions
Before restatement 9.3 7.1 7.2 6.3 6.3 6.4 0.9 19.9
Effect of
restatement -0.8 0.6 0.4 0.0 0.4 -0.6 0.8 0.5
Operating profit /
loss 8.5 7.7 7.6 6.3 6.7 5.8 1.7 20.5
Segments total
Before restatement 28.6 21.2 23.5 11.7 19.5 5.7 -17.4 19.5
Effect of
restatement 1.6 0.8 1.5 0.5 -2.3 1.0 3.1 2.2
Segments total,
operating profit /
loss 30.1 21.9 25.0 12.1 17.3 6.7 -14.4 21.8
Corporate centre
and other
Before restatement -6.8 -3.6 -2.1 -3.2 -0.5 -3.1 -1.7 -8.4
Effect of
restatement 0.1 0.0 0.2 -0.2 0.0 0.0 0.0 -0.2
Operating profit /
loss -6.8 -3.6 -1.9 -3.4 -0.5 -3.1 -1.7 -8.6
Kemira GrowHow
total operating
profit / loss
Before restatement 21.8 17.6 21.4 8.5 19.1 2.6 -19.1 11.1
Effect of
restatement 1.6 0.8 1.7 0.3 -2.3 1.0 3.1 1.9
Operating profit /
loss 23.4 18.4 23.0 8.8 16.8 3.6 -16.0 13.0
Contingent liabilities
EUR million 31.12.2007 31.12.2006
Mortgages 21,9 27,0
Assets pledged
On behalf of own commitments - 2,3
Guarantees
On behalf of joint ventures 6.0 -
On behalf of others (* 0,2 29,5
Operating lease commitments
Maturity within one year 6,8 9,3
Maturity after one year 16,1 27,7
(* EUR 0.0 (29.2) million of this obligation is related to the
guarantees for which Kemira Oyj has issued a counter indemnity to
Kemira GrowHow Oyj.
The Finnish Supreme Administrative Court gave a decision in April
2004 on Kemira GrowHow's appeal concerning the waste management
permit for Kemira GrowHow's Siilinjärvi plant in Finland. Although
the Court's decision was negative, the opinion of the management is
that this will not have an impact on Kemira GrowHow's financial
position. A new environmental and water management permit was issued
in October 2006 to Siilinjärvi mine and plants. The enforcement of
the permit is pending due to appeal. Kemira GrowHow estimates that
the new environmental permit will not create any new material
obligations.
Derivative instruments
31.12.2007 31.12.2006
Nominal
EUR million value Fair value Nominal value Fair value
Currency derivatives
Forward contracts 58.0 -0.6 181.9 -2.4
of which hedging net
investment in foreign
entity - - 1.2 -0.1
Currency options
Bought 17.8 0.0 61.7 0.7
Sold 17.8 -0.8 61.7 -0.2
Interest rate
derivatives
Interest rate swaps 20.0 0.5 70.0 1.7
Interest rate options
Bought - - 10.0 0.3
Sold - - 10.0 0.0
Commodity derivatives
Swaps 296,3 -7,4 136,2 -7,9
Derivative instruments are used only for hedging purposes. Nominal
values of derivative instruments do not necessarily correspond with
the actual cash flows between the counterparties and do not therefore
give a fair view of the risk position of the Group. The fair values
are based on market valuation on the date of reporting.
Segment information
Kemira GrowHow's operations are organized under two strategic
business units: Crop Cultivation and Industrial Solutions. The
Industrial Solutions business unit has strong synergies with the Crop
Cultivation business unit in production and sourcing.
The Crop Cultivation strategic business unit produces and markets a
broad range of fertilizers and other related products and services
for agriculture, horticulture and home gardening in selected markets
in Northern, Western and Eastern Europe and overseas. Kemira GrowHow
has a significant market position in fertilizer business in Finland,
Denmark, the Baltic countries, the Benelux countries and France.
The Industrial Solutions strategic business unit provides high
performance products and innovative solutions, such as feed
phosphates and feed acidifiers, a range of nitrogen-based chemicals
and phosphoric acid. The Industrial Solutions business unit focuses
on selected customer segments, that, in addition to the animal feed
industry, include the chemical, pharmaceutical, metal, electronics
and food industries. Industrial Solutions is one of the leading
global suppliers of inorganic feed phosphates with sales in more than
80 countries.
Kemira GrowHow's primary segment is business segment. Kemira GrowHow
Group's business segments are Crop Cultivation and Industrial
Solutions strategic business units. Segment information is presented
in the tables below.
Kemira GrowHow's segments will change from 1 January 2008 to
correspond Yara's segments.
Net sales by segment
EUR million
Q1-Q4/ Q1-Q4/
Net sales Q4/2007 Q4/2006 2007 2006
Crop Cultivation
External sales 210.0 207.1 994.9 897.5
Internal sales 0.3 0.3 2.1 0.9
Total 210.3 207.5 997.0 898.4
Industrial Solutions
External sales 78.1 75.6 299.8 271.2
Internal sales 5.9 8.8 30.8 37.1
Total 84.0 84.4 330.6 308.3
Internal eliminations -6.1 -9.1 -32.8 -38.0
Kemira GrowHow total 288.2 282.7 1,294.7 1,168.7
Result by segment
Q1-Q4/ Q1-Q4/
EUR million Q4/2007 Q4/2006 2007 2006
Operating profit/loss before share of
joint ventures' and
associates' result
Crop Cultivation 8.0 6.2 58.3 1.1
Industrial Solutions 3.9 6.1 27.6 20.5
Segments total 11.9 12.3 85.9 21.6
Corporate centre and other 15.3 -3.4 3.0 -8.6
Operating profit/loss before share of
joint ventures' and
associates' result total 27.1 8.9 88.9 13.0
Share of joint ventures' and
associates' result
Crop Cultivation -3.2 -0.4 -0.2 0.1
Industrial Solutions 0.1 0.2 0.1 0.0
Non-allocated -5.9 0.0 -5.9 0.0
Share of joint ventures' and
associates' result total -8.9 -0.2 -5.9 0.1
Total operating profit/loss
Crop Cultivation 4.8 5.8 58.1 1.3
Industrial Solutions 4.0 6.3 27.7 20.5
Segments total 8.8 12.1 85.9 21.8
Corporate centre and other 9.4 -3.4 -2.9 -8.6
Total operating profit/loss 18.2 8.8 83.0 13.2
Financial income and expenses -2.7 -3.6 -11.3 -11.0
Result before income taxes 15.5 5.2 71.6 2.1
Depreciation, amortization and impairment
EUR million
Q1-Q4/ Q1-Q4/
Q4/2007 Q4/2006 2007 2006
Crop Cultivation 5.4 8.2 30.0 33.4
Industrial Solutions 2.6 2.6 10.6 10.6
Segments total 7.9 10.8 40.6 44.0
Corporate centre and other 1.5 0.1 3.9 0.4
Total depreciation, amortization and
impairment 9.4 10.9 44.5 44.4
Assets
EUR million
31.12.2007 31.12.2006
Crop Cultivation 415.2 581.1
Industrial Solutions 201.2 194.3
Corporate centre and unallocated 137.6 25.1
Eliminations -8.0 -6.7
Interest-bearing receivables 32.7 3.2
Tax receivables 4.8 0.6
Deferred tax assets 18.5 24.8
Cash and bank and current investments 23.6 20.0
Total assets 825.5 842.3
Liabilities
EUR million
31.12.2007 31.12.2006
Crop Cultivation 165.5 219.5
Industrial Solutions 59.1 53.7
Corporate centre and unallocated 17.2 7.1
Eliminations -7.3 -11.8
Interest-bearing liabilities 184.3 205.9
Tax liabilities 1.5 6.3
Deferred tax liabilities 14.9 17.3
Total liabilities 435.1 498.0
Gross capital expenditure
EUR million
Q1-Q4/ Q1-Q4/
2007 2006
Crop Cultivation 30.5 45.5
Industrial Solutions 20.7 13.4
Corporate centre and unallocated 5.7 0.0
Total 56.9 58.9
Quarterly development by strategic business unit
EUR million
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Net sales 2007 2007 2007 2007 2006 2006 2006 2006
Crop Cultivation
External sales 210.0 245.6 262.4 276.9 207.1 238.7 242.4 209.3
Internal sales 0.3 0.3 0.2 1.3 0.3 0.2 0.2 0.2
Total 210.3 245.9 262.5 278.2 207.5 238.9 242.6 209.5
Industrial Solutions
External sales 78.1 76.4 71.0 74.3 75.6 67.9 63.3 64.4
Internal sales 5.9 9.3 8.8 6.8 8.8 8.0 8.7 11.6
Total 84.0 85.6 79.8 81.1 84.4 75.9 72.0 76.0
Internal eliminations -6.1 -9.6 -9.0 -8.1 -9.1 -8.2 -8.9 -11.8
Kemira GrowHow total 288.2 322.0 333.3 351.2 282.7 306.6 305.7 273.7
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Operating profit/loss 2007 2007 2007 2007 2006 2006 2006 2006
Crop Cultivation 4.8 21.6 14.3 17.4 5.8 10.6 0.9 -16.0
Industrial Solutions 4.0 8.5 7.7 7.6 6.3 6.7 5.8 1.7
Segments total 8.8 30.1 21.9 25.0 12.1 17.3 6.7 -14.4
Corporate centre and other 9.4 -6.8 -3.6 -1.9 -3.4 -0.5 -3.1 -1.7
Operating profit/loss total 18.2 23.4 18.4 23.0 8.8 16.8 3.6 -16.0
Non-recurring items
Non-recurring items included in operating profit mainly consist of
capital gains and losses from the sale of assets, impairment losses,
provisions and releases of provisions and restructuring expenses.
Non-recurring items, net, EUR million Q1 Q2 Q3 Q4 2007
Crop Cultivation 3.0 1.2 4.3 -5.7 2.9
Industrial Solutions 0.6 1.2 1.1 -0.4 2.5
Other - 0.2 -1.2 27.4 26.4
Total 3.6 2.6 4.2 21.3 31.8
Non-recurring items, net, EUR million Q1 Q2 Q3 Q4 2006
Crop Cultivation 1.4 3.7 6.0 1.2 12.4
Industrial Solutions -0.1 0.0 0.3 0.2 0.4
Other 0.0 -1.5 0.0 -1.7 -3.1
Total 1.3 2.3 6.3 -0.3 9.6
Acquisitions
Kemira GrowHow acquired in December 2007 the remaining 26 percent of
the shares in the South-African subsidiary Kemira Phosphates (Pty)
Ltd. from the minority owner. As Kemira GrowHow had already
previously consolidated 100 percent of Kemira Phosphates (Pty) Ltd.
in the consolidated financial statements, the purchase consideration,
EUR 0.5 million, was recorded in its entirety as goodwill.
There were no other acquisitions in 2007.
Property, plant and equipment
EUR million
Q1-Q4/ Q1-Q4/
Changes in property, plant and equipment 2007 2006
Carrying amount at beginning of the period 306.4 318.1
Additions 46.4 35.2
Disposals -1.9 -6.7
Disposed subsidiaries -74.0 -0.2
Depreciations -38.2 -41.0
Impairment losses and reversals of impairment losses -1.7 -0.2
Reclassification and other changes -0.3 -0.3
Transfer to assets held for sale -0.1 -
Exchange differences -3.7 1.4
Carrying amount at end of the period 232.7 306.4
The amount of contractual commitments for the acquisition of
property, plant and equipment were EUR 10.2 (1.3) million at the end
of December 2007.
Impairment losses of tangible assets are related mainly to property
which was damaged in the fire at Tertre plant.
Related party transactions
Kemira GrowHow Group's related parties include the parent company of
the Group (Kemira GrowHow Oyj), subsidiaries, associated companies
and joint ventures. In addition, related parties include the parent
company of Kemira GrowHow Oyj, Yara Nederland B.V., and other
companies in Yara Group. Kemira GrowHow Group has belonged to Yara
Group since 9 October 2007. Related parties also include the members
of the Board of Directors and the Group's Management Team, the CEO
and his deputy and their family members. Kemira GrowHow's Finnish
pension foundations and funds are legal units of their own and they
manage part of the pension assets of the Group's personnel in
Finland.
Kemira GrowHow follows the same commercial terms in transactions with
associated companies, joint ventures and other related parties as
with third parties.
During the review period Kemira GrowHow's related party transactions
were mainly sales to associated companies, joint ventures and other
Yara Group companies. During the review period there were no related
party transactions whose terms would differ from the terms in
transactions with third parties. The remaining 26 percent of the
shares in the South-African subsidiary were acquired from the
managing director of the company. The purchase price was fair value
of the shares at the time of the acquisition.
Yara Nederland B.V., a fully-owned subsidiary of Yara International
ASA, acquired 30.05 percent of shares and votes in Kemira GrowHow Oyj
from the Government of Finland. Based on its ownership in Kemira
GrowHow, Yara would have been a related party to Kemira GrowHow.
However, pursuant to article 7(2)(b) of the EC Council Regulation EC
139/2004 an acquirer is not allowed to exercise the voting rights
attached to the purchased securities during the proceedings of the
European Commission. Because Yara did not use the voting rights
related to the shares purchased in connection with the share purchase
until the European Commission had approved the share purchase, Yara
was not considered a related party to Kemira GrowHow until it had
received the approval. The approval was given on 21 September 2007.
Based on this, Yara would have been a related party to Kemira GrowHow
from 21 September 2007. The tender offer was completed on 4 October
2007 and the ownership of the shares was transferred on 9 October
2007. For this reason the companies in Yara Group belong to the same
group with Kemira GrowHow from 9 October 2007 and are thus related
parties of Kemira GrowHow.
Based on the 2004 share-based incentive plan, Kemira GrowHow Oyj
transferred in March own shares to persons who are considered to be
related parties. The shares were transferred to the CEO (12.249
shares), the deputy CEO (9.187 shares) and other members of the
Management Board (in total 25.262 shares).
As a result of the completion of Yara's tender offer, a maximum
reward was paid for the 2007 performance period of the share-based
incentive plan of Kemira GrowHow. The expenses arising from the plan,
including personnel costs, were EUR 10.9 million. Also the
share-based incentive plan for the 2005 reward period was settled in
cash in 2007. Both plans have mainly been paid in 2007. Based the
2007 and 2005 share-based incentive plans, in total EUR 1.1 million
was paid to the CEO and deputy CEO, and EUR 1.8 million to the other
members of the Management Board.
Transactions with associated companies and joint ventures
EUR million
Q1-Q4/2007 Q1-Q4/2006
Sales to associated companies and joint
ventures 154.2 136.3
Purchases from associated companies and joint
ventures 11.3 9.3
Other expenses charged by associated companies
and joint ventures 7.1 4.0
Other income from associated companies and
joint ventures 0.1 0.1
Interest and other financial income from
associated companies and joint ventures 0.3 0.5
Interest expenses to associated companies and
joint ventures 0.0 0.0
Dividend income from associated companies and
joint ventures 0.2 0.3
Property, plant and equipment sold to
associated companies and joint ventures, sales
price 0.0 0.6
Associated company and joint venture balances
EUR million
31.12.2007 31.12.2006
Receivables
Loan receivables 6.2 6.7
Accounts receivable 24.7 19.7
Other receivables 0.5 0.1
Liabilities
Accounts payable 6.4 1.2
Other current liabilities 0.0 0.3
Transactions with other Yara companies
EUR million
2007 (*
Sales 17.9
Purchases 0.8
Other expenses charged 0.0
Other operating income (** 2.0
Interest income 0.1
Interest expenses 0.0
Exchange rate differences, currency derivatives 0.0
(* 1 October - 31 December 2007
(** The ammonia business related to ammonia tank in Rozenburg, the
Netherlands, was sold to Yara.
Kemira GrowHow's operations in Germany were sold in the beginning of
2008 to Yara GmbH at arm's length price.
Balances with other Yara companies
EUR million
31.12.2007
Receivables
Loan receivables 30.3
Accounts receivable 12.7
Other receivables 0.1
Liabilities
Interest-bearing current liabilities 4.1
Current interest-free liabilities 0.1
Accounts payable 0.9
Kemira GrowHow Oyj: Financial Statements 1 January - 31 December 2007
| Source: Kemira GrowHow Oyj
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