HONKARAKENNE OYJ STOCK EXCHANGE RELEASE 27 FEBRUARY 2008 AT 9:00 AM
HONKARAKENNE OYJ'S REPORT ON ACCOUNTS 1 JANUARY - 31 DECEMBER 2007
Net sales and profit
Honkarakenne's consolidated net sales of 2007 amounted to EUR 93.4 million,
compared with EUR 84.9 million in the same period last year. Income before taxes
showed a profit of EUR 2.7 million (a loss of EUR 1.8 million in the previous
year).
Net sales increased by 10.0 per cent when compared with last year. With regards
to the East European countries, exports to Russia developed exceptionally well,
and the project delivery of 100 homes to Kazakhstan that began in the fall of
2006 was completed during the spring and summer of 2007. With regards to the
Central European countries, the exports to France increased, but exports to
Germany decreased. This was due to the VAT increase and discontinuation of the
subsidy targeted for people constructing their first home, both of which came
into force in Germany at the turn of 2006-2007. The Japanese exports decreased
due to the unfavorable exchange rate of Yen. On the other hand, the Finnish net
sales increased.
The favorable profit development was influenced by the increase in net sales,
good utilization rates at the factories (except for the end of the year),
improved raw material use, more efficient operations, and lower overhead costs.
The price of wood has increased very rapidly this year, but the effects of
increased sales prices on the profit have been visible since last spring. The
effects of the strengthening program that was launched in the spring also
contributed to the favorable profit development.
Honkarakenne Group's order book amounted to EUR 35.1 million (EUR 32.6 million
in the previous year) at the end of December. The order book was 7.7 per cent
bigger than the corresponding figure of last year.
Market situation
In Finland, the holiday construction has remained stable and the overall market
grew due to the increase in average building size and construction costs. Even
though the market for single-family homes has decreased for three successive
years, the log home has maintained its solid position.
In the eastern European markets - i.e. Russia, Kazakhstan and Ukraine - the
construction volume has increased steadily. As for the central European
countries, the construction volume has decreased significantly in Germany, and
in France the growth of construction volumes has halted.
In Japan, the processing of planning constructions has tightened up due to the
earthquake problems. Since last year, it has lead to fewer applications and
postponed project start-ups. Furthermore, the Yen has remained weak against the
Euro, which decreases the European manufacturers' competitive strength on the
Japanese markets.
Financing and investments
The financial position of the company has remained stable. The equity ratio
stood at 40.1 per cent (37.7%), and interest-bearing net liabilities at EUR 13.4
million (EUR 11.6 million). Group's liquid assets totaled EUR 1.9 million (EUR
4.1 million). Gearing was at 72.0% (65.7%).
Capital expenditure totaled EUR 3.7 million (EUR 2.6 million). The investments
were still primarily targeted at replacement investments, development of
information systems for better internal efficiency. The investments of 2008 will
exceed last year's figures, and will focus mainly on improving the efficiency of
the Alajärvi and Karstula factories.
General meeting of 2007
Honkarakenne Oyj's General Meeting was held on Friday 30 March 2007. The general
meeting confirmed the financial statements of the parent company and the Group,
and released the Board members and the President from liability for the year of
2006. The General Meeting also decided not to pay any dividends for 2006. The
elected board members included Mauri Saarelainen, Eero Saarelainen, Kari
Saarelainen and Mauri Niemi (old members) and Tomi Laamanen as a new member.
KPMG Oy Ab, Authorized Public Accountants, was selected to continue as the
company's auditor with Ari Eskelinen, APA, as the chief accountant.
Own shares
Honkarakenne Oyj has repurchased 129,556 shares during the period under review
for an average price of EUR 6.09 per share. At the end of the review period the
company held 158,100 of its B shares with a total nominal value of EUR
316,200.00 and a total purchase price of EUR 941,877.19. These shares represent
4.22% of the company's capital stock and 1.67% of the voting rights. The
purchase cost has been deducted from shareholders' equity.
The Board of Directors has been granted a share repurchase authorization, valid
until 4 April 2008, to repurchase company shares for an amount equivalent to a
maximum of 5% of the company's capital stock. The Board of Directors has also
been granted authority, also valid until 4 April 2008, to dispose of 187,448 B
shares.
Future Outlook
The order book amounted to EUR 33.8 million (39.4 MEUR) on 19 February 2008,
i.e. the order book was 14.2 per cent bigger than the corresponding figure of
last year. The customers' decision-making has been influenced by their
uncertainty about the price development of wood and the unsure economic
prospects which have spread from the United States of America. The price level
of timber has dropped from the peak prices of last fall, but is not expected to
decrease significantly anymore this year as a result of the high stumpage price
and export duties on Russian raw wood.
Nevertheless, the market situation on the company's main market areas is
expected to remain stable regardless of the uncertainty factors. The company
will continue the strengthening program it started last year, and the product
development will focus on energy-efficient structural solutions.
Events after the review period
The company's subsidiary, Finwood Oy, organized a directed issue in February.
The parent company's ownership decreased to 68.2% after the issue.
Board of Directors' proposal for the disposal of profit
The parent company's unrestricted equity amounted on 31 December 2007 to EUR 7.4
million, of which the profit for the financial period equals EUR 3.8 million.
The Board of Directors proposes that the disposable profit be used to pay EUR
0.30 in dividends per each of the 3,572,320 shares in circulation. The total
dividend distribution will amount to EUR 1,071,696.00 The remaining profit of
EUR 2,671,572.74 will be left in the unrestricted equity.
HONKARAKENNE OYJ
Board of Directors
Further information: President and CEO Esko Teerikorpi, tel. +358 20 575 7816,
+358 40 580 6111, esko.teerikorpi@honka.com.
Honkarakenne Oyj's annual general meeting will be held on Friday, 4 April 2008
at 2 p.m. at the company headquarters in Tuusula.
The annual report of 2007 will be published on the company's web pages at
www.honka.com in week 12. The interim reports of 2008 will be published on 7 May
2008, 13 August 2008, and 5 November 2008.
DISTRIBUTION
Helsinki Stock Exchange
Principal media
The figures have not been examined by the auditor
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| CONSOLIDATED INCOME | | | | |
| STATEMENT | | | | |
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| (unaudited) | 10-12/2007 | 10-12/2006 | 1-12/2007 | 1-12/2006 |
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| (MEUR) | | | | |
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| Net sales | 22.2 | 24.4 | 93.4 | 84.9 |
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| Other operating income | 0.5 | 0.7 | 1.8 | 2.0 |
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| Change in inventories | -2.6 | -2.0 | -0.6 | -1.6 |
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| Production for own use | 0.1 | 0.1 | 0.7 | 0.2 |
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| Materials and services | -13.5 | -13.3 | -59.0 | -51.3 |
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| Employee benefit | -3.7 | -4.3 | -17.3 | -16.6 |
| expenses | | | | |
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| Depreciations | -1.1 | -0.8 | -4.0 | -4.0 |
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| Other operating expenses | -2.7 | -4.0 | -12.0 | -14.7 |
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| Operating profit/loss | -0.7 | 0.8 | 3.1 | -1.3 |
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| Financial income and | -0.2 | -0.2 | -0.6 | -0.6 |
| expenses | | | | |
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| Share of associated | 0.2 | 0.0 | 0.2 | 0.0 |
| companies' profit | | | | |
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| Profit/loss before taxes | -0.7 | 0.7 | 2.7 | -1.8 |
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| Taxes | 0.0 | -0.4 | -0.8 | 0.2 |
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| Profit/loss for the | -0.7 | 0.3 | 1.9 | -1.6 |
| period | | | | |
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| Attributable to: | | | | |
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| Equity holders of the | -0.7 | 0.3 | 1.9 | -1.6 |
| parent | | | | |
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| Minority interest | 0.0 | 0.0 | 0.0 | 0.0 |
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| | -0.7 | 0.3 | 1.9 | -1.6 |
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| Earnings/share (EPS), | | | | |
| EUR | | | | |
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| Basic | -0.19 | 0.08 | 0.53 | -0.42 |
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| Diluted | -0.19 | 0.08 | 0.53 | -0.42 |
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| CONSOLIDATED BALANCE SHEET | | |
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| (unaudited) | 31.12.2007 | 31.12.2006 |
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| (MEUR) | | |
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| Assets | | |
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| Non-current assets | | |
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| Property, plant and equipment | 24.8 | 25.5 |
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| Goodwill | 0.5 | 0.5 |
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| Other intangible assets | 1.1 | 0.8 |
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| Investments in associated companies | 0.5 | 0.5 |
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| Other investments | 0.4 | 0.2 |
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| Receivables | 0.3 | 0.9 |
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| Deferred tax assets | 0.8 | 1.3 |
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| | 28.3 | 29.6 |
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| Current assets | | |
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| Inventories | 14.1 | 15.7 |
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| Trade and other receivables | 8.7 | 9.4 |
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| Cash and bank receivables | 1.9 | 4.1 |
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| | 24.7 | 29.2 |
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| Total assets | 53.0 | 58.8 |
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| Shareholders' equity and liabilities | | |
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| Equity attributable to equity holders of the parent | |
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| Capital stock | 7.5 | 7.5 |
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| Share premium | 0.5 | 0.5 |
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| Reserve fund | 5.3 | 5.3 |
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| Translation differences | 0.2 | 0.2 |
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| Retained earnings | 5.1 | 4.1 |
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| | 18.6 | 17.6 |
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| Minority share | 0.0 | 0.0 |
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| Total equity | 18.6 | 17.6 |
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| Non-current liabilities | | |
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| Deferred tax liabilities | 0.6 | 1.3 |
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| Provisions | 0.4 | 0.2 |
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| Intrest bearing debt | 13.0 | 11.9 |
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| | 13.9 | 13.4 |
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| Current liabilities | | |
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| Trade and other payables | 17.6 | 24.0 |
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| Tax liabilities | 0.5 | 0.0 |
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| Intrest bearing debt | 2.4 | 3.8 |
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| | 20.5 | 27.7 |
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| Total liabilities | 34.4 | 41.2 |
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| Total equity and liabilities | 53.0 | 58.8 |
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| STATEMENT OF CHANGES IN | | | | | | | |
| EQUITY | | | | | | | |
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| | | | | | | | | | |
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| | | | | | | | |
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| (unaudited) | | | | | | | |
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| 1000 EUR | Equity attributable to equity holders of the parent |
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| | Mi | Tot |
| | no | al |
| | ri | equ |
| | ty | ity |
| | in | |
| | t. | |
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| |
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| |
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| |
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| | Share | Primi | Res | Trans | Own | Retaine | Total | | |
| | capit | um | erv | latio | shares | d | | | |
| | al | fund | e | n | | earning | | | |
| | | | fun | diff. | | | | | |
| | | | d | | | | | | |
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| Tota | 7,498 | 520 | 5,3 | 257 | -73 | 5,775 | 19,293 | 8 | 19, |
| l | | | 16 | | | | | | 301 |
| equi | | | | | | | | | |
| ty | | | | | | | | | |
| 1.1. | | | | | | | | | |
| 2006 | | | | | | | | | |
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| Tran | | | | -39 | | | -39 | | -39 |
| slat | | | | | | | | | |
| ion | | | | | | | | | |
| diff | | | | | | | | | |
| eren | | | | | | | | | |
| ce | | | | | | | | | |
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| Repurchase of own | | | -80 | | -80 | | -80 |
| shares | | | | | | | |
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| Result of | | | | | -1,559 | -1,559 | | -1, |
| the period | | | | | | | | 559 |
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| Osingon | | | | | | 0 | 0 | | 0 |
| jako | | | | | | | | | |
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| Total | 7, | 520 | 5,3 | 218 | -153 | 4,216 | 17,615 | 8 | 17, |
| equity | 49 | | 16 | | | | | | 623 |
| 31.12.2 | 8 | | | | | | | | |
| 006 | | | | | | | | | |
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| Total | 7, | 520 | 5,3 | 218 | -153 | 4,216 | 17,615 | 8 | 17, |
| equity | 49 | | 16 | | | | | | 623 |
| 1.1.200 | 8 | | | | | | | | |
| 7 | | | | | | | | | |
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| Transla | | | | -39 | | | -39 | | -39 |
| tion | | | | | | | | | |
| differe | | | | | | | | | |
| nce | | | | | | | | | |
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| Repurchase of own | | | -789 | | -789 | | -78 |
| shares | | | | | | | 9 |
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| Result of | | | | | 1,899 | 1,899 | -1 | 1,8 |
| the period | | | | | | | 6 | 83 |
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| Other | | | | | | -78 | -78 | | -78 |
| changes | | | | | | | | | |
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| Total | 7, | 520 | 5,3 | 179 | -942 | 6,037 | 18,608 | -8 | 18, |
| equity | 49 | | 16 | | | | | | 600 |
| 31.12.2 | 8 | | | | | | | | |
| 007 | | | | | | | | | |
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| CONSOLIDATED CASH FLOW STATEMENT | | |
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| (Unaudited) | 1-12/2007 | 1-12/2006 |
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| (MEUR) | | |
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| Cash flow from operations | 2.30 | 4.70 |
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| Cash flow from investments, net | -3.10 | -1.60 |
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| Total cash flow from financing | -1.40 | 1.00 |
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| Increase in credit capital | 2.40 | 10.00 |
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| Decrease in credit capital | -2.80 | -10.70 |
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| Other financial items | -1.00 | -0.30 |
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| Change in liquid assets | -2.20 | 2.00 |
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| Liquid assets at the beginning of period | 4.10 | 2.10 |
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| Liquid assets at the end of period | 1.90 | 4.10 |
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Notes to the interim report
Calculation methods
The financial statements release has been prepared in compliance with the
recognition and measurement policies of the IFRS, but requirements of 34
standards has not been fully followed.
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| CONTINGENT LIABILITIES | | | |
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| (Unaudited) | | | |
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| MEUR | | 31.12.2007 | 31.12.2006 |
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| For own loans | | | |
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| - Mortgages | | 19.7 | 20.0 |
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| - Pledged shares | | 0.63 | 0.18 |
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| - Other quarantees | | 0.69 | 0.69 |
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| For others | | | |
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| - Guarantees | | 0.65 | 1.49 |
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| Leasing liabilities | | 0.70 | 0.30 |
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| Rent liabilities | | 0.26 | 0.42 |
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| Nominal values of forward | | 0.91 | 0.00 |
| exchange contracts | | | |
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Events in the circle of acquaintances
The circle of acquaintances consists of subsidiaries associated companies and
the company's management. The management included in the circle of acquaintances
comprises the Board of Directors, CEO and the company's managing committee.
Transactions with acquaintances has been in value of 189,9 teur during the
financial year.
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| KEY INDICATORS | | | |
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| | | 1-12 | 1-12 |
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| (Unaudited) | | 2007 | 2006 |
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| Earnings/share (EPS) | eur | 0.53 | -0.42 |
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| Return on equity | % | 10.5 | -8.4 |
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| Equity ratio | % | 40.1 | 37.7 |
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| Net debt | MEUR | 13.4 | 11.6 |
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| Gearing | % | 72.0 | 65.7 |
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| Gross investments | MEUR | 3.7 | 2.6 |
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| | % of net sales | 3.9 | 3.1 |
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| Order book | MEUR | 35.1 | 32.6 |
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| Average number of personnel | Staff | 206 | 210 |
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| | Workers | 215 | 218 |
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| | Total | 421 | 428 |
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| Calculation of key indicators | |
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| | Profit for the period attributable to equity | |
| | holders of parent | |
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| Earnings/share | -------------------------------------------- | |
| (EPS) | -- | |
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| | Average number of outstanding shares | |
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| | Profit before taxes - taxes | |
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| Return on equity % | -------------------------------------------- | x 100 |
| | -- | |
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| | Total equity, average | |
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| | Total equity | |
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| Equity ratio, % | -------------------------------------------- | x 100 |
| | -- | |
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| | Balance sheet total - advances received | |
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| Net debt | Interest-bearing debt - cash and cash | |
| | equivalents | |
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| | Interest-bearing debt - cash and cash | |
| | equivalents | |
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| Gearing, % | -------------------------------------------- | x 100 |
| | -- | |
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| | Total equity | |
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| | Shareholders' equity | |
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| Shareholders | -------------------------------------------- | |
| equity/share | -- | |
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| | Number of shares outstanding at end of | |
| | period | |
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