Tulikivi Corporation Interim Report 1-3/2008
April 17, 2008 at 10:00
Interim Report 1-3/2008
- The Tulikivi Group's sales were EUR 14.6 million (EUR 19.2
million, 1-3/2007).
- The Group's result before taxes was a loss of EUR 0.6 (+0.6)
million.
- Cash flow from operating activities before investments was EUR
0.8 (-1.2) million.
- The order backlog has improved by over 30% since the beginning
of the year and amounted to EUR 9.2 (10.8) million.
- Full-year sales are expected to be at the same level as in the
previous year and earnings to improve substantially due to
downscaling measures.
Sales and result
The Group's sales amounted to EUR 14.6 million (EUR 19.2 million
in January-March 2007). The Fireplaces Business posted sales of
EUR 12.0 (16.7) million, the Natural Stone Products Business sales
of EUR 2.0 (1.9) million and Other Operations sales of EUR 0.6
(0.6) million. The decline in sales of lining stones accounted for
more than 70 per cent of the reduction in the sales of the
Fireplaces Business.
Sales in Finland accounted for EUR 8.1 (9.4) million, or 55.2
(48.7) per cent, of total sales. Exports accounted for EUR 6.5
(9.8) million. The largest countries for exports were France and
Belgium.
The Group posted a loss at the operating profit level, EUR -0.3
(+0.8) million. In accordance with the Group's segment reporting,
the Fireplaces Business had an operating profit of EUR 0.5 (1.5)
million, the Natural Stone Products Business an operating profit
of EUR 0.1 (0.1) million and Other Operations an operating loss of
EUR -0.9 (-0.8) million. The operating profit of ceramic utensils,
included under Other Operations, was at the breakeven level. The
Group's loss before taxes was EUR 0.6 (profit of 0.6) million. The
Group has downscaled costs and personnel to match the scope of
operations. The codetermination negotiations concluded in January
led to 67 redundancies and layoffs of 26 employees until further
notice.
Financing and investments
Cash flow from operating activities before investments amounted to
EUR 0.8 (-1.2) million. The equity ratio was 42.3 per cent (47.6
per cent at March 31, 2007). The ratio of interest-bearing net
debt to equity, or gearing, was 65.7 (48.6) per cent. Current
ratio was 1.8 (1.6). Equity per share amounted to EUR 0.73 (0.84).
The Group's investments were EUR 0.7 (1.3) million. Conversion and
replacement investments were made in fireplace production during
the review period.
Risks and uncertainties
The Group's near-term risks are related to the demand for lining
stone products and the decline in the volume of housing
construction.
According to the Group's long-term risk assessment, its strategic
risks concern, but are not limited to, the Group's raw material
reserves, legislative amendments and the market position.
Operational risks are related to products, distribution channels
and processes. For more information, see the 2007 Annual Report.
Future outlook
Greater efficiency in domestic distribution has substantially
increased the Group's order backlog compared with the turn of the
year. The trend in the export demand for fireplaces remains
inconsistent. The outlook is positive for fireplace exports, while
the near-term outlook for lining stones is weak. Full-year sales
are expected to be at the same level as in the previous year and
earnings to improve substantially due to downscaling measures.
The order backlog at the end of the review period amounted to EUR
9.2 (10.8) million. The order backlog was EUR 6.9 million at
December 31, 2007.
Segment reporting
The Group's business segments are the Fireplaces Business, Natural
Stone Products Business and Other Operations. The Fireplaces
Business includes soapstone and ceramic fireplaces, and also stone
lining for heaters. The Natural Stone Products Business includes
interior decoration stone products for households and stone
deliveries to construction sites. Other Operations includes
expenses that are not allocated to the Group's other segments, tax
and financial expenses, as well as sales of ceramic utensils and
the expenses of this business.
CONSOLIDATED INCOME STATEMENT
MEUR 01-03/ 01-03/ Change, 01-12/
2008 2007 % 2007
Sales 14.6 19.2 -24.2 69.9
Other operating income 0.1 0.1 0.6
Increase/decrease in inventories in
finished goods and in work
in progress -0.3 1.2 2.1
Production for own use 0.1 0.1 1.1
Raw materials and consumables 2.8 3.9 14.2
External services 2.0 2.5 11.1
Personnel expenses 5.4 7.5 27.1
Depreciation 1.4 1.4 5.7
Other operating expenses 3.2 4.6 14.7
Operating profit -0.3 0.8 -133.2 1.0
Percentage of sales -1.7 4.0 1.4
Finance costs -net -0.3 -0.2 -0.8
Share of the profit of
associated company 0.0 0.0 0.0
Profit before income tax -0.6 0.6 -191.7 0.2
Percentage of sales -4.0 3.3 0.2
Direct taxes 0.2 -0.1 0.2
Profit for the period -0.4 0.5 -198.2 0.4
Earnings per share attributable
to the equity holders of the
parent company, EUR
basic and diluted -0.01 0.01 0.01
CONSOLIDATED BALANCE SHEET
MEUR 03/2008 03/2007 12/2007
ASSETS
Non-current assets
Property, plant and equipment
Land 1.1 0.9 1.1
Buildings 8.5 8.8 8.6
Machinery and equipment 12.1 13.5 12.7
Other tangible assets 1.3 1.3 1.4
Intangible assets
Goodwill 4.3 4.3 4.3
Other intangible assets 11.0 10.7 11.1
Investment properties 0.2 0.2 0.2
Available-for-sale investments 0.1 0.1 0.1
Receivables
Deferred tax assets 1.1 0.6 1.0
Total non-current assets 39.7 40.4 40.5
Current assets
Inventories 12.3 12.2 12.7
Trade receivables 5.4 7.4 5.3
Current income tax receivables 0.5 0.2 0.1
Other receivables 0.9 2.5 0.5
Cash and cash equivalents 5.2 2.8 3.8
Total current assets 24.3 25.1 22.4
Total assets 64.0 65.5 62.8
EQUITY AND LIABILITIES
Equity
Share capital 6.3 6.3 6.3
Share premium fund 7.4 7.4 7.4
Translation difference -0.1 -0.1
Retained earnings 13.5 17.5 14.0
Total equity 27.1 31.2 27.6
Non-current liabilities
Deferred income tax liabilities 2.2 3.1 2.3
Provisions 0.9 0.8 0.9
Interest-bearing debt 19.7 14.4 17.7
Other debt 0.3 0.3 0.3
Total non-current liabilities 23.1 18.6 21.2
Current liabilities
Trade and other payables 10.3 11.9 9.4
Current income tax liabilities 0.3 0.1
Current provisions 0.3 0.7
Short-term interest-bearing debt 3.2 3.5 3.8
Total current liabilities 13.8 15.7 14.0
Total liabilities 36.9 34.3 35.2
Total equity and liabilities 64.0 65.5 62.8
CONSOLIDATED CASH FLOW STATEMENT 01-03/ 01-03/ 01-12/
MEUR 2008 2007 2007
Cash flows from operating activities
Profit for the period -0.4 0.5 0.4
Adjustments:
Non-cash transactions 1.3 1.4 5.5
Interest expenses
and interest income and taxes 0.2 0.3 0.6
Change in working capital 0.3 -2.8 -1.8
Interest paid and received
and taxes paid -0.6 -0.6 -2.2
Net cash flow from operating
Activities 0.8 -1.2 2.5
Cash flows from investing activities
Investment in property, plant and
equipment and intangible assets -0.8 -1.4 -5.7
Grants received for investments
and sales of property, plant and
equipment 0.1 1.4
Net cash flow from investing
activities -0.7 -1.4 -4.3
Cash flows from financing activities
Proceeds from non-current and
Current borrowings 2.0 1.0 8.5
Repayment of non-current and current
borrowings -0.7 -0.5 -4.4
Dividends paid -3.4
Net cash flow from financing
activities 1.3 0.5 0.7
Change in cash and cash
equivalents 1.4 -2.1 -1.1
Cash and cash equivalents at
beginning of period 3.8 4.9 4.9
Cash and cash equivalents at
end of period 5.2 2.8 3.8
STATEMENT OF CHANGES IN EQUITY
MEUR
Share Share Trans- Re- Total
capital premium lation tained
fund diff. ear-
nings
Equity 1 January 2008 6.3 7.4 -0.1 14.0 27.6
Translation differences 0.0 0.0
Profit for the period -0.4 -0.4
Equity 31 March 2008 6.3 7.4 -0.1 13.5 27.1
Share Share Trans- Re- Total
capital premium lation tained
fund diff. ear-
nings
Equity 1 January 2007 6.3 7.4 0.0 17.0 30.7
Translation differences 0.0 0.0
Profit for the period 0.4 0.4
Equity 31 March 2007 6.3 7.4 0.0 17.4 31.1
BUSINESS SEGMENTS Q1/ Q1/ 1-12
MEUR 2008 2007 2007
Sales 14.6 19.2 69.9
Fireplaces business 12.0 16.7 59.7
Natural stone products business 2.0 1.9 7.4
Other operations 0.6 0.6 2.8
Operating profit -0.3 0.8 1.0
Fireplaces business 0.5 1.5 4.4
Natural stone products business 0.1 0.1 0.4
Other operations -0.9 -0.8 -3.8
BUSINESS SEGMENTS QUARTERLY
Q1/ Q4/ Q3/ Q2/ Q1/
2008 2007 2007 2007 2007
Sales 14.6 16.8 16.5 17.4 19.2
Fireplaces business 12.0 14.4 13.9 14.7 16.7
Natural stone products
business 2.0 1.7 1.7 2.1 1.9
Other operations 0.6 0.7 0.9 0.6 0.6
Operating profit -0.3 -0.9 0.4 0.7 0.8
Fireplaces business 0.5 0.5 0.9 1.5 1.5
Natural stone products
business 0.1 0.0 0.1 0.2 0.1
Other operations -0.9 -1.4 -0.6 -1.0 -0.8
KEY FINANCIAL RATIOS AND
SHARE RATIOS
03/2008 03/2007 12/2007
Outstanding orders
(31 March), MEUR 9.2 10.8 6.9
Gross investment, MEUR 0.7 1.3 5.7
Gross investment, % of sales 4.5 6.6 8.1
Average number of staff 584 746 682
Earnings per share, EUR -0.01 0.01 0.01
Equity per share, EUR 0.73 0.84 0.74
Equity ratio, % 42.3 47.6 43.9
Gearing, % 65.7 48.6 64.7
Current ratio 1.8 1.6 1.6
Number of shares average 37143970 37143970 37143970
Number of shares 31 March 37143970 37143970 37143970
NOTES TO THE INTERIM REPORT
This interim report has been prepared in accordance with
International Financial Reporting Standard IAS 34 Interim
Financial Reporting. In preparing of this interim report, Tulikivi
has applied same accounting policies as in the 2007 financial
statements, with the exception of the following new/amended
standards that the group has adopted as from January 1, 2008:
- IFRIC 12, Service Concession Arrangements
- IFRIC 14, IAS 19 The Limit and Defined Benefit Assets, Minimum
Funding Requirements and their Interaction
The changes have no material effect on Tulikivi's interim report.
The key figures presented in the Interim Report have been
calculated using the same formulas as the latest financial
statements. The formulas can be found on page 63 of the Annual
Report 2007.
The quarterly comparison information has been amended due to the
change in the depreciation method in 2007. The effect of the
change on the Q1/2007 profit before taxes was EUR +0.1 million.
Income taxes
01-03/0801-03/07 01-12/07
Taxes for the current and previous
financial periods 0.0 -0.2 -1.1
Deferred taxes 0.2 0.1 1.3
Total 0.2 -0.1 0.2
Collateral and securities given and other commitments
MEUR 3/2008 3/2007 12/
2007
Loans from credit institutions
and other non-current liabilities,
secured by mortgages and pledges 18.5 17.9 18.4
Mortgages and pledges given 25.5 27.7 25.5
Other mortgages and pledges given
by the company on its own behalf 0.8 2.1 0.8
Derivatives
Interest rate swaps;
nominal value 7.4 8.3 7.4
Interest rate swaps;
fair value 0.1 0.1 0.1
The fair value of derivatives is the gain or loss for closing the
contract based on market rates at the balance sheet date.
Provisions
The Group's non-current provisions are an environmental provision
of EUR 0.4 million and a warranty provision of EUR 0.5 million.
Current provisions include a restructuring provision recognized in
2007, which was raised by EUR 0.1 million during the review
period. EUR 0.5 million of the restructuring provision has been
used and it stood at EUR 0.3 million at the end of the review
period.
Provisions are itemized in greater detail in notes 24. Provisions
and 33. Other contingent liabilities in the 2007 consolidated
financial statements.
Contingent liabilities have not changed after the end of the
financial period.
Share capital
Share capital by share series
Number % of % of Share,
of shares shares voting EUR of
rights share
capital
K-shares(10 votes) 9 540 000 25.7 77.6 1 621 800
A-shares (1 vote) 27 603 970 74.3 22.4 4 692 675
Total 37 143 970 100.0 100.0 6 314 475
There have been no changes in Tulikivi Corporation´s share capital
during the period.According to the articles of association the
dividend paid for Series A shares shall be 0.0017 EUR higher than
the dividend paid on Series K shares. The Series A share is
listed on the OMX Nordic Exchange in Helsinki and its trading code
is TULAV.
Rate development and exchange of Series A shares
During the reporting period, 640 711 shares were traded, with the
value of share turnover being EUR 1.0 million. The highest rating
for the share was EUR 1.88 and the lowest was EUR 1.37. The
closing rate for the period was EUR 1.50.
Board authorizations
The Annual General Meeting of April 13, 2007 authorized the Board
of Directors to acquire the company's own shares. A maximum of
2,760,397 Series A shares in the company and 954,000 Series K
shares in the company can be bought back. The authorization is
valid until the 2008 Annual General Meeting. In addition, the
Board of Directors has an authorization to decide on issuing new
shares and the conveyance of own shares in the company's
possession. New shares can be issued or own shares held by the
company conveyed amounting to a maximum of 5,520,794 Series A
shares and 1,908,000 Series K shares. The authorization is valid
until the 2008 Annual General Meeting.
At the end of the review period, the company did not hold any of
its own shares.
Related party transactions
3/2008 3/2007
Sales of goods and services
-sales of goods and services to
associated companies 11 0
Purchases of goods and services
-purchases of goods and services
from associated companies 13 19
Transactions with key management
- leases from related parties 30 26
- leases to related parties 0 0
Transactions with other related parties
Tulikivi Corporation is a founder member of the Finnish Stone
Research Foundation. The company has leased offices and storages
from the property owned by the Foundation and North Karelia
Educational Federation of Municipalities. The rent paid for these
facilities was EUR 31 thousand (31 thousand)in the period. The
rent corresponds with the market rents. The sales of services to
foundation were EUR one thousand (EUR one thousand) in the period.
Largest shareholders on 31 March 2008
Name of shareholder Shares Proportion
of total
vote
Vauhkonen Reijo 4 160 179 24.2 %
Vauhkonen Heikki 2 999 739 24.1 %
Elo Eliisa 2 957 020 5.9 %
Virtaala Matti 2 417 152 12.6 %
Mutual Pension Insurance
Company Ilmarinen 1 902 380 1.5 %
Mutanen Susanna 1 643 800 7.2 %
Vauhkonen Mikko 797 700 3.6 %
Paatero Ilkka 718 430 0.6 %
Nuutinen Tarja 674 540 3.5 %
Investment Fund Phoebus 608 140 0.5 %
Other shareholders 18 264 890 16.3 %
The Financial Statements have not been audited.
The companies included in the Group are the parent company
Tulikivi Corporation (Kermansavi Oy merged with the parent company
as at December 31, 2007), Kivia Oy, AWL-Marmori Oy, Tulikivi U.S.
Inc. and OOO Tulikivi. Group companies include also Uuni Vertriebs
GmbH and The New Alberene Stone Company, Inc., which are dormant.
The parent company has a fixed place of business in Germany,
Tulikivi Oyj Niederlassung Deutschland. The Group has interests in
associated companies Stone Pole Oy and Leppävirran Matkailukeskus
Oy.
TULIKIVI CORPORATION
Board of Directors
Matti Virtaala, Chairman of the Board
Distribution: OMX Nordic Exchange in Helsinki
Central Media
www.tulikivi.com
Additional information: Tulikivi Corporation, 83900 Juuka, tel.
+358-207-636 000, www.tulikivi.com
- Chairman of the Board of Directors Matti Virtaala
- Managing Director Heikki Vauhkonen