Neomarkka Plc INTERIM REPORT 7 May 2009 at 1:30 PM 1(15)
INTERIM REPORT 1.1. - 31.3.2009
OPERATING PROFIT OF THE FIRST PERIOD POSITIVE DESPITE THE DECREASE IN TURNOVER
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| KEY FIGURES | 1-3/2009 | 1-3/2008 |
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| Turnover, EUR million, of which | 17.1 | 26.3 |
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| - Cable business | 17.0 | 27.3 |
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| - Other operations | 0.1 | -0.9 |
--------------------------------------------------------------------------------
| Operating profit, EUR million, of which | 0.3 | 1.8 |
--------------------------------------------------------------------------------
| - Cable business | 0.4 | 3.0 |
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| - Other operations | -0.1 | -1.2 |
--------------------------------------------------------------------------------
| Profit for the period EUR million | -0.5 | 0.6 |
--------------------------------------------------------------------------------
| Earnings per share EUR | -0.08 | 0.10 |
--------------------------------------------------------------------------------
Return on investment (ROI) during period under review was 0.3%
(1.9%). Equity ratio is 50.7% (53.1%).
Neomarkka has executed the new strategy since June 2007. The proportion of
investments in securities has decreased substantially, hence it is not reported
as an own segment. The remaining securities (mainly unquoted shares) can be
found under other operations.
MAJOR EVENTS DURING THE PERIOD UNDER REVIEW
Industrial private equity investments; Cable business
The turnover of cable business during the first quarter was lower than previous
year. One reason for this is substantially lower raw material prices than last
year.
Due to the general uncertainty in the global economy the construction and
industrial investments output have waned. Decided investments have been
postponed and hardly any new investment decisions have been made. In Russia the
financial crisis has caused delays in customers' purchasing decisions.
In addition the customers have decreased their inventories. The price of copper
has increased some 30 % and the price of aluminium has decreased some 8 % during
the review period.
The exchange rate of Russia's ruble (RUB) has continued to depreciate during the
first quarter, which along with the volatility of raw material prices and the
decrease in demand, have affected the result of the review period. The exchange
rate of Swedish krona (SEK) has continued to depreciate, which also has
increased already tight competition.
OAO Expocable in Russia received over EUR 5 million purchase order from
Tatarstan Oil company regarding electric cables to oil refinery.
Russian organization has been reinforced by appointing a new Managing Director
to ZAO Reka Kabel as well as a new Marketing Director for the Russian market.
The Managing Director of OAO Expokabel continues as before.
Reka Cables Ltd's co-operation negotiations concerning factories in Hyvinkää and
in Riihimäki have ended. The negotiations started 2 February 2009. The outcome
of the negotiations was lay-offs and nine dismissals. The demand for the
products made in Keuruu factory has been good during the first quarter and
therefore the earlier, at the end of year 2008, seen possible need for lay-offs
in Keuruu production has expired.
Reka Cables Ltd has started the co-operation negotiations concerning officials
on 26 March 2009. The co-operation negotiations have been finished on 7 May
2009.
Various cost saving programs have been launched to boost the cost competence.
The associated company Nestor Cables Ltd´s result during the review period was
unprofitable.
OTHER OPERATIONS
Since Neomarkka has detached from its hedge based investments and bonds, are
other operations than industrial investments, mainly investing cash funds. The
ownership of private equity investments has remained the same, but its
proportion of total investments is small. Therefore Neomarkka has given up the
investment in securities -segment and reports other than industrial investments
in other operations. The reference information in the statement of financial
position has also updated accordingly.
The market risk of Neomarkka's investments is very low because the company has
no securities or securities related derivatives in the investment portfolio.
Neomarkka's investments in synthetic derivatives (deposit + credit default swap)
are under one year long and aimed at solid companies. The funds are mainly
invested in time deposits.
Regarding ownership relating private equity, no changes were made during the
period.
NEOMARKKA SHARES; PRICES AND VOLUMES TRADED
Neomarkka Plc's B shares are listed on the NASDAQ OMX Helsinki. The closing
price at the end of the review period was EUR 5.15 (EUR 8.64) per share. On 31
December 2008 the price was EUR 5.80 per share. The share turnover in the review
period was 46,323 (93,204) shares. The lowest B share quotation was EUR 5.00
(EUR 7.90) and the highest quotation was EUR 5.48 (EUR 10.10).
FINANCIAL RESULT, STATEMENT OF FINANCIAL POSITION AND FINANCING
The interim report has been drawn up in accordance with the IAS 34 requirements
for interim reports. Same principles for drawing up consolidated financial
statements have been followed as in the financial statement 2008 except for
changes in IAS and IFRS standards that came into effect on financial period
starting 1 January 2009 and on all periods starting after that.
The exchange rate differences of the long term intra-group loans are handled in
translation differences in the consolidated statement of comprehensive income
according to IAS 1. The interim report is unaudited.
FINANCIAL RESULT
The consolidated turnover totalled EUR 17.1 million in the review period (EUR
26.3 million in 2008), consisting of the turnover of the cable business and
other operations. The turnover of the cable business in the review period was
EUR 17.0 million (EUR 27.3 million in 2008).
Operating profit for the review period was EUR 0.3 million (EUR 1.8 million), of
which the operating profit of the cable business was EUR 0.4 million (operating
profit EUR 3.0 million). The net result for the review period was EUR -0.5
million (EUR 0.6 million). Earnings per share were EUR -0.08 (EUR 0.10).
STATEMENT OF FINANCIAL POSITION AND FINANCING
At the end of the review period the consolidated statement of financial position
totalled EUR 98.9 million (EUR 113.5 million).
At the end of the review period, the equity per share was EUR 8.31 (10.01) and
the equity ratio was 50.7 % (53.1 %).
To fulfil the working capital financing needs, Reka Cables has available
short-term bank account credit limit of EUR 6 million and a factoring limit of
EUR 7.5 million.
The liquidity situation of the Group is good.
INVESTMENTS
The investments made in the review period relate to the cable business,
totalling EUR 1.9 million (EUR 0.8 million). Long-term leases have been
recognised as fixed assets under IFRS.
SHAREHOLDERS' MEETING AND GOVERNANCE
The Annual General Meeting will be held on 10 June 2009. The Board of Directors
proposes the distributable dividend to be EUR 0.25 per share from the year 2008.
From the financial year 2007 was paid a dividend of EUR 0.50 per share.
Neomarkka Plc started acquisitions of its own B shares during the review period.
The total amount of acquired shares was 3,454 pieces in total EUR 18,057.82. The
total value of the shares acquired by stock price, on 31 March 2009, totalled
EUR 17,788.10. The interest of shares acquired of total shares was 0.06% and of
total votes 0.04%. The shares are acquired to be used in order to carry out
acquisitions and other arrangements within the scope of the company's business
operations, to improve the company's capital structure, as part of implementing
the company's incentive scheme, or to be further transferred for other purposes
or to be cancelled.
The Board of Directors of Neomarkka Plc since 11 June 2008 consists of the
following persons: Jorma Wiitakorpi as chairman of the Board, Matti Lainema as
vice chairman and as members Ilpo Helander, Taisto Riski and Pekka Soini.
Jorma Wiitakorpi, the chairman of the Board of Directors, announced 16 December
2008 that he is withdrawing from the work of the Board of Neomarkka Plc for the
time being. During this time the Board of Neomarkka Plc will be led by vice
chairman Matti Lainema.
Matti Lainema and Taisto Riski, members of the Board of Directors, are the
members of the Audit Committee.
The Managing Director of Neomarkka Plc is Markku E. Rentto.
PERSONNEL
The Group employed an average of 511 people (296). Group personnel numbered 504
on 31 March 2009, of which 501 were in the cable business.
GROUP STRUCTURE AND SHAREHOLDERS
Neomarkka Plc is the parent company in a Group that includes the fully owned
subsidiaries Novalis Plc and Alnus Ltd with their subsidiaries. The domicile of
the parent company is Hyvinkää.
At the end of the review period, Neomarkka Plc had 12,706 (12,850) shareholders.
The biggest shareholder Reka Ltd had a 50.76% (50.76%) interest at the end of
the review period, with 65.77% (65.77%) of all votes. Neomarkka Plc is thus part
of the Reka Group. Reka Ltd's domicile is Hyvinkää.
At the end of the review period, the aggregate ownership of the ten largest
shareholders was 60.49% (60.62%) of all shares and 72.53% (72.60%) of all votes.
MAJOR EVENTS AFTER THE REVIEW PERIOD
Neomarkka Plc´s subsidiary Reka Cables Ltd´s co-operation negotiations
concerning officials have been finished. The negotiations started on 26 March
2009 and concerned all officials of Reka Cables Ltd in Hyvinkää, Riihimäki and
Keuruu. The outcome of the negotiations is lay-offs and five dismissals.A
separate stock exchange release has been published 7 May 2009.
ASSESSMENT OF UNCERTAINTY FACTORS AND BUSINESS RISKS
The main financial risks of Neomarkka are currency, interest rate, commodity,
liquidity, credit and investment market-risks. These financial risks and their
hedging measures are explained further in notes to the financial statement for
year 2008.
In accordance with the updated strategy 2007, future risk factors are more
closely tied to trends in the development of business operations of portfolio
companies. At the moment there is one portfolio company, the cabel business. The
previous strategy based Neomarkka's risk on a widely distributed market risk.
The most significant risks at Reka Cables and OAO Expokabel are the fluctuation
in raw material prices and changes in exchange rates. In order to be aware of
the risks and be prepared for them, Reka Cables Ltd has carried out an extensive
risk-charting process.
The company believes that the cable markets in Russia will grow and develop and
has invested heavily in exploiting the business opportunities there. These
investments include a risk that the growth in Russia will not take place
according to expectations.
Nestor Cables Ltd's business carries cable business risks and the risks involved
in starting up a new company.
Comments made in this report that do not refer to actual facts that have already
taken place are future estimates. Such estimates include expectations concerning
market trends, growth and profitability, and statements that include the terms
‘believe', ‘assume', ‘will be', or a similar expression. Since these estimates
are based on current plans and estimates, they involve risks and uncertainty
factors which may lead to results differing substantially from current
statements. Such factors include 1) operating conditions, e.g. continued success
in production and consequent efficiency benefits, availability and cost of
production inputs, demand for new products, changing circumstances in respect of
the acquisition of capital under acceptable conditions; 2) circumstances in the
sector such as the intensity of demand for products, the competition, current
and future market prices for the Group's products and related pricing pressures,
the financial situation of the Group's customers and competitors, competitors'
possible new competing products and 3) the general economic situation such as
economic growth in the Group's main geographical market areas or changes in
exchange rates and interest rates.
PROSPECTS FOR THE NEAR FUTURE
The reconstruction business and the energy production investments are expected
to grow, thus the demand of cables is foreseen to become gradually stronger.
Although the new building industry and infrastructure investments are slowing
down both in the Nordic Countries and in Russia compared to last year, we
estimate that the turnover and the operating profit of the second quarter will
increase clearly compared to the first quarter.
The Annual General Meeting will be held on 10 June 2009 in Hyvinkää. The summons
to the Annual General Meeting will be published separately.
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| CONSOLIDATED INCOME STATEMENT (IFRS) | |
--------------------------------------------------------------------------------
| | 1.1.-31.3. | 1.1.-31.3. |
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| EUR 1,000 | 2009 | 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TURNOVER | 17,077 | 26,334 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in inventories of finished | 87 | 3,377 |
| products and production in progress | | |
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| Production for own use | 4 | 42 |
--------------------------------------------------------------------------------
| Materials and services | -8,732 | -21,713 |
--------------------------------------------------------------------------------
| Personnel expenses | -3,978 | -3,504 |
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| Depreciation and impairment | -1,186 | -874 |
--------------------------------------------------------------------------------
| Other operating income and expenses | -2,989 | -1,879 |
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| | -16,794 | -24,551 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING PROFIT | 283 | 1,783 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income | 137 | 5 |
--------------------------------------------------------------------------------
| Financial expenses | -561 | -708 |
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| Share of the result of associates | -202 | -86 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit or loss before taxes | -343 | 994 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Taxes | -169 | -409 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit or loss for the period | -512 | 585 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit or loss attributable to: | | |
--------------------------------------------------------------------------------
| Equity holders of the parent | -486 | 585 |
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| Minority interest | -26 | 0 |
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| | -512 | 585 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share after and before | -0.08 | 0.10 |
| dilution, EUR | | |
--------------------------------------------------------------------------------
| Number of shares | 6,016,906 | 6,020,360 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS) |
--------------------------------------------------------------------------------
| EUR 1,000 | | |
--------------------------------------------------------------------------------
| Profit or loss | -512 | 585 |
--------------------------------------------------------------------------------
| Other comprehensive items: | | |
--------------------------------------------------------------------------------
| Translation differences related to | 387 | 33 |
| foreign units | | |
--------------------------------------------------------------------------------
| Total | 387 | 33 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE INCOME | -125 | 618 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income | | |
| attributable to: | | |
--------------------------------------------------------------------------------
| Equity holders of the parent | -99 | 618 |
--------------------------------------------------------------------------------
| Minority interest | -26 | 0 |
--------------------------------------------------------------------------------
| | -125 | 618 |
--------------------------------------------------------------------------------
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| CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS) |
--------------------------------------------------------------------------------
| EUR 1,000 | 31.3.2009 | 31.12.2008 |
--------------------------------------------------------------------------------
| A s s e t s | | |
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | |
--------------------------------------------------------------------------------
| Goodwill | 4,530 | 4,587 |
--------------------------------------------------------------------------------
| Other intangible non-current assets | 6,582 | 6,461 |
--------------------------------------------------------------------------------
| Tangible non-current assets | 33,544 | 33,753 |
--------------------------------------------------------------------------------
| Holdings in associates | 0 | 202 |
--------------------------------------------------------------------------------
| Receivables | 414 | 414 |
--------------------------------------------------------------------------------
| Deferred tax assets | 1,175 | 947 |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS | 46,246 | 46,365 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CURRENT ASSETS | | |
--------------------------------------------------------------------------------
| Inventories | 17,981 | 17,903 |
--------------------------------------------------------------------------------
| Available-for-sale financial assets | 3,733 | 3,733 |
--------------------------------------------------------------------------------
| Sales receivables and other receivables | 11,588 | 13,831 |
--------------------------------------------------------------------------------
| Tax receivables from the profit | 351 | 1,975 |
--------------------------------------------------------------------------------
| Cash in hand and at bank | 19,041 | 22,319 |
--------------------------------------------------------------------------------
| TOTAL CURRENT ASSETS | 52,694 | 59,761 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| A s s e t s | 98,940 | 106,125 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| S h a r e h o l d e r s´e q u i t y a n | | |
| d l i a b i l i t i e s | | |
--------------------------------------------------------------------------------
| CAPITAL AND RESERVES ATTRIBUTABLE TO | | |
| EQUITY HOLDERS OF THE PARENT | | |
--------------------------------------------------------------------------------
| Share capital | 24,082 | 24,082 |
--------------------------------------------------------------------------------
| Premium fund | 66 | 66 |
--------------------------------------------------------------------------------
| Reserve fund | 1,221 | 1,221 |
--------------------------------------------------------------------------------
| Retained profit | 3,418 | 9,969 |
--------------------------------------------------------------------------------
| Other unrestricted equity | 21,327 | 21,327 |
--------------------------------------------------------------------------------
| Profit or loss for the period | -99 | -6,562 |
--------------------------------------------------------------------------------
| Total equity attributable to equity | 50,015 | 50,103 |
| holders of the parent | | |
--------------------------------------------------------------------------------
| Minority interest | 105 | 159 |
--------------------------------------------------------------------------------
| Total shareholders´ equity | 50,120 | 50,262 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NON-CURRENT LIABILITIES | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 3,729 | 4,056 |
--------------------------------------------------------------------------------
| Provisions | 810 | 802 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 21,083 | 21,193 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CURRENT LIABILITIES | | |
--------------------------------------------------------------------------------
| Tax liabilities from the profit | 140 | 497 |
--------------------------------------------------------------------------------
| Reserves | 163 | 163 |
--------------------------------------------------------------------------------
| Short-term interest-bearing liabilities | 10,341 | 11,950 |
--------------------------------------------------------------------------------
| Accounts payable and other liabilities | 12,554 | 17,202 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 48,820 | 55,863 |
--------------------------------------------------------------------------------
| S h a r e h o l d e r s´e q u i t y a | 98,940 | 106,125 |
| n d l i a b i l i t i e s | | |
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS´ EQUITY (IFRS)
--------------------------------------------------------------------------------
| EUR | Share | Pre | Reserv | Other | Retai | Total | Minori | Share-h |
| 1,000 | capita | miu | e fund | unres | ned | | ty | olders´ |
| | l | m | | trict | profi | | | equity |
| | | fun | | ed | t | | | total |
| | | d | | equit | | | | |
| | | | | y | | | | |
--------------------------------------------------------------------------------
| | | | | | | | | |
--------------------------------------------------------------------------------
| Sharehol | 24,082 | 66 | 1,221 | 21,32 | 12,97 | 59,675 | | 59,675 |
| ders' | | | | 7 | 9 | | | |
| equity | | | | | | | | |
| 31.12.20 | | | | | | | | |
| 07 | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | | | | 618 | 618 | | 618 |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | 0 | 0 | | 0 |
| s paid | | | | | | | | |
--------------------------------------------------------------------------------
| Minority | | | | | | 0 | 0 | 0 |
| interest | | | | | | | | |
--------------------------------------------------------------------------------
| Sharehol | 24,082 | 66 | 1,221 | 21,32 | 13,59 | 60,293 | 0 | 60,293 |
| ders' | | | | 7 | 7 | | | |
| equity | | | | | | | | |
| 31.3.200 | | | | | | | | |
| 8 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR | Share | Pre | Reserv | Other | Retai | Total | Minori | Share-h |
| 1,000 | capita | miu | e fund | unres | ned | | ty | olders´ |
| | l | m | | trict | profi | | | equity |
| | | fun | | ed | t | | | total |
| | | d | | equit | | | | |
| | | | | y | | | | |
--------------------------------------------------------------------------------
| Sharehol | 24,082 | 66 | 1,221 | 21,32 | 3,408 | 50,104 | 159 | 50,263 |
| ders' | | | | 7 | | | | |
| equity | | | | | | | | |
| 31.12.20 | | | | | | | | |
| 08 | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | | | | -99 | -99 | -26 | -125 |
| or loss | | | | | | | | |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | 0 | 0 | | 0 |
| s paid | | | | | | | | |
--------------------------------------------------------------------------------
| Acquisit | | | | | -18 | -18 | | -18 |
| ion of | | | | | | | | |
| own | | | | | | | | |
| shares | | | | | | | | |
--------------------------------------------------------------------------------
| Minority | | | | | 29 | 29 | -29 | 0 |
| interest | | | | | | | | |
--------------------------------------------------------------------------------
| Sharehol | 24,082 | 66 | 1,221 | 21,32 | 3,320 | 50,016 | 105 | 50,120 |
| ders' | | | | 7 | | | | |
| equity | | | | | | | | |
| 31.3.200 | | | | | | | | |
| 9 | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| STATEMENT OF CASH FLOWS (IFRS) | 1.1.-31.3. | 1.1.-31.3. |
| EUR 1,000 | 2009 | 2008 |
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| OPERATING ACTIVITIES | | |
--------------------------------------------------------------------------------
| Payments received from operating activities | 17,867 | 24,587 |
--------------------------------------------------------------------------------
| Payments paid on operating activities | -18,601 | -23,472 |
--------------------------------------------------------------------------------
| Paid interests and other financial expenses | -500 | -667 |
--------------------------------------------------------------------------------
| Interests received and other financial | 86 | -440 |
| incomes | | |
--------------------------------------------------------------------------------
| Direct taxes paid | 981 | -699 |
--------------------------------------------------------------------------------
| Total operating activities | -168 | -691 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| INVESTING ACTIVITIES | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries and new | -308 | 0 |
| business | | |
--------------------------------------------------------------------------------
| Investments in tangible non-current assets | -649 | -660 |
--------------------------------------------------------------------------------
| Sales of tangible non-current assets | 68 | 0 |
--------------------------------------------------------------------------------
| Investments in intangible non-current | -60 | 0 |
| assets | | |
--------------------------------------------------------------------------------
| Total investing activities | -949 | -660 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| FINANCING ACTIVITIES | | |
--------------------------------------------------------------------------------
| Acquisition of own shares | -18 | 0 |
--------------------------------------------------------------------------------
| Increase in loans | 0 | 963 |
--------------------------------------------------------------------------------
| Decrease in loans | -1,941 | -249 |
--------------------------------------------------------------------------------
| Payments of financial leasing | -187 | -128 |
--------------------------------------------------------------------------------
| Dividends paid | -1 | -2 |
--------------------------------------------------------------------------------
| Total financing activities | -2,147 | 584 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| CASH FLOW FOR THE PERIOD | -3,264 | -767 |
--------------------------------------------------------------------------------
| Liquid funds at beginning of the period | 22,382 | 23,086 |
--------------------------------------------------------------------------------
| Exchange rate differences | -77 | 0 |
--------------------------------------------------------------------------------
| LiQUID FUNDS AT END OF PERIOD | 19,041 | 22,319 |
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NOTES TO THE ACCOUNTS
The interim report has been drawn up in accordance with the IAS 34 requirements
for interim reports.
PRINCIPLES FOR DRAWING UP THE INTERIM REPORTS
Neomarkka has applied the same principles for drawing up the interim reports as
in the financial statement 2008 except for changes in IAS and IFRS standards
that are in force in financial periods beginning 1 January 2009 and after that.
The change of IAS 1 standard effects the consolidated income statement, the
consolidated statement of changes in shareholders' equity and the presentation
of equity in the consolidated statement of financial position. According to the
new IFRS 8 standard, the segment reporting is based on the management's internal
reporting. The accounting principles have not changed. Applying IFRS 8 enables
that the assets and liabilities can be allocated more specifically than before.
As complementary information the distribution of turnover per product group and
per sales area are presented. The reference data has been converted to
correspond the changes that came into effect on 1 January 2009.
IAS 23-, IAS 27-, IFRS 2- and IAS 32 -standards have also been changed. The
changes are effective on financial periods beginning 1 January 2009, but have no
significant effect on the Group's figures.
Otherwise the Group has applied the same principles for drawing up the interim
report as for the consolidated financial statement 2008.
SEGMENT INFORMATION
--------------------------------------------------------------------------------
| 31.3.2009 | Industrial | Other | Eliminations | Group total |
| | Investment; | operations | and | |
| | Cable | | balancing | |
| | business | | | |
--------------------------------------------------------------------------------
| EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| Turnover | 16,994 | 108 | -25 | 17,077 |
--------------------------------------------------------------------------------
| Segment | 413 | | | 413 |
| operating | | | | |
| profit | | | | |
--------------------------------------------------------------------------------
| Unallocated | | -130 | | -130 |
| items | | | | |
--------------------------------------------------------------------------------
| Operating | 413 | -130 | | 283 |
| profit | | | | |
--------------------------------------------------------------------------------
| Share of the | -202 | | | -202 |
| result of | | | | |
| associates | | | | |
--------------------------------------------------------------------------------
| Unallocated | | | -593 | -593 |
| items | | | | |
--------------------------------------------------------------------------------
| Profit or loss | | | | -512 |
| for the period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment assets | 78,948 | | | 78,948 |
--------------------------------------------------------------------------------
| Unallocated | | 20,704 | -712 | 19,992 |
| assets | | | | |
--------------------------------------------------------------------------------
| Total assets | 78,948 | 20,704 | -712 | 98,940 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Segment | 50,271 | | | 50,271 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Unallocated | | 12,639 | -14,090 | -1,450 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Total | 50,271 | 12,639 | -14,090 | 48,821 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Assets - | 28,678 | 8,064 | 13,378 | 50,120 |
| Liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investments | 1,954 | -36 | | 1,918 |
--------------------------------------------------------------------------------
| Depreciations | -1,104 | -82 | | -1,186 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 31.3.2008 | Industrial | Other | Eliminations | Group total |
| | Investment; | operations | and | |
| | Cable | | balancing | |
| | business | | | |
--------------------------------------------------------------------------------
| EUR 1,000 | | | | |
--------------------------------------------------------------------------------
| Turnover | 27,273 | -939 | | 26,334 |
--------------------------------------------------------------------------------
| Segment | 2,998 | | | 2,998 |
| operating | | | | |
| profit | | | | |
--------------------------------------------------------------------------------
| Unallocated | | -1,215 | | -1,215 |
| items | | | | |
--------------------------------------------------------------------------------
| Operating | 2,998 | -1,215 | | 1,783 |
| profit | | | | |
--------------------------------------------------------------------------------
| Share of the | -86 | | | -86 |
| result of | | | | |
| associates | | | | |
--------------------------------------------------------------------------------
| Unallocated | | | -1,112 | -1,112 |
| items | | | | |
--------------------------------------------------------------------------------
| Profit or loss | | | | 585 |
| for the period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment assets | 75,497 | | | 75,497 |
--------------------------------------------------------------------------------
| Unallocated | | 39,908 | -1,930 | 37,978 |
| assets | | | | |
--------------------------------------------------------------------------------
| Total assets | 75,497 | 39,908 | -1,930 | 113,475 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Segment | 46,513 | | | 46,513 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Unallocated | | 13,729 | -7,060 | 6,669 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Total | 46,513 | 13,729 | -7,060 | 53,182 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Assets - | 28,984 | 26,179 | 5,130 | 60,293 |
| Liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investments | 69 | 702 | | 771 |
--------------------------------------------------------------------------------
| Depreciations | -829 | -45 | | -874 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cable business turnover per product group |
--------------------------------------------------------------------------------
| EUR million | 1-3/2009 | 1-3/2008 |
--------------------------------------------------------------------------------
| LV energy | 7.0 | 9.7 |
--------------------------------------------------------------------------------
| Power cable | 10.0 | 17.4 |
--------------------------------------------------------------------------------
| Others | 0.0 | 0.3 |
--------------------------------------------------------------------------------
| Total | 17.0 | 27.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cable business turnover per sales area |
--------------------------------------------------------------------------------
| EUR million | 1-3/2009 | 1-3/2008 |
--------------------------------------------------------------------------------
| EU -countries | 15.5 | 23.9 |
--------------------------------------------------------------------------------
| Non-EU -countries | 1.5 | 3.4 |
--------------------------------------------------------------------------------
| Total | 17.0 | 27.3 |
--------------------------------------------------------------------------------
The three biggest customer groups of cable business are Onninen, Rexel and
Sonepar, whose share of turnover is more than 10% respectively.
--------------------------------------------------------------------------------
| CHANGE IN NON-CURRENT ASSETS | | |
--------------------------------------------------------------------------------
| EUR 1,000 | 1-3/2009 | 1-12/2008 |
--------------------------------------------------------------------------------
| Book value at beginning of period | 33,753 | 23,916 |
--------------------------------------------------------------------------------
| Investment | 1,716 | 14,784 |
--------------------------------------------------------------------------------
| Increase through company acquisition | 121 | 4,942 |
--------------------------------------------------------------------------------
| Decrease | -59 | -5,471 |
--------------------------------------------------------------------------------
| Depreciations | -1,032 | -3,449 |
--------------------------------------------------------------------------------
| Impairments | 0 | 0 |
--------------------------------------------------------------------------------
| Translation differences | -956 | -969 |
--------------------------------------------------------------------------------
| BOOK VALUE AT END OF PERIOD | 33,544 | 33,753 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONTINGENT LIABILITIES | | |
--------------------------------------------------------------------------------
| EUR 1,000 | 31.3.2009 | 31.12.2008 |
--------------------------------------------------------------------------------
| Debts, on behalf corporate mortgages are | | |
| given | | |
--------------------------------------------------------------------------------
| Loans from financial institutions | 6,735 | 8,467 |
--------------------------------------------------------------------------------
| Granted corporate mortgages | 15,000 | 15,000 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Debts, on behalf of securities or | | |
| guarantees are given | | |
--------------------------------------------------------------------------------
| Loans from financial institutions | 11,900 | 11,900 |
--------------------------------------------------------------------------------
| Book value of pledged securities | 26,987 | 26,987 |
--------------------------------------------------------------------------------
| Granted guarantees | 11,900 | 11,900 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OTHER COLLATERALS | | |
--------------------------------------------------------------------------------
| Bond guarantees | 1,216 | 1,326 |
--------------------------------------------------------------------------------
| Gaurantees and payment commitments | 1,058 | 1,058 |
--------------------------------------------------------------------------------
Payment commitments
Reka Cables Ltd has made a commitment to the raw material acquisitions of its
subsidiary ZAO Reka Cables. Payment commitment is included in the figures above.
On 31 March 2009 the sales receivables concerned as security for the factoring
credit were EUR 3.7 million (EUR 3.9 million 31 December 2008). The factoring
credit on 31 March 2009 was EUR 3.3 million (EUR 3.5 million 31 December 2008).
INVESTMENT COMMITMENTS
Investment commitments on tangible non-current assets on 31 March 2009 totalled
EUR 0.4 million (31 December 2008 EUR 0.0 million).
ADJUSTMENT OF PURCHASE PRICE
Concerning the acquisition of Reka Cables the parties to the deal have agreed on
an adjustment to the purchase price on the basis of the trend in the average
operating margin of Reka Cables in 2007 and 2008. At the most, the price can be
raised or lowered by EUR 3.5 million. The adjustment of the purchase price
requires calculations based on the confirmed financial statement. To the
calculations the terms of the deal need to be interpreted. The amount of the
final purchase price is foreseen to be confirmed during the spring 2009 in the
negotiations between the parties. In the 2008 financial statement the purchase
price of Reka Cables has been valued at the original purchase price.
DERIVATIVE CONTRACTS
--------------------------------------------------------------------------------
| EUR 1,000 | 31.3.2009 | 31.12.2008 |
--------------------------------------------------------------------------------
| NOMINAL VALUES | | |
--------------------------------------------------------------------------------
| Interest derivatives | | |
--------------------------------------------------------------------------------
| Interest rate swaps | 14,600 | 14,590 |
--------------------------------------------------------------------------------
| Interest rate ceiling derivatives | 9,800 | 9,800 |
--------------------------------------------------------------------------------
| Foreign exchange derivatives | | |
--------------------------------------------------------------------------------
| Currency options | 2,500 | 2,500 |
--------------------------------------------------------------------------------
| Credit derivatives | | |
--------------------------------------------------------------------------------
| Credit default swaps | 10,000 | 0 |
--------------------------------------------------------------------------------
| Raw material derivatives | | |
--------------------------------------------------------------------------------
| Price hedging for metals | 3,898 | 3,655 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| FAIR VALUES | | |
--------------------------------------------------------------------------------
| Interest derivatives | | |
--------------------------------------------------------------------------------
| Interest rate swaps | -463 | -315 |
--------------------------------------------------------------------------------
| Interest rate ceiling derivatives | 28 | 28 |
--------------------------------------------------------------------------------
| Foreign exchange derivatives | | |
--------------------------------------------------------------------------------
| Currency options | -70 | -21 |
--------------------------------------------------------------------------------
| Credit derivatives | | |
--------------------------------------------------------------------------------
| Credit default swaps | 9 | 0 |
--------------------------------------------------------------------------------
| Raw material derivatives | | |
--------------------------------------------------------------------------------
| Price hedging for metals | -833 | -1,433 |
--------------------------------------------------------------------------------
The loans of the Group have been partly hedged with interest rate ceiling
derivatives. The nominal - and the fair value of the interest rate ceiling
derivatives have been informed above. Part of the Group's loans has been hedged
with interest rate swaps. The nominal - and the fair values of these swaps are
informed above. The interest rate swaps will expire in June 2009. The interest
rate ceiling derivatives will expire in June 2010.
--------------------------------------------------------------------------------
| RELATED PARTY EVENTS (REKA GROUP) |
--------------------------------------------------------------------------------
| EUR 1,000 | 1-3/2009 | 1-3/2008 |
--------------------------------------------------------------------------------
| Sales to Reka Group | 10 | 39 |
--------------------------------------------------------------------------------
| Dividends to Reka Group | 0 | 0 |
--------------------------------------------------------------------------------
| Acquisition of Reka Cables Ltd | 0 | 0 |
--------------------------------------------------------------------------------
| Other purchases from Reka Group | -293 | -207 |
--------------------------------------------------------------------------------
| Sales receivables and other receivables at end of | 321 | 321 |
| period | | |
--------------------------------------------------------------------------------
| Non-current debts (financial leases) at end of | -9,050 | -6,458 |
| period | | |
--------------------------------------------------------------------------------
| Other debts at end of period | -8 | -350 |
--------------------------------------------------------------------------------
| Guarantees received | 0 | 1,548 |
--------------------------------------------------------------------------------
OAO EXPOKABEL
Neomarkka has acquired supplementary shares from OAO Expokabel in year 2009
through public purchase offer. Shareholding before the public purchase offer was
81.27% and after 83.34%. The purchase price allocation after the public purchase
offer has been made by using the original balance sheet values and exchange
rate. Below the updated purchase price allocation after the public purchase
offer. The purchase price allocation is preliminary.
--------------------------------------------------------------------------------
| EUR 1,000 | Acquiree's | Fair value | Fair value |
| | carrying amount | adjustments | |
| | before | | |
| | combination | | |
--------------------------------------------------------------------------------
| NET ASSETS ACQUIRED | | | |
--------------------------------------------------------------------------------
| Intangible assets | 0 | 4,241 | 4,241 |
--------------------------------------------------------------------------------
| Tangible assets | 175 | 4,892 | 5,067 |
--------------------------------------------------------------------------------
| Inventories | 685 | 0 | 685 |
--------------------------------------------------------------------------------
| Current receivables | 244 | 0 | 244 |
--------------------------------------------------------------------------------
| Cash in hand and at bank | 133 | 0 | 133 |
--------------------------------------------------------------------------------
| Short-term liabilities | -884 | 0 | -884 |
--------------------------------------------------------------------------------
| Deferred tax liability | 0 | -2,192 | -2,192 |
--------------------------------------------------------------------------------
| NET ASSETS ACQUIRED | | | 7,294 |
--------------------------------------------------------------------------------
| Goodwill arising on | | | 123 |
| acquisition | | | |
--------------------------------------------------------------------------------
| TOTAL CONSIDERATION, | | | 7,417 |
| SATISFIED BY CASH | | | |
--------------------------------------------------------------------------------
| Net cash flow arising on | | | |
| acquisition: | | | |
--------------------------------------------------------------------------------
| Cash consideration, | | | -7,417 |
| expert fees and taxes | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | | 133 |
| acquired | | | |
--------------------------------------------------------------------------------
| Net cash flow arising on | | | -7,284 |
| acquisition: | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| AVAILABLE-FOR-SALE FINANCIAL ASSETS | Book value | Book value |
| EUR 1,000 | 31.3.2009 | 31.12.2008 |
--------------------------------------------------------------------------------
| Oulun Puhelin Holding Plc | 2,813 | 2,813 |
--------------------------------------------------------------------------------
| Lännen Teletieto Ltd | 920 | 920 |
--------------------------------------------------------------------------------
| Total available-for-sale financial | 3,733 | 3,733 |
| assets | | |
--------------------------------------------------------------------------------
CALCULATION OF KEY FIGURES
--------------------------------------------------------------------------------
| Return on | = | Profit before taxes + interest and other | x 100 |
| investment | | financial expenses / | |
--------------------------------------------------------------------------------
| (ROI) % | | [Balance sheet total - obligatory | |
| | | provisions and non-interest bearing | |
| | | liabilities] (average) | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio, | = | Shareholders' equity + minority interest | x 100 |
| % | | minus deferred tax liabilities / | |
--------------------------------------------------------------------------------
| | | Balance sheet total - advances received | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | = | Profit for the period belonging to equity holders of |
| share (EPS), | | the parent / |
--------------------------------------------------------------------------------
| EUR | | Number of shares adjusted for share | |
| | | issues (average) | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity/share, | = | Shareholders´ equity - minority interest minus |
| EUR | | deferred tax liabilities / |
--------------------------------------------------------------------------------
| | | Number of shares adjusted for share | | |
| | | issues at the end of the financial | | |
| | | period | | |
--------------------------------------------------------------------------------
Helsinki, 7 May 2009
Neomarkka Plc
Board of Directors
pp. Sari Tulander
CFO
FURTHER INFORMATION:
Markku E. Rentto, Managing Director, tel. +358 207 209 190
Sari Tulander, CFO, tel. +358 207 209 192
DISTRIBUTION
NASDAQ OMX Helsinki
Main media
www.neomarkka.fi
