Nurminen Logistics Plc Financial Statement Release 26 February 2013 1.00 p.m.
NURMINEN LOGISTICS KEY FIGURES 1 JANUARY - 31 DECEMBER 2012
- Net sales were EUR 78.4 million (2011: EUR 76.6 million).
- Reported operating result was EUR 5.4 million (EUR 1.9 million).
- Operating margin was 6.9% (2.5%).
- Operating result excluding non-recurring items was EUR 5.6 million (EUR 1.1 million).
- EBT was EUR 4.0 million (EUR -0.7 million).
- Net result was EUR 2.7 million (EUR -1.5 million).
- Earnings per share, undiluted: EUR 0.05 (EUR -0.19).
- Earnings per share, diluted: EUR 0.05 (EUR -0.19).
FOURTH QUARTER 1 OCTOBER - 31 DECEMBER 2012
- Net sales were EUR 18.4 million (2011: EUR 19.4 million).
- Reported operating result was EUR 0.7 million (EUR 1.0 million).
- Operating margin was 3.7% (5.2%).
- Operating result excluding non-recurring items was EUR 0.9 million (EUR 0.5 million).
- EBT was EUR 0.1 million (EUR 0.0 million).
- Net result was EUR -0.2 million (EUR -0.2 million).
- Earnings per share, undiluted: EUR -0.03 (EUR -0.04).
- Earnings per share, diluted: EUR -0.03 (EUR -0.04).
Nurminen Logistics Plc reorganised its operations as of 4 October 2011. As a part of these reorganisation measures, operations were divided into four accountable business units: Railway Logistics, Special Transports and Projects, Transit Logistics and Forwarding and Value Added Services. In the Group’s financial reporting for 2011, only one operating unit was reported. As of the year 2012, Nurminen Logistics Plc reports on four separate business units.
Nurminen Logistics Plc issued a stock exchange release on 12 October 2012 announcing its plans to turn its operations in Finland into independent companies and restructure its Baltic operations. In the transformation, Nurminen Logistics Plc’s Forwarding and Value Added Services, Railway Logistics and Transit Logistics business units formed one independent company and the Special Transports and Projects business unit was transformed into another independent company. These two new Finnish companies began operating under the new structure on 1 January 2013.
Turning these business operations into independent companies has no effect on Nurminen Logistics Plc’s financial reporting. The reported segments are still Forwarding and Value Added Services, Special Transports and Projects, Railway Logistics and Transit Logistics.
OUTLOOK FOR 2013
Nurminen Logistics expects its net sales and operating result to be at the same level as in 2012 and earnings per share to improve.
BOARD OF DIRECTORS’ PROPOSAL FOR PROFIT DISTRIBUTION
The Board of Directors proposes to the Annual General Meeting that EUR 0.08 per share be distributed to shareholders from the other reserves of the unrestricted equity as repayment of equity.
TOPI SAARENHOVI, PRESIDENT AND CEO:
“The year 2012 was a significant turning point for Nurminen Logistics. Our profitability improved in every business unit, and the overall improvement even outpaced our expectations. We grew our business operations, particularly in the active markets of Russia and its neighbouring countries. The company’s new organisational structure improved operational efficiency and management.
The company’s largest business unit, Railway Logistics, developed particularly strongly. We were successful in developing our Russian organisation. The new sales organisation helped us expand our customer base in rail transport within Russia. Thanks to better sales work and more efficient operation of our fleet, the utilisation rate and profitability of our rolling stock improved across nearly all wagon types. The profitability of Transit Logistics increased significantly in Nurminen Logistics’ Baltic operations. This increase was due in particular to the growth achieved by our Lithuanian subsidiary in the container export market and the higher activity in container traffic to Russia and Central Asia through the Baltics. We achieved positive development in the profitability of Special Transports and Projects. This was mainly due to strong growth in special transports and projects delivered to Russia and its neighbouring countries.
Our most significant challenges in 2012 were the profitability of terminal services and the unstable domestic market conditions. While we were able to improve our terminal operations compared to 2011, the profitability of the Vuosaari logistics centre remained unsatisfactory. Measures to improve profitability were implemented throughout the year. Profitability was weaker in the final quarter of the year compared to the previous three due to weaker demand. The company’s result was also negatively affected by non-recurring costs related to organisational restructuring.
In 2013, the focus of our business development will be on growing our railway logistics business in Russia and its neighbouring markets. We will continue the project to expand our fleet of rolling stock that began in 2011. We also aim to grow our project transport business in Russia and its neighbouring markets and increase profitability in Vuosaari and across other operations through various means, including the improvement of operational efficiency.
MARKET SITUATION IN THE REVIEW PERIOD
The market situation in Nurminen Logistics’ operating environment was variable: market activity remained high in the company’s key strategic growth market of Russia and its neighbouring countries and the demand for logistics services in these markets was good. In Finland, markets remained at a reasonable level, although the demand and market situation varied between different business operations.
Domestic rail cargo transport grew in Russia and its neighbouring countries. With the help of the newly strengthened sales organisation in St. Petersburg, the company won new customers and further increased its share in Russia’s domestic rail transport. The positive development of Russian operations balanced the volume of the Railway Logistics business unit as the demand for transport from Finland to Russia was characterised by fluctuations. However, demand slowed down in the Russian market late in the year. The demand for rail transport from Finland to Russia did not develop as well as expected due to factors including structural changes in the industrial sector and increased competition.
The relative share of the company’s Baltic operations grew in Transit Logistics. The demand and volumes for container transport from the Baltics to Moscow and Central Asia were at a good level. The volume of transit traffic to Russia through Finnish ports declined slightly. The capacity utilisation rate of the Kotka unit improved as a result of its expanded customer base and increased export transport volume. Demand for the company’s chemicals warehouse services also increased. Structural changes in traffic at the Hamina port weakened harbour service demand somewhat.
The demand for forwarding services remained satisfactory, although there was a slight decline in the demand for import forwarding late in the year. The market situation and price level remained challenging for the Vuosaari terminal as the market tightened and competition intensified towards the end of the year.
The demand for special transport was characterised by customer-specific and market-specific variation. Price levels also fluctuated considerably in the market. Competition remained intense, particularly with respect to large project deliveries for the mechanical engineering industry. Demand and prices were better in international special transport, especially deliveries to Russia and its neighbouring countries, compared to Finland, where competition continued to be fierce.
NET SALES AND FINANCIAL PERFORMANCE 1 JANUARY - 31 DECEMBER 2012
The net sales for the financial period amounted to EUR 78.4 million (2011: EUR 76.6 million), which represents an increase of 2.3% compared to 2011. The reported operating result was EUR 5,421 (1,947) thousand. The increase was 178.5%. The operating result includes non-recurring items of EUR -148 (850) thousand. The comparative operating result was therefore EUR 5,570 thousand, which is an increase of 407.8% compared to 2011. Due to the improved result, the amount of bonuses paid under the short and long-term share-based incentive plans was higher than in 2011, which had an effect on the operating result.
The non-recurring profit of the financial period was the result of a final payment of a receivable written down in the 2010 financial statements. The non-recurring expenses in the review period were related to the changes in the Group’s corporate structure in Finland. The non-recurring profit of the 2011 financial year resulted from a partial payment of a receivable written down in the 2010 financial statements and of a sales profit from divesting the Group’s associated companies in Baltic countries. The non-recurring expenses in 2011 were based on moving the head office and reorganising the business structure of the company.
The appreciation of the Russian rouble during the review period increased the company’s financial result by EUR 0.3 million. This exchange rate profit had no cash flow impact.
Railway Logistics
The Railway Logistics business unit’s net sales for the review period amounted to EUR 43,620 (2011: 43,777) thousand and the operating result was EUR 6,275 (2011: 5,055) thousand. The operating result includes non-recurring items of EUR -49 (305) thousand. The comparative operating result was therefore EUR 6,324 (4,750) thousand. There were considerable volume fluctuations in rail exports from Finland to Russia during the year. The full-year volume was lower than in 2011, mainly due to weaker demand in the fourth quarter. Demand for domestic railway transport in Russia and its neighbouring countries remained at a good level, although demand weakened late in the year. Profitability was boosted by the development of sales operations, growing the customer base and achieving operational improvements in areas such as domestic Russian transport.
Special Transports and Projects
The Special Transports and Projects business unit’s net sales for the review period amounted to EUR 9,375 (7,572) thousand and the operating result was EUR 441 (-461) thousand. The operating result includes non-recurring items of EUR -16 (0) thousand. The comparative operating result was therefore EUR 457 (-461) thousand. The margins of received orders remained at an unsatisfactory level on average due to significantly increased costs and intense competition. Compared to the reference period, the operating result was improved by strong performance in sales operations, special transports and projects destined for Russia and its neighbouring countries, higher equipment utilisation rates and the successful management of fixed costs.
Transit Logistics
The Transit Logistics business unit’s net sales for the review period amounted to EUR 13,903 (12,503) thousand and the operating result was EUR 2,510 (1,221) thousand. The operating result includes non-recurring items of EUR -42 (545) thousand. The comparative operating result was therefore EUR 2,552 (676) thousand. The result of the Transit Logistics unit during the review period was good, especially due to the container volumes transported via the Baltic countries to the CIS countries and Central Asia, as well as the increased export of containers by the Lithuanian subsidiary. Transit traffic operated by the company’s Finnish units declined due to the decreased transit traffic market share of Finnish ports. The higher export traffic volumes, chemicals warehousing services and development of the customer base of the Kotka unit helped balance out the impact of reduced transit traffic volume.
Forwarding and Value Added Services
The net sales of the Forwarding and Value Added Services business unit for the review period amounted to EUR 11,774 (13,031) thousand and the operating result was EUR -3,805 (-3,869) thousand. The operating result includes non-recurring items of EUR -41 (0) thousand. The comparative operating result was therefore EUR -3,763 (-3,869) thousand. The operating loss of the Vuosaari logistics centre amounted to EUR 2.8 (3.1) million in the review period. The volume handled by the Vuosaari logistics centre declined by 5%, but the profitability of the logistics centre improved as a result of a profitability development programme implemented by the company. However, the effect of improved efficiency was counteracted somewhat by a rise in the cost of business premises.
| NET SALES BY UNIT | 1-12/2012 | 1-12/2011 | |
| EUR 1,000 | |||
| Railway Logistics | 43,620 | 43,777 | |
| Special Transports and Projects | 9,375 | 7,572 | |
| Transit Logistics | 13,903 | 12,503 | |
| Forwarding and Value Added Services | 11,774 | 13,031 | |
| Eliminations | -276 | -254 | |
| Total | 78,396 | 76,630 |
| OPERATING RESULT BY UNIT | 1-12/2012 | 1-12/2011 | |
| EUR 1,000 | |||
| Railway Logistics | 6,275 | 5,055 | |
| Special Transports and Projects | 441 | -461 | |
| Transit Logistics | 2,510 | 1,221 | |
| Forwarding and Value Added Services | -3,805 | -3,869 | |
| Total | 5,421 | 1,947 |
NET SALES AND FINANCIAL PERFORMANCE IN THE FOURTH QUARTER
Net sales in the fourth quarter of 2012 amounted to EUR 18.4 million (2011: 19.4 million), which represents a decrease of 5.2% compared to the corresponding period in 2011. The reported operating result was EUR 684 (1,009) thousand. The operating result declined by 32.2%. The operating result includes non-recurring items of EUR -217 (2011: 487) thousand. The comparative operating result therefore increased by 72.6% compared to the corresponding period in 2011.
The non-recurring expenses in the review period were related to the changes in the Group’s corporate structure in Finland. The non-recurring expenses of the fourth quarter of 2011 were the result of operational restructuring and moving the head office from Pasila to Vuosaari. The non-recurring profit of the corresponding period in the 2011 financial year resulted from a partial payment of a receivable written down in the 2010 financial statements and of a sales profit from divesting the Group’s associated companies in the Baltic countries.
The depreciation of the Russian rouble during the review period decreased the company’s financial result by EUR 0.1 million. This exchange rate loss had no cash flow impact.
The net sales and operating result of the Railway Logistics business unit decreased in the final quarter of the year due to weaker demand caused by increased uncertainty in the markets. Volumes declined particularly in export transport from Finland to Russia. A slight weakening of demand in the domestic markets of Russia and its neighbouring countries also increased price competition.
The net sales and operating result of the Special Transports and Projects business unit grew in the fourth quarter compared to the third quarter due to the timing of project transports.
The Transit Logistics business unit continued to achieve positive development in its result in the fourth quarter, particularly in the Baltic countries, but seasonal variation at the end of the year caused these improvements to level off somewhat. Volumes in Finnish operations were lower than expected in the review period, although the volume of exports transported through Kotka began to increase late in the period.
The fourth quarter result of the Forwarding and Value Added Services business unit was weaker, particularly due to increased competition and weaker demand at the Vuosaari logistics centre. Among the main customer groups of the terminal at the Vuosaari logistics centre, forest industry volumes grew, but total volume declined by approximately 5% compared to the third quarter of the year.
| NET SALES BY UNIT | 10-12/2012 | 10-12/2011 | Change |
| EUR 1,000 | |||
| Railway Logistics | 10,346 | 10,804 | -458 |
| Special Transports and Projects | 2,519 | 1,666 | 853 |
| Transit Logistics | 2,755 | 3,990 | -1,235 |
| Forwarding and Value Added Services | 2,797 | 3,062 | -265 |
| Eliminations | -13 | -104 | 91 |
| Total | 18,404 | 19,418 | -1,014 |
|
OPERATING RESULT BY UNIT |
10-12/2012 |
10-12/2011 |
Change |
| EUR 1,000 | |||
| Railway Logistics | 1,456 | 1,215 | 241 |
| Special Transports and Projects | 65 | -295 | 360 |
| Transit Logistics | 306 | 1,186 | -880 |
| Forwarding and Value Added Services | -1,143 | -1,097 | -46 |
| Total | 684 | 1,009 | -325 |
OUTLOOK
Nurminen Logistics’ key markets in Russia and its neighbouring countries are expected to continue to grow in 2013, although the rate of growth may be slower than in 2012, at least early in the year. Demand in the Finnish market is expected to be slightly lower than in 2012 due to the slowing down of economic growth.
Nurminen Logistics expects its net sales and operating result to be at the same level as in 2012 and earnings per share to improve.
The company’s long-term goal is to grow at a faster rate than the market, on average by over 15% per year. Going forward, over 50% of net sales will come from the growth markets of Russia and its neighbouring countries. The company’s further long-term goals are to improve profitability, achieve an operating profit level of 10% and return on equity of 20%.
SHORT-TERM RISKS AND UNCERTAINTIES
Uncertainty in the world economy may result in lower industrial production volumes and as a consequence weaker demand for the company’s services and the cancellation of orders. Unfavourable market development in Russia and its neighbouring countries, in particular, would have a negative effect on the development of the company’s net sales and result.
Overcapacity in Finnish ports keeps price competition intense. The company operates in Vuosaari, Kotka and Hamina harbours and therefore the variation in volume development of these ports has an effect on the company’s result.
Unpredictable changes to railway tariffs in different countries may have a significant effect on the price competitiveness of rail transports and/or the company. Price competition may also burden the company’s profitability in the future. Structural changes in the export industry and weaker than expected development of foreign trade would have a negative impact on the development of the company's net sales and profitability. The company has notable customer agreements whose continuity may be significant, especially with respect to the profitability of the company’s business operations in the Baltic countries.
The company has received a total of 32 subsequent levy decisions from the National Board of Customs’ Eastern District Office in Lappeenranta, which state that the company and VG Cargo Plc, which has filed for bankruptcy, are liable to pay import taxes from the year 2009. The company’s liability for the import taxes is, at a maximum, EUR 0.8 million. The company does not consider itself liable for the aforementioned import taxes and has not recorded provisions for the associated costs. If there is a case for subsequent levy, the company’s view is that the levy should primarily be directed at the bankruptcy estate of VG Cargo Plc and be paid from its valid customs guarantee. The company has filed an appeal with the Helsinki District Court against the subsequent levy decisions made by the National Board of Customs.
FINANCIAL POSITION AND BALANCE SHEET
The company’s cash flow from operations was EUR 4 372 thousand. Cash flow from investments was EUR -512 thousand. Cash flow from financing activities amounted to EUR -1 474 thousand.
At the end of the review period, cash and cash equivalents amounted to EUR 4,901 thousand. Liquidity improved as a result of financing arrangements made late in the year.
The Group’s interest-bearing debt totalled EUR 29.1 million and net interest-bearing debt amounted to EUR 24.2 million.
Financing negotiations related to the company’s continuing business operations are planned for the first half of 2013. The management expects the negotiations to lead to a positive outcome.
The balance sheet total was EUR 69.8 million and the equity ratio was 42.7%.
CAPITAL EXPENDITURE
The Group’s gross capital expenditure during the review period amounted to EUR 1,145 (905) thousand, accounting for 1.5% of net sales. Depreciation totalled EUR 4.0 (4.2) million, or 5.1% of net sales.
GROUP STRUCTURE
On 12 October 2012, the company announced its plans to turn its operations in Finland into independent companies and restructure its Baltic operations. In the transformation, Nurminen Logistics Plc’s Forwarding and Value Added Services, Railway Logistics and Transit Logistics business units formed one independent company and the Special Transports and Projects business unit was transformed into another independent company. The new Finnish companies started operating under the new structure on 1 January 2013. The companies responsible for the Estonian and Lithuanian operations of Nurminen Logistics Plc were be transferred directly under the parent company in 2012. The Russian operations will continue as a separate company.
The Group comprises the parent company, Nurminen Logistics Plc, as well as the following subsidiaries and associated companies, owned directly or indirectly by the parent (ownership, %): RW Logistics Oy (100%), Nurminen Logistics Services Oy (100%), Nurminen Logistics Heavy Oy (100%), Nurminen Logistics Finland Oy (100%), OOO John Nurminen, St. Petersburg (100%), Nurminen Maritime Latvia SIA (51%), Pelkolan Terminaali Oy (20%), ZAO Irtrans (100%), OOO Nurminen Logistics (100%), OOO John Nurminen Terminal (100%), ZAO Terminal Rubesh (100%), Nurminen Logistics LLC (100%), UAB Nurminen Maritime (51%), Nurminen Maritime Eesti AS (51%), Team Lines Latvia SIA (23%) and Team Lines Estonia Oü (20.3%).
RESEARCH AND DEVELOPMENT
Nurminen Logistics offers logistics services and aims to constantly develop these services both on its own and in cooperation with its partners. Due to the nature of its operations the company did not have separate research and development costs in its income statement in 2012.
PERSONNEL
At the end of the review period the Group’s number of personnel stood at 341, compared to 343 on 31 December 2011. The number of employees working abroad was 69.
The Railway Logistics unit had 126 employees, the Special Transports and Projects unit had 26 employees, the Transit Logistics unit had 86 employees and the Forwarding and Value Added Services unit had 78 employees. Management and administrative personnel comprised 25 employees.
Personnel expenses in 2012 totalled EUR 15.9 million (2011: EUR 15.0 million).
CHANGES IN SENIOR MANAGEMENT
Senior Vice President Harri Vainikka, a member of Nurminen Logistics Plc’s Executive Board and Director of the Transit Logistics business unit, left the company on 14 May 2012. His departure was announced in a stock exchange release dated 12 April 2012. The change resulted in the size of Nurminen Logistics’ Executive Board decreasing from six members to five. As of 15 May 2012, the Transit Logistics business units reports directly to President and CEO Topi Saarenhovi, with Director Risto Holopainen responsible for Finnish operations and Managing Director Alexander Kovalenko responsible for operations in the Baltic countries.
On 16 May 2012, the company announced that Nurminen Logistics’ CFO and member of the Executive Board Antti Sallila has decided to leave his position to pursue further career opportunities with another employer outside the logistics industry.
On 20 June 2012 the company announced that Paula Kupiainen, M.Sc. (Econ), aged 51, has been appointed the new CFO of the company and member of the Executive Board of Nurminen Logistics. She reports to Topi Saarenhovi, President and CEO. Before joining Nurminen Logistics, Paula Kupiainen had been the Chief Financial Officer of the Polttimo Group since 2007. Kupiainen joined Nurminen Logistics on 15 October 2012.
The company also announced it will place a stronger focus on the significance of developing the quality of its IT systems and operations in implementing its strategy. In connection with this announcement, Vice President Risto Miettinen, who is responsible for IT and quality, was appointed as a Member of the Executive Board. Miettinen joined the Executive Board on 1 August 2012 with the title of Senior Vice President. Miettinen has held various positions in Nurminen Logistics since 1994. He has worked in his current position since 2011.
SHARE-BASED INCENTIVE PLAN
The Board of Directors of Nurminen Logistics Plc approved a new share-based incentive plan for the Group’s key personnel in March 2011. The aim of the plan is to combine the objectives of the shareholders and the key personnel in order to increase the value of the company, to commit the key personnel to the company, and to offer them a competitive incentive plan based on ownership of company shares.
The plan includes one earning period, the 2011-2012 calendar years. The Board of Directors decides on the earnings criteria and related targets. The earnings criteria of the 2011-2012 earning period are Nurminen Logistics Group's net sales and operating profit.
The potential bonus for the earning period 2011-2012 will be paid partly in the form of company shares and partly in cash in 2013. The proportion to be paid in cash is intended to cover taxes and tax-related costs incurred by the key personnel as a result of receiving the bonus. The shares received under the plan may not be transferred during a one-year restriction period. If a key person’s employment in the company ends during the restriction period, he or she must freely return to the company the shares received as a bonus. Approximately 15 people, including the members of the Executive Board, are included in the incentive plan.
The net bonuses to be paid on the basis of the plan are equal to a maximum total of 300,000 Nurminen Logistics Plc shares.
The incentive plan was announced in a stock exchange release dated 7 March 2011.
ENVIRONMENTAL FACTORS
Nurminen Logistics seeks environmentally friendly and efficient transport solutions as part of the development of its services. All services provided by the company in Finland are covered by a certified environmental management system that meets the requirements of the ISO 14001:2004 standard.
SHARES AND SHAREHOLDERS
Nurminen Logistics Plc’s share has been quoted on the main list of NASDAQ OMX Helsinki Ltd under the current company name since 1 January 2008. The total number of Nurminen Logistics Plc’s registered shares is 12,904,728 and the registered share capital is EUR 4,214,521. The company has one share class and all shares carry equal rights in the company. The company name was Kasola Oyj until 31 December 2007. The company was listed on the Helsinki Stock Exchange in 1987.
No dividend was paid for the 2011 financial year.
The trading volume of Nurminen Logistics Plc’s shares between 1 January and 31 December 2012 was 259,727. This represented 2% of the total number of shares. The value of the turnover was EUR 502,513. The lowest price for the period was EUR 1.78 per share and the highest EUR 2.34 per share. The closing price for the review period was EUR 1.88 per share and the market value of the entire share capital EUR 24,260,888.64.
At the end of the 2012 financial year the company had 525 shareholders. At the end of 2011 the number of shareholders stood at 507.
The company owns 13,830 of its own shares, which represent 0.107% of the votes in the company.
Nurminen Logistics Plc issued a stock exchange release on 17 January 2013 announcing that the market making in accordance with the liquidity providing agreement between Nurminen Logistics Plc and Evli Bank Plc for the share of Nurminen Logistics Plc will end on 18 February 2013.
Decisions made by the Annual General Meeting of Shareholders
Nurminen Logistics Plc's Annual General Meeting of Shareholders held on 23 April 2012 made the following decisions:
Adoption of the financial statements and resolution on the discharge from liability
The Annual General Meeting of Shareholders confirmed the company's financial statements and the Group's financial statements for the financial period 1 January 2011 – 31 December 2011 and released the Board of Directors and the Managing Directors from liability.
Payment of dividend
The Annual General Meeting of Shareholders approved the Board's proposal that no dividend shall be paid for the financial year 1 January 2011 - 31 December 2011.
Composition and remuneration of the Board of Directors
The Annual General Meeting of Shareholders resolved that the Board of Directors shall consist of five (5) ordinary members. The Annual General Meeting of Shareholders re-elected the following ordinary members to the Board of Directors: Tero Kivisaari, Jan Lönnblad, Juha Nurminen, Jukka Nurminen and Olli Pohjanvirta. In its organising meeting immediately following the Annual General Meeting of Shareholders, the Board of Directors elected Olli Pohjanvirta as the Chairman of the Board. The Board of Directors also appointed an Audit Committee. The members of the Audit Committee are Tero Kivisaari and Jukka Nurminen.
The Annual General Meeting of Shareholders resolved that for the members of the Board elected at the Annual General Meeting for the term ending at the close of the Annual General Meeting in 2013 will remuneration level be as follows: annual remuneration of EUR 80,000 for the Chairman and EUR 15,000 for the other members. Additionally a meeting fee of EUR 700 per meeting shall be paid for each member of the Board. 50 per cent of the annual remuneration will be paid in the form of Nurminen Logistics Plc's shares and the remainder in money. A member of the Board of Directors may not transfer shares received as annual remuneration before a period of three years has elapsed from receiving shares.
Authorising the Board of Directors to decide on the repurchase of the company's own shares
Annual General Meeting authorised the Board to decide on the repurchasing a maximum of 50,000 of the company's shares. The authorisation will be used for the paying of remuneration of the Board members. The own shares may be repurchased pursuant to the authorisation only by using unrestricted equity. The price payable for the shares shall be based on the price of the company's shares in public trading. The own shares may be repurchased in deviation from the proportional shareholdings of the shareholders (directed repurchase). The authorisation includes the right whereby the Board is authorised to decide on all other matters related to the acquisition of own shares.
The authorisation remains in force until 30 April 2013.
Authorising the Board of Directors to decide on the issuance of shares as well as the issuance of options and other special rights entitling to shares
Annual General Meeting authorised the Board to decide on issuance of shares and/or special rights entitling to shares pursuant to chapter 10 section 1 of the Finnish Companies Act.
Based on the aforesaid authorisation the Board is entitled to release or assign, either by one or several resolutions, shares and/or special rights up to a maximum equivalent of 20,000,000 new shares so that aforesaid shares and/or special rights can be used, e.g., for the financing of company and business acquisitions corporate and business trading or for other business arrangements and investments, for the expansion of owner structure, paying of remuneration of the Board members and/or for the creating incentives for, or encouraging commitment in, personnel.
The authorisation gives the Board the right to decide on share issue with or without payment. The authorisation for deciding on a share issue without payment also includes the right to decide on the issue for the company itself, so that the number of shares granted to the company is no more than one tenth of all shares of the company.
The authorisation includes the right whereby the Board is entitled to decide of all other issues of shares and special rights. Furthermore, the Board is entitled to decide on share issues, option rights and other special rights in every way similarly as the Annual General Meeting could decide on these. The authorisation also includes right to decide on directed issues of shares and/or special rights.
The authorisation remains in force until 30 April 2013.
Auditor
KPMG Oy Ab, Authorised Public Accountant audit-firm, was re-elected as Nurminen Logistics Plc's auditor. Mr Lasse Holopainen acts as the responsible auditor. The auditor's term ends at the end of the first Annual General Meeting following the election. Auditor’s fee and costs will be paid in accordance with their invoice.
DIVIDEND POLICY
The company’s Board of Directors has on 14 May 2008 determined the company’s dividend policy, according to which Nurminen Logistics Plc aims to annually distribute as dividends approximately one third of its net profit, provided that the company’s financial position allows this.
AUTHORISATIONS GIVEN TO THE BOARD
Authorising the Board of Directors to decide on the repurchase of the company's own shares
Annual General Meeting authorised the Board to decide on the repurchasing a maximum of 50,000 of the company's shares. The authorisation will be used for the paying of remuneration of the Board members. The own shares may be repurchased pursuant to the authorisation only by using unrestricted equity. The price payable for the shares shall be based on the price of the company's shares in public trading. The own shares may be repurchased in deviation from the proportional shareholdings of the shareholders (directed repurchase). The authorisation includes the right whereby the Board is authorised to decide on all other matters related to the acquisition of own shares.
The authorisation remains in force until 30 April 2013.
Authorising the Board of Directors to decide on the issuance of shares as well as the issuance of options and other special rights entitling to shares
Annual General Meeting authorised the Board to decide on issuance of shares and/or special rights entitling to shares pursuant to chapter 10 section 1 of the Finnish Companies Act.
Based on the aforesaid authorisation the Board is entitled to release or assign, either by one or several resolutions, shares and/or special rights up to a maximum equivalent of 20,000,000 new shares so that aforesaid shares and/or special rights can be used, e.g., for the financing of company and business acquisitions corporate and business trading or for other business arrangements and investments, for the expansion of owner structure, paying of remuneration of the Board members and/or for the creating incentives for, or encouraging commitment in, personnel.
The authorisation gives the Board the right to decide on share issue with or without payment. The authorisation for deciding on a share issue without payment also includes the right to decide on the issue for the company itself, so that the number of shares granted to the company is no more than one tenth of all shares of the company.
The authorisation includes the right whereby the Board is entitled to decide of all other issues of shares and special rights. Furthermore, the Board is entitled to decide on share issues, option rights and other special rights in every way similarly as the Annual General Meeting could decide on these. The authorisation also includes right to decide on directed issues of shares and/or special rights.
The authorisation remains in force until 30 April 2013.
EXTRAORDINARY GENERAL MEETING
Nurminen Logistics Plc’s Extraordinary General Meeting of Shareholders held on 5 October 2012 made the following decision:
Return on equity
In accordance with the proposal of the Board of Directors, the Extraordinary General Meeting resolved that EUR 0.07 per share shall be distributed from the other reserves of the unrestricted equity as repayment of equity on the basis of the balance sheet adopted in respect of the financial year ending on 31 December 2011. The repayment of equity is paid to shareholders registered in the company's shareholders’ register maintained by Euroclear Finland Ltd on the record date, 10 October 2012. The payment date is 25 October 2012.
OTHER EVENTS DURING THE REVIEW PERIOD
Nurminen Logistics publishes preliminary information of its January-March 2012 result and updates its outlook to be more positive
On 12 April 2012, Nurminen Logistics announced its decision to publish preliminary information of its January-March 2012 result because the result in the review period was higher than expected.
Nurminen Logistics’ year started better than expected and the company improved its net sales and operating profit. This was mostly due to the increased profitability of railway logistics and more efficient operation of wagons. The company’s railway logistics sales in Russia and other CIS countries developed better than planned. The company was also able to increase its net sales in transit logistics from the Baltic countries and Finland to Russia.
Nurminen Logistics updates its outlook for 2012.
Outlook published on 24 February 2012:
The net sales of the company are expected to increase in 2012 compared to 2011. The company’s operating result is expected to be better than in 2011.
New outlook published on 12 April 2012:
The net sales of the company are expected to increase in 2012 compared to 2011. The company’s operating result is expected to be clearly better than in 2011.
Nurminen Logistics updates its outlook to be more positive
The company issued a stock exchange release on 25 September 2012 to announce its decision to update its outlook for the year to be more positive. The year exceeded expectations, particularly with regard to the company’s result. The company’s performance has improved across all business areas.
Profitability has improved particularly in railway logistics due to the positive development in Russian operations, greater efficiency in the operation of wagons and strong development in the customer base. The company’s transit logistics business in the Baltic countries has also developed better than expected.
Nurminen Logistics updates its outlook for 2012.
Outlook published on 12 April 2012:
The net sales of the company are expected to increase in 2012 compared to 2011. The company’s operating result is expected to be clearly better than in 2011.
New outlook published on 25 September 2012:
The net sales of the company are expected to increase in 2012 compared to 2011. The company’s operating result is expected to be significantly better than in 2011, with the estimated figure being EUR 5-6 million.
Nurminen Logistics to align its legal corporate structure with the structure of its business operations
Nurminen Logistics Plc issued a stock exchange release on 12 October 2012 announcing its plans to turn its operations in Finland into independent companies and restructure its Baltic operations. In this transformation, Nurminen Logistics Plc’s Forwarding and Value Added Services, Railway Logistics and Transit Logistics business units will be formed into an independent company and the Special Transports and Projects business unit will be transformed into another independent company. These two new Finnish companies will start operating under the new structure on 1 January 2013. The companies responsible for the Estonian and Lithuanian operations will be transferred directly under the parent company during 2012. The Russian operations will continue as a separate company. After these changes, Nurminen Logistics Plc will be the direct parent company of all companies.
This restructuring is purely administrative in nature; with it, the company streamlines its legal structure and cost allocation to current business operations. All business operations of the Finnish business units mentioned above will be transferred to the new companies. Personnel will transfer to the new companies with unchanged terms of employment.
Turning these business operations into independent companies has no effect on Nurminen Logistics Plc’s financial reporting. The reported segments will still be Forwarding and Value Added Services, Special Transports and Projects, Railway Logistics and Transit Logistics.
The Group management and supporting functions will remain in Nurminen Logistics Plc and provide the Group companies with financial and administrative services.
EVENTS AFTER THE REVIEW PERIOD
Liquidity providing in the share of Nurminen Logistics Plc ends
The company issued a stock exchange release on 17 January 2013 announcing that the market making in accordance with the liquidity providing agreement between Nurminen Logistics Plc and Evli Bank Plc for the share of Nurminen Logistics Plc will end on 18 February 2013.
Nurminen Logistics starts co-determination negotiations for its Finnish operations
Nurminen Logistics issued a stock exchange release on 31 January 2013 announcing that it is to commence co-determination negotiations pertaining to all personnel in Finland. The Group is planning structural changes to improve its competitiveness and boost the efficiency of its Finnish operations. The reasons for the planned changes include structural changes in demand and flows of goods in Finland and the insufficient profitability of the Group’s Finnish operations. The negotiations concern all of the company’s personnel in Finland, 270 employees in total. The adjustment requirement is estimated to be no more than 28 man-years. The aim of the changes is to achieve some EUR 800,000 in annual cost savings at the Group level. The planned measures would involve a one-time cost of no more than EUR 400,000, which would be recorded in the second quarter of 2013.
The planned changes in production structure will not affect the company’s strategy of strengthening its position in domestic railway transport in Russia and nearby countries as well as railway transport between Finland and Russia.
BOARD OF DIRECTORS’ PROPOSAL FOR PROFIT DISTRIBUTION
Based on the financial statements as at 31 December 2012, the parent company’s distributable equity is 32,127,845.33 euros. The Board of Directors proposes to the Annual General Meeting that EUR 0.08 per share be distributed to shareholders from the other reserves of the unrestricted equity as repayment of equity.
ANNUAL GENERAL MEETING 2013
The Annual General Meeting of Nurminen Logistics Plc will take place on Monday, 15 April 2013 starting at 10.00 a.m. at the address Pasilankatu 2, 00240 Helsinki, Finland.
CORPORATE GOVERNANCE STATEMENT
The Corporate Governance Statement of Nurminen Logistics Plc will be published on 20 March 2013 on the company’s website at www.nurminenlogistics.com.
Disclaimer
Certain statements in this bulletin are forward-looking and are based on the management's current views. Due to their nature, they involve risks and uncertainties and are susceptible to changes in the general economic or industry conditions.
Nurminen Logistics Plc
Board of Directors
For more information, please contact: Topi Saarenhovi, President and CEO, tel. +358 10 545 2431.
DISTRIBUTION
NASDAQ OMX Helsinki
Major media
www.nurminenlogistics.com
Nurminen Logistics provides high-quality logistics services, such as railway transports, terminal services, forwarding, special and heavy transport and value added services. The company has collected logistics know-how from three centuries, starting in 1886. Nurminen Logistics’ main market areas are Finland, the Baltic Sea region, Russia and other Eastern European countries. The company’s share is listed on NASDAQ OMX Helsinki.
TABLES
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | 1-12/2012 | 1-12/2011 |
| EUR 1,000 | ||
| NET SALES | 78 396 | 76 630 |
| Other operating income | 721 | 1 037 |
| Materials and services | -33 801 | -37 431 |
| Employee benefit expenses | -15 900 | -14 994 |
| Depreciation, amortisation and impairment losses | -4 004 | -4 185 |
| Other operating expenses | -19 991 | -19 110 |
| OPERATING RESULT | 5 421 | 1 947 |
| Financial income | 478 | 146 |
| Financial expenses | -2 040 | -2 931 |
| Share of profit in equity-accounted investees | 185 | 91 |
| RESULT BEFORE TAX | 4 044 | -746 |
| Income taxes | -1 360 | -784 |
| PROFIT/LOSS FOR THE PERIOD | 2 684 | -1 530 |
| Other comprehensive income: | ||
| Translation differences | 867 | -887 |
| Other comprehensive income for the period after tax | 867 | -887 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 3 552 | -2 417 |
| Result attributable to | ||
| Equity holders of the parent company | 682 | -2 458 |
| Non-controlling interest | 2 002 | 928 |
| Total comprehensive income attributable to | ||
| Equity holders of the parent company | 1 550 | -3 345 |
| Non-controlling interest | 2 002 | 928 |
| EPS undiluted | 0,05 | -0,19 |
| EPS diluted | 0,05 | -0,19 |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | 10-12/2012 | 10-12/2011 | Change |
| EUR 1,000 | |||
| NET SALES | 18 404 | 19 418 | -1 014 |
| Other operating income | 217 | 614 | -397 |
| Materials and services | -7 725 | -9 000 | 1 275 |
| Employee benefit expenses | -4 017 | -4 089 | 73 |
| Depreciation, amortisation and impairment losses | -976 | -1 010 | 34 |
| Other operating expenses | -5 219 | -4 924 | -296 |
| OPERATING RESULT | 684 | 1 009 | -325 |
| Financial income | 25 | -34 | 59 |
| Financial expenses | -624 | -840 | 217 |
| Share of profit in equity-accounted investees | 57 | -117 | 174 |
| RESULT BEFORE TAX | 142 | 18 | 124 |
| Income taxes | -294 | -265 | -28 |
| PROFIT/LOSS FOR THE PERIOD | -151 | -247 | 96 |
| Other comprehensive income: | |||
| Translation differences | -158 | 10 | -168 |
| Other comprehensive income for the period after tax | -158 | 10 | -168 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | -309 | -237 | -72 |
| Result attributable to | |||
| Equity holders of the parent company | -339 | -504 | 165 |
| Non-controlling interest | 188 | 257 | -69 |
| Total comprehensive income attributable to | |||
| Equity holders of the parent company | -497 | -494 | -3 |
| Non-controlling interest | 188 | 257 | -69 |
| EPS undiluted | -0,03 | -0,04 | 0,01 |
| EPS diluted | -0,03 | -0,04 | 0,01 |
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | 31.12.2012 | 31.12.2011 |
| EUR 1,000 | ||
| ASSETS | ||
| Non-current assets | ||
| Property, plant, equipment | 38 737 | 40 785 |
| Goodwill | 9 516 | 9 516 |
| Other intangible assets | 813 | 719 |
| Investments in equity-accounted investees | 389 | 309 |
| Receivables | 35 | 35 |
| Deferred tax assets | 1 068 | 954 |
| NON-CURRENT ASSETS | 50 558 | 52 318 |
| Current assets | ||
| Trade and other receivables | 14 157 | 14 509 |
| Current tax receivables | 156 | 37 |
| Cash and cash equivalents | 4 901 | 2 490 |
| CURRENT ASSETS | 19 214 | 17 036 |
| ASSETS TOTAL | 69 772 | 69 354 |
| EQUITY AND LIABILITIES | ||
| Share capital | 4 215 | 4 215 |
| Other reserves | 17 346 | 17 896 |
| Retained earnings | 5 799 | 4 673 |
| Non-controlling interest | 2 437 | 1 064 |
| EQUITY, TOTAL | 29 797 | 27 848 |
| Non-current liabilities | ||
| Deferred tax liabilities | 431 | 398 |
| Other liabilities | 656 | 635 |
| Interest-bearing finance liabilities | 17 571 | 19 044 |
| NON-CURRENT LIABILITIES | 18 658 | 20 077 |
| Current liabilities | ||
| Current tax liabilities | 283 | 2 |
| Interest-bearing finance liabilities | 11 536 | 9 997 |
| Trade payable and other liabilities | 9 497 | 11 430 |
| CURRENT LIABILITIES | 21 317 | 21 429 |
| TOTAL LIABILITIES | 39 975 | 41 506 |
| TOTAL EQUITY AND LIABILITIES | 69 772 | 69 354 |
| CONDENSED CONSOLIDATED CASH FLOW STATEMENT | 1-12/2012 | 1-12/2011 |
| CASH FLOW FROM OPERATING ACTIVITIES | ||
| Profit/Loss for the period | 2 684 | -1 530 |
| Gains and losses on disposals of property, plant and equipment and other non-current assets | -559 | -32 |
| Depreciation, amortisation and impairment losses | 4 004 | 4 185 |
| Unrealised foreign exchange gains and losses | -322 | 234 |
| Other adjustments | 2 603 | 2 731 |
| Paid and received interest | -1 300 | -1 505 |
| Taxes paid | -1 160 | -995 |
| Changes in working capital | -1 578 | 1 781 |
| Cash flow from operating activities | 4 372 | 4 868 |
| CASH FLOW FROM INVESTING ACTIVITIES | ||
| Proceeds from sale of property, plant and equipment and intangible assets | 639 | 54 |
| Investments in property, plant and equipment and intangible assets | -1 151 | -905 |
| Proceeds from sale of interests in associate | 0 | 404 |
| Cash flow from investing activities | -512 | -448 |
| CASH FLOW FROM FINANCING ACTIVITIES | ||
| Investment by non-controlling interest | 63 | 0 |
| Acquistion of own shares | -70 | -47 |
| Changes in liabilities | 66 | -3 569 |
| Dividends paid / repayments of equity | -1 532 | -857 |
| Cash flow from financing activities | -1 474 | -4 473 |
| CHANGE IN CASH AND CASH EQUIVALENTS | 2 411 | -73 |
| Cash and cash equivalents at beginning of period | 2 490 | 2 563 |
| Cash and cash equivalents at end of period | 4 901 | 2 490 |
A= Share capital
B= Share premium reserve
C= Legal reserve
D= Reserve for invested unrestricted equity
E= Translation differences
F= Retained earnings
G= Non-controlling interest
H= Total
| STATEMENT OF CHANGES IN EQUITY 1-12/11 EUR 1,000 | A | B | C | D | E | F | G | H |
| Equity 1.1.2011 | 4215 | 86 | 2378 | 19178 | -3352 | 7373 | 993 | 30872 |
| Result for the period | 0 | 0 | 0 | 0 | 0 | -2458 | 928 | -1530 |
| Total comprehensive income for the period / translation differences | 0 | 0 | 0 | 0 | -348 | -540 | 0 | -887 |
| Other changes | 0 | 0 | 0 | -47 | 0 | 297 | 0 | 250 |
| Dividends / repayments of equity | 0 | 0 | 0 | 0 | 0 | 0 | -857 | -857 |
| Equity 31.12.2011 | 4215 | 86 | 2378 | 19131 | -3699 | 4673 | 1064 | 27848 |
| STATEMENT OF CHANGES IN EQUITY 1-12/12 EUR 1,000 | A | B | C | D | E | F | G | H |
| Equity 1.1.2012 | 4215 | 86 | 2378 | 19131 | -3699 | 4673 | 1064 | 27848 |
| Result for the period | 0 | 0 | 0 | 0 | 0 | 682 | 2002 | 2684 |
| Total comprehensive income for the period / translation differences | 0 | 0 | 0 | 0 | 423 | 444 | 0 | 867 |
| Other changes | 0 | 0 | 0 | -70 | 0 | -1 | 0 | -71 |
| Dividends / repayments of equity | 0 | 0 | 0 | -903 | 0 | 0 | -628 | -1532 |
| Equity 31.12.2012 | 4215 | 86 | 2378 | 18158 | -3276 | 5799 | 2437 | 29797 |
RELATED PARTY TRANSACTIONS
The related parties comprise the members of the Board of Directors and Executive Board of Nurminen Logistics and companies in which these members have control. Related parties are also deemed to include shareholders with direct or indirect control or substantial influence. Information on the management remuneration is presented in the notes of the financial statements.
| Related party transactions | |
| EUR 1,000 | 1-12/2012 |
| Sales | 10 |
| Purchases | 30 |
| Interest expenses | 97 |
| Current receivables | 6 |
| Current liabilities | 1 271 |
KEY FIGURES
| KEY FIGURES | 1-12/2012 | 1-12/2011 |
| Gross capital expenditure, EUR 1,000 | 1 145 | 905 |
| Personnel | 341 | 343 |
| Operating margin % | 6,9 % | 2,5 % |
| Share price development | ||
| Share price at beginning of period | 1,78 | 2,89 |
| Share price at end of period | 1,88 | 1,78 |
| Highest for the period | 2,34 | 3,00 |
| Lowest for the period | 1,78 | 1,51 |
| Equity/share EUR | 2,12 | 2,08 |
| Earnings/share (EPS) EUR, undiluted | 0,05 | -0,19 |
| Earnings/share (EPS) EUR, diluted | 0,05 | -0,19 |
| Equity ratio % | 42,71 | 40,15 |
OTHER LIABILITIES AND COMMITMENTS
| Contingencies and commitments, 1000 eur | 31.12.2012 | 31.12.2011 |
| Mortgages given | 11 000 | 7 000 |
| Other contingent liabilities | 14 580 | 11 458 |
| Rent liabilities | 79 174 | 83 766 |
Accounting policies
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) complying with the standards and interpretations effective on 31 December 2012. This year-end report has been prepared in accordance with IAS 34 'Interim Financial Reporting'. The IFRS recognition and measurement principles as described in the annual financial statements for 2011 have also been applied in the preparation of the interim financial information, with the changes mentioned below. Other adopted new and amended IFRS-standards and interpretations have not had significant impact on reported figures.
The Group has applied the following revised and amended standards as of 1
January 2012:
Amendments to IFRS 7 Financial Instruments: Disclosures: The amendments will promote transparency in the reporting of transfer transactions and improve users’ understanding of the risk exposures relating to transfers of financial instruments and the effect of those risks on an entity’s financial position, particularly those involving securitisation of financial assets.
All figures have been rounded and consequently the sum of individual figures can deviate from the presented sum figure. Key figures have been calculated using exact figures. The financial statement report’s financials are audited.
Calculation of Key Figures
Equity ratio (%) =
Equity
______________________________________ x 100
Balance sheet total – advances received
Earnings per share (EUR) =
Result attributable to equity holders of the parent company
_________________________________________________________
Weighted average number of ordinary shares outstanding
Equity per share (EUR) =
Equity attributable to equity holders of the parent company
________________________________________
Number of shares at the end of the financial year, adjusted for the share issue