Vieremä, Finland, 2014-04-23 08:00 CEST (GLOBE NEWSWIRE) --
PONSSE’S INTERIM REPORT FOR 1 JANUARY – 31 MARCH 2014
– Net sales amounted to EUR 86.9 (61.6) million.
– Operating result totalled EUR 7.4 (0.1) million, equalling 8.5 (0.2) per cent of net sales.
– Result before taxes was EUR 6.9 (0.7) million.
– Cash flow from operating activities was EUR 2.2 (12.7) million.
– Earnings per share were EUR 0.19 (0.00).
– Equity ratio was 37.9 (32.3) per cent.
– Order books stood at EUR 104.1 (49.1) million.
PRESIDENT AND CEO JUHO NUMMELA:
The good outlook in the forestry sector had a positive impact. The demand for forest machines was at a good level during the first quarter. The order volume of new machines increased, and our order book continued to increase, ending up at EUR 104.1 (49.1) million. The order book grew by 112 per cent compared with the comparable period.
Russia, an important market area for us, was still at a normal level, and the unstable situation in Ukraine has not had a substantial impact on the Russian market. The positive trend in North America continues, and the market is expected to develop favourably. With regard to European markets, Central Europe has shown signs of recovery, while Sweden is still at a low level in terms of overall market development.
Serial production of the PONSSE Scorpion range has began at the Vieremä factory. The demand for the PONSSE Scorpion has continued to be active, and the feedback from the demonstration tours has been extremely positive. The demand for other product models has been at a good level as well, and as a result of the active order intake, the factory operates in the normal two shifts.
The service business continued to grow significantly. At the same time, our used machine sales continued its moderate growth. Sales of new machines returned to the normal level from the weak comparable period, and the net sales for the quarter were good for a first quarter, at EUR 86.9 (61.6) million. Net sales increased by 41 per cent from the corresponding period.
The operating result amounted to EUR 7.4 (0.1) million during the first quarter, equalling 8.5 (0.0) per cent of net sales.
Cash flow from business operations amounted to EUR 2.2 (12.7) million in the period under review. The stock of new products was at a level slightly higher than normal, while the capital tied up in raw materials and consumables increased slightly, but the stock of trade-in machines was correspondingly at a good level. The equity ratio continued to develop favourably, amounting to 37.9 per cent.
Consolidated net sales for the period under review amounted to EUR 86.9 (61.6) million, which is 40.9 per cent more than in the comparison period. International business operations accounted for 69.7 (60.1) per cent of net sales.
Net sales were regionally distributed as follows: Northern Europe 42.7 (52.2) per cent, Central and Southern Europe 19.1 (15.2) per cent, Russia and Asia 13.1 (13.9) per cent, North and South America 25.2 (18.7) per cent and other countries 0.0 (0.0) per cent.
The operating result amounted to EUR 7.4 (0.1) million. The operating result equalled 8.5 (0.2) per cent of net sales for the period under review. Consolidated return on capital employed (ROCE) stood at 22.4 (3.4) per cent.
Staff costs for the period totalled EUR 13.5 (12.6) million. Other operating expenses stood at EUR 8.4 (7.3) million. The net total of financial income and expenses amounted to EUR -0.5 (0.7) million. Exchange rate gains and losses with a net effect of EUR -0.2 (1.0) million were recognised under financial items for the period. Result for the period under review totalled EUR 5.3 (0.5) million. Diluted and undiluted earnings per share (EPS) came to EUR 0.19 (0.00). The interest on the subordinated loan for the period, less tax, has been taken into account in the calculation of EPS.
STATEMENT OF FINANCIAL POSITION AND FINANCING ACTIVITIES
At the end of the period under review, the total consolidated statements of financial position amounted to EUR 191.1 (194.4) million. Inventories stood at EUR 89.9 (87.6) million. Trade receivables totalled EUR 23.6 (19.1) million, while liquid assets stood at EUR 10.2 (23.0) million. Group shareholders’ equity stood at EUR 72.1 (62.1) million and parent company shareholders’ equity (FAS) at EUR 91.9 (81.9) million. The amount of interest-bearing liabilities was EUR 61.2 (75.3) million. The company has used 21 per cent of its credit facility limit. The parent company's net receivables from other Group companies stood at EUR 78.0 (77.2) million. The parent company’s receivables from subsidiaries mainly consisted of trade receivables. Consolidated net liabilities totalled EUR 50.9 (52.3) million, and the debt-equity ratio (net gearing) was 70.6 (84.2) per cent. The equity ratio stood at 37.9 (32.3) percent at the end of the period under review.
Cash flow from operating activities amounted to EUR 2.2 (12.2) million. Cash flow from investment activities came to EUR -4.7 (-3.0) million.
ORDER INTAKE AND ORDER BOOKS
Order intake for the period totalled EUR 92.3 (69.0) million, while period-end order books were valued at EUR 104.1 (49.1) million.
No changes took place in the Group structure during the period under review.
The subsidiaries included in the Ponsse Group are: Epec Oy, Finland; OOO Ponsse, Russia; Ponsse AB, Sweden; Ponsse AS, Norway; Ponsse Asia-Pacific Ltd, Hong Kong; Ponsse China Ltd, China; Ponsse Latin America Ltda, Brazil; Ponsse North America, Inc., the United States; Ponssé S.A.S., France; Ponsse UK Ltd, the United Kingdom; and Ponsse Uruguay S.A., Uruguay. Sunit Oy, based in Kajaani, Finland, is an affiliated company in which Ponsse Plc has a holding of 34 per cent.
R&D AND CAPITAL EXPENDITURE
Group’s R&D expenses during the period under review totalled EUR 2.6 (2.4) million, of which EUR 0.4 (0.6) million was capitalised.
Capital expenditure totalled EUR 4.7 (3.0) million. It consisted in addition to capitalised R&D expenses of ordinary maintenance and replacement investments for machinery and equipment.
The following persons were members of the Management Team: Juho Nummela, President and CEO, acting as the chairman; Juha Haverinen, Factory Director; Petri Härkönen, CFO; Juha Inberg, Technology and R&D Director; Tapio Mertanen, Service Director; Paula Oksman, HR Director; Tommi Väänänen, Purchasing Director and Jarmo Vidgrén, Deputy CEO, Sales and Marketing Director. The company management has regular management liability insurance.
The area director organisation of sales is lead by Jarmo Vidgrén, Group’s Sales and Marketing Director and Tapio Mertanen, Service Director. The geographical distribution and the responsible persons are presented below:
Northern Europe: Jarmo Vidgrén (Finland), Eero Lukkarinen (Sweden, Denmark) and Sigurd Skotte (Norway),
Central and Southern Europe: Janne Vidgrén (Austria, Poland, Romania, Germany, the Czech Republic and Hungary), Clément Puybaret (France), Jussi Hentunen (Spain, Italy, Portugal and Norrbotten/Sweden) and Gary Glendinning (the United Kingdom)
Russia and Asia: Jaakko Laurila (Russia, Belarus), Norbert Schalkx (Japan and the Baltic countries) and Risto Kääriäinen (China),
North and South America: Pekka Ruuskanen (the United States), Marko Mattila (North American dealers), Teemu Raitis (Brazil) and Martin Toledo (Uruguay).
The Group had an average staff of 1,136 (975) during the period and employed 1,158 (981) people at period-end.
The company’s registered share capital consists of 28,000,000 shares. The trading volume of Ponsse Plc shares for 1 January – 31 March 2014 totalled 683,426, accounting for 2.4 per cent of the total number of shares. Share turnover amounted to EUR 7.0 million, with the period’s lowest and highest share prices amounting to EUR 9.02 and EUR 10.75, respectively.
At the end of the period, shares closed at EUR 10.50, and market capitalisation totalled EUR 294.0 million.
At the end of the period under review, the company held 212,900 treasury shares.
ANNUAL GENERAL MEETING
A separate release was issued on 15 April 2014 regarding the authorizations given to the Board of Directors and other resolutions at the AGM.
In its decision-making and administration, the company observes the Finnish Limited Liability Companies Act, other regulations governing publicly listed companies and the company’s Articles of Association. The company’s Board of Directors has adopted the Code of Governance that complies with the Finnish Corporate Governance Code approved by the Board of the Securities Market Association in 2010. The purpose of the code is to ensure that the company is professionally managed and that its business principles and practices are of a high ethical and professional standard.
The Code of Governance is available on Ponsse’s website in the Investors section.
Risk management is based on the company’s values, as well as strategic and financial objectives. Risk management aims to support the achievement of the objectives specified in the company’s strategy, as well as to ensure the financial development of the company and the continuity of its business.
Furthermore, risk management aims to identify, assess and monitor business-related risks which may influence the achievement of the company’s strategic and financial goals or the continuity of its business. Decisions on the necessary measures to anticipate risks and react to observed risks are made on the basis of this information.
Risk management is a part of regular daily business, and it is also included in the management system. Risk management is controlled by the risk management policy approved by the Board.
A risk is any event that may prevent the company from reaching its objectives or that threatens the continuity of business. On the other hand, a risk may also be a positive event, in which case the risk is treated as an opportunity. Each risk is assessed on the basis of its impact and probability. Methods of risk management include avoiding, mitigating and transferring risks. Risks can also be managed by controlling and minimising their impact.
SHORT-TERM RISK MANAGEMENT
The prolonged insecurity in the world economy and weak economic situation may result in a decline in the demand for forest machines. The uncertainty may be increased by the volatility of developing countries’ foreign exchange markets.
The parent company monitors the changes in the Group’s internal and external trade receivables and the associated risk of impairment.
The key objective of the company’s financial risk management policy is to manage liquidity, interest and currency risks. The company ensures its liquidity through credit limit facilities agreed with a number of financial institutions. The effect of adverse changes in interest rates is minimised by utilising credit linked to different reference rates and by concluding interest rate swaps. The effects of currency rate fluctuations are mitigated through derivative contracts.
Changes taking place in the fiscal and customs legislation in countries to which Ponsse exports may hamper the company’s export trade or its profitability.
OUTLOOK FOR THE FUTURE
The Group’s euro-denominated operating profit is expected to be significantly higher than in 2013.
Ponsse’s strongly renewed and competitive product portfolio and maintenance service solutions are having a positive effect on the company’s business operations.
Thanks to the strong order books, the factory is able to produce forest machines at normal capacity. We estimate that the work situation of our customers will also continue to be normal.
Our investments in the buildings of the Vieremä factory, product development and maintenance services, development and renewal of production technology and product development will continue.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1,000)
|Increase (+)/decrease (-) in inventories of finished goods and work in progress||4,884||12,016||5,832|
|Other operating income||243||140||1,053|
|Raw materials and services||-60,791||-52,152||-210,146|
|Expenditure on employment-related benefits||-13,484||-12,594||-49,022|
|Depreciation and amortisation||-1,849||-1,648||-6,568|
|Other operating expenses||-8,440||-7,315||-31,472|
|Share of results of associated companies||-38||-84||-45|
|Financial income and expenses||-532||704||-8,208|
|RESULT BEFORE TAXES||6,852||713||14,248|
|NET RESULT FOR THE PERIOD||5,349||512||9,098|
|OTHER ITEMS INCLUDED IN TOTAL COMPREHENSIVE RESULT:|
|Translation differences related to foreign units||-759||-843||2,955|
|TOTAL COMPREHENSIVE RESULT FOR THE PERIOD||4,590||-331||12,053|
|Diluted and undiluted earnings per share*||0.19||0.00||0.31|
* The interest on the subordinated loan for the period, less tax, was taken into account in this figure.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 1,000)
|ASSETS||31 Mar 14||31 Mar 13||31 Dec 13|
|Property, plant and equipment||38,014||36,675||37,766|
|Investments in associated companies||994||992||1,031|
|Deferred tax assets||1,468||2,022||1,374|
|TOTAL NON-CURRENT ASSETS||59,171||56,426||58,908|
|Income tax receivables||259||897||207|
|Other current receivables||7,975||7,268||6,100|
|Cash and cash equivalents||10,234||23,029||11,958|
|TOTAL CURRENT ASSETS||131,968||137,966||127,140|
|SHAREHOLDERS’ EQUITY AND LIABILITIES|
|EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS||72,140||62,113||67,550|
|Deferred tax liabilities||632||1,175||657|
|Other non-current liabilities||0||0||0|
|TOTAL NON-CURRENT LIABILITIES||39,730||42,646||39,466|
|Tax liabilities for the period||958||65||920|
|Trade creditors and other current liabilities||51,881||50,976||52,002|
|TOTAL CURRENT LIABILITIES||79,270||89,632||79,032|
|TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES||191,139||194,391||186,048|
CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1,000)
|CASH FLOWS FROM OPERATING ACTIVITIES:|
|Net result for the period||5,349||512||9,098|
|Financial income and expenses||532||-704||8,208|
|Share of the result of associated companies||38||84||45|
|Depreciation and amortisation||1,849||1,648||6,568|
|Cash flow before changes in working capital||8,891||2,286||31,706|
|Change in working capital:|
|Change in trade receivables and other receivables||-226||2,238||-81|
|Change in inventories||-4,146||-5,987||-4,131|
|Change in trade creditors and other liabilities||-829||13,580||15,557|
|Change in provisions for liabilities and charges||-256||-214||-359|
|Other financial items||-196||105||-1,063|
|Income taxes paid||-884||704||-2,260|
|NET CASH FLOWS FROM OPERATING ACTIVITIES (A)||2,244||12,693||38,453|
|CASH FLOWS USED IN INVESTING ACTIVITIES|
|Investments in tangible and intangible assets||-4,690||-3,036||-11,188|
|NET CASH FLOWS USED IN INVESTMENT ACTIVITIES (B)||-4,690||-3,036||-11,188|
|CASH FLOWS FROM FINANCING ACTIVITIES|
|Interest paid, hybrid loan||0||-1,136||-1,136|
|Withdrawal/Repayment of current loans||1,428||472||-14,500|
|Change in current interest-bearing liabilities||0||213||-136|
|Withdrawal of non-current loans||245||20,000||29,322|
|Repayment of non-current loans||-760||-342||-10,668|
|Payment of finance lease liabilities||-48||-1,650||-239|
|Change in non-current receivables||-32||-49||172|
|NET CASH FLOWS FROM FINANCING ACTIVITIES (C)||833||-1,493||-23,132|
|Change in cash and cash equivalents (A+B+C)||-1,613||8,164||4,133|
|Cash and cash equivalents on 1 Jan||11,958||14,083||14,083|
|Impact of exchange rate changes||-110||781||-6,259|
|Cash and cash equivalents on 31 Mar/31 Dec||10,234||23,029||11,958|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR 1,000)
|A = Share capital|
|B = Share premium and other reserves|
|C = Translation differences|
|D = Treasury shares|
|E = Retained earnings|
|F = Total shareholders’ equity|
|EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS|
|SHAREHOLDERS’ EQUITY 1 JAN 2014||7,000||30||1,417||-2,228||61,331||67,550|
|Result for the period||5,349||5,349|
|Total comprehensive income for the period||-759||5,349||4,590|
|SHAREHOLDERS' EQUITY 31 MAR 2014||7,000||30||658||-2,228||66,680||72,140|
|SHAREHOLDERS’ EQUITY 1 JAN 2013||7,000||19,030||-1,538||-2,228||59,180||81,444|
|Result for the period||512||512|
|Total comprehensive income for the period||-843||512||-331|
|SHAREHOLDERS' EQUITY 31 MAR 2013||7,000||30||-2,381||-2,228||59,692||62,113|
||31 Mar 14||31 Mar 13||31 Dec 13|
|1. LEASING COMMITMENTS (EUR 1,000)||1,490||2,441||1,691|
|2. CONTINGENT LIABILITIES (EUR 1,000)||31 Mar 14||31 Mar 13||31 Dec 13|
|Guarantees given on behalf of others||463||1,570||487|
|3. PROVISIONS (EUR 1,000)||Guarantee provision|
|1 January 2014||4,618|
|31 March 2014||4,362|
|KEY FIGURES AND RATIOS||31 Mar 14||31 Mar 13||31 Dec 13|
|R&D expenditure (EUR million)||2.6||2.4||9.7|
|Capital expenditure (EUR million)||4.7||3.0||11.2|
|as % of net sales||5.4||4.9||3.6|
|Average number of employees||1,136||975||1,027|
|Order books (EUR million)||104.1||49.1||99.8|
|Equity ratio, %||37.9||32.3||36.5|
|Diluted and undiluted earnings per share (EUR)||0.19||0.00||0.31|
|Equity per share (EUR)||2.58||2.22||2.41|
FORMULAE FOR FINANCIAL INDICATORS
Return on capital employed, %:
Result before tax + financial expenses
Shareholder´s equity + interest-bearing financial liabilities (average during the year) * 100
Average number of employees:
Average of the number of personnel at the end of each month. The calculation has been adjusted for part-time employees.
Net gearing, %:
Interest-bearing financial liabilities – cash and cash equivalents
Shareholders’ equity * 100
Equity ratio, %:
Shareholders’ equity + Non-controlling interests
Balance sheet total - advance payments received * 100
Earnings per share:
Net result for the period - Non-controlling interests - Interest on hybrid loan for the period less tax
Average number of shares during the accounting period, adjusted for share issues
Equity per share:
Number of shares on the balance sheet date, adjusted for share issues
|ORDER INTAKE (EUR million)||1-3/14||1-3/13||1-12/13|
The stock exchange release for the interim report has been prepared observing the recognition and valuation principles of IFRS standards, but not all of the requirements of IAS 34 have been complied with. The same accounting principles were observed for the interim report as for the annual financial statements dated 31 December 2013.
The above figures have not been audited.
The above figures have been rounded and may therefore differ from those given in the official financial statements.
This communication includes future-oriented statements that are based on the assumptions currently made by the company’s management and its current decisions and plans. Although the management believes that the future expectations are well founded, there is no certainty that these expectations will prove to be correct. This is why the results may significantly deviate from the assumptions included in the future-oriented statements as a result of, among other things, changes in the economy, markets, competitive conditions, legislation or currency exchange rates.
Vieremä, 23 April 2014
President and CEO
Juho Nummela, President and CEO, tel. +358 20 768 8914 or +358 400 495 690
Petri Härkönen, CFO, tel. +358 20 768 8608 or +358 50 409 8362
NASDAQ OMX Helsinki Ltd
Ponsse Plc is a company specialising in the sales, manufacture, servicing and technology of cut-to-length method forest machines and is driven by genuine interest in its customers and their business. Ponsse develops and manufactures sustainable and innovative harvesting solutions based on customers’ needs.
The company was established by forest machine entrepreneur Einari Vidgrén in 1970, and it has been a leader in timber harvesting solutions based on the cut-to-length method ever since. Ponsse is headquartered in Vieremä, Finland. The company’s shares are quoted on the NASDAQ OMX Nordic List.