HONKARAKENNE OYJ INTERIM REPORT 30 October 2014 at 3:00 p.m.
HONKARAKENNE OYJ’S INTERIM REPORT, 1 JANUARY – 30 SEPTEMBER 2014
SUMMARY
Third-quarter net sales saw year-on-year growth of 8%. The operating result improved by 202% compared with 2013. Net sales in January-September were up 9% on the previous year and the operating result weakened by 4%.
Net sales in Finland and Russia and CIS continued to develop favourably. Growth was particularly strong in Russia and CIS, with a cumulative year-on-year increase of 28%. Net sales in Global Markets weakened in comparison to the previous year. Decreased demand and strong competition continued to impact on profitability in all markets.
July- September 2014
- The Honkarakenne Group's net sales for the third quarter amounted to MEUR 13.5 (MEUR 12.4 in 2013). Net sales rose by 8 % on the previous year.
- The operating result was MEUR 0.6 (MEUR 0.2). The operating result before non-recurring items was MEUR 0.6 (MEUR 0.2).
- The result before taxes was MEUR 0.5 (MEUR 0.1).
- Earnings per share amounted to EUR 0.07 (EUR 0.03).
January - September 2014
- The Honkarakenne Group's net sales January-September amounted to MEUR 34.0 (MEUR 31.3 in 2013). Net sales rose by 9 % on the previous year.
- The operating result was MEUR -1.9 (MEUR -1.8). The operating result before non-recurring items was MEUR -1.9 (MEUR -1.8).
- The result before taxes was MEUR -2.1 (MEUR -1.6).
- Earnings per share amounted to EUR -0.36 (EUR -0.26).
The Group’s order book stood at MEUR 15.9 at the end of September. In the previous year at the same time period it was MEUR 21.4.
Honkarakenne reiterates the outlook announced in October.
According the Honkarakenne’s view the net sales and result before non-recurring items and taxes will be lower than in the previous year.
| KEY FIGURES |
7-9/ 2014 |
7-9/ 2013 |
1-9/ 2014 |
1-9/ 2013 |
1-12/ 2013 | |
| Net sales, MEUR | 13.5 | 12.4 | 34.0 | 31.3 | 48.3 | |
| Operating profit/loss, MEUR | 0.6 | 0.2 | -1.9 | -1.8 | -1.7 | |
| Operating profit/loss before non-recurring items, MEUR | 0.6 | 0.2 | -1.9 | -1.8 | -1.1 | |
| Profit/loss before taxes, MEUR | 0.5 | 0.1 | -2.1 | -1.6 | -1.7 | |
| Average number of personnel | 153 | 187 | 164 | 221 | 213 | |
| Personnel in person-years, average | 151 | 184 | 156 | 181 | 185 | |
| Earnings/share (EPS), EUR | 0.07 | 0.03 | -0.36 | -0.26 | -0.32 | |
| Earnings/share (EPS), diluted, EUR | 0.07 | 0.03 | -0.36 | -0.26 | -0.32 | |
| Equity ratio, % | 35 | 42 | 38 | |||
| Return on equity, % | -17 | -10 | -13 | |||
| Shareholders' equity/share, EUR | 1.86 | 2.30 | 2.20 | |||
| Gearing, % | 86 | 35 | 57 |
Mikko Kilpeläinen, President and CEO of Honkarakenne Oyj, in connection with the interim report:
"In the third quarter, the Group's net sales growth was 8% on the previous year. Net sales grew in all market areas except Global Markets.
In Finland, our main activities were launching ready-to-move in detached houses and Healthy House model collection. Honkarakenne participated in Jyväskylä Housing Fair with two detached houses. One of them showcased the Healthy House concept, which was developed to cater to the requirements of healthy living. The housing fair reinforced our view that there is clear market demand for healthy construction in Finland. We acquired a substantial number of sales leads at the fair and are currently working on them. At the earliest, they will lead to deliveries during next summer's construction season. Honka continued to increase its market shares in Finland especially in winter-habitable second homes and the detached house segment in spite of the challenging market.
In Russia and CIS, we continued to forge ahead with our tried-and-true area construction concept. Sales in Russia have developed well and the outlook for the rest of the year is also good.
The development of net sales in Global Markets has not been satisfactory. In Japan, exchange rates and the sales tax hike that came into force in early 2014 have slowed down sales. Sales development has continued in the Chinese market. We shipped our first deliveries to China in the third quarter."
NET SALES
Honkarakenne Group’s net sales for the third quarter of 2014 increased by 8 per cent to MEUR 13.5 (MEUR 14.4).
Geographical distribution of net sales:
| DEVELOPMENT OF SALES | ||||||||||
|
Distribution of net sales, % |
1-9 /2014 |
1-9 /2013 |
||||||||
| Finland & Baltics | 46 % | 45 % | ||||||||
| Russia & CIS | 37 % | 28 % | ||||||||
| Global Markets | 17 % | 27 % | ||||||||
| Total | 100 % | 100 % | ||||||||
| Net sales, MEUR |
7-9 /2014 |
7-9 /2013 |
change % |
1-9 /2014 |
1-9 /2013 |
change % | ||||
| Finland & Baltics | 6.2 | 5.5 | 12 % | 17.3 | 15.3 | 13 % | ||||
| Russia & CIS | 4.9 | 3.5 | 42 % | 10.1 | 7.9 | 28 % | ||||
| Global Markets | 2.3 | 3.4 | -31 % | 6.7 | 8.1 | -17 % | ||||
| Total | 13.5 | 12.4 | 8 % | 34.0 | 31.3 | 9 % | ||||
Finland & Baltics includes the following countries: Finland, Estonia, Latvia and Lithuania. It includes also Process waste sales for recycling and power production.
Russia & CIS includes the following countries: Russia, Azerbaijan, Kazakhstan, Ukraine and other CIS countries.
Global Markets includes other countries than above-mentioned.
The Group’s order book stood at MEUR 15.9 at the end of September. In the previous year at the same time period it was MEUR 21.4.
TRENDS IN PROFIT AND PROFITABILITY
Operating loss for January-September was MEUR -1.9 (MEUR -1.8) and profit before taxes was MEUR -2.1 (MEUR -1.6).
The operating result was affected by price competition in all markets. In addition the implementation of new production lines at the end of June increased production costs in the first half of the year.
FINANCING AND INVESTMENTS
The financial position of the Group was satisfactory at the end of the report period. The equity ratio stood at 35 % (42 %) and net financial liabilities at MEUR 7.9 (MEUR 3.9). MEUR 2.4 (MEUR 1.7) of the financial liabilities carries a 30 % equity ratio covenant term. Group liquid assets totalled MEUR 1.3 (MEUR 4.3). The Group also has a MEUR 8.0 (MEUR 8.0) bank overdraft facility, MEUR 4.2 of which had been drawn on at the end of the report period (MEUR 4.6). Gearing stood at 86 % (35 %).
The Group's capital expenditure totalled MEUR 1.0 (MEUR 1.3). The capital expenditure consist modernised and more efficient production lines which were finalised at the end of June.
MARKET DEVELOPMENT
The Confederation of Finnish Construction Industries expects that the construction of a total of 6,000 detached houses will be begun this year, which is the lowest number in almost twenty years. According to a study commissioned by RTS Oy, Finnish log house production is expected to decrease by 5% this year, this includes also export.
In addition, market development is slowed by the fact that availability of bank loans has become more difficult for both detached and holiday home construction.
PRODUCTS AND MARKETING
In the Finland & Baltics market area, price competition continued to be severe due to the difficult market situation. During the third quarter, we focused our efforts on the Jyväskylä Housing Fair by showcasing two houses. At the fair, we gained particularly great interest with our Healthy House concept.
In Russia & CIS, we continued to develop area construction projects. In spite of the political situation, sales to Russia have developed well and the outlook for the rest of the year is also good.
In Global Markets, measures focused on developing the Chinese market. The first deliveries to China were made during the third quarter. In the Japanese market, sales are hindered by the trend in exchange rates and the sales tax hike that came into force in the spring.
RESEARCH AND DEVELOPMENT
In R&D, we continued to develop the Healthy House model collection and our focus on the special features of the Chinese market.
In the January - September period, the Group's R&D expenditure totalled MEUR 0.4 (MEUR 0.3), representing 1.1 % of net sales (0.8 %). The Group did not capitalise any development expenditure during the report period.
STAFF
During the third quarter, the Group employed 153 (187) people on average. By the end of the review period, the average number of employees for current year totalled 164 (221), representing a year-on-year decrease of 57. At the end of the review period, the Group had 153 (181) employees, 28 less than in the corresponding period of the previous year.
In terms of person years, the Group employed a total of 151 (184) people on average during the third quarter and the average number of employees for January - September totalled 156 (181) at the end of the review period, representing a year-on-year decrease of 25 in person years.
On the basis of the co-operation negotiations that ended in December 2013, the company had the authorisation to implement temporary lay-offs of a maximum of 90 days affecting its personnel in Finland until the end September 2014.
In August 2014 the company concluded co-operation negotiations and as a result it was agreed that Honkarakenne has authorisation to implement temporary lay-offs of a maximum of 90 days affecting its personnel in Finland until the end of February 2015.
LONG-TERM INCENTIVE PLAN
In the second quarter of 2013, the Board of Directors decided on a long-term share-based incentive plan for members of the Executive Group. The performance period of the new plan began on 1 January 2013 and will end on 31 December 2016. The potential reward for the performance period is based on the cumulative earnings per share (EPS) for 2013 - 2016 and on the average return on capital employed (ROCE) for 2013 - 2016. Any rewards for the performance period 2013 - 2016 will be paid partly as B shares and partly in cash in 2017. The rewards to be paid on the basis of the performance period will correspond to a total maximum of about 340,000 B shares, including the amount to be paid in cash.
In January - September the number of allocated shares was 3,361. These allocated shares are recognised as follows: 6 (20) thousand euros for employee benefit expenses, 0 (2) thousand euros for income tax deductions and deferred tax assets and 5 (11) thousand euros in retained earnings.
HONKARAKENNE OYJ’S 2014 ANNUAL GENERAL MEETING, BOARD OF DIRECTORS, AND AUDITORS
The Annual General Meeting of Honkarakenne Oyj was held at the company’s headquarters in Tuusula on 4 April 2014. The AGM approved the parent company's and the consolidated Financial Statements, and discharged the members of the Board of Directors and the CEO from liability for 2013. The AGM decided not to pay a dividend for the 2013 financial year.
Teijo Pankko and Mauri Saarelainen were re-elected to the Board of Directors. Arto Tiitinen, Anita Saarelainen and Hannu Krook were elected to the Board as new members. At the Board's constituent meeting, Arto Tiitinen was elected Chairman of the Board. Mauri Saarelainen was elected as Deputy Chairman. The Board of Directors decided not to elect any committees from among its members.
PricewaterhouseCoopers Oy, member of the Finnish Institute of Authorised Public Accountants, was re-appointed as auditor of the company, with Maria Grönroos, APA, as chief auditor.
HONKARAKENNE OYJ's DIRECTED ISSUE, OWN SHARES AND BOARD AUTHORISATIONS
On the basis of an authorisation to issue shares granted to the Board of Directors at the Annual General Meeting of 5 April 2013, the Board decided (on 10 January 2014) to arrange a directed issue to Honkarakenne employees. The Board approved a total of 42,451 subscriptions for new Series B shares through the directed issue. The Series B shares subscribed for through the directed issue represent about 0.9 per cent of the total number of Series B shares and the voting rights conferred by them. 62 company employees subscribed for shares through the directed issue. Shares were offered to a total of 146 employees. The total number of Series B shares increased to 4,911,323 shares after the new shares were registered in the Trade Register.
At the end of the review period, the total number of Honkarakenne Oyj shares entered in the Trade Register amounted to 5,211,419, of which 300,096 were Series A shares and 4,911,323 Series B shares. Each B share carries one (1) vote and each A share carries twenty (20) votes. Hence, Honkarakenne’s shares in aggregate carry a total of 10,913,243 votes. The company's registered share capital is EUR 9,897,936.00.
Honkarakenne has not acquired its own shares during the report period. At the end of the report period, the Group held 364,385 of its Honkarakenne B shares with a total purchase price of EUR 1,381,750.23. These shares represent 6.99 % of the company's all shares and 3.34 % of all votes. The purchase cost has been deducted from shareholders' equity in the consolidated financial statements.
On 4 April 2014, the AGM decided that the Board of Directors will be authorised to acquire a maximum of 400,000 of the company’s own B shares with assets included in the company’s unrestricted equity. In addition, the AGM authorised the Board to decide on a rights issue or bonus issue and on granting special rights to shares referred to in Section 1 of Chapter 10 of the Limited Liability Companies Act in one or more instalments. By virtue of the authorisation, the Board may issue a maximum total of 400,000 new shares and/or relinquish old B shares held by the company, including those shares that can be issued by virtue of special rights. Both authorisations will be valid until 25 March 2015.
CORPORATE GOVERNANCE
Honkarakenne Oyj follows the Limited Liability Companies Act and the Finnish Corporate Governance Code, 1 October 2010, for listed companies issued by the Finnish Securities Market Association. The company's website, www.honka.com, provides more information on the corporate governance systems.
FUTURE OUTLOOK
The market situation remains uncertain. The Finnish market is being impacted by the general low level of construction in both the detached house and holiday home sectors. The situation in Ukraine and its associated sanctions are causing uncertainty in the Russian market.
At the end of September, the Group's order book stood at MEUR 15.9, down 26 % on the corresponding period of the previous year, when it stood at MEUR 21.4. The order book refers to orders whose delivery date falls within the next 24 months. Some orders may include terms and conditions relating to financing or building permits.
FORTHCOMING RISKS AND UNCERTAINTIES
Changes in the Russian market in particular may lead to amendments to the future outlook. However, sales have thus far been better than last year.
The economic situation in Finland is weak. Both detached house and holiday home construction is waning. In addition, it is now even more difficult for customers to obtain financing from banks.
The Group has one concentration of credit risks in sales receivables, concerning the open sales receivables of one dealer. No provision for doubtful debt has been made for this. A payment plan has been made with this dealer. The payment plan is intended to be completed in 2014.
The assessment of amounts in the balance sheet is based on current assessment by the management. If these assessments are changed, this may result in changes to the Group's result.
REPORTING
This report contains statements that relate to the future, and these statements are based on hypotheses that the company's management hold currently as well as on the decisions and plans that are currently in place. Although the management believes that the hypotheses relating to the future are well-founded, there is no guarantee that the said hypotheses will prove to be correct.
This interim report has been drafted in accordance with IAS 34. The principles adhered to in preparing the annual financial statements also apply to this interim report. The interim report should be read together with the annual financial statements for 2013. The new revised standards or interpretations effective as of 1 January 2014 have no bearing on the figures presented for the report period. The figures have not been examined by the auditor.
EVENTS AFTER THE REVIEW PERIOD
On 7 October 2014, Honkarakenne announced that it will continue with its development programme. In the current phase, the target is to achieve savings of three million euros. The development programme is expected to come into full effect during the third quarter of 2015. The programme might result in non-recurring costs in 2014.
In connection with this Honkarakenne initiated co-operation negotiations which may lead to redundancy. According the preliminary estimate the reduction of workforce is maximum 25 persons.
THE OUTLOOK FOR 2014
Honkarakenne reiterates the outlook announced in October.
According the Honkarakenne’s view the net sales and result before non-recurring items and taxes will be lower than in the previous year.
HONKARAKENNE OYJ
Board of Directors
Further information:
Mikko Kilpeläinen, President and CEO, tel. +358 50 542 5884, mikko.kilpelainen@honka.com or
Mikko Jaskari, CFO, tel. +358 400 535 337, mikko.jaskari@honka.com
This and previous releases are available for viewing on the company’s website at www.honka.com. Honkarakenne publishes its financial results from 2014 on 12 February 2015.
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
Financial Supervisory Authority
www.honka.com
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
|||||
| unaudited | 7-9 /2014 | 7-9 /2013 |
1-9 /2014 |
1-9 /2013 |
1-12 /2013 |
| MEUR | |||||
| Net sales | 13.5 | 12.4 | 34.0 | 31.3 | 48.3 |
| Other operating income | 0.2 | 0.0 | 0.5 | 0.3 | 0.4 |
| Change in inventories | 0.3 | 0.2 | -0.3 | 1.9 | 0.9 |
| Materials and services | -9.2 | -8.0 | -23.1 | -20.9 | -30.9 |
| Employee benefit expenses | -2.0 | -2.4 | -6.3 | -7.4 | -10.9 |
| Depreciations and amortisation | -0.6 | -0.5 | -1.6 | -1.9 | -2.3 |
| Impairment | 0.0 | 0.0 | 0.0 | 0.0 | -0.2 |
| Other operating expenses | -1.5 | -1.6 | -5.0 | -5.1 | -6.9 |
| Operating profit/loss | 0.6 | 0.2 | -1.9 | -1.8 | -1.7 |
| Financial income | 0.0 | 0.1 | 0.0 | 0.4 | 0.8 |
| Financial expenses | -0.1 | -0.1 | -0.3 | -0.2 | -0.7 |
| Share of result of assosiated companies | -0.0 | -0.0 | 0.0 | -0.1 | -0.0 |
| Profit/loss before taxes | 0.5 | 0.1 | -2.1 | -1.6 | -1.7 |
| Taxes | -0.2 | -0.0 | 0.4 | 0.4 | 0.1 |
| Profit/loss for the period | 0.3 | 0.1 | -1.7 | -1.2 | -1.5 |
| Other comprehensive income | |||||
| Translation differences | 0.0 | 0.0 | 0.1 | -0.2 | -0.4 |
|
Total comprehensive income for the period |
0.3 | 0.1 | -1.7 | -1.5 | -2.0 |
| Result for the period attributable to | |||||
| Equity holders of the parent | 0.3 | 0.1 | -1.7 | -1.2 | -1.5 |
| Non-controlling interest | -0.0 | 0.0 | -0.0 | 0.0 | 0.0 |
| 0.3 | 0.1 | -1.7 | -1.2 | -1.5 | |
| Comprehensive income attributable to | |||||
| Equity holders of the parent | 0.3 | 0.1 | -1.7 | -1.5 | -2.0 |
| Non-controlling interest | -0.0 | 0.0 | -0.0 | 0.0 | 0.0 |
| 0.3 | 0.1 | -1.7 | -1.5 | -2.0 | |
|
Earnings/share (EPS) calculated on the profit attributable to equity holders of the parent, EUR |
|||||
| Basic | 0.07 | 0.03 | -0.36 | -0.26 | -0.32 |
| Diluted | 0.07 | 0.03 | -0.36 | -0.26 | -0.32 |
Honkarakenne Oyj has two series of shares: A shares and B shares, which have different right to dividend. Profit distribution of 0.20 EUR per share will be paid first for B shares, then 0.20 EUR per share for A shares, followed by equal distribution of remaining profit distribution between all shares.
|
CONSOLIDATED BALANCE SHEET unaudited |
30.9.2014 | 30.9.2013 | 31.12.2013 | |||||||||||||
| MEUR | ||||||||||||||||
| Assets | ||||||||||||||||
| Non-current assets | ||||||||||||||||
| Property, plant and equipment | 15.1 | 14.0 | 15.9 | |||||||||||||
| Goodwill | 0.1 | 0.1 | 0.1 | |||||||||||||
| Other intangible assets | 0.4 | 0.5 | 0.5 | |||||||||||||
| Investments in associated companies | 0.3 | 0.3 | 0.3 | |||||||||||||
| Available-for-sale financial assets | 0.0 | 0.1 | 0.0 | |||||||||||||
| Receivables | 0.3 | 0.3 | 0.2 | |||||||||||||
| Deferred tax assets | 1.9 | 1.6 | 1.5 | |||||||||||||
| 18.1 | 16.7 | 18.4 | ||||||||||||||
| Current assets | ||||||||||||||||
| Inventories | 6.8 | 8.4 | 7.1 | |||||||||||||
| Trade and other receivables | 4.3 | 6.4 | 5.2 | |||||||||||||
| Cash and bank receivables | 1.3 | 4.3 | 3.2 | |||||||||||||
| 12.3 | 19.0 | 15.6 | ||||||||||||||
| Total assets | 30.4 | 35.7 | 34.0 | |||||||||||||
| Shareholders' equity and liabilities | 30.9.2014 | 30.9.2013 | 31.12.2013 | |||||||||||||
|
Equity attributable to equity holders of the parent company |
||||||||||||||||
| Share capital | 9.9 | 9.9 | 9.9 | |||||||||||||
| Share premium account | 0.5 | 0.5 | 0.5 | |||||||||||||
| Fund for invested unrestricted equity | 6.5 | 6.4 | 6.4 | |||||||||||||
| Own shares | -1.4 | -1.4 | -1.4 | |||||||||||||
| Translation differences | -0.1 | -0.0 | -0.2 | |||||||||||||
| Retained earnings | -6.4 | -4.4 | -4.7 | |||||||||||||
| 9.0 | 11.1 | 10.6 | ||||||||||||||
| Non-controlling interests | 0.2 | 0.2 | 0.2 | |||||||||||||
| Total equity | 9.2 | 11.3 | 10.8 | |||||||||||||
| Non-current liabilities | ||||||||||||||||
| Deferred tax liabilities | 0.0 | 0.1 | 0.1 | |||||||||||||
| Provisions | 0.5 | 0.5 | 0.5 | |||||||||||||
| Financial liabilities | 7.4 | 6.3 | 7.5 | |||||||||||||
| 8.0 | 6.9 | 8.1 | ||||||||||||||
| Current liabilities | ||||||||||||||||
| Trade and other payables | 11.0 | 15.2 | 12.3 | |||||||||||||
| Current tax liabilities | 0.2 | 0.2 | 0.2 | |||||||||||||
| Provisions | 0.2 | 0.2 | 0.9 | |||||||||||||
| Current financial liabilities | 1.8 | 1.9 | 1.8 | |||||||||||||
| 13.2 | 17.5 | 15.1 | ||||||||||||||
| Total liabilities | 21.2 | 24.4 | 23.2 | |||||||||||||
| Total equity and liabilities | 30.4 | 35.7 | 34.0 | |||||||||||||
|
STATEMENT OF CHANGES IN EQUITY abridged unaudited |
||||||||||||||||
| EUR thousand | Equity attributable to equity holders of the parent | |||||||||||||||
| a) | b) | c) | d) | e) | f) | Total | g) | Total equity | ||||||||
|
Total equity 1.1.2013 |
9898 | 520 | 6828 | 224 | -1382 | -3178 | 12909 | 209 | 13117 | |||||||
| Profit/loss for the period | -1230 | -1230 | 1 | -1229 | ||||||||||||
| Translation difference | -238 | -238 | -238 | |||||||||||||
| Repayment of capital | -384 | -384 | -384 | |||||||||||||
| Management incentive plan | 10 | 10 | 10 | |||||||||||||
|
Total equity 30.9.2013 |
9898 | 520 | 6444 | -14 | -1382 | -4400 | 11066 | 212 | 11277 | |||||||
|
EUR thousand |
Equity attributable to equity holders of the parent | |||||||||||||||
| a) | b) | c) | d) | e) | f) | Total | g) | Total equity | ||||||||
|
Total equity 1.1.2014 |
9898 | 520 | 6444 | -197 | -1382 | -4710 | 10573 | 211 | 10784 | |||||||
| Profit/loss for the period | -1734 | -1734 | -6 | -1740 | ||||||||||||
| Translation difference | 72 | 72 | 72 | |||||||||||||
| Share issue | 90 | 90 | 90 | |||||||||||||
| Management incentive plan | 5 | 5 | 5 | |||||||||||||
|
Total equity 30.9.2014 |
9898 | 520 | 6534 | -126 | -1382 | -6438 | 9006 | 205 | 9211 | |||||||
a) Share capital
b) Share premium account
c) Fund for invested unrestricted equity
d) Translation difference
e) Own shares
f) Retained earnings
g) Non-controlling interests
|
CONSOLIDATED STATEMENT OF CASH FLOWS abridged unaudited |
1.1.- 30.9.2014 |
1.1.- 30.9.2013 |
1.1.- 31.12.2013 |
| MEUR | |||
| Cash flow from operating activities | -0.3 | -0.8 | -1.2 |
| Cash flow from investing activities, net | -1.6 | -1.2 | -3.0 |
| Total cash flows from financing activities | -0.1 | 1.5 | 2.6 |
| Share issue | 0.1 | 0.0 | 0.0 |
| Repayment of capital | 0.0 | -0.4 | -0.4 |
| Proceeds from borrowings | 3.0 | 4.4 | 5.6 |
| Repayment of borrowings | -3.1 | -2.3 | -2.4 |
| Other financial items | -0.1 | -0.1 | -0.2 |
| Change in cash and cash equivalents | -1.9 | -0.5 | -1.6 |
| Cash and cash equivalents at the beginning of period | 3.2 | 4.8 | 4.8 |
| Cash and cash equivalents at the close of period | 1.3 | 4.3 | 3.2 |
NOTES TO THE REPORT
Accounting policies
This interim report has been drafted in accordance with IAS 34. The principles adhered to in preparing the annual financial statements also apply to this interim report. The interim report should be read together with the annual financial statements for 2013. The new revised standards or interpretations effective as of 1 January 2014 have no bearing on the figures presented for the report period. The figures have not been examined by the auditor.
Honka Management Oy, which is a company established in 2010 by members of company’s Executive Group, is included in the consolidated financial statements due to the terms and conditions of the shareholder agreement concluded between it and Honkarakenne Oyj.
Honkarakenne has three geographical operating segments that have been combined into one segment for reporting purposes. Geographically, sales are divided as follows: Finland & Baltics, Russia & CIS and Global Markets. The internal reporting of the management is in line with IFRS reporting. For this reason, separate reconciliations are not presented.
| PROPERTY, PLANT AND EQUIPMENT | |
| Unaudited | Property, plant and equipment |
| MEUR | |
| Cost 1.1.2014 | 65.7 |
| Translation differences (+/-) | 0.0 |
| Increase | 0.9 |
| Disposals | -0.7 |
| Cost 30.9.2014 | 65.9 |
| Accumulated depreciation 1.1.2014 | -49.8 |
| Translation differences (+/-) | -0.0 |
| Accumulated depreciation of disposals and reclassifications | 0.5 |
| Depreciation for the period | -1.4 |
| Accumulated depreciation 30.9.2014 | -50.8 |
| Carrying amount 1.1.2014 | 15.9 |
| Carrying amount 30.9.2014 | 15.1 |
SHARES AND OWN SHARES
At the end of the review period, the total number of Honkarakenne Oyj shares entered in the Trade Register amounted to 5,211,419, of which 300,096 were Series A shares and 4,911,323 Series B shares. Each B share carries one (1) vote and each A share carries twenty (20) votes. Hence, Honkarakenne’s shares in aggregate carry a total of 10,913,243 votes. The company's registered share capital is EUR 9,897,936.00.
Honkarakenne has not acquired its own shares during the report period. At the end of the report period, the Group held 364,385 of its Honkarakenne B shares with a total purchase price of EUR 1,381,750.23. These shares represent 6.99 % of the company's all shares and 3.34 % of all votes. The purchase cost has been deducted from shareholders' equity in the consolidated financial statements.
| CONTINGENT LIABILITIES | |||
| unaudited | 30.9.2014 | 30.9.2013 | 31.12.2013 |
| MEUR | |||
| For own loans | |||
| - Mortgages | 25.7 | 25.7 | 25.7 |
| - Other quarantees | 1.8 | 2.0 | 2.3 |
| Rental liabilities | 0.5 | 0.0 | 0.6 |
| Leasing liabilities | 0.2 | 0.3 | 0.2 |
| Derivative contracts | 0.3 | 0.3 | 0.4 |
| Nominal values of forward exchange contracts | 0.5 | 0.7 | 1.7 |
EVENTS WITH RELATED PARTIES
The Group’s related parties consist of subsidiaries and associated companies; the company's management and any companies in which they exert influence; and those involved in the Saarelainen shareholder agreement and any companies controlled by them. The management personnel considered to be related parties comprise the Board of Directors, President & CEO, and the company's Executive Group. The pricing of goods and services in transactions with related parties conforms to market-based pricing.
During the report period, ordinary business transactions with related parties were made as follows: the sales to the related parties were EUR 291 thousand and the purchases from the related parties were EUR 361 thousand. There are total EUR 924 thousand receivables from related parties and this includes the long-term loan granted to Honka Management Oy, which is a company established in 2010 by members of company’s Executive Group.
| KEY INDICATORS | |||||||
| 1-9/ | 1-9/ | 1-12/ | |||||
| Unaudited | 2014 | 2013 | 2013 | ||||
| Earnings/share (EPS) | euro | -0.36 | -0.26 | -0.32 | |||
| Return on equity | % | -17 | -10 | -13 | |||
| Equity ratio | % | 35 | 42 | 38 | |||
| Shareholders equity/share | euro | 1.86 | 2.30 | 2.20 | |||
| Net financial liabilities | MEUR | 7.9 | 3.9 | 6.1 | |||
| Gearing | % | 86 | 35 | 57 | |||
| Gross investments | MEUR | 1.0 | 1.3 | 3.7 | |||
| % of net sales | 3 | 4 | 8 | ||||
| Order book | MEUR | 15.9 | 21.4 | 18.1 | |||
| Average number of personnel | Staff | 93 | 113 | 111 | |||
| Workers | 71 | 108 | 102 | ||||
| Total | 164 | 221 | 213 | ||||
| Personnel in person-years, average | Staff | 84 | 103 | 104 | |||
| Workers | 71 | 78 | 82 | ||||
| Total | 156 | 181 | 185 | ||||
| Adjusted number of shares (’000) | At period-end | 4847 | 4805 | 4805 | |||
| Average during period | 4844 | 4813 | 4813 | ||||
|
CALCULATION OF KEY INDICATORS |
|||||||
| Profit / loss for the period attributable to equity holders of parent | |||||||
| Earnings/share (EPS) | ----------------------------------------------- | ||||||
| Average number of outstanding shares | |||||||
| Profit / loss before taxes – taxes | |||||||
| Return on equity % | ----------------------------------------------- | x 100 | |||||
| Total equity, average | |||||||
| Total equity | |||||||
| Equity ratio, % | ----------------------------------------------- | x 100 | |||||
| Balance sheet total - advances received | |||||||
| Net financial liabilities | Financial liabilities – cash and cash equivalents | ||||||
| Financial liabilities – cash and cash equivalents | |||||||
| Gearing, % | ------------------------------------------- | x 100 | |||||
| Total equity | |||||||
| Shareholders’ equity | |||||||
| Shareholders equity/share | ------------------------------------------------ | ||||||
| Number of shares outstanding at the close of period | |||||||