The Ukrainian crisis and the collapse of oil prices had a negative impact on the
company’s net sales and operating result.
Nurminen Logistics Plc Financial Statement Release 19
February 2015 at 1:00 p.m.
NURMINEN LOGISTICS KEY FIGURES 1 JANUARY - 31 DECEMBER 2014
· Net sales were EUR 52.8 million (2013: EUR 63.8 million).
· Reported operating result was EUR 1.3 million (EUR 0.2 million).
· Operating margin was 2.5% (0.3%).
· Operating result excluding non-recurring items was EUR 1.5 million (EUR 1.6
million).
· EBT was EUR -1.9 million (EUR -3.0 million).
· Net result was EUR -2.3 million (EUR -3.9 million).
· Earnings per share, undiluted: EUR -0.21 (EUR -0.32).
· Earnings per share, diluted: EUR -0.21 (EUR -0.32).
FOURTH QUARTER 1 OCTOBER - 31 DECEMBER 2014
· Net sales were EUR 12.0 million (2013: EUR 14.4 million).
· Reported operating result was EUR 1.4 million (EUR -0.9 million).
· Operating margin was 12.1% (-6.2%).
· Operating result excluding non-recurring items was EUR 1.4 million (EUR 0.1
million).
· EBT was EUR -0.2 million (EUR -1.8 million).
· Net result was EUR -0.3 million (EUR -2.0 million).
· Earnings per share, undiluted: EUR -0.04 (EUR -0.15).
· Earnings per share, diluted: EUR -0.04 (EUR -0.15).
As of 1 January 2014, Nurminen Logistics reports on three business units:
Railway Logistics, Special Transports and Projects, and Forwarding and Value
Added Services. In 2013, the company reported on four business units. At the end
of 2013, the Transit Logistics business unit was merged into the Forwarding and
Value Added Services unit.
The company’s internal reporting and segment breakdown of external reporting
have been amended as stated in the stock exchange release published on 7 August
2014. The Luumäki railway terminal and the Finnish railway forwarding operations
were transferred from the Railway Logistics business unit to the Forwarding and
Value Added Services business unit. Business operations are reported according
to the new business unit structure as of the second quarter of the financial
period 1 January 2014 - 31 December 2014.
OUTLOOK FOR 2015
Nurminen Logistics expects its net sales, operating result and earnings per
share to improve compared to 2014.
BOARD OF DIRECTORS’ PROPOSAL FOR PROFIT DISTRIBUTION
The Board of Directors proposes to the Annual General Meeting that no dividend
be paid for the financial year 1 January - 31 December 2014.
OLLI POHJANVIRTA, PRESIDENT AND CEO:
“The positive outlook of early 2014 turned negative towards the end of the year,
and the market conditions for the company’s business operations, particularly in
the railway logistics business, turned significantly worse in the final quarter.
The Ukrainian crisis that began in March, and its escalation towards the end of
the year, combined with the substantial fall in the price of oil and the
subsequent depreciation of the Russian rouble, decreased the company’s rail
transport volume from Finland to Russia by more than 50 per cent. These factors,
together with the postponement of previously agreed project deliveries to
Russia, are the reasons for the substantial decline in our net sales and our
result falling considerably short of the targets we had set.
In spite of the unsatisfactory development of the Finnish economy and the
substantial depreciation of the Russian rouble, we were able to expand our
clientele in 2014 in all of our business units. The Forwarding and Value Added
Services business unit, which operates in Finland and the Baltic countries,
improved both its net sales and result, the Railway Logistics business unit’s
transport volumes in Russian domestic traffic grew, and in Group administration,
we were able to reduce fixed costs. Despite the substantial deterioration of the
economic situation in Russia, our railway logistics business in Russia was
clearly profitable throughout the year.
Measures to improve operational efficiency under the profit improvement
programme launched in 2013, as well as measures to develop sales, were continued
in 2014, which included investing in the salesforce for railway logistics
services and project logistics in Finland and Russia.
Our situation remains challenging, and we will continue to implement our profit
improvement programme in 2015. Our most important goal in 2015 is to improve our
profitability and market position in all our business segments. We are well
positioned to achieve this goal due to our high service level and skilled
personnel. Furthermore, the peaceful resolution of the Ukrainian crisis, and oil
prices stabilising at a higher level than at present, would have a very positive
impact on our company’s business operations from 2015 onwards.
Currently, it looks like the market conditions in 2015–2016 will be similar to
those of last year. A slight increase in Finnish exports appears possible,
particularly through the ports of Helsinki and Kotka, while a decrease in
imports also seems likely. Under the prevailing circumstances, Finnish exports
to Russia are likely to remain at the same level as in the fourth quarter of
2014, with Russian domestic traffic remaining at the same level as in 2014.
Changes in the rouble exchange rate have a significant impact on the company’s
profitability.
In the present situation, the forecast horizon is short. Nevertheless, we expect
our net sales, operating result and earnings per share to improve in 2015
compared to 2014, based on our increasingly diverse clientele and improved
operational efficiency. We will further specify this outlook and our longer-term
targets during the spring as necessary,” says President and CEO Pohjanvirta.
MARKET SITUATION IN THE REVIEW PERIOD
Market conditions remained challenging throughout the review period due to the
tense international political situation around Russia.
In Railway Logistics, the market conditions deteriorated further towards the end
of the year due to the escalation of the Ukrainian crisis, the substantial
decline in the price of oil, and the subsequent depreciation of the Russian
rouble. The lower prices and faster delivery times of road transports have
resulted in transports shifting from rail to road. The utilisation rate of the
company’s rolling stock was good considering the market situation, and the
company was successful in winning new Russian export sector accounts for covered
wagons to replace the falling Finnish volumes.
In the special transport and project market, the uncertainty in the world
economy and the tightening of financial markets were reflected in demand, which
remained weak throughout the review period. The volumes of international project
deliveries by the engineering industry remained low in the fourth quarter.
Depreciation of the Russian rouble and the crisis in Ukraine affected the demand
for transports in Russia and the CIS in the second half of 2014. Competition
remained intense and price levels in the market fluctuated considerably.
In the Forwarding and Value Added Services business unit’s markets, the negative
impact of the difficult market conditions was the most significant for Finnish
exports to Russia and transit logistics through Finland to Russia, the value of
which declined substantially. However, Finnish exports to Europe and countries
outside Europe developed favourably in 2014. Competition in the Finnish
forwarding sector remained intense and profitability is weak. The decrease in
total exports and imports in Finland increased price competition, but the
business unit nevertheless succeeded in improving its net sales and operating
result.
NET SALES AND FINANCIAL PERFORMANCE 1 JANUARY – 31 DECEMBER 2014
The net sales for the 2014 financial period amounted to EUR 52.8 million (2013:
EUR 63.8 million), which represents a decrease of 17.3% compared to 2013. The
reported operating result was EUR 1,328 (216) thousand. The operating result
includes non-recurring items of EUR -174 (-1,366) thousand. The comparative
operating result was therefore EUR 1,502 (1,582) thousand. The operating result
for the financial period was improved by exchange rate gains on the valuation of
rouble-denominated trade payables resulting from the depreciation of the rouble.
This had a total effect of EUR 2.7 million on the result, with no cash flow
impact.
The non-recurring costs in the review period and in 2013 were related to
adjustment measures, personnel arrangements and restructuring implemented under
the profit improvement programme.
The depreciation of the Russian rouble during the review period decreased the
company’s financial result by EUR 1.5 million. This exchange rate loss had no
cash flow impact.
Railway Logistics
The Railway Logistics business unit’s net sales for the review period amounted
to EUR 17,935 (2013: 29,405) thousand and the operating result was EUR 2,686
(5,276) thousand. The operating result includes non-recurring items of EUR -85 (
-534) thousand. The comparative operating result was therefore EUR 2,771 (5,808)
thousand.
The net sales and operating result of Railway Logistics declined substantially
during the review period compared to the previous year due to a significant
decrease in transport volumes in traffic between Finland and Russia and the
suspension of traffic to Ukraine. Covered wagon deliveries originating from
Finland declined by 50 per cent on average compared to 2013. The situation was
particularly weak in the fourth quarter. Transport volumes for other wagon types
remained at a good level throughout the review period. In Russian domestic
transport, covered wagon traffic volumes grew, while the volumes for other wagon
types remained at the same level as in 2013.
Special Transports and Projects
The Special Transports and Projects business unit’s net sales for the review
period amounted to EUR 7,794 (8,874) thousand and the operating result was EUR
163 (-142) thousand. The operating result includes non-recurring items of EUR 0
(-78) thousand. Therefore, the comparative operating result was EUR 163 (-64)
thousand.
Net sales of the Special Transports and Projects business unit decreased from
2013 due to decreased volumes in the project business. The special transport
business succeeded in increasing its market share in a tight market situation.
Successful new customer acquisition compensated for the substantial decline in
the volumes of a few key customers. The unit’s result improved due to cost
savings and successful equipment renewal. Late in the year, the company invested
in developing the project and special transport business in Russia by opening a
branch in Moscow and strengthening its resources in St. Petersburg. This will be
reflected in the company’s order books in the near future.
Forwarding and Value Added Services
The net sales of the Forwarding and Value Added Services business unit for the
review period amounted to EUR 27,778 (26,095) thousand and the operating result
was EUR -1,521 (-4,918) thousand. The operating result includes non-recurring
items of EUR -89 (-754) thousand. The comparative operating result was therefore
EUR -1,432 (-4,164) thousand.
The Forwarding and Value Added Services business unit’s result has developed
positively due to measures implemented by the unit to improve the efficiency of
operations. The business unit’s net sales increased and the operating result
improved significantly compared to 2013. At the Vuosaari terminal, volumes in
the pulp, paper and forest industry were at a good level throughout the year,
while substantial fluctuation was seen in the volumes of the engineering and
metal industries during the review period. The demand for the services of the
Baltic companies was at a good level in a difficult market situation, and their
results improved significantly year-on-year. Forwarding volumes in railway
transport and transit logistics declined from the previous year due to the
Ukrainian crisis, but in general forwarding services, the unit achieved a
significant increase in market share in 2014. The operational loss of the
Vuosaari logistics centre was EUR -1.2 (-2.2) million in the review period. The
high rental level of the Vuosaari logistics centre has a significant negative
effect on the otherwise good operating result.
+-----------------------------------+---------+---------+
|NET SALES BY UNITS |1-12/2014|1-12/2013|
+-----------------------------------+---------+---------+
|EUR 1,000 | | |
+-----------------------------------+---------+---------+
|Railway Logistics |17,935 |29,405 |
+-----------------------------------+---------+---------+
|Special Transports and Projects |7,794 |8,874 |
+-----------------------------------+---------+---------+
|Forwarding and Value Added Services|27,778 |26,095 |
+-----------------------------------+---------+---------+
|Eliminations |-734 |-530 |
+-----------------------------------+---------+---------+
|Total |52,774 |63,844 |
+-----------------------------------+---------+---------+
+-----------------------------------+---------+---------+
|OPERATING RESULT BY UNITS |1-12/2014|1-12/2013|
+-----------------------------------+---------+---------+
|EUR 1,000 | | |
+-----------------------------------+---------+---------+
|Railway Logistics |2,686 |5,276 |
+-----------------------------------+---------+---------+
|Special Transports and Projects |163 |-142 |
+-----------------------------------+---------+---------+
|Forwarding and Value Added Services|-1,521 |-4,918 |
+-----------------------------------+---------+---------+
|Total |1,328 |216 |
+-----------------------------------+---------+---------+
NET SALES AND FINANCIAL PERFORMANCE IN THE FOURTH QUARTER
Net sales in the fourth quarter of 2014 amounted to EUR 12.0 million (2013: 14.4
million), which represents a decrease of 17% compared to the corresponding
period in 2013. The reported operating result was EUR 1,443 (-892) thousand. The
operating result includes non-recurring items of EUR 0 (-975) thousand.
The non-recurring costs in the fourth quarter of 2013 were related to adjustment
measures, personnel arrangements and restructuring implemented under the profit
improvement programme. The operating result for the financial period was
improved by exchange rate gains on the valuation of rouble-denominated trade
payables resulting from the depreciation of the rouble. This had a total effect
of EUR 1.9 million on the result, with no cash flow impact.
The depreciation of the Russian rouble during the review period decreased the
company’s financial result by EUR 1.1 million. This exchange rate loss had no
cash flow impact.
The net sales of the Railway Logistics business unit declined substantially
compared to the previous year due to a sharp decline in traffic volume from
Finland to Russia.
The Special Transports and Projects business unit’s net sales decreased from the
comparison period. The decline was mainly attributable to decreased volume in
the project business due to the steep depreciation of the Russian rouble and the
uncertain political situation. However, the unit’s operating result improved
substantially thanks to successful cost saving measures.
In Forwarding and Value Added Services, net sales grew in the fourth quarter and
the operating result improved significantly compared to the corresponding period
in the previous year due to increased operational efficiency and successful new
customer acquisition. The operational loss of the Vuosaari logistics centre was
EUR 0.3 million in the fourth quarter, compared to EUR 0.6 million in the
corresponding period in the previous year.
+-----------------------------------+----------+----------+------+
|NET SALES BY UNITS |10-12/2014|10-12/2013|Change|
+-----------------------------------+----------+----------+------+
|EUR 1,000 | | | |
+-----------------------------------+----------+----------+------+
|Railway Logistics |3,811 |6,581 |-2,770|
+-----------------------------------+----------+----------+------+
|Special Transports and Projects |1,561 |1,838 |-277 |
+-----------------------------------+----------+----------+------+
|Forwarding and Value Added Services|6,860 |6,170 |690 |
+-----------------------------------+----------+----------+------+
|Eliminations |-281 |-153 |-128 |
+-----------------------------------+----------+----------+------+
|Total |11,950 |14,436 |-2,486|
+-----------------------------------+----------+----------+------+
+-----------------------------------+----------+----------+------+
|OPERATING RESULT BY UNITS |10-12/2014|10-12/2013|Change|
+-----------------------------------+----------+----------+------+
|EUR 1,000 | | | |
+-----------------------------------+----------+----------+------+
|Railway Logistics |1,714 |1,342 |372 |
+-----------------------------------+----------+----------+------+
|Special Transports and Projects |20 |-195 |215 |
+-----------------------------------+----------+----------+------+
|Forwarding and Value Added Services|-291 |-2,039 |1,748 |
+-----------------------------------+----------+----------+------+
|Total |1,443 |-892 |2,335 |
+-----------------------------------+----------+----------+------+
OUTLOOK
Nurminen Logistics expects market conditions to remain similar to last year. A
slight increase in Finnish exports appears possible, particularly through the
ports of Helsinki and Kotka, while a decrease in imports also seems likely.
Under the prevailing circumstances, Finnish exports to Russia are likely to
remain at the same level as in the fourth quarter of 2014, with Russian domestic
traffic remaining at the same level as in 2014. Changes in the rouble exchange
rate have a significant impact on the company’s profitability.
In the present situation, the forecast horizon is short. Nevertheless, we expect
our net sales, operating result and earnings per share to improve in 2015
compared to 2014, based on our increasingly diverse clientele and improved
operational efficiency.
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 per cent and return on equity of 20 per cent.
SHORT-TERM RISKS AND UNCERTAINTIES
The potential escalation of the Ukrainian crisis and the continued decline of
the price of oil in 2015 would have a strong impact on Russia’s economic
development, which in turn would negatively affect the company’s railway
transport and project logistics volumes, and have a significant impact on the
company’s outlook. The further depreciation of the Russian rouble would worsen
the company’s cash flow situation and complicate financing.
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 0.5 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 -448 thousand. Cash flow from
investments was EUR 268 thousand. Cash flow from financing activities amounted
to EUR -1,670 thousand.
At the end of the financial period, cash and cash equivalents amounted to EUR
1,530 thousand. Liquidity remained at a satisfactory level during the review
period, but tightened towards the end of the year.
The covenants of the Group’s loans from financial institutions, namely the ratio
of net debt to operating margin and the equity ratio, were breached as of the
financial statement date of 31 December 2014.
The Group has received a commitment from its creditors confirming that the
breach of the covenants will not have any consequences on the Group.
Nurminen Logistics has preliminary agreed with its financing banks on a 12-month
financial arrangement that will be finalised during the next few weeks.
The Group has also launched other actions to improve its financial position.
Financing negotiations related to the company’s continuing business operations
will be held in the first quarter. The company’s management expects the
negotiations to lead to a positive outcome.
The Group’s interest-bearing debt totaled EUR 21.8 million at the end of the
financial period, and net interest-bearing debt amounted to EUR 20.3 million.
The balance sheet total was EUR 45.3 million, and the equity ratio was 23.6%
(36.3%). The most significant factor contributing to the decline in the equity
ratio is the substantial depreciation of the rouble and the decrease in equity
due to translation differences.
CAPITAL EXPENDITURE
The Group’s gross capital expenditure during the review period amounted to EUR
506 (429) thousand, accounting for 1.0% of net sales. Depreciation totaled EUR
2.4 (3.5) million, or 4.5% of net sales.
GROUP STRUCTURE
Nurminen Logistics Plc’s Russian subsidiaries OOO John Nurminen, St. Petersburg
(100%) and ZAO Irtrans (100%) were closed down on 23 September 2014. Russian
subsidiary OOO John Nurminen Terminal (100%) was closed down on 1 October 2014.
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%), Nurminen Maritime Latvia SIA (51%), Pelkolan Terminaali Oy (20%), OOO
Nurminen Logistics (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 2014.
PERSONNEL
At the end of the review period, the Group had 233 employees, compared with 261
on 31 December 2013. The number of employees working abroad was 58.
Railway Logistics had 34 employees, Special Transports and Projects 21 and
Forwarding and Value Added Services 161 employees. Management and administrative
personnel comprised 17 employees.
Personnel expenses in 2014 totaled EUR 11.1 million (2013: EUR 14.6 million).
Nurminen Logistics announced on 25 September 2014 its plans to implement cost
savings by temporarily laying off all of its Finnish personnel for a maximum of
30 days during the last quarter of 2014 and in 2015. After the negotiations were
concluded, the company decided to temporarily lay off all of its Finnish
personnel for two weeks during the last quarter of 2014 and the first half of
2015. The company estimates that this will achieve cost savings of approximately
EUR 0.5 million. In addition, the company has the opportunity to temporarily lay
off the Finnish personnel for another two weeks during 2015 so that the duration
of the temporary lay-offs will be a maximum of 30 calendar days. The Management
Team of Nurminen Logistics has decided to take part in the savings programme and
will give up two weeks’ salary during the last quarter of 2014. Correspondingly,
the Board of Directors of Nurminen Logistics will give up 20% of their
remuneration for 2014. This information was published in a stock exchange
release on 22 October 2014.
REMUNERATION
Nurminen Logistics has a new key employee stock option plan. The company has a
weighty financial reason for the issue of stock options, since the stock options
are intended to form part of the incentive and commitment program for the Group
key employees. The purpose of the stock options is to encourage the key
employees to work on a long-term basis to increase shareholder value. The
purpose of the stock options is also to commit the key employees to the
employer. Approximately 10 key employees, including the members of the Group’s
Executive Board and other separately named executives, belong to the target
group of the plan. For all key employees, the prerequisite for receiving stock
options is share ownership in the company. This information was published in a
stock exchange release on 14 January 2014.
CHANGES IN THE TOP MANAGEMENT
Marko Tuunainen, M.Sc. (Econ), aged 43, was appointed the Senior Vice President
of Nurminen Logistics Plc’s Forwarding and Value Added Services business unit
and member of the Management Team of Nurminen Logistics on 8 January 2014. He
reports to Olli Pohjanvirta, President and CEO. Tuunainen started in his new
position on 14 January 2014.
Maija Dietrich, M.Sc. (Tech.), aged 36, was appointed the HR Director and member
of the Management Team of Nurminen Logistics on 12 May 2014. She reports to Olli
Pohjanvirta, President and CEO. Dietrich started in her new position on 9 June
2014. The change meant the size of Nurminen Logistics’ Management Team increased
from five members to six.
Ari Viinikkala, M.Sc. (Econ.), aged 46, was appointed the new Chief Financial
Officer (CFO) and member of the Management Team of Nurminen Logistics on 30 June
2014. He reports to Olli Pohjanvirta, President and CEO. Viinikkala joined
Nurminen Logistics on 1 August 2014 and started in his new position of CFO on 15
August 2014 after the former CFO, Paula Kupiainen, vacated her post.
President and CEO Olli Pohjanvirta assumed responsibility for the duties of the
Senior Vice President for Railway Logistics in addition to his other duties as
of 27 October 2014 after the member of Management Team and Senior Vice President
Fedor Larionov vacated his post.
The change meant the size of Nurminen Logistics’ Management Team decreased from
six members to five.
On 31 December 2014, Nurminen Logistics’ Management Team consisted of the
following members:
Olli Pohjanvirta, President and CEO
Ari Viinikkala, CFO
Maija Dietrich, HR Director
Marko Tuunainen, Senior Vice President, Forwarding and Value Added Services
Hannu Vuorinen, Senior Vice President, Special Transports and Projects.
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 13,057,742 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.
The trading volume of Nurminen Logistics Plc’s shares was 309,273 during the
period from 1 January to 31 December 2014. This represented 2.4% of the total
number of shares. The value of the turnover was EUR 432,420.65. The lowest price
during the review period was EUR 0.98 per share and the highest EUR 1.73 per
share. The closing price for the period was EUR 0.99 per share and the market
value of the entire share capital was EUR 12,927,164.58 at the end of the
period.
At the end of the 2014 financial year the company had 586 shareholders. At the
end of 2013 the number of shareholders stood at 567.
In the end of 2014 the company held 20,275 of its own shares, corresponding to
0.2% of votes.
DECISIONS MADE BY THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
Nurminen Logistics Plc's Annual General Meeting of Shareholders held on 8 April
2014 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 2013 - 31 December 2013 and released the Board of Directors and the
President and CEO 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 2013 - 31 December 2013.
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, Juha Nurminen, Jukka Nurminen and Alexey Grom. Tommi
Matomäki was elected as a new member of the Board of Directors. In its
organising meeting immediately following the Annual General Meeting of
Shareholders, the Board of Directors elected Tero Kivisaari as the Chairman of
the Board. The Board of Directors also appointed an Audit Committee. The members
of the Audit Committee are Jukka Nurminen and Alexey Grom.
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 2015 remuneration level will be as follows: annual
remuneration of EUR 80,000 for the Chairman and EUR 20,000 for the other
members. Additionally a meeting fee of EUR 1,000 per meeting for the Board and
Board Committee meetings shall be paid for each member of the Board living in
Finland and EUR 1,500 per meeting for a member of the Board living outside
Finland. 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 acquisition of the company’s
own shares
Annual Meeting authorised the Board to decide on the acquisition of a maximum of
100,000 of the company’s own shares. The authorisation will be used for the
paying of remuneration of the members of the Board of Directors. The own shares
may be acquired 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 at the time of the acquisition. The own shares may be
acquired in deviation from the proportional shareholdings of the shareholders
(directed repurchase). The authorisation includes the right whereby the Board of
Directors is authorised to decide on all other matters related to the
acquisition of own shares.
The authorisation remains in force until 30 April 2015.
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 of Directors 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 authorisation may be used in such a way that in total no more than one tenth
(1/10) of all shares in the company may from time to time be in the possession
of the company and its subsidiaries.
The authorisation includes the right whereby the Board of Directors is entitled
to decide of all other issues of shares and special rights. Furthermore, the
Board of Directors is entitled to decide on share issues, option rights and
other special rights, in every way, as the same as General Meeting could decide.
The authorisation also includes right to decide on directed issues of shares
and/or special rights.
The authorisation remains in force until 30 April 2015.
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 will be paid in accordance with the auditor´s
invoice accepted by the company.
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 acquisition of the company’s
own shares
Annual Meeting authorised the Board to decide on the acquisition of a maximum of
100,000 of the company’s own shares. The authorisation will be used for the
paying of remuneration of the members of the Board of Directors. The own shares
may be acquired 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 at the time of the acquisition. The own shares may be
acquired in deviation from the proportional shareholdings of the shareholders
(directed repurchase). The authorisation includes the right whereby the Board of
Directors is authorised to decide on all other matters related to the
acquisition of own shares.
The authorisation remains in force until 30 April 2015.
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 of Directors 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 authorisation may be used in such a way that in total no more than one tenth
(1/10) of all shares in the company may from time to time be in the possession
of the company and its subsidiaries.
The authorisation includes the right whereby the Board of Directors is entitled
to decide of all other issues of shares and special rights. Furthermore, the
Board of Directors is entitled to decide on share issues, option rights and
other special rights, in every way, as the same as General Meeting could decide.
The authorisation also includes right to decide on directed issues of shares
and/or special rights.
The authorisation remains in force until 30 April 2015.
OTHER EVENTS DURING THE REVIEW PERIOD
Nurminen Logistics Plc arranges a share issue to the personnel
Nurminen Logistics announced on 14 January 2014 that the Board of Directors of
Nurminen Logistics Plc has decided on 14 January 2014 to arrange a share issue
directed to the personnel. In the share issue, new shares in the company will be
offered for subscription to all Group employees. In the share issue, a maximum
total of 200,000 new shares in the company will, in deviation from the
shareholders’ pre-emptive right, be offered for subscription to the Group
personnel. The company has a weighty financial reason for the deviation from the
shareholders’ pre-emptive right, since the purpose of the share issue is to
encourage the personnel to acquire and own the company´s shares.
Nurminen Logistics announced on 10 March 2014 that the Board of Directors has
decided to update the share subscription price of the new shares to be offered
in the personnel share issue. The new share subscription price is EUR 1.41 per
share. The share subscription price is based on the trade volume weighted
average quotation of the company’s share on NASDAQ OMX Helsinki Ltd between 1
February 2014 and 28 February 2014, and on a discount of 10 per cent calculated
from such price. The trade volume weighted average quotation of the company’s
share during the above period is EUR 1.57 per share. The share subscription
period will be 10 March - 20 March 2014.
Nurminen Logistics announced on 25 March 2014 that the Board of Directors of
Nurminen Logistics Plc approved subscriptions for 45,005 new shares subscribed
in the personnel share issue, corresponding to a total of EUR 63,457.05. The
share subscription price was EUR 1.41 per share. The share subscription period
ended on 20 March 2014.
On 28 April 2014, the company announced that a total of 45,005 new shares
subscribed in the personnel share issue of Nurminen Logistics Plc were entered
into the Trade Register on 28 April 2014. The shareholder rights of the new
shares arise from the date of the Trade Register entry, 28 April 2014. After the
Trade Register entry of the new shares, the total number of shares in Nurminen
Logistics Plc stood at 13,057,742. The shares entered into the Trade Register
were subject to public trading as of 29 April 2014.
The decision on the share issue was based on the authorisation granted by the
Annual General Meeting on 15 April 2013.
Nurminen Logistics will centralise its railway terminal operations to Luumäki
Nurminen Logistics announced on 20 January 2014 its plans to reduce its terminal
capacity and transfer terminal operations from the Niirala terminal to the
Luumäki terminal. Due to the personnel impact of the planned changes, Nurminen
Logistics launched co-determination negotiations concerning the terminal and
forwarding personnel of the Niirala location. The co-determination negotiations
were concluded on 11 February 2014, and the company has decided to shut down the
Niirala terminal and centralise its railway terminal operations to Luumäki.
Project deliveries through the Niirala project field will be continued. As a
result of the negotiations, Nurminen Logistics will permanently lay off a
maximum of nine people in Niirala. The lay-offs will be carried out without
delay. The company will support those being laid off to find new employment.
According to preliminary estimates, Nurminen Logistics will record approximately
EUR 0.2 million of expenses related to the arrangement to the first quarter of
2014. The arrangement will save EUR 0.4 million annually from 2015 onwards.
Change in Nurminen Logistics’ own shares
A total of 10,030 shares granted as share-based incentives have been returned to
Nurminen Logistics on February 6, 2014 in accordance with the terms of the
incentive plan as the employment ended. Nurminen Logistics holds now a total of
20,275 its own shares. The number of own shares corresponds to 0.2% of all
Nurminen Logistics shares. This information was published in a stock exchange
release on 6 February 2014.
Nurminen Logistics has agreed on working capital financing in Finland
The company announced on 3 March 2014 that it had signed a 12-month financing
agreement relating to its continuing business operations with its financing
banks. Under the terms of the financing agreement, Nurminen Logistics may not
distribute a dividend or repayment of equity to its shareholders, or redeem or
purchase its own shares, without prior consent from the financiers.
Disclosure notification under chapter 2, section 9 of the Securities Market Act
The company announced in a stock exchange release on 14 April 2014 that it has
received the following disclosure notifications of changes in portions of
holdings on 14 April 2014, pursuant to the Securities Markets Act:Mr. Olli
Pohjanvirta has announced to Nurminen Logistics Plc that his personal and
controlled companies’ portion of Nurminen Logistics Plc’s total number of shares
and voting rights has risen above 5 per cent (1/20). A company controlled by
Olli Pohjanvirta, VGK Invest Oy, bought 648,000 of Nurminen Logistics Plc’s
shares (4.98% of shares and votes) on 11 April 2014. In addition, Olli
Pohjanvirta controls directly or indirectly Nurminen Logistics Plc’s shares and
votes as follows: Olli Pohjanvirta owns directly 141,184 shares (1.08% of shares
and votes) and through the companies controlled by him: Etl Holding Oy 158,000
shares (1.21% of shares and votes), Etl Invest Oy 181,818 shares (1.40% shares
and votes), and through Russian Capital Management Oy 25,000 shares (0.19% of
shares and votes). Olli Pohjanvirta’s share capital now comprises 1,154,002
Nurminen Logistics Plc's shares which are equivalent to 8.87% of Nurminen
Logistics Plc's share capital and voting rights. Nurminen Logistics Plc's share
capital comprises 13,012,737 shares and votes.
A positive arbitrage for Nurminen Logistics in a tax responsibility matter
The company announced on 14 April 2014 that an arbitral tribunal has given a
positive arbitrage for Nurminen Logistics in the matter related to the taxation
of the old John Nurminen Ltd of year 2007. The arbitration clarified the
division of tax responsibility between the new John Nurminen Ltd and Nurminen
Logistics Plc pertaining to the adjustment decision of the pre-demerger John
Nurminen Ltd for the financial year 2007. According to the arbitrage, the new
John Nurminen Ltd is responsible for the EUR 0.4 million tax responsibility.
The former John Nurminen Ltd was demerged on 1 January 2008 according to a
demerger plan dated 7 September 2007, with the two receiving companies being the
new John Nurminen and Kasola Plc. Kasola Plc subsequently changed its name to
Nurminen Logistics Plc.
EVENTS AFTER THE REVIEW PERIOD
The company had no significant events after the review period.
BOARD OF DIRECTORS’ PROPOSAL FOR PROFIT DISTRIBUTION
Based on the financial statements as at 31 December 2014, the parent company’s
distributable equity is 32,929,881.97 euros. The Board of Directors proposes to
the Annual General Meeting that that no dividend shall be distributed for the
financial year 2014.
ANNUAL GENERAL MEETING 2015
The Annual General Meeting of Nurminen Logistics Plc will take place on Tuesday,
7 April 2015 starting at 1.00 p.m. at the address Satamakaari 24, 00980
Helsinki, Finland.
CORPORATE GOVERNANCE STATEMENT
The Corporate Governance Statement of Nurminen Logistics Plc will be published
on 12 March 2015 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: Olli Pohjanvirta, President and CEO, tel.
+358 10 545 2431
DISTRIBUTION
Nasdaq Helsinki
Major media
www.nurminenlogistics.com
Nurminen Logistics is a listed company established in 1886 that offers logistics
services. The company provides high-quality railway transports, project
transport services, special transports and forwarding and cargo handling
services to its customers. The main market areas of Nurminen Logistics are
Finland, Russia and its neighbouring countries.
TABLES
Tables concerning business units are presented in the verbal part of the interim
report.
CONSOLIDATED STATEMENT OF COMPREHENSIVE 1-12/2014 1-12/2013
INCOME
EUR 1,000
NET SALES 52 774 63 844
Other operating income 465 1 834
Materials and services -24 600 -29 189
Employee benefit expenses -11 146 -14 606
Depreciation, amortisation and impairment -2 351 -3 538
losses
Other operating expenses -13 813 -18 129
OPERATING RESULT 1 328 216
Financial income 82 55
Financial expenses -3 298 -3 444
Share of profit in equity-accounted -57 126
investees
RESULT BEFORE TAX -1 945 -3 048
Income taxes -396 -899
PROFIT / LOSS FOR THE PERIOD -2 341 -3 947
Other comprehensive income
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods:
Translation differences -7 842 -2 287
Other comprehensive income for the period -7 842 -2 287
after tax
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD -10 183 -6 234
Result attributable to
Equity holders of the parent company -2 793 -4 149
Non-controlling interest 453 202
Total comprehensive income attributable to
Equity holders of the parent company -10 636 -6 436
Non-controlling interest 453 202
EPS undiluted -0,21 -0,32
EPS diluted -0,21 -0,32
CONSOLIDATED STATEMENT OF COMPREHENSIVE 10-12/2014 10-12/2013 Change
INCOME
EUR 1,000
NET SALES 11 950 14 436 -2 486
Other operating income 64 56 8
Materials and services -5 207 -6 203 996
Employee benefit expenses -2 733 -4 089 1 356
Depreciation, amortisation and impairment -447 -789 341
losses
Other operating expenses -2 184 -4 303 2 119
OPERATING RESULT 1 443 -892 2 335
Financial income 5 3 2
Financial expenses -1 641 -986 -655
Share of profit in equity-accounted 8 45 -37
investees
RESULT BEFORE TAX -184 -1 830 1 645
Income taxes -141 -192 50
PROFIT / LOSS FOR THE PERIOD -326 -2 022 1 696
Other comprehensive income:
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods:
Translation differences -5 801 -721 -5 080
Other comprehensive income for the period -5 801 -721 -5 080
after tax
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD -6 127 -2 743 -3 384
Result attributable to
Equity holders of the parent company -467 -1 917 1 450
Non-controlling interest 141 -105 246
Total comprehensive income attributable to
Equity holders of the parent company -6 268 -2 638 -3 630
Non-controlling interest 141 -105 246
EPS undiluted -0,04 -0,15 0,11
EPS diluted -0,04 -0,15 0,11
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31.12.2014 31.12.2013
EUR 1,000
ASSETS
Non-current assets
Property, plant and equipment 23 360 31 492
Goodwill 9 516 9 516
Other intangible assets 345 530
Investments in equity-accounted investees 173 295
Receivables 35 35
Deferred tax assets 608 926
NON-CURRENT ASSETS 34 037 42 795
Current assets
Trade and other receivables 9 648 11 045
Current tax receivables 83 93
Cash and cash equivalents 1 530 3 553
CURRENT ASSETS 11 262 14 691
ASSETS TOTAL 45 299 57 486
EQUITY AND LIABILITIES
Share capital 4 215 4 215
Other reserves 19 655 19 591
Translation difference -7 679 -4 193
Retained earnings -6 349 720
Non-controlling interest 833 558
EQUITY, TOTAL 10 674 20 891
Non-current liabilities
Deferred tax liability 426 350
Other liabilities 350 561
Interest-bearing finance liabilities 13 200 14 849
NON-CURRENT LIABILITIES 13 977 15 760
Current liabilities
Current tax liabilities 127 88
Interest-bearing finance liabilities 8 592 8 902
Trade payables and other liabilities 11 930 11 846
CURRENT LIABILITIES 20 649 20 835
TOTAL LIABILITIES 34 625 36 595
TOTAL EQUITY AND LIABILITIES 45 299 57 486
CONDENSED CONSOLIDATED CASH FLOW STATEMENT 1-12/2014 1-12/2013
CASH FLOW FROM OPERATING ACTIVITIES
Profit/Loss for the period -2 341 -3 947
Gains and losses on disposals of property, -19 -1 685
plant and equipment and other non-current
assets
Depreciation, amortisation and impairment 2 351 3 538
losses
Unrealised foreign exchange gains and losses 1 530 1 071
Other adjustments -901 2 629
Paid and received interest -1 294 -1 400
Taxes paid -349 -1 244
Changes in working capital 575 4 848
Cash flow from operating activities -448 3 808
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and 758 3 531
equipment and intangible assets
Investments in property, plant and equipment -490 -446
and intangible assets
Cash flow from investing activities 268 3 087
CASH FLOW FROM FINANCING ACTIVITIES
Investment by non-controlling interest 63 0
Acquisition of own shares 0 0
Changes in liabilities -1 556 -5 360
Dividends paid / repayments of equity -178 -2 762
Cash flow from financing activities -1 670 -8 122
CHANGE IN CASH AND CASH EQUIVALENTS -2 022 -1 349
Cash and cash equivalents at beginning of 3 553 4 901
period
Cash and cash equivalents at end of period 1 530 3 553
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 A B C D E F G H
CHANGES IN
EQUITY 1
-12/2013 EUR
1,000
Equity 1.1.2013 4215 86 2378 18158 -3276 5799 2437 29797
Result for the 0 0 0 0 0 -4149 202 -3947
period
Total 0 0 0 0 -917 -1370 0 -2287
comprehensive
income for
the period /
translation
differences
Other changes 0 0 0 0 0 441 -351 90
Dividends / 0 0 0 -1031 0 0 -1731 -2762
repayments of
equity
Equity 4215 86 2378 17127 -4193 721 558 20891
31.12.2013
STATEMENT OF A B C D E F G H
CHANGES IN
EQUITY 1
-12/2014 EUR
1,000
Equity 1.1.2014 4215 86 2378 17127 -4193 720 558 20891
Result for the 0 0 0 0 0 -2793 453 -2340
period
Total 0 0 0 0 -3486 -4357 0 -7842
comprehensive
income for
the period /
translation
differences
Other changes 0 0 0 63 0 80 0 143
Dividends / 0 0 0 0 0 0 -178 -178
repayments of
equity
Equity 4215 86 2378 17190 -7679 -6349 833 10674
31.12.2014
Movements in fixed assets
Movements in fixed assets Tangible Intangible Total
EUR 1,000
Book value 1.1.2013 38 737 10 329 49 066
Additions 393 36 429
Disposals -2 709 0 -2 709
Depreciation, amortisation and impairment losses -3 083 -318 -3 401
Exchange rate differences -1 846 0 -1 846
Book value 30.6.2013 31 492 10 046 41 538
Movements in fixed assets Tangible Intangible Total
EUR 1,000
Book value 1.1.2014 31 492 10 046 41 539
Additions 379 32 410
Disposals -553 0 -553
Depreciation, amortisation and impairment losses -1 237 -208 -1 445
Exchange rate differences -6 730 0 -6 730
Book value 30.6.2014 23 351 9 870 33 221
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.
Related party transactions 1-12/2014
EUR 1,000
Sales 7
Purchases 170
Current liabilities 130
Key figures
KEY FIGURES 1-12/2014 1-12/2013
Gross capital expenditure, EUR 1,000 506 429
Personnel 241 277
Operating margin % 2,5 % 0,3 %
Share price development
Share price at beginning of period 1,60 1,88
Share price at end of period 0,99 1,60
Highest for the period 1,73 2,20
Lowest for the period 0,98 1,52
Eguity/share EUR 0,75 1,56
Earnings/share (EPS) EUR, undiluted -0,21 -0,32
Earnings/share (EPS) EUR, diluted -0,21 -0,32
Equity ratio % 23,56 36,42
Gearing % 189,8 96,7
Other liabilities and commitments
Contingencies and commitments, 31.12.2014 31.12.2013
EUR 1,000
Mortgages given 11 000 11 000
Book value of pledged 51 229 46 516
subsidiary shares and -loan
receivables
Other contingent liabilities 11 976 13 875
Rental obligations 60 131 67 194
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 2014. 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 2013 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 2014:
IFRS 10 Consolidated Financial Statements
IFRS 12 Disclosures of Interests in Other Entities
Annual Improvements to IFRS
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. This interim report is unaudited.
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
________________________________________
Undiluted number of shares outstanding at the end of the financial year
Gearing (%) =
Interest-bearing liabilities - cash and cash equivalents
____________________________________________ X 100
Equity
