VAAHTO GROUP INTERIM REPORT FOR 1 SEPTEMBER 2011 – 29 FEBRUARY 2012

Lahti, Finland, 2012-04-12 12:00 CEST (GLOBE NEWSWIRE) -- VAAHTO GROUP PLC OYJ STOCK EXCHANGE BULLETIN 12.4.2012  at  13.00

VAAHTO GROUP INTERIM REPORT FOR 1 SEPTEMBER 2011 – 29 FEBRUARY 2012

Vaahto Group’s turnover for 1 September 2011 – 29 February 2012 was 26.5 MEUR (compared with 24.9 MEUR for the corresponding period in the previous financial year), with an operating loss of 2.9 MEUR (comparative: operating loss 1.3 MEUR). Turnover increased by six per cent from the reference period’s level, but the operating result was weaker than in the comparative period. The Group’s order backlog decreased by six per cent and stood at 21.1 MEUR at the closing of the period under review. Vaahto Group’s profitability is expected to improve in the latter part of the year, but the full-year result is still expected to be negative.

Vaahto Paper Technology

The Paper Technology division’s turnover during the period under review was 17.5 MEUR (17.4 MEUR), and the division made an operating loss of 2.1 MEUR (operating loss 0.6 MEUR). Turnover increased by 0.4 per cent from the reference period’s figure, but the result remained clearly weaker than that of the comparative period, on account of the low profitability of the project business.

The most significant new order during the period under review was for the modernisation of the pulp dryer at the Södra Cell Mönsterås pulp mill. Profitability was heavily affected by the order from the InvestLesProm Group (ILP) Kama mill in Russia, which, because of delays and economic problems on the customer’s side, still caused extra work, administration, and costs.

As part of the strategy work at Vaahto Group, the possibilities for clarification of the structure and organisation of the project business unit, as well as potential options for business acquisitions or sales, are being analysed. The project business unit focuses on offering its key products, headboxes and shoe pressers, to both European and Asian markets.

The company has made a strategic decision to focus on service business in the Vaahto Paper Technology division, where possibilities for utilizing Vaahto’s paper-technology expertise have made themselves evident. Investments are being made in product development and expansion of the product range, for attainment of growth. The division’s objective is to be a strong Nordic service organisation.

Vaahto Process Technology

Vaahto Process Technology’s turnover during the period under review was 9.0 MEUR (from 7.5 MEUR) and operating loss 0.8 MEUR (operating loss 0.7 MEUR). The turnover improved 20% from the reference period’s level, but the operating result decreased slightly. The negative result was caused by weak profitability in the vessel business.

The market situation where pricing is concerned remained difficult for the division’s vessel business, even though the number of confirmed orders and of projects in the tender stage are rapidly growing. The order book doubled in size during the period under review.

Vaahto Process Technology’s market situation in the agitator business has remained good, and the size of the order book is unchanged. Objectives for the agitator business have almost been met, and the outlook for our agitator operations for the latter part of the financial year is good. The agitator business is considered one of the strategic areas of focus for the Group.

Research and development

The Group’s research and development activities have focused on expanding the product range of the Vaahto Paper Technology division. The scope of research and development activities remains at the level seen in the previous financial year.

Investments

The Group’s capital expenditure during the period under review was 0.5 MEUR (1.1 MEUR). It consisted mainly of machine and equipment investments and information systems for the Vaahto Paper Technology division’s service business.

Financing

The cash flow of the Group’s business operations was -0.4 MEUR (-1.3 MEUR), and the cash flow of investments -0.1 MEUR (7.7 MEUR) during the period under review. The interest-bearing liabilities remained at 15.1 MEUR in the period under review. The Group’s consolidated balance sheet total was 33.4 MEUR (35.8 MEUR), with an equity ratio of 7.9% (22.8%). Measures have been taken in the Group to improve the equity ratio.

Human resources

The average number of personnel employed by the Group during the period under review was 341 (342).

Ari Viinikkala, M.Sc. (Econ.), has been appointed as CFO of Vaahto Group Plc Oyj, serving in this capacity from 1 February 2012.

Authorisation for a share issue

The annual general meeting of 12 December 2011 authorised the Executive Board to decide on the issuing of new shares in one or more tranches. The maximum number of new shares that may be issued is 1,000,000. At maximum, the authorisation for a share issue corresponds to approximately 33% of all shares in the company. This authorisation entitles the Board to decide on all terms of the share issue, including the right to deviate from the shareholders’ subscription privilege. The authorisation is valid until 31 December 2012 unless a general meeting amends or revokes the authorisation before that date. 

International Financial Reporting Standards

The interim report has been prepared in accordance with International Financial Reporting Standards (IFRS) IAS 34, Interim Financial Reporting.

Development prospects

General uncertainty about the economic situation and a highly challenging market situation in Vaahto Group’s main fields of operation continue, making forecasting difficult. The new strategy definitions are expected to improve the Group’s competitiveness, but results from this work are not expected to be seen before the end of the year. Therefore Vaahto Group’s result for the full financial year is expected to be negative.

Vaahto Group interim management statement

Instead of an interim report, Vaahto Group Plc Oyj will publish the management’s interim statement for a period of nine months in the second half of the 1 September 2011 – 31 August 2012 financial year. The management’s interim report will be published on 29 June 2012.

Events after the end of the period under review

The board of Vaahto Group has appointed Ari Viinikkala as acting CEO of Vaahto Group Plc Oyj as of 4th April 2012. Former CEO, Anssi Klinga, has resigned and will pursue his career outside Vaahto Group.

Figures are in thousand euros unless stated otherwise. Figures are unaudited.

NOTES REQUIRED BY IAS 34

Accounting principles

The Interim Report was drawn up according to the same accounting principles and calculation methods as the previous financial statement, for the fiscal period that ended on August 31, 2011.

Dividends paid

During the period under review, Vaahto Group Plc Oyj paid no dividends.

Lahti, April 12, 2012

VAAHTO GROUP PLC OYJ

Board of Directors

         Information:
         Ari Viinikkala
         acting CEO
         tel. +358 400 127664