Ruukki Group Plc, Stock Exchange Release, 6 November 2008 at 9:30 a.m.
Ruukki Group's Sawmill Business segment facing increased foreign exchange risks
in its export sales
The export sales of Ruukki Group Plc's Sawmill Business segment to Japanese
market has declined sharper than expected due to strong short-term change in yen
exchange rate and due to price competition from Swedish competitors. The
expected future yen denominated sales inflows have been hedged with currency
forward agreements. The domestic sales have increased in relation to export
sales and therefore the amount of open yen position has increased.
Due to large fluctuation in Japanese yen exchange rate, the unrealised foreign
exchange rate related to currency forwards has significantly increased. The
realisation of the exchange rate risk is conditional upon the exchange rate
development until 30 June 2009 as well as on the realised volume of export sales
denominated in yen during that period.
The open nominal net position of currency forward agreements were altogether EUR
18.0 million on 31 October 2008 (30 September 2008: EUR 16.2m), and the
unrealised losses at fair value based on 5 November 2008 exchange rates were
altogether EUR 3.9 million (30 September 2008: EUR 1.1m) when excluding the
effect of commercial cash flows.
In case the risks described above would be realised in full and the exchange
rates would be at 5 November 2008 level, fourth quarter (1 Oct - 31 Dec 2008)
operating profit (EBIT) would be negatively affected by about EUR 0.3 million
and net finance income negatively affected by approximately EUR 2.5 million. On
30 September 2008 EUR 1.1 million unrealised foreign exchange losses have been
recognised.
Ruukki Group Plc does not apply hedging accounting as specified in IAS39.
RUUKKI GROUP PLC
Alwyn Smit
Chairman of the Board and CEO
Ruukki Group Plc's shares are listed on OMX Nordic Exchange Helsinki in which
the shares of the Company are traded in the mid cap segment, in the industrials
sector.
For additional information, please contact:
Alwyn Smit
Chairman of the Board and CEO
Ruukki Group Plc
Telephone +41 7960 19094
www.ruukkigroup.fi
Antti Kivimaa
Deputy CEO, domestic wood processing businesses
Ruukki Group Plc
Telephone +358 400 501 780
www.ruukkigroup.fi
This stock exchange release is based on a translation into English of a document
written in Finnish. In case of any discrepancies, inconsistencies or
inaccuracies, the Finnish version of the release shall prevail.
RUUKKI GROUP'S SAWMILL BUSINESS SEGMENT FACING INCREASED FOREIGN EXCHANGE RISKS IN ITS EXPORT SALES
| Source: Afarak Group Plc