Neo Industrial Plc INTERIM REPORT 7 November 2012 at 2.45 p.m.
The board of the Neo Industrial Group signed a demerger plan in August. The Cable segment again recorded a positive operating result in the third quarter.
January–September:
- The Neo Industrial Group’s net sales were EUR 86.0 million (95.2 million in 2011), decreasing by 9.6 percent.
- Its operating result improved by 167.0 percent to EUR 8.1 million (-12.1 million).
- The Cable segment’s operating result was EUR 2.3 million (-2.0 million).
- The Viscose Fibres segment’s operating result was EUR 6.5 million (-8.9 million).
- The Group’s result for the period improved by 100.4 percent to EUR 0.1 million (-16.3 million).
July–September
- The Neo Industrial Group’s net sales were EUR 28.3 million (27.4 million), increasing by 3.4 percent.
- Its operating result improved by 114.8 percent to EUR 0.4 million (-2.9 million).
- The Cable segment’s operating result was EUR 1.8 million (-1.5 million).
- The Viscose Fibres segment’s operating result was EUR -1.1 million (-1.1 million).
- The Board of Directors signed a demerger plan.
KEY FIGURES
| Q3/ 2012 | Q3/ 2011 | Change | Q1-3/ 2012 | Q1-3/ 2011 | Change | |
| Net sales (EUR million) | 28.3 | 27.4 | 3,4 % | 86.0 | 95.2 | -9,6 % |
| Operating result (EUR million) | 0.4 | -2.9 | 114,8% | 8.1 | -12.1 | 167,0 % |
| Profit for the period (EUR million) | -1.5 | -4.7 | 67,1 % | 0.1 | -16.3 | 100,4 % |
| Earnings per share, EUR | -0.38 | -0.64 | 41,2 % | -0.25 | -2.56 | 90,3 % |
| ROI | 6,1 % | -19,8 % | ||||
| Equity ratio | 17,3 % | 21,3 % |
MANAGING DIRECTOR JARI SALO:
The Cable segment improved its result considerably in the third quarter when compared to the corresponding period of the previous year. Its positive operating result was boosted by increased demand in Finland and other Nordic countries. This is significant for the stability of the Group’s finances. Working capital management continued to present challenges and require considerable attention from the management.
The Group prepared reorganisation programmes for the Viscose Fibres and Single Family Housing segments during the review period, and the programme for the Viscose Fibres segment was confirmed. In June, Neo Industrial decided to write off its shares in Finndomo Ltd and discontinue its Single Family Housing segment.
The Neo Industrial Group's Board of Directors signed a demerger plan in August. The Board believes that the demerger will streamline business structures, improve transparency and help create more value for shareholders over the long term.
In the Viscose Fibres segment, Avilon’s corporate reorganisation programme was confirmed in June, which improved the company’s debt structure and future prospects. The segment made an investment that enables the manufacture of antimicrobial products and continued to market the PPV technology and the related licences. It also signed a letter of intent with a major Chinese fibre manufacturer and continued negotiations towards its first licensing contract.
NEAR-TERM OUTLOOK
The Cable segment is expected to record a positive result also in the second half of 2012. The outlook for the main markets of the Cable segment is uncertain for the rest of the year. Many significant investments will be postponed in the Nordic countries because of economic uncertainty. The Finnish construction industry seems to be slowing more than expected towards the winter. Several underground cabling projects are being planned in Finland and Sweden, but their implementation will not begin for the most part until the spring of 2013. The Norwegian cable market is expected to develop favourably in 2013.
In the Viscose Fibres segment, the first deliveries in Avilon’s new product category, antimicrobial fibres, will be small, and growth in volumes depends on customers’ schedules, decision-making processes and the results of test runs. Procurement logistics must also be developed to ensure continuous and stable production volumes in different situations. Antimicrobial products have been manufactured for stock, and post-processing runs will be carried out as customer volumes increase in the future. Costs and operations will be adjusted depending on the situation.
Viscose production will be launched after operating conditions, the appropriate product mix and funding have been secured. Preparations for the winter are in progress, which means that the viscose fibre production lines will not be launched during 2012.
Negotiations related to the PPV technology will continue with selected target companies. The first agreement is expected to be concluded in the fourth quarter of 2012.
DISCLOSURE POLICY OF INTERIM REPORT
Neo Industrial discloses relevant information related to its Interim Report with this Stock Exchange Release. Neo Industrial's Interim Report Q3/ 2012 is attached to this release and is also available on company's website at www.neoindustrial.fi.
Helsinki, 7 November 2012
Neo Industrial Plc
Board of Directors
More information:
Jari Salo, Managing Director, tel. +358 20 720 9196
Markku E. Rentto, Managing Director during the review period, tel. +358 20 720 9191
Sari Tulander, CFO, tel. +358 20 720 9192
www.neoindustrial.fi
Neo Industrial's strategy is to invest mainly in industrial companies with similar synergic benefits. The aim of investments is with active ownership to develop the purchased companies and establish additional value. Returns are sought through both dividend flow and an increase in value. Neo Industrial's class B shares are listed on the NASDAQ OMX Helsinki Stock Exchange. Neo Industrial's business segments are Cable and Viscose Fibres.
ENCL: Neo Industrial's Interim Report Q3/2012
