HONKARAKENNE OYJ INTERIM REPORT 27 October 2016 at 9:00 a.m.
HONKARAKENNE OYJ’S INTERIM REPORT 1 JANUARY – 30 SEPTEMBER 2016
SUMMARY
Third-quarter net sales amounted to MEUR 11.3 (MEUR 11.6 in the previous year) representing a decrease of 3% year-on-year. The operating result improved by MEUR 1.0 to MEUR 1.0 (0.0). In the third quarter no adjustment items affecting comparability were recognised (0.1).
Cumulative net sales in the January-September period were 25.8 (29.2), a decline of 12% from the previous year. The adjusted operating result for January-September was MEUR -0.9 (-0.4) and the operating result was MEUR -1.1 (-1.0).
July - September 2016
- Honkarakenne Group's net sales for the third quarter of the year amounted to MEUR 11.3 (MEUR 11.6 in 2015), representing a decrease over the same period the previous year of 3 %.
- The operating result was MEUR 1.0 (MEUR 0.0). Adjusted operating result was MEUR 1.0 (MEUR 0.1).
- The result before taxes was MEUR 0.9 (MEUR 0.0).
- Earnings per share amounted to EUR 0.14 (EUR 0.01).
Tammikuu - syyskuu 2016
- Honkarakenne Group's net sales January-September amounted to MEUR 25.8 (MEUR 29.2 in 2015), representing a decrease over the same period the previous year of 12 %.
- The operating result was MEUR -1.1 (MEUR -1.0). Adjusted operating result was MEUR -0.9 (MEUR -0.4).
- The loss before taxes was MEUR -1.6 (MEUR -1.4).
- Earnings per share amounted to EUR -0.39 (EUR -0.21).
Honkarakenne reiterates its view that the net sales and adjusted result before taxes for 2016 will be lower than in the previous year.
At the end of September, the Group's order book stood at MEUR 16.5, up 1 % on the corresponding period of the previous year, when it amounted to MEUR 16.3. 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.
| KEY INDICATORS |
7-9/ 2016 |
7-9/ 2015 |
1-9/ 2016 |
1-9/ 2015 |
1-12/ 2015 | |
| Net sales, MEUR | 11.3 | 11.6 | 25.8 | 29.2 | 39.1 | |
| Operating profit/loss, MEUR | 1.0 | 0.0 | -1.1 | -1.0 | -1.1 | |
| Adjusted operating profit/loss, MEUR | 1.0 | 0.1 | -0.9 | -0.4 | -0.2 | |
| Profit/loss before taxes, MEUR | 0.9 | 0.0 | -1.6 | -1.4 | -1.7 | |
| Adjusted profit/loss before taxes, MEUR | 0.9 | 0.1 | -1.4 | -0.9 | -0.9 | |
| Average number of personnel | 135 | 140 | 137 | 142 | 139 | |
| Personnel in person-years, average | 125 | 131 | 114 | 117 | 115 | |
| Earnings/share (EPS), EUR | 0.14 | 0.01 | -0.39 | -0.21 | -0.23 | |
| Equity ratio, % | 34 | 34 | 37 | |||
| Return on equity, % | -26 | -12 | -13 | |||
| Shareholders' equity/share, EUR | 1.28 | 1.62 | 1.61 | |||
| Gearing, % | 81 | 89 | 81 |
Marko Saarelainen, President and CEO of Honkarakenne Oyj, in connection with the interim report:
“In the third quarter the trend in pre-sales in Finland was significantly better than in the previous year. The market uncertainty in Russia reminded almost unchanged and that appeared in poor development of pre-sales. However, the net sales in Russia developed positively during the report period. In Global Markets, the sales trend has been weaker than expected due to the scarcity of project sales. As a whole the Group’s net sales in the third quarter fell short of the previous year. At the end of the review period, the order book was at a higher level than in the previous year.
During the third quarter, Honkarakenne continued to make outlays in marketing. Our successful marketing actions included our participation in the Seinäjoki Housing Fair and the factory market at the Karstula facility. Honkarakenne seems to be benefiting from the recovery of the Finnish market. Market research proves that we have increased our market share in Finland. Especially we were pleased with the increase in sales of detached houses.
Honka published its own concept for public construction and will continue to make outlays on this business. In addition, we are further developing our sales network and sales support functions as well as investing in project sales in all selected markets.”
NET SALES
The Group’s third quarter net sales were MEUR 11.3 (11.6), down 3 % on the corresponding period of the previous year. In January-September net sales were MEUR 25.8 (MEUR 29.2), down 12 % on the corresponding period of the previous year.
Geographical distribution of net sales:
| DEVELOPMENT OF SALES | |||||||||
|
Distribution of net sales, % |
1-9 /2016 |
1-9 /2015 |
|||||||
| Finland & Baltics | 56 % | 46 % | |||||||
| Russia & CIS | 22 % | 24 % | |||||||
| Global Markets | 22 % | 30 % | |||||||
| Total | 100 % | 100 % | |||||||
| Net sales, MEUR |
7-9 /2016 |
7-9 /2015 |
change % |
1-9 /2016 |
1-9 /2015 |
change % | |||
| Finland & Baltics | 5.9 | 5.3 | 10 % | 14.5 | 13.4 | 8 % | |||
| Russia & CIS | 3.6 | 2.6 | 36 % | 5.6 | 7.0 | -20 % | |||
| Global Markets | 1.9 | 3.7 | -48 % | 5.7 | 8.8 | -36 % | |||
| Total | 11.3 | 11.6 | -3 % | 25.8 | 29.2 | -12 % | |||
Finland & Baltics includes the following countries: Finland, Estonia, Latvia and Lithuania. It includes also Process waste sales for recycling.
Russia & CIS includes the following countries: Russia, Azerbaijan, Kazakhstan and other CIS countries excluding Ukraine.
Global Markets includes other countries than above-mentioned and CIS country Ukraine.
The Group’s order book stood at MEUR 16.5 at the end of September. In the previous year at the same time period it was MEUR 16.3.
TRENDS IN PROFIT AND PROFITABILITY
The adjusted operating loss for the January-September period was MEUR -0.9 (MEUR -0.4), the operating loss was MEUR -1.1 (MEUR -1.0) and the result before taxes was MEUR -1.6 (MEUR -1.4). Adjustment items include MEUR 0.2 in costs related to the efficiency-boosting programme kicked off in May, in the third quarter no adjustment items affecting the comparability were recognised (MEUR 0.1).
The development of the operating result was negatively impacted by the year-on-year decline in net sales.
FINANCING AND INVESTMENTS
The financial position of the Group remained satisfactory during the repot period. The equity ratio stood at 34 % (34 %) and net financial liabilities at MEUR 5.2 (MEUR 7.1). MEUR 1.5 (MEUR 1.7) of the financial liabilities carries a 30 % equity ratio covenant term. Group liquid assets totalled MEUR 0.4 (MEUR 1.1). The Group also has a MEUR 5.4 (MEUR 7.8) bank overdraft facility, MEUR 1.4 of which had been drawn on at the end of the report period (MEUR 3.0). Gearing stood at 81 % (89 %).
The Group’s capital expenditure on fixed assets totalled MEUR 0.1 (MEUR 0.0).
PRODUCTS AND MARKETING
In Finland & Baltics, sales development was positive. In particular, more single-family homes have been sold this year than in 2015. Honkarakenne’s marketing outlays yielded results and the company was able to tap into the recovery of the Finnish market. According the market researches Honkarakenne has increased its market share in Finland.
Honka’s showcase house at the Seinäjoki Housing Fair – the modern log house, designed by SAFA Anssi Lassila - Honka Markki,– attracted widespread positive interest in fair audience and also in media. Towards the end of the housing fair, Honka released its own public construction concept. Outlays on this business will continue. One of the successful marketing actions carried out during this autumn was the factory market held at the Karstula facility.
In Russia & CIS, the uncertainty of Russian economic situation is seen. To bolster net sales, Honkarakenne is developing new methods and tools for more modern architecture and focuses on expanding its product range and large-scale projects.
In Global Markets, the company is seeking sales growth in Central Europe, Asia and other international projects by focusing on selected markets. The international sales network and support functions are the primary development focuses; during the third quarter, the company launched its revamped Internet site.
RESEARCH AND DEVELOPMENT
In the January–September period, the Group's R&D expenditure totalled MEUR 0.2 (MEUR 0.3), representing 0.9 % of net sales (0.9 %). The Group did not capitalise any development expenditure during the report period.
PERSONNEL
During the third quarter of the year, the Group employed a total of 125 (131) employees on average in terms of person-years. The Group had an average of 135 (140) employees during the third quarter of the year, representing a year-on-year decrease of 5.
In May-June, the Group conducted negotiations under the act on co-operation within undertakings and as a result Honkarakenne can lay-off clerical and managerial employees temporarily maximum 90 days and blue-collar workers will work under reduced working hours. The lay-off plan is effective until 31 March 2017 for white-collars and until 31 May 2017 for blue-collar workers.
CHANGE IN MANAGEMENT
In June Honkarakenne’s CFO Mikko Jaskari announced that he will transfer into another company’s employ. Mikko Jaskari’s employment relationship ended on 31 July 2016. Erja Heiskanen, Honkarakenne’s Vice President – Operations, left the company at the end of June due to the organisational reform carried out as part of the efficiency-boosting programme.
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.
At the end of 2015, payouts from the share scheme were assessed as zero for the entire performance period 2013- 2016, and any amounts previously recognised for the scheme were cancelled.
HONKARAKENNE OYJ’S 2016 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 15 April 2016. 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 2015. The AGM decided not to pay a dividend for the 2015 financial year.
Kati Rauhaniemi, Anita Saarelainen, Jukka Saarelainen, Mauri Saarelainen and Arto Tiitinen were re-elected to the company's Board of Directors. Rainer Häggblom was elected as a new member. At the Board's constituent meeting, Arto Tiitinen was elected Chairman of the Board and Mauri Saarelainen was elected as Deputy Chairman. At the same meeting, the Board decided to establish a Nomination and Remuneration Committee. The following directors were elected as members of the committee: Arto Tiitinen (as Chairman of the Committee), Anita Saarelainen and Mauri Saarelainen.
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.
OWN SHARES AND AUTHORISATIONS OF THE BOARD OF DIRECTORS
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 15 April 2016, 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 1,500,000 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 remain in force until the next Annual General Meeting, however expiring at the latest on June 30, 2017.
CORPORATE GOVERNANCE
Honkarakenne Oyj follows the Finnish Corporate Governance Code 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.
FORTHCOMING RISKS AND UNCERTAINTIES
Russia is one of Honkarakenne’s major business territories. The sanctions connected to the Ukrainian crisis, the trend in the price of oil and strong exchange rate fluctuations currently cause instability in the Russian market. This might have major impacts on Honkarakenne’s operations.
It is currently more difficult to acquire funding from the financial markets. Some of the company’s loans carry a 30% equity ratio covenant term. At the end of the second quarter, the equity ratio stood at 34% (34). If the company’s sales do not develop sufficiently well, it is possible that the terms of the covenant will be broken during the last quarter of the year. The company has launched negotiations on new financing with banks and other potential financiers.
The assessment of amounts in the balance sheet is based on current assessments by the management. If these assessments are changed, this may result in changes to the company’s result.
At the end of September, the deferred tax assets in the balance sheet included an item of MEUR 1.5 related to unused tax losses. In Honkarakenne’s opinion, these deferred tax assets recognised in the balance sheet can be utilised by using the company’s estimated taxable income, which is based on Honkarakenne’s business plans, including the current efficiency-boosting programme. If earnings do not develop as expected in the long term, it is possible that the tax assets might not be utilised in time and must be impaired. The company has not recognised new deferred tax assets in the balance sheet in 2016.
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 2015. The new revised standards or interpretations effective as of 1 January 2016 have no bearing on the figures presented for the report period. The figures have not been examined by the auditor.
As from half year financial report, Honkarakenne complies with the Guidelines on Alternative Performance Measures (APM) issued by the European Securities and Markets Authority (ESMA). An APM is a financial measure of performance other than a financial measure defined or specified in IFRS. For this reason, the term “adjusted” is used instead of “without non-recurring items”.
THE OUTLOOK FOR 2016
Honkarakenne reiterates its view that the net sales and adjusted result before taxes for 2016 will be lower than in the previous year.
HONKARAKENNE OYJ
Board of Directors
Further information:
Marko Saarelainen, President and CEO, tel. +358 40 542 0254, marko.saarelainen@honka.com
This and previous releases are available for viewing on the company’s website at www.honka.com.
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
Financial Supervisory Authority
www.honka.com
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
|||||
| unaudited | 7-9 /2016 | 7-9 /2015 |
1-9 /2016 |
1-9 /2015 |
1-12 /2015 |
| MEUR | |||||
| Net sales | 11.3 | 11.6 | 25.8 | 29.2 | 39.1 |
| Other operating income | 0.0 | 0.0 | 0.2 | 0.2 | 0.3 |
| Change in inventories | -0.4 | -1.4 | 0.4 | -0.7 | -0.6 |
| Materials and services | -6.8 | -6.7 | -17.2 | -18.4 | -24.8 |
| Employee benefit expenses | -1.5 | -1.8 | -5.1 | -5.8 | -7.5 |
| Depreciations and amortisation | -0.4 | -0.5 | -1.4 | -1.5 | -2.0 |
| Impairment | -0.0 | -0.0 | -0.0 | -0.0 | -0.3 |
| Other operating expenses | -1.3 | -1.3 | -3.9 | -3.8 | -5.3 |
| Operating profit/loss | 1.0 | 0.0 | -1.1 | -1.0 | -1.1 |
| Financial income | 0.0 | 0.0 | 0.1 | 0.2 | 0.2 |
| Financial expenses | -0.1 | 0.0 | -0.6 | -0.6 | -0.8 |
| Share of associated companies' result | -0.0 | -0.0 | -0.0 | -0.0 | -0.1 |
| Profit/loss before taxes | 0.9 | 0.0 | -1.6 | -1.4 | -1.7 |
| Taxes | -0.2 | 0.0 | -0.3 | 0.4 | 0.6 |
| Profit/loss for the period | 0.7 | 0.0 | -1.9 | -1.0 | -1.1 |
| Other comprehensive income | |||||
| Translation differences | 0.0 | 0.0 | 0.3 | 0.1 | 0.2 |
|
Total comprehensive income for the period |
0.7 | 0.1 | -1.6 | -0.9 | -0.9 |
| Result for the period attributable to | |||||
| Equity holders of the parent | 0.7 | 0.0 | -1.9 | -1.0 | -1.1 |
| Non-controlling interest | 0.0 | -0.0 | -0.0 | 0.0 | -0.0 |
| 0.7 | 0.0 | -1.9 | -1.0 | -1.1 | |
| Comprehensive income attributable to | |||||
| Equity holders of the parent | 0.7 | 0.1 | -1.6 | -0.9 | -0.9 |
| Non-controlling interest | 0.0 | -0.0 | -0.0 | 0.0 | -0.0 |
| 0.7 | 0.1 | -1.6 | -0.9 | -0.9 | |
|
Calculated from the result for the period attributable to equity holders of parent Earnings/share (EPS), EUR |
|||||
| Basic | 0.14 | 0.01 | -0.39 | -0.21 | -0.23 |
| Diluted | 0.14 | 0.01 | -0.39 | -0.21 | -0.23 |
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 |
30.9.2016 | 30.9.2015 | 31.12.2015 | |||||||||||||
| MEUR | ||||||||||||||||
| Assets | ||||||||||||||||
| Non-current assets | ||||||||||||||||
| Property, plant and equipment | 10.0 | 13.0 | 11.4 | |||||||||||||
| Goodwill | 0.1 | 0.1 | 0.1 | |||||||||||||
| Other intangible assets | 0.2 | 0.3 | 0.2 | |||||||||||||
| Investments in associated companies | 0.2 | 0.2 | 0.2 | |||||||||||||
| Receivables | 0.1 | 0.2 | 0.2 | |||||||||||||
| Deferred tax assets | 2.7 | 2.6 | 2.7 | |||||||||||||
| 13.2 | 16.3 | 14.8 | ||||||||||||||
| Current assets | ||||||||||||||||
| Inventories | 4.7 | 4.3 | 4.2 | |||||||||||||
| Trade and other receivables | 5.2 | 5.6 | 3.7 | |||||||||||||
| Tax receivable, income tax | 0.2 | 0.2 | 0.0 | |||||||||||||
| Cash and bank receivables | 0.4 | 1.1 | 1.1 | |||||||||||||
| 10.5 | 11.2 | 9.1 | ||||||||||||||
| Non-current assets held for sale | 0.0 | 0.0 | 1.0 | |||||||||||||
| Total assets | 23.7 | 27.5 | 24.9 | |||||||||||||
| Shareholders' equity and liabilities | 30.9.2016 | 30.9.2015 | 31.12.2015 | |||||||||||||
|
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 | 6.5 | 6.5 | |||||||||||||
| Own shares | -1.4 | -1.4 | -1.4 | |||||||||||||
| Translation differences | 0.3 | -0.1 | -0.0 | |||||||||||||
| Retained earnings | -9.6 | -7.7 | -7.8 | |||||||||||||
| 6.2 | 7.8 | 7.8 | ||||||||||||||
| Non-controlling interests | 0.2 | 0.2 | 0.2 | |||||||||||||
| Total equity | 6.4 | 8.0 | 8.0 | |||||||||||||
| Non-current liabilities | ||||||||||||||||
| Provisions | 0.2 | 0.3 | 0.2 | |||||||||||||
| Financial liabilities | 2.2 | 6.2 | 4.5 | |||||||||||||
| Other liabilities | 0.0 | 0.1 | 0.1 | |||||||||||||
| 2.4 | 6.6 | 4.9 | ||||||||||||||
| Current liabilities | ||||||||||||||||
| Trade and other payables | 10.9 | 10.2 | 8.5 | |||||||||||||
| Current tax liabilities | 0.3 | 0.3 | 0.1 | |||||||||||||
| Provisions | 0.3 | 0.4 | 0.3 | |||||||||||||
| Current financial liabilities | 3.4 | 2.0 | 3.1 | |||||||||||||
| 14.9 | 12.9 | 12.0 | ||||||||||||||
| Liabilities of non-current assets held for sale | 0.0 | 0.0 | 0.1 | |||||||||||||
| Total liabilities | 17.3 | 19.4 | 16.9 | |||||||||||||
| Total equity and liabilities | 23.7 | 27.5 | 24.9 | |||||||||||||
|
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 1.1.2015 | 9898 | 520 | 6534 | -215 | -1382 | -6638 | 8716 | 204 | 8920 | |||||||
| Profit/loss for the period | -1000 | -1000 | 0 | -1000 | ||||||||||||
| Translation difference | 139 | 139 | 139 | |||||||||||||
| Management incentive plan | -19 | -19 | -19 | |||||||||||||
| Total equity 30.9.2015 | 9898 | 520 | 6534 | -77 | -1382 | -7657 | 7836 | 205 | 8041 | |||||||
|
EUR thousand |
Equity attributable to equity holders of the parent |
|||||||||||||||
| a) | b) | c) | d) | e) | f) | Total | g) | Total equity | ||||||||
|
Total equity 1.1.2016 |
9898 | 520 | 6534 | -27 | -1382 | -7757 | 7786 | 204 | 7990 | |||||||
| Profit/loss for the period | -1881 | -1881 | -1 | -1882 | ||||||||||||
| Translation difference | 309 | 309 | 309 | |||||||||||||
| Total equity 30.9.2016 | 9898 | 520 | 6534 | 280 | -1382 | -9638 | 6212 | 204 | 6416 | |||||||
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 |
1.1.- 30.9.2016 |
1.1.- 30.9.2015 |
1.1.- 31.12.2015 |
| MEUR | |||
| Cash flow from operating activities | 0.4 | 1.1 | 1.8 |
| Cash flow from investing activities, net | 0.9 | -0.0 | -0.1 |
| Total cash flows from financing activities | -2.1 | -1.0 | -1.6 |
| Proceeds from borrowings | 0.0 | 0.0 | 0.2 |
| Repayment of borrowings | -2.0 | -1.0 | -1.7 |
| Other financial items | -0.0 | -0.1 | -0.1 |
| Change in cash and cash equivalents | -0.7 | 0.1 | 0.1 |
| Cash and cash equivalents at the beginning of period | 1.1 | 1.0 | 1.0 |
| Cash and cash equivalents at the close of period | 0.4 | 1.1 | 1.1 |
NOTES TO THE REPORT
ACCOUNTING POLICIES
This half year financial report has been drafted in accordance with IAS 34. The principles adhered to in preparing the annual financial statements also apply to this half year financial report. The half year financial report should be read together with the annual financial statements for 2015. The new revised standards or interpretations effective as of 1 January 2016 have no bearing on the figures presented for the report period. The figures have not been examined by the auditor.
As from half-year report, Honkarakenne complies with the Guidelines on Alternative Performance Measures (APM) issued by the European Securities and Markets Authority (ESMA). An APM is a financial measure of performance other than a financial measure defined or specified in IFRS. For this reason, the term “adjusted” is used instead of “without non-recurring items”. As adjustment items, the company classifies significant business transactions that are considered to affect comparisons between different reporting periods. Such transactions include significant reorganisation expenses, impairment losses or reversals thereof, and capital gains and losses on assets.
Honka Management Oy, which is owned by the senior management of Honkarakenne Oyj and was established in 2010, 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 |
| MEUR | equipment |
| Cost 1.1.2016 | 51.0 |
| Translation differences (+/-) | 0.0 |
| Increase | 0.1 |
| Disposals | -0.8 |
| Cost 30.9.2016 | 50.3 |
| Accumulated depreciation 1.1.2016 | -39.6 |
| Translation differences (+/-) | -0.0 |
| Accumulated depreciation of disposals and reclassifications | 0.8 |
| Depreciation for the period | -1.4 |
| Accumulated depreciation 30.9.2016 | -40.3 |
| Carrying amount 1.1.2016 | 11.4 |
| Carrying amount 30.9.2016 | 10.0 |
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 | 30.9.2016 | 30.9.2015 | 31.12.2015 |
| MEUR | |||
|
For own loans |
|||
| - Mortgages | 17.4 | 25.7 | 25.7 |
| - Other quarantees | 1.9 | 1.8 | 2.1 |
| Rental liabilities | 0.2 | 0.3 | 0.4 |
| Leasing liabilities | 0.1 | 0.2 | 0.4 |
| Derivative contracts | 0.1 | 0.2 | 0.2 |
| Nominal values of forward exchange contracts | 0.5 | 0.5 | 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.
In January-September ordinary business transactions with related parties were made as follows: sales of goods and services to related parties amounted to EUR 177 thousand and purchases from related parties amounted to EUR 288 thousand. In 2010 and 2011, Honkarakenne Oyj granted long-term loans totalling MEUR 0.9 to Honka Management Oy, which is owned by the company’s senior management. Impairments amounting total EUR 393 thousand was recognised in 2014-2015 for this loan in the parent company.
| KEY INDICATORS | ||||
| 1-9/ | 1-9/ | 1-12/ | ||
| Unaudited | 2016 | 2015 | 2015 | |
| Earnings/share (EPS) | euro | -0.39 | -0.21 | -0.23 |
| Return on equity | % | -26 | -12 | -13 |
| Equity ratio | % | 34 | 34 | 37 |
| Shareholders equity/share | euro | 1.28 | 1.62 | 1.61 |
| Net financial liabilities | MEUR | 5.2 | 7.1 | 6.5 |
| Gearing | % | 81 | 89 | 81 |
| Gross investments | MEUR | 0.1 | 0.0 | 0.1 |
| % of net sales | 0 | 0 | 0 | |
| Order book | MEUR | 16.5 | 16.3 | 15.0 |
| Average number of personnel | Clerical | 67 | 75 | 71 |
| Workers | 70 | 67 | 68 | |
| Total | 137 | 142 | 139 | |
| Personnel in person-years, average | Clerical | 63 | 65 | 63 |
| Workers | 51 | 52 | 51 | |
| Total | 114 | 117 | 115 | |
| Adjusted number of shares (’000) | At period-end | 4847 | 4847 | 4847 |
| Average during period | 4847 | 4847 | 4847 |
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CALCULATION OF KEY INDICATORS |
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| Profit for the period attributable to equity holders of parent | ||
| Earnings/share (EPS): | ------------------------------------------------ | |
| Average number of outstanding shares | ||
| Result 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 outstanding shares at the close of period | ||