Ruukki Group Plc, Stock Exchange Release, 17 June 2008 at 10:50 a.m. Ruukki Group Plc redefines its financial forecast for this year. The financial outlook of the wood processing business area for the current year is more moderate than previously assumed, but on the other hand the pending chrome business transaction can, if finalised, very significantly enhance the profitability of the latter half of 2008. An updated financial estimate will be provided in August 2008. The economically weaker outlook is based on lower than expected output delivery volumes in the furniture business segment, as well as on decline in demand and prices in the sawmill business segment. Moreover, of the expenses related to preparation of Russian sawmill and pulp mill investment more than originally anticipated will be recognised as expenses. In order to improve financial performance Ruukki Group will immediately assess opportunities to reduce operational costs. In the short-term emphasis will be on scaling down the Russian project-specific and group level costs. It is estimated that by the measures to be taken, further to be defined in the near future, significant cost savings can be achieved by the end of the year. Because of the planned actions there may be need for one-off impairment of certain assets. The Russian investment project will be continued - for the sawmill as planned and for the pulp mill adjusted. In order to improve profitability and operational efficiency Ruukki Group has decided to slightly adjust its sawmilling capacity by having longer production stoppage during the summer than customarily has been done in the past. Furthermore, group's own kiln capacity will be increased so that dependence on external parties declines and so that one prerequisite for better profitability can be achieved. Ruukki Group Plc has on 5 June 2008 announced that it has entered into a preliminary agreement with Kermas Limited to acquire Kermas Limited's chrome ore operations in Turkey and related sales operations in Malta. According to the preliminary agreement, the initial purchase price is EUR 200 million and the seller will provide Ruukki Group Plc with an EBITDA performance guarantee for the period of 1 July 2008 - 30 June 2012 at the level of EUR 50 million per year. Ruukki Group Plc has decided to initially focus its mineral operations on ferrochrome market. The share purchase agreement is estimated to be signed and the extraordinary shareholders' meeting to be held during August 2008. With reference to the preliminary agreement of the acquisition of Kermas Limited´s chrome ore operations in Turkey and related sales operations in Malta, Kermas Limited has offered to Ruukki Group the opportunity to acquire all the shares in MOGALE, which is a South African based smelter operation and can produce annually 150,000 metric tons of various grades of Charge Chrome. The independent board members of Ruukki Group will assess the MOGALE opportunity in the near future and will inform the market accordingly. RUUKKI GROUP PLC BOARD OF DIRECTORS 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: Matti Vikkula Chief Executive Officer Ruukki Group Plc Tel. + 358 45 6700 606 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 Plc's financial forecast for 2008 - operational actions and new chrome opportunity
| Source: Afarak Group Plc