2010-08-24 10:00:05 CEST
2010-08-24 10:00:52 CEST
REGULATED INFORMATION
Aspo - Interim report (Q1 and Q3)
ASPO GROUP INTERIM REPORT JANUARY 1 TO JUNE 30, 2010
ASPO Plc STOCK EXCHANGE RELEASE August 24, 2010 at 11.00 a.m.
ASPO: Record sales, operating profit growing
January-June
- Aspo Group's net sales in January-June grew by 15% and amounted to EUR 182.6
million (EUR 159.3 million).
- Operating profit grew by 12% to EUR 6.4 million (comparable operating profit
EUR 5.1 million plus EUR 0.6 million in non-recurring items).
- Profit before tax amounted to EUR 4.5 million (EUR 3.4 million).
- Earnings per share stood at EUR 0.13 (EUR 0.10).
April-June
- Aspo Group's net sales grew by 23% and amounted to EUR 99.2 million (EUR 80.9
million).
- Operating profit grew by 126% to EUR 4.3 million (comparable operating profit
EUR 1.3 million plus EUR 0.6 million in non-recurring items).
- Earnings per share stood at EUR 0.11 (EUR 0.03).
- Aspo's ESL Shipping made the largest vessel order in its history, of which the
first installment of EUR 10 million was paid.
- The equity ratio at the end of the review period was 30.2% (29.4%).
- Aspo maintains its guidance unchanged. Aspo will increase its net sales and
the Group has the preconditions to improve its earnings per share.
KEY FIGURES
1-6/2010 1-6/2009 1-12/2009
Net sales, MEUR 182.6 159.3 329.4
Operating profit, MEUR 6.4 5.7 15.3
Share of net sales, % 3.5 3.6 4.6
Profit before tax, MEUR 4.5 3.4 11.7
Share of net sales, % 2.5 2.1 3.6
Personnel at the end of period 717 761 717
Earnings per share, EUR 0.13 0.10 0.33
EPS adjusted for dilution, EUR 0.13 0.09 0.33
Comparable earnings per share, EUR 0.02 0.16
Equity per share, EUR 2.42 2.32 2.59
Equity ratio, % 30.2 29.4 34.6
Gearing, % 124.7 142.2 87.9
AKI OJANEN, ASPO'S CEO:"The second quarter was strong for the conglomerate. ESL Shipping and Telko
improved their comparable operating profit considerably. We carried out measures
in accordance with Group strategy; the importance of the growing eastern markets
was furthered emphasized. During the review period we invested in the future by
making the largest ever vessel acquisition agreement at ESL Shipping. The EU has
continued processing the change in tonnage tax and experts still expect the new
legislation to take effect retroactively from the beginning of 2010.
I feel that Aspo's result for the first half of the year was good despite the
difficult winter traffic for the shipping company, and the growth in net sales
and operating profit in the second quarter was a sign of the earnings potential
of the new Aspo Group established in 2008.
The restructuring of Telko that began in the spring of 2009 has progressed
according to plan. The new management has been successful in achieving many
important goals: strong profitable growth, expansion in eastern markets, and
focusing on the products of the best principals. The added value of our
personnel's know-how to our clients has further strengthened Telko's position as
the leading player in its market in Northern Europe.
After the acquisition in the spring of 2008, Aspo launched a program aimed at
saving costs in Group administration. The fixed costs of the Group's other
operations were expected to decrease by EUR 2 million on an annual level. During
the first half of 2010 the savings have amounted to EUR 1.3 million.
We estimate that Aspo has the preconditions to improve its earnings per share
even though the comparison figure from 2009 includes EUR 5.5 million in
non-recurring sales gains and losses from vessel and business operation
divestments."
ASPO AS A COMPANY
Aspo is a conglomerate that owns and develops business operations in the Baltic
Sea region focusing on demanding B-to-B customers. Aspo's strong company brands
- ESL Shipping, Leipurin, Telko and Kaukomarkkinat - aim to be the market
leaders in their sectors. They are responsible for their own operations,
customer relationships, and the development of these. Together they generate
Aspo's goodwill. Aspo's Group structure and business operations are continually
developed without any predefined schedules.
Aspo's operating segments are ESL Shipping, Leipurin, Telko and Kaukomarkkinat.
Other operations include Aspo Group's administration and other operations not
belonging to the business units.
The Group monitors its net sales on the basis of the following geographical
division: Finland, the Nordic countries, the Baltic countries, Russia and other
CIS countries (including Ukraine), and other countries.
OPERATIONAL PERFORMANCE
General uncertainty has decreased on the markets. The prices of sold raw
materials have increased and the transport volumes of industrial raw materials
that are important for Aspo have grown, but international cargo price levels
have decreased. Concerning food products, the price of grain, in particular, has
started rising.
The national economies in the Baltic region are expected to have made an upturn.
General uncertainty on the financial markets has continued and it is still
difficult to estimate future developments. There have been considerable changes
in the value of currencies as the euro has weakened during the second quarter.
ESL Shipping
ESL Shipping is the leading dry bulk shipping company operating in the Baltic
Sea area. At the end of the review period, the fleet consisted of 17 vessels, of
which the shipping company owns 14 in full. Two are rented and one is partially
owned.
4-6/2010 4-6/2009 Change 1-6/2010 1-6/2009 1-12/2009
Net sales, MEUR 21.7 15.1 6.6 39.0 32.4 63.8
Operating profit, MEUR 3.4 5.2 -1.8 4.8 9.3 14.7
Personnel 195 215 -20 195 215 194
The price level on international dry bulk cargo decreased during the review
period. A majority of the shipping company's capacity has been covered by
long-term agreements. Concerning important industries, the production of the
Scandinavian steel industry has been clearly higher than last year. Coal
transports for the energy industry decreased from last year's levels.
During the review period, shipping operations were successful despite hard winds
making operations difficult in April-May. Transported cargo volumes increased
and the fleet was in full use. During the review period, Ms Pasila was docked as
planned and time chartering of Ms Princenborg ended in April.
The cargo volume carried by ESL Shipping in April-June amounted to 3.4 million
tons (2.5). The share of the steel industry was 2.4 million tons (1.1), and the
energy industry represented 0.9 million tons (1.3).
The operating profit for the quarter was EUR 3.4 million (EUR 2.3 million, plus
EUR 2.9 million sales gain from Ms Kontula). The 20,000 dwt vessel ordered from
India will be ready for handover in the fall. The vessel has binding leasing
financing. The result for the period includes a EUR 0.3 million insurance
indemnity from the 2008 average of Ms Tali, and an extra rent installment of EUR
0.3 million caused by the docking of the partially owned Ms Credo. In May, ESL
Shipping ordered two new 56,150 dwt ice-strengthened dry cargo supramax class
vessels from the Korean Hyundai Mipo shipyard, which will be in operation during
the first half of 2012.
Leipurin
Leipurin serves the baking and other sectors of food industry by supplying
ingredients, production machinery, and production lines, as well as related
expertise. Leipurin operates in Finland, Russia, Poland, the Baltic countries,
and Ukraine. In Russia, Leipurin has operations in several large cities in
addition to St. Petersburg and Moscow. Procurement operations are international.
4-6/2010 4-6/2009 Change 1-6/2010 1-6/2009 1-12/2009
Net sales, MEUR 26.4 26.7 -0.3 51.6 48.4 99.3
Operating profit, MEUR 0.6 1.2 -0.6 1.3 1.5 3.2
Personnel 222 193 29 222 193 218
Raw material prices and demand in the food industry have remained stable. During
the 2009 financial crisis, the orders for project deliveries in machine sales
clearly decreased and there have been temporary lay-offs in the Hausjärvi
machine unit during the second quarter.
The operating profit for the review period, EUR 0.6 million, was below last
year's level (EUR 1.2 million), due to low machine project deliveries. Net sales
and profitability of the strategically important bakery raw material unit
improved compared to the comparison period. The net sales of the bakery and food
raw material units has increased by 13% in January-June and amounted to EUR
46.9 million (41.7). On the Russian growth markets the net sales of Leipurin
increased by 41% in April-June, i.e. to EUR 5.5 million (3.9). The operating
margin for Russia was 8.0% in April-June. The overall operating margin for
Leipurin was 2.3%. The company that was acquired in Latvia in 2009 was merged
into Leipurin's operations.
Telko
Telko is the leading expert and supplier of industrial chemicals and plastic raw
materials in the Baltic Sea region. It operates in Finland, the Baltic
countries, Scandinavia, Poland, Ukraine, Russia, and Belarus. Procurement
operations are international. Business is based on representation by the best
international principals and on the expertise of the personnel. Telko develops
the production and competitiveness of its customers' products in cooperation
with them.
4-6/2010 4-6/2009 Change 1-6/2010 1-6/2009 1-12/2009
Net sales, MEUR 45.2 31.0 14.2 79.7 59.8 128.8
Operating profit, MEUR 1.7 -1.8 3.5 3.3 -1.7 3.1
Personnel 198 225 -27 198 225 193
Prices and demand for sold raw materials strengthened further during the second
quarter. Demand has increased in all market areas. Two-thirds of the strong net
sales growth comes from volume growth and one-third from higher prices. The euro
weakened during the review period. Fluctuations in currencies resulted in
exchange gains.
Telko improved its profitability considerably and the operating profit for the
review period was EUR 1.7 million (comparable operating profit EUR 0.0 million
plus EUR 1.8 million in non-recurring costs). Demand increased and earnings
improved both in industrial chemicals and plastic raw materials. Industrial
demand in lubricants has still not recovered and is clearly below the 2008
level.
On the strategically important eastern markets, net sales growth continued and
during the review period net sales in Russia, other CIS countries, and Ukraine
amounted to EUR 16.7 million (9.0), and the operating margin was 6.6%. The
overall operating margin for Telko was 3.8%.
Telko opened sales operations in China on Kaukomarkkinat's premises to initially
serve European customers.
Kaukomarkkinat
Kaukomarkkinat specializes in energy efficiency technology, solutions to improve
efficiency in the process industry, and security and digital products.
Operations are based on the products of the best companies in the industry and
the willingness of the company's own experts to improve the operations and
efficiency of its customers. Kaukomarkkinat operates in Finland, Poland, Russia,
China, and Vietnam.
4-6/2010 4-6/2009 Change 1-6/2010 1-6/2009 1-12/2009
Net sales, MEUR 5.9 7.9 -2.0 12.3 17.7 36.4
Operating profit, MEUR -0.4 -0.9 0.5 -0.8 0.1 0.5
Personnel 88 97 -9 88 97 90
Kaukomarkkinat's comparable operating profit remained unchanged at EUR -0.4
million (EUR -0.4 million, plus EUR 0.5 million sales loss from Metex
Deutschland).
The order book for industrial project deliveries and the sales of energy
efficiency products improved towards the end of the review period. In energy
efficiency products, the overall market for air-source heat pumps decreased and
Kaukomarkkinat's sales volume decreased during the first half of the year. No
significant industrial machine projects materialized during the review period.
Domestic AV and data units improved their result. The relative share of fixed
administrative costs of net sales increased as net sales decreased as a result
of operational and business divestments and lower sales volumes. Kaukomarkkinat
is adopting a new ERP system that is already in use in Telko.
Other operations
Other operations include Aspo Group's administration and other operations not
belonging to the business units.
4-6/2010 4-6/2009 Change 1-6/2010 1-6/2009 1-12/2009
Net sales, MEUR 0.0 0.2 -0.2 0.0 1.0 1.1
Operating profit, MEUR -1.0 -1.8 0.8 -2.2 -3.5 -6.2
Personnel 14 31 -17 14 31 22
The Group's administrative costs have decreased as planned since the
acquisitions in the spring of 2008.
NET SALES
January-June
Aspo Group's net sales in January-June 2010 amounted to EUR 182.6 million
(159.3). ESL Shipping's net sales grew in spring, particularly after a harsh icy
winter. Leipurin's net sales grew as the volume of bakery raw material sales
increased in Russia, in particular. No bakery lines were delivered during the
review period, which slowed down net sales growth. Kaukomarkkinat's net sales
decreased due to a temporary drop in air-source heat pump demand, project sales
focusing towards the end of the year, and as a result of operational and
business deals carried out in 2009. Telko's net sales grew heavily as demand
recovered as a result of volume growth and price strengthening.
April-June
Aspo Group's net sales in April-June amounted to EUR 99.2 million compared with
EUR 80.9 million in the corresponding period last year.
Net sales by segment, MEUR
4-6/2010 4-6/2009 Change 1-6/2010 1-6/2009 1-12/2009
ESL Shipping 21.7 15.1 6.6 39.0 32.4 63.8
Leipurin 26.4 26.7 -0.3 51.6 48.4 99.3
Telko 45.2 31.0 14.2 79.7 59.8 128.8
Kaukomarkkinat 5.9 7.9 -2.0 12.3 17.7 36.4
Other operations 0,0 0,2 -0,2 0,0 1,0 1,1
Total 99.2 80.9 18.3 182.6 159.3 329.4
There is no considerable inter-segment net sales.
Net sales by market area, MEUR
4-6/2010 4-6/2009 Change 1-6/2010 1-6/2009 1-12/2009
Finland 40.3 38.2 2.1 76.1 75.3 151.8
Nordic countries 14.7 6.4 8.3 25.9 13.4 30.0
Baltic countries 10.5 10.5 0.0 19.5 18.0 37.0
Russia + other CIS
countries 22.3 12.6 9.7 39.3 24.2 56.2
Other countries 11.4 13.2 -1.8 21.8 28.4 54.4
Total 99.2 80.9 18.3 182.6 159.3 329.4
The strong growth of Russia, CIS countries, and Ukraine continued and reached
record sales. Net sales for the Nordic countries exceeded the 2008 level. The
recession has continued in the Baltic market area, which meant net sales from
the Baltic region did not grow.
If ESL Shipping's raw material exports from Russia are included in the Russian
net sales, the sales for Russia increased to EUR 28.7 million (25.3). The
transport volume for Russia-based coal was below the 2009 level.
MEUR 4-6/2010 4-6/2009 Change 1-6/2010 1-6/2009 1-12/2009
Russia + other CIS
countries 28.7 25.3 3.4 50.7 43.6 87.9
EARNINGS
January-June
Aspo Group's operating profit in January-June was EUR 6.4 million (5.7), i.e.
3.5% of net sales. Planned depreciation totaled EUR 4.1 million (4.5). The
Group's net financial costs totaled EUR 1.8 million (2.3). January-June profit
before tax was EUR 4.5 million (3.4), and profit for the period amounted to EUR
3.4 million (2.6). Return on equity was 10.4% (8.4).
April-June
Aspo Group's operating profit in April-June was EUR 4.3 million (EUR 1.9
million, including EUR 2.4 million in sales gains and losses), i.e. 4.3% of net
sales. The operating profit of ESL Shipping totaled EUR 3.4 million (EUR 5.2
million, including sales gains of EUR 2.9 million). Leipurin's operating profit
was EUR 0.6 million (1.2). Telko's operating profit was EUR 1.7 million (EUR
-1.8 million, including non-recurring costs of EUR 1.8 million).
Kaukomarkkinat's operating profit was in the red at EUR -0.4 million (EUR -0.9
million, including EUR -0.5 million in sales losses). Other operations include
Aspo Group's administration and other operations not belonging to the business
units. The operating profit of other operations was EUR -1.0 million (-1.8).
Operating profit by segment, MEUR
4-6/2010 4-6/2009 Change 1-6/2010 1-6/2009 1-12/2009
ESL Shipping 3.4 5.2 -1.8 4.8 9.3 14.7
Leipurin 0.6 1.2 -0.6 1.3 1.5 3.2
Telko 1.7 -1.8 3.5 3.3 -1.7 3.1
Kaukomarkkinat -0.4 -0.9 0.5 -0.8 0.1 0.5
Other operations -1.0 -1.8 0.8 -2.2 -3.5 -6.2
Total 4.3 1.9 2.4 6.4 5.7 15.3
Earnings per share January-June
Earnings per share was EUR 0.13 (0.10) and diluted earnings per share was EUR
0.13 (0.09). Equity per share was EUR 2.42 (2.32).
INVESTMENTS
Group investments in January-June amounted to EUR 11.2 million (3.9), of which a
majority was prepayments for ESL Shipping's new vessel orders. Other investments
include dockings of ESL Shipping's vessels and ICT investments of other business
operations as well as smaller investments required for operational expansion.
Investments by segment, acquisitions excluded, MEUR
4-6/2010 4-6/2009 Change 1-6/2010 1-6/2009 1-12/2009
ESL Shipping 10.3 1.5 8.8 10.4 2.3 3.1
Leipurin 0.0 0.1 -0.1 0.1 0.3 0.5
Telko 0.2 0.6 -0.4 0.3 0.6 2.5
Kaukomarkkinat 0.3 0.2 0.1 0.3 0.3 0.6
Other operations 0.0 0.0 0.0 0.1 0.4 0.7
Total 10.8 2.4 8.4 11.2 3.9 7.4
FINANCING
The Group's financing position improved from the comparison period. The Group's
cash and cash equivalents amounted to EUR 10.7 million (6.9). There was a total
of EUR 89.1 million (91.9) in interest-bearing liabilities on the consolidated
balance sheet. Interest bearing liabilities were affected by dividends paid in
the second quarter and the first installment of the vessel order, both of which
were financed with a bank loan. Interest-free liabilities totaled EUR 57.0
million (53.1).
Aspo Group's gearing was 124.7% (142.2) and the equity ratio was 30.2% (29.4).
The main factor affecting equity in the review period was dividend payments. The
balance sheet total grew as result of the vessel investment.
The Group's cash flow from operations amounted to EUR 2.0 million (6.0) in
January-June. The cash flow was weakened by the low result in the first quarter
and an increase in inventories and sales receivables. In the second quarter, the
cash flow from operations was clearly positive. At the end of the period the
change in working capital stood at EUR -5.2 million (4.2).
Cash flow from investments was EUR -10.4 million so the Group's free cash flow
in January-June was EUR -8.4 million. The cash flow from investments was
affected by the EUR 10 million payment related to the vessel investment.
The dollar denominated cash flow of the approximately EUR 60 million vessel
order signed by ESL Shipping during the review period is largely hedged with
financial instruments. Because the currency derivatives used in the hedging fall
under hedge accounting the exchange losses or gains caused by exchange rate
fluctuations are mainly recognized as changes in equity.
The amount of binding standby credit limits signed between Aspo and its main
financing banks stood at EUR 50 million at the end of the period. In June, a EUR
20 million standby credit limit was signed with Nordea. The limit replaces a
limit of the same amount that matures in August 2010. The new agreement is valid
for two years. At the end of the review period, EUR 20 million of the standby
credit limits was in use.
Convertible capital loan
Aspo Plc has EUR 14,600,000 in a convertible capital loan issued in 2009. The
original principal of the loan was EUR 15,000,000. The loan period is June
30, 2009-June 30, 2014. The loan will be repaid in one installment on June
30, 2014, assuming that the repayment conditions outlined in Chapter 5 of the
Finnish Companies Act and the loan terms are met. The loan has a fixed interest
rate of 7%.
The loan units can be converted into Aspo shares. Each EUR 50,000 subscription
of the loan entitles the loan unit holder to convert the loan unit to 7,690 Aspo
Plc shares. The conversion rate is EUR 6.50. The loan can be converted annually
between January 2 and November 30. The conversion period ends on June 15, 2014.
A total of 61,520 new Aspo Plc shares corresponding with eight loan shares have
been subscribed from the convertible capital loan. The new shares were entered
into the trade register on May 12, 2010. The amount of the transferred loan was
EUR 400,000.
RISKS AND RISK MANAGEMENT
The economic upturn and gradual recovery in prices have reduced, but not
completely removed, the Group's risks in its main business areas. Among Aspo's
market areas, market uncertainty still affects industrial demand in Western
countries. The Group is growing, in particular, in developing market areas where
growth risks are also affected by investments, interest rate levels, exchange
rates, and customers' liquidity, as well as rapid changes in legislation and
import regulations.
In operational risks, the main risks, in terms of likelihood and effect, are
connected to the permanence of customer relationships, equipment sufficiency,
maintaining the balance level, and key personnel, as well as the application of
internal guidelines. Risks connected to goodwill are monitored with segment
specific impairment tests that are carried out at least once a year.
The Group has avoided considerable exchange rate losses due to active hedging of
currency positions and currency flow. The general credit loss risk is still high
but is normalizing as the economic situation among customers improves. The
currency risks related to vessel investments have been hedged and prepayments
are secured with guarantees.
Risk management is part of Aspo's internal supervision and its task is to ensure
the implementation of the Group's strategy, development of financial results,
shareholder value, dividend payment ability, and continuity in business
operations. The operational management of the business areas is responsible for
risk management. The management is responsible for defining sufficient measures,
implementation, and for monitoring and ensuring that the measures are
implemented as part of day to day operational control. Risk management is
coordinated by Aspo's CFO, who reports to the Group CEO.
Aspo Group's financing and financing risk management is centralized in the
parent company in accordance with the financing policy approved by the Board of
Directors.
PERSONNEL
Aspo Group's number of personnel stood at 717 (761) at the end of June. The
biggest changes in the total number of personnel compared to the comparison
period were caused by the reduction in personnel caused by ESL Shipping's vessel
sales, the increase in personnel in Latvia caused by Leipurin's acquisition, and
the personnel for new units in Russia and Ukraine. Telko's personnel has been
reduced in Finland and in Scandinavia. Kaukomarkkinat's personnel decreased as a
result of divestments.
Personnel by segment
4-6/2010 4-6/2009 Change 1-6/2010 1-6/2009 1-12/2009
ESL Shipping 195 215 -20 195 215 194
Leipurin 222 193 29 222 193 218
Telko 198 225 -27 198 225 193
Kaukomarkkinat 88 97 -9 88 97 90
Other operations 14 31 -17 14 31 22
Total 717 761 -44 717 761 717
Rewarding
Aspo Group has a profit bonus system. Part of the Group's profit is paid as a
profit bonus to the personnel fund. The aim is that the personnel fund uses the
majority of the profit bonuses to purchase Aspo Plc shares. The long-term goal
is that the personnel will become a considerable shareholder group in the
company. All persons working at Aspo Group's Finnish subsidiaries are members of
the personnel fund. Aspo's business areas pay part of their earnings as bonuses
to the personnel. The calculation principles for the bonuses are decided on by
business area.
In 2009, Aspo decided on a new management shareholding program where the
potential gain is based on the earnings per share during 2009-2011. The
management shareholding program encompasses about 40 people in Aspo's management
and key personnel.
SHARE CAPITAL AND SHARES
Aspo Plc's share capital on June 30, 2010, was EUR 17,691,729.57, and the total
number of shares was 26,467,583, of which the company held 576,870 shares, i.e.
2.18% of the share capital. Aspo Plc has one share series. Each share entitles
the shareholder to one vote at the shareholder's meeting. Aspo's share is quoted
on NASDAQ OMX Helsinki Ltd's medium-sized companies group under industrial
products and services.
From the convertible subordinated loan issued by Aspo Plc in 2009, 61,520 new
shares corresponding with eight loan shares have been subscribed. The new shares
were entered into the trade register on May 12, 2010, and were traded from May
14, 2010.
On March 25, 2010, Aspo Plc's granted 43,130 treasury shares to 25 members of
Aspo Group's management team as part of a shareholding program directed at key
personnel.
From January to June 2010 a total of 2,578,939 Aspo Plc shares with a market
value of EUR 18.4 million were traded on NASDAQ OMX Helsinki, in other words,
9.7% of the stock changed hands. In January-June, the stock reached a high of
EUR 8.06 and a low of EUR 5.91. The average price was EUR 7.16 and the closing
price at the end of the period was EUR 6.80. At the end of the period, the
market capitalization excluding treasury shares was EUR 176.1 million.
At the end of the period, the number of Aspo Plc shareholders was 5,446. A total
of 745,182 shares, or 2.8% of the total share capital, were nominee registered
or held by non-domestic shareholders.
DECISIONS AT THE ANNUAL SHAREHOLDERS´ MEETING
Dividend
At the Aspo Plc Annual Shareholders' Meeting on April 7, 2010, the shareholders
adopted the Board of Directors' proposal for a dividend of EUR 0.42 per share.
The dividend was paid on April 19, 2010, as decided by the Shareholders'
Meeting.
Board of Directors and Auditors
Aspo Plc's Annual Shareholders´ Meeting re-elected Matti Arteva, Esa Karppinen,
Roberto Lencioni, Gustav Nyberg, Kristina Pentti-von Walzel and Risto Salo to
the Board of Directors for a one-year term. At the Board´s organizing meeting
held after the Shareholders' Meeting, Gustav Nyberg was elected to carry on as
Chairman and Matti Arteva as Vice-Chairman. At the meeting, the Board also
decided to establish an Audit Committee and appointed Roberto Lencioni Chairman
of the Committee and Kristina Pentti-von Walzel and Risto Salo as Committee
members.
The authorized public accounting firm PricewaterhouseCoopers Oy continues as
company auditor. Jan Holmberg, APA, acts as the auditor in charge.
Board Authorizations
The shareholders authorized the Board to decide on the acquisition of
company-held shares using the unrestricted shareholders' equity of the company.
The authorization covers a maximum of 500,000 own shares. The shares shall be
acquired through public trading, for which reason the shares are acquired
otherwise than in proportion to the holdings of the shareholders and the
consideration paid for the shares shall be the market price of Aspo's share at
the time of repurchase. The authorization does not exclude the Board's right to
resolve on a directed repurchase.
The shares shall be acquired to be used to finance or carry out possible
acquisitions or other arrangements, to balance the financial risk of the
company's share-ownership program or for other purposes determined by the Board.
The Board may not exercise the authorization if, after the acquisition, the
company or its subsidiary were to possess or have as a pledge more than 10% of
the company's stock.
The Annual Shareholders' Meeting also authorized the Board of Directors to
decide on a share issue, through one or several installments, to be executed by
conveying shares held by the company. An aggregate maximum amount of 1,120,000
shares may be conveyed based on the authorization. The authorization will be
used to finance and complete any acquisitions or other transactions, to carry
out the company's share-ownership programme or for other purposes to be
determined by the Board.
The authorization includes the right for the Board to decide on all the terms
and conditions of the conveyance, and thus also includes the right to decide on
a directed share issue deviating from the shareholders' pre-emptive right on the
conditions provided by law.
The authorizations are valid until the Annual Shareholders' Meeting in 2011, but
no more than 18 months from the approval at the Shareholders' Meeting. The Board
of Directors has not utilized the authorizations granted in 2010 by August
24, 2010.
Amendment of the Articles of Association
The Annual Shareholders´ Meeting decided to amend the Articles of Association in
accordance with the Board's proposal.
EVENTS AFTER THE REPORTING PERIOD
After the review period ESL Shipping signed a EUR 25 million loan agreement for
vessel financing with Pohjola Bank. The loan maturity is 12 years. The credit
will be used to finance the first vessel to be completed of the two vessels
ordered from the Korean Hyundai Mipo shipyard.
OUTLOOK ON FUTURE DEVELOPMENT
Market outlook
Aspo estimates that the general economic situation is improving from the
recession in the summer of 2009. The national economies in the Baltic region,
which is strategically important for the Group, are recovering. Estimates are
still made difficult by the uncertainty that prevails in the euro area and on
the financial markets.
Aspo's 2010 outlook
Aspo Group's current structure creates a good basis for growth in net sales and
profitability. The Group's costs are estimated to be considerably lower than in
2009. A possible change to the tonnage tax legislation would considerably
improve the Group's profit after tax.
Aspo maintains its guidance unchanged. Aspo will increase its net sales and the
Group has the preconditions to improve its earnings per share.
ESL Shipping
The aim of the shipping company is to maintain its position as the leading dry
cargo shipping company and transporter on the Baltic Sea by renewing its fleet.
In the fall, a 20,000 dwt Eira class vessel will be completed in India, and two
56,150 dwt supramax class vessels have been ordered from the Hyundai Mipo
shipyard. When these vessels are completed, the shipping company's capacity will
grow by over 50%.
The cargo markets are expected to remain at the current level on the Baltic Sea
during the fall. A considerable share of the transportation capacity of 2010 has
been covered with long-term agreements. The cargo volumes of the energy and
steel industries are expected to be normal.
The amendment to the tonnage tax legislation that is awaiting approval from the
EU commission would have a considerable positive effect on ESL Shipping's
post-tax result if applied. Experts estimate that the new tonnage tax
legislation will become retroactively valid from January 1, 2010.
Leipurin
Organic growth in Leipurin's bakery raw material business is expected to
continue. Leipurin will continue to establish itself in Russia's growing
metropolitan areas and in Kazakhstan during 2010. A new customs union between
Russia, Kazakhstan, and Belarus entered into force on July 1, 2010. New
locations create a good basis for several years of growth. Raw material sales to
other food industry actors aim to expand to the Baltic, Russian, and Kazakhstan
markets. The positive financial effects of the expansion will become visible in
2011.
The machine unit has agreed on three considerable project deliveries after the
review period. The new orders have enabled the machine unit to cancel the
temporary lay-offs after the end of the review period. The project deliveries
will materialize at the end of 2010 and partially next year.
Telko
Telko will continue its profitable growth in all market areas, particularly in
the growing eastern markets. The cost savings effect from the reorganization
completed in 2009 is estimated to be approximately EUR 2 million in 2010 fixed
costs.
This year, two to three new offices will be opened in Russia in selected
metropolitan areas. A new customs union between Russia, Kazakhstan, and Belarus
entered into force on July 1, 2010. Telko has established a subsidiary in
Belarus and is preparing to start operating in Kazakhstan during 2010.
Kaukomarkkinat
A stronger order book in industrial project deliveries, the exceptionally hot
summer, and the success of Panasonic's air-source heat pumps in tests are
estimated to improve Kaukomarkkinat's operating profit.
The company has launched new strategic work with the aim of ensuring that the
company's operational profitability improves. Of the current operations, energy
efficiency products, particularly expansion into new equipment solution and
service packages, are being investigated.
The need for energy efficiency products and services will increase heavily as
new Finnish- and EU-wide energy efficiency regulations for greenfield
construction and a new national energy policy are adopted, and as energy prices
increase.
Considerable projects are expected to materialize in the Far East unit in late
2010.
Other operations
Other operations include Aspo Group's administration and other operations not
belonging to the business units. The Group's overall costs are expected to
clearly decrease from last year. Financial costs are expected to decrease from
2009.
Operational risks
The general economic situation is affecting industrial demand in the Baltic Sea
region. It is difficult to foresee whether the growth in demand in developing
markets will continue, as well as any other sudden changes in business
preconditions on the eastern markets. Changes in the financial markets and in
the value of currencies may have an effect on the Group's future financial
development.
A more detailed account of the risk management policy and the main risks have
been published in the 2009 annual report and on the company's website. A more
detailed account of the financial risks can be found in the notes to the 2009
annual report.
Helsinki, August 24, 2010
ASPO Plc
Board of Directors
ASPO GROUP INCOME STATEMENT
4-6/2010 4-6/2009
MEUR % MEUR %
Net sales 99.2 100 80.9 100
Other operating income 0.1 0.1 3.2 4.0
Depreciation and write-downs -2.0 -2.0 -2.2 -2.7
Operating profit 4.3 4.3 1.9 2.3
Financial income and expenses -0.7 -0.7 -1.0 -1.2
Profit before taxes 3.5 3.5 0.9 1.1
Profit for the period 2.9 2.9 0.7 0.9
Other comprehensive income
Translation differences 0.3 0.3
Cash flow hedges 1.9 -0.9
Income tax on other comprehensive income -0.5 0.2
Other comprehensive income for the year, net of
taxes 1.7 -0.4
Total comprehensive income 4.6 0.3
Profit attributable to shareholders 2.9 0.7
Non-controlling interest 0.0 0.0
Total comprehensive income attributable to
shareholders 4.6 0.3
Non-controlling interest 0.0 0.0
1-6/10 1-6/09 1-12/09
MEUR % MEUR % MEUR %
Net sales 182.6 100.0 159.3 100.0 329.4 100.0
Other operating income 0.7 0.4 3.9 2.4 10.5 3.2
Depreciation and write-downs -4.1 -2.2 -4.5 -2.8 -8.9 -2.7
Operating profit 6.4 3.5 5.7 3.6 15.3 4.6
Financial income and expenses -1.8 -1.0 -2.3 -1.4 -3.6 -1.1
Profit before taxes 4.5 2.5 3.4 2.1 11.7 3.6
Profit for the period 3.4 2.6 8.6
Other comprehensive income
Translation differences 1.2 -0.6 -0.1
Cash flow hedges 1.9 0.0 0.4
Net result recoqnized directly to equity 0.2
Income tax on other comprehensive income -0.5 0.0 -0.1
Other comprehensive income for the year,
net of taxes 2.6 -0.6 0.4
Total comprehensive income 6.0 2.0 9.0
Profit attributable to shareholders 3.4 2.6 8.5
Non-controlling interest 0.0 0.0 0.1
Total comprehensive income attributable
to shareholders 6.0 2.0 8.9
Non-controlling interest 0.0 0.0 0.1
ASPO GROUP BALANCE SHEET
06/10 06/09 Change 12/09
MEUR MEUR % MEUR
Assets
Non-current assets
Intangible assets 16.1 16.3 -1.2 16.6
Goodwill 40.3 40.5 -0.5 40.2
Tangible assets 57.5 69.1 -16.8 50.1
Available-for-sale assets 0.2 0.2 0.0 0.2
Long-term receivables 2.5 1.3 92.3 0.6
Shares in associated companies 1.3 0.9 44.4 1.6
Total non-current assets 117.9 128.3 -8.1 109.3
Current assets
Inventories 33.9 26.3 28.9 29.3
Sales and other receivables 46.4 43.3 7.2 44.7
Cash and bank deposits 10.7 6.9 55.1 11.5
Total current assets 91.0 76.5 19.0 85.5
Total assets 208.9 204.8 2.0 194.8
Shareholders' equity and liabilities
Shareholders' equity
Share capital 17.7 17.7 0.0 17.7
Other shareholders' equity 45.1 42.1 7.1 49.2
Shareholders' equity attributable to equity holders of
the parent company 62.8 59.8 5.0 66.9
Non-controlling interest 0.0 0.0 0.0 0.0
Long-term liabilities 56.6 82.7 -31.6 57.1
Short-term liabilities 89.5 62.3 43.7 70.8
Total shareholders' equity and liabilities 208.9 204.8 2.0 194.8
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
A = Share capital F = Translation difference
B = Premium fund G = Retained earnings
C = Fair value fund H = Total
D = Other funds I = Non-controlling interest
E = Repurchased shares J = Total shareholders' equity
MEUR A B C D E F G H I J
Balance at
31.12.2009 17.7 4.3 0.0 2.8 -3.7 -1.6 47.5 67.0 -0.1 66.9
Comprehensive income:
Profit for the period 3.4 0.0
Translation difference 1.2
Cash flow hedge, net of taxes 1.4
Total comprehensive income 1.4 1.2 3.4 6.0
Transactions with owners:
Dividend payment -10.8
Share based payment 0.2 0.1 0.0
Conversion of convertible bond 0.3
Total transactions with owners 0.5 0.1 -10.8 -10.2
Balance at 30.6.2010 17.7 4.3 1.4 3.3 -3.6 -0.4 40.1 62.8 0.0 62.8
Balance at
31.12.2008 17.7 4.3 -0.3 0.5 -3.7 -1.5 49.0 66.0 0.0 66.0
Comprehensive income:
Profit for the period 2.6
Translation difference -0.6
Cash flow hedge, net of taxes 0.0
Total comprehensive income 0.0 -0.6 2.6 2.0
Transactions with owners:
Dividend payment -10.8
Share based payment 0.2
Equity share of convertible
bond, net of taxes 2.4
Total transactions with
owners 2.4 -10.6 -10.6
Balance at 30.6.2009 17.7 4.3 -0.3 2.9 -3.7 -2.4 40.2 57.0 0.0 57.0
ASPO GROUP CASH FLOW STATEMENT
1-6/10 1-6/09 1-12/09
MEUR MEUR MEUR
OPERATIONAL CASH FLOW
Operating profit 6.4 5.7 15.3
Adjustments to operating profit 4.2 1.0 1.7
Change in working capital -5.2 4.2 6.8
Interest paid -3.1 -3.4 -5.5
Interest received 0.9 0.3 0.2
Taxes paid -1.2 -1.8 -5.5
Total operational cash flow 2.0 6.0 13.0
INVESTMENTS
Investments in tangible and
intangible assets -10.9 -3.9 -3.8
Gains on the sale of tangible and intangible assets 0.2 3.0 13.8
Gains on the sale of business operations 11.1
Purchases of subsidiary shares -1.2
Sale of the subsidiary shares 1.0
Associated companies acquired 0.3
Total cash flow from investments -10.4 -0.9 20.9
FINANCING
Change in short-term borrowings 19.6 -35.0 -32.7
Change in long-term borrowings -1.2 35.0 8.5
Dividends paid -10.8 -10.8 -10.8
Total financing 7.6 -10.8 -35.0
Increase / Decrease in liquid funds -0.7 -5.7 -1.1
Liquid funds in beginning of year 11.5 12.6 12.6
Liquid funds at period end 10.7 6.9 11.5
KEY FIGURES AND RATIOS
1-6/2010 1-6/2009 1-12/2009
Earnings per share, EUR 0.13 0.10 0.33
EPS adjusted for dilution, EUR 0.13 0.09 0.33
Comparable earnings per share, EUR 0.02 0.16
Equity per share, EUR 2.42 2.32 2.59
Equity ratio, % 30.2 29.4 34.6
Gearing, % 124.7 142.2 87.9
ACCOUNTING PRINCIPLES AND FINANCIAL REPORTING
Aspo Plc's interim report has been compiled in accordance with the principles of
IAS 34 Interim Financial Reporting. The same accounting principles have been
adopted in the interim report as in the Financial Statements on December
31, 2009. The calculation formulas for key indicators are explained on page 82
of the 2009 financial statements. The information in this report is unaudited.
Helsinki, August 24, 2010
ASPO Plc
Aki Ojanen Arto Meitsalo
CEO CFO
For more information:
Aki Ojanen, +358 9 521 4010, +358 400 106 592
aki.ojanen@aspo.com
PRESS AND ANALYST CONFERENCE
A press and analyst conference will be arranged today, Tuesday August 24, 2010
at 14.30 at the Paavo Nurmi cabinet at Hotel Kämp, Pohjoisesplanadi 29, 00100
Helsinki.
FINANCIAL REPORTING 2010
Aspo Plc's next interim report will be published:
1-9/2010 on Tuesday October 26, 2010
DISTRIBUTION:
NASDAQ OMX Helsinki
Key media
www.aspo.com
[HUG#1439392]
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