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2012-07-19 08:00:00 CEST 2012-07-19 08:01:16 CEST REGLAMENTUOJAMA INFORMACIJA Rautaruukki - Interim report (Q1 and Q3)Rautaruukki Corporation Interim report H1/2012: Second quarter better than first, full year comparable operating profit estimated to remain at 2011 level. Profitability improvement still main focus.Rautaruukki Corporation Stock exchange release 19 July 2012 at 9am EEST April-June 2012 (Q2/2011) - Order intake was up 12 per cent at EUR 755 million (672). - Comparable net sales were up 1 per cent at EUR 740 million (730). - Comparable operating profit was EUR 8 million (71), equating to 1.0 per cent of net sales. - Comparable result before income taxes was EUR 0 million (62). - Net cash from operating activities was -EUR 5 million (7). January-June 2012 (H1/2011) - Order intake was up 7 per cent at EUR 1,441 million (1,346). - Comparable net sales were up 2.5 per cent at EUR 1,440 million (1,405). - Comparable operating profit was -EUR 8 million (96). - Comparable result before income taxes was EUR -26 million (76). - Net cash from operating activities was EUR 49 million (13). Guidance for 2012 changed Revised guidance: Net sales in 2012 are estimated to grow about 5 per cent. Comparable operating profit is estimated to be at the same level as in 2011. Earlier guidance: Net sales in 2012 are estimated to grow about 5 per cent. Comparable operating profit is estimated to improve compared to 2011. KEY FIGURES ------------------------------------------------------------------------------- Q2/12 Q2/11 Q1-Q2/12 Q1-Q2/11 2011 ------------------------------------------------------------------------------- Comparable figures Comparable net sales, EUR m 740 730 1,440 1,405 2,797 Comparable operating profit, EUR m 8 71 -8 96 56 Comparable operating profit as % of net sales 1.0 9.7 -0.5 6.8 2.0 Comparable result before income tax, EUR m 0 62 -26 76 22 Reported figures Reported net sales, EUR m 742 730 1,444 1,405 2,798 Reported operating profit, EUR m -5 68 -21 93 22 Reported result before income tax, EUR m -13 59 -39 74 -12 Net cash from operating activities, EUR m -5 7 49 13 114 Net cash before financing activities, EUR m -30 -34 2 -64 -57 Earnings per share, EUR -0.07 0.32 -0.22 0.38 -0.07 Return on capital employed (rolling 12 months), % -4.1 4.1 1.3 Return on capital employed (annualised), % -0.8 8.9 1.3 Gearing ratio, % 71.6 57.9 60.4 Equity ratio, % 45.9 48.7 48.5 Personnel on average 11,692 12,243 11,521 11,839 11,821 ------------------------------------------------------------------------------- President & CEO Sakari Tamminen: The emerging markets continued to be the driver of economic growth during the second quarter, whereas in Europe the uncertainty caused by the sovereign debt crisis continued and confidence in economic growth remained weak. There is a risk of prolonged economic crisis in the eurozone and growing signs of uncertainty in the global economy. In addition, growth forecasts for Ruukki's important developed economies, such as the Nordic countries, have been downgraded during the first half of the year. Increased uncertainty since the early part of the year can be seen in the order behaviour and forecasts of steel customers. This has weakened the outlook for the rest of the year. Consequently, we now estimate our comparable operating profit to be at the same level as in 2011, whereas we had earlier estimated it to improve compared to 2011. As far as performance is concerned, the second quarter was better for Ruukki than the first. All our business areas reported improved earnings and consolidated operating profit was back in the black at EUR 8 million. Cumulative cash flow was EUR 49 million before capital expenditure and EUR 2 million after capital expenditure. Order intake was up 12 per cent quarter on quarter. This was due especially to strong growth of 24 per cent in order intake in our construction business. Our net sales grew 2 per cent, but the profitability of the steel business is clearly trailing behind what it was a year earlier. I believe in improved profitability as a result of the efficiency projects initiated in our steel and construction businesses have progressed somewhat better than earlier expected. The impact of these projects aimed at a permanent improvement in earnings performance is around EUR 20 million for this year. Market conditions require us to raise the total target of our efficiency projects to EUR 100 million from the current figure of EUR 70 million by expanding points for improvement already identified in our steel business. On top of this, improved profitability in construction is supported by the solid outlook for the rest of the year in roofing products, a pick-up in order intake for commercial and industrial construction in Russia, as well as a clearly improved margin, compared to the previous year, on new orders in the project business. Global steel prices decreased during the second quarter due to weakened demand caused by economic uncertainty. On a positive note, we signed new supply contracts for raw materials at lower prices than earlier. An example of this is our contract with LKAB for iron ore pellets. We also signed a long-term contract for supplies of coking coal and iron ore pellets with the Russian company Severstal Resources. This enables us to reduce our dependency on distant coking coal and the associated price risk related to higher winter inventory and to balance our purchases of raw materials. The cost benefits of these new contracts are estimated to be in the region of EUR 20 million and will be reflected in full during the second half of the year. Overall, prices of raw materials are still clearly higher than before the 2009 financial crisis. Construction activity in residential construction, which depends on consumer demand, has developed well in many of our market areas, including Finland and Poland, and net sales of our roofing products are up 16 per cent year on year. In steel roofs, there is growth potential especially in Russia, where the annual total market is almost EUR 500 million and where we are focusing on opening our own distribution channels. Also in Sweden, we have improved our own distribution channels by, among other things, expanding our Ruukki Express chain in Stockholm and Södertälje through an acquisition. Demand for components in commercial and industrial construction continued to be at a good level. Demand for energy- efficient panels in particular has shown good progress. The profitability of our project business has improved and we have received significant orders. Demand in the engineering industry has remained at a fairly good level and we have obtained new customers in Hungary and Poland, for example. Comparable net sales improved and earnings were positive, but profitability is still not at a satisfactory level. Actions aiming at improving profitability, such as withdrawal from engineering operations in Shanghai, optimising the product range and unit-specific actions to improve efficiency are already under way. In the steel business, the slow-down in market demand was reflected by a 3 per cent fall in order intake compared to the previous quarter. Prices of orders received declined somewhat towards the end of the quarter. Net sales in the steel business were at the same level year on year, but down quarter on quarter due to decreased delivery volumes. The steel business posted a comparable operating profit of EUR 10 million for the second quarter. This was an improvement compared to the previous quarter, but clearly weaker year on year. The fall in operating profit was mainly attributable to a lower capacity utilisation rate, a weaker price level for steel products and higher raw material prices. The capacity utilisation rate in our steel business averaged 84 per cent. Annual steel demand in the EU-27 region seems to have levelled off at around 150 million tonnes, whereas it was still around 200 million tonnes in 2007. Market overcapacity enables fast stock turnover for customers and makes it difficult to forecast demand. We are focusing increasingly more strongly on special steels, where demand continues to be at a good level, shows better predictability and the markets are global. We are strengthening and expanding the global distribution of our special steels. During the report period, we opened a new steel service centre in Shanghai and strengthened our special steels distribution network on other emerging markets. We still estimate net sales in 2012 to grow about 5 per cent. Comparable operating profit for the whole year is now estimated to be at the same level as in 2011, whereas we earlier estimated it to improve compared to 2011. Rautaruukki Corporation's full interim report for January-June 2012 is attached to this release. For further information, please contact: Sakari Tamminen, President & CEO, tel. +358 20 592 9075 Markku Honkasalo, CFO, tel. +358 20 592 8840 News conference for analysts and the media A joint news conference in English both for analysts and the media will be hosted on Thursday 19 July at 10.30am EEST at Ruukki, Suolakivenkatu 1, 00810 Helsinki. A live webcast of the event and the presentation by the company's President & CEO Sakari Tamminen may be followed online on the company website at www.ruukki.com/Investors starting at 10.30am EEST. This event can also be attended through a conference call by dialling the number below 5-10 minutes before the scheduled time: +44 20 7162 0025 (calls outside Finland) +358 9 2313 9201 (calls inside Finland) Access code: 914147 A replay of the webcast can be viewed on the company website at approximately 4pm EEST. A replay of the conference call will be available until 26 July 2012 at: +44 20 7031 4064 (calls outside Finland) +358 9 2314 4681 (calls inside Finland) Access code: 914147 Rautaruukki Corporation Taina Kyllönen SVP, Marketing and Communications Ruukki provides its customers with energy-efficient steel solutions for better living, working and moving. Ruukki operates in some 30 countries and employs around 11,800 people. Net sales in 2011 totalled EUR 2.8 billion. The company's share is quoted on NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS). DISTRIBUTION: NASDAQ OMX Helsinki Main media www.ruukki.com [HUG#1627845] |
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