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2009-07-23 12:53:14 CEST 2009-07-23 12:54:24 CEST REGULATED INFORMATION Metsäliitto Osuuskunta - Interim report (Q1 and Q3)Metsäliitto Group Interim Report 1 January - 30 June 2009Metsäliitto Group Interim Report 1 January - 30 June 2009 23.7.2009 at 1.45 p.m. Metsäliitto Group's operating result excluding nonrecurring items EUR -128 million in the first half of the year Result for the first half of 2009 * Sales EUR 2,492 million (1-6/2008: EUR 3,386 million). * Operating result excluding non-recurring items was EUR -128 million (93). Operating result including non-recurring items was EUR -193 million (189). * Result before tax excluding non-recurring items was EUR -181 million (-16). Result before tax including non-recurring items was EUR -257 million (80). Result for the second quarter of 2009 * Sales EUR 1,213 million (4-6/2008: EUR 1,676 million). * Operating result excluding non-recurring items was EUR -61 million (33). Operating result including non-recurring items was EUR -56 million (105). * Result before tax excluding non-recurring items was EUR -88 million (-18). Result before tax including non-recurring items was EUR -95 million (54). Events in the second quarter * Metsäliitto sold its holding in Vapo (49.9%) for EUR 165 million to a Finnish consortium led by EPV Energy and began, jointly with Vapo, to explore the possibilities for biofuel production in the Baltic Sea region. * Metsäliitto Wood Products Industry continued its efforts to improve the profitability of sawmill operations. Operations at the Karihaara sawmill in Kemi were suspended until further notice, and the personnel at other operating sawmills were laid off temporarily for two to four weeks as an extension to summer vacations. Events after the review period * Metsäliitto Group signed a letter of intent with UPM-Kymmene on 15 July 2009 concerning the new ownership structure of Metsä-Botnia."Metsäliitto Group took another important step in its active restructuring after the second quarter in July, when it signed a letter of intent concerning the new ownership structure of Metsä-Botnia. The new arrangement will give Metsäliitto Cooperative a majority shareholding in Metsä-Botnia. This will enhance the company's focus on selected core operations. Taken together with the Vapo deal, the arrangement, when completed, will considerably improve the balance sheet structure of Metsäliitto Group." Kari Jordan, President & CEO, Metsäliitto Group Metsäliitto Group +-------------------------------------------------------------------+ | Income statement | 2009 | 2008 | 2009 | 2008 | 2008 | | (Continuing | 1-6 | 1-6 | Q2 | Q2 | 1-12 | | operations) | | | | | | |---------------------+--------+---------+--------+--------+--------| | Sales | 2 492 | 3 386 | 1 213 | 1 676 | 6 434 | |---------------------+--------+---------+--------+--------+--------| | Other operating | 84 | 172 | 43 | 113 | 239 | | income | | | | | | |---------------------+--------+---------+--------+--------+--------| | Operating | -2 569 | - 3 178 | -1 227 | -1 591 | -6 189 | | expenses | | | | | | |---------------------+--------+---------+--------+--------+--------| | Depreciation and | -200 | -192 | -85 | -93 | -482 | | impairment losses | | | | | | |---------------------+--------+---------+--------+--------+--------| | Operating result | -193 | 189 | -56 | 105 | 2 | |---------------------+--------+---------+--------+--------+--------| | Share of results | -10 | 4 | -8 | 2 | 6 | | in associates | | | | | | |---------------------+--------+---------+--------+--------+--------| | Exchange gains | -4 | 0 | -1 | -2 | 19 | | and losses | | | | | | |---------------------+--------+---------+--------+--------+--------| | Other net | -50 | -113 | -30 | -51 | -260 | | financial items | | | | | | |---------------------+--------+---------+--------+--------+--------| | Result before | -257 | 80 | -95 | 54 | -233 | | income tax | | | | | | |---------------------+--------+---------+--------+--------+--------| | Income tax | 25 | -8 | 7 | -1 | 60 | |---------------------+--------+---------+--------+--------+--------| | Result from | -232 | 72 | 88 | 53 | -172 | | continuing | | | | | | | operations | | | | | | +-------------------------------------------------------------------+ Metsäliitto Group +-------------------------------------------------------------------+ | Profitability | 2009 | 2008 | 2009 | 2008 | 2008 | | (Continuing operations) | 1-6 | 1-6 | Q2 | Q2 | 1-12 | |--------------------------+-------+-------+-------+-------+--------| | Operating result, EUR | -193 | 189 | -56 | 105 | 2 | | mill. | | | | | | |--------------------------+-------+-------+-------+-------+--------| | - " -, excluding | -128 | 93 | -61 | 33 | 45 | | non-recurring items | | | | | | |--------------------------+-------+-------+-------+-------+--------| | Return on capital | -7.5 | 7.9 | -4.6 | 8.7 | 0.5 | | employed, % | | | | | | |--------------------------+-------+-------+-------+-------+--------| | - " -, excluding | -4.9 | 4.2 | -5.1 | 3.1 | 1.3 | | non-recurring items | | | | | | |--------------------------+-------+-------+-------+-------+--------| | Return on equity, % | -28.7 | 6.2 | -23.2 | 9.2 | -8.4 | |--------------------------+-------+-------+-------+-------+--------| | - " -, excluding | -19.3 | -2.0 | -21.5 | -3.2 | -6.4 | | non-recurring items | | | | | | |--------------------------+-------+-------+-------+-------+--------| | | | | | | | |--------------------------+-------+-------+-------+-------+--------| | Financial position | 2009 | 2008 | 2009 | 2008 | 2008 | | | 30.6. | 30.6. | 31.3. | 31.3. | 31.12. | |--------------------------+-------+-------+-------+-------+--------| | Equity ratio, % | 25.6 | 30.1 | 24.8 | 29.2 | 26.0 | |--------------------------+-------+-------+-------+-------+--------| | Net gearing ratio, % | 162 | 147 | 167 | 142 | 149 | |--------------------------+-------+-------+-------+-------+--------| | Interest-bearing net | 2 348 | 3 421 | 2 666 | 3 329 | 2 666 | | liabilities, EUR mill. | | | | | | +-------------------------------------------------------------------+ +----------------------------------------------------------------------+ |Sales and Operating | | Wood | |Board and|Tissue | |result | Wood |Products|Pulp *) | Paper | and | |1-6/2009 |Supply |Industry|Industry|Industry |Cooking| |(EUR mill.) | | | | |Papers | |------------------------+---------+--------+--------+---------+-------| |Sales | 577| 425| 585| 1 208| 435| |------------------------+---------+--------+--------+---------+-------| | Other operating income | 4| 3| 14| 61| 4| |------------------------+---------+--------+--------+---------+-------| | Operating expenses | -570| -443| -638| -1 340| -377| |------------------------+---------+--------+--------+---------+-------| | Depreciation & | -2| -20| -126| -120| -21| |impairment losses | | | | | | |------------------------+---------+--------+--------+---------+-------| |Operating result | 9| -35| -165| -191| 41| |------------------------+---------+--------+--------+---------+-------| | Non-recurring items | 0| 0| 75| 56| 0| |------------------------+---------+--------+--------+---------+-------| |Operating result | | | | | | |excl. non-recurring | 9| -35| -90| -135| 41| |items | | | | | | +----------------------------------------------------------------------+ *) Represents 100%. The Metsäliitto Group consolidates 53% of the Pulp Industry. The figures are unaudited METSÄLIITTO GROUP INTERIM REPORT 1 JANUARY - 30 JUNE 2009 Sales and result Metsäliitto Group's sales for January-June were EUR 2,492 million (3,386). Operating result excluding non-recurring items was EUR -128 million (93). Net nonrecurring items amounted to EUR -65 million (95), EUR 40 million of which was related to the closure of the Metsä-Botnia Kaskinen mill, EUR 29 million to the closure of the M-real Hallein paper mill and EUR 4 million to M-real's ongoing efficiency improvement programmes. A sales gain of EUR 8 million was recognised at Group level for the Vapo deal. The second-quarter operating result excluding non-recurring items totalled EUR -61 million, slightly up from the previous quarter(Q1/09: -67). Metsäliitto Group's operating result including non-recurring items was EUR -193 million (189). Financial income amounted to EUR 20 million (10), income fromassociates was EUR -10 million (4) and financial expenses totalled EUR 70 million (123). Net exchange gains/losses recognised in financial items were EUR -4 million (0). The US dollar strengthened on average 13 per cent in the first half, while the British pound weakened by 15 per cent and the Swedish krona by 16 per cent year-over-year. Income from associates includes a EUR 11 million non-recurring expense item related to the sale of Myllykoski Paper's Sunila shares. In the first quarter, M-realmade a market repurchase with a nominal value of EUR 59.95 million of its EUR 400 million bond, which matures in December 2010. A profit of approximately EUR 30.8 million for the purchase was recognised in financial income. Result before tax was EUR -257 million (80), and taxes, including changes in deferred tax liabilities, totalled EUR 25 million (-8). The result for continuingoperations was EUR -232 million (72), the result for discontinued operations EUR -12million (-64) and the result for the review period EUR -245 million (8). Of the period's results, EUR -119 million (19) was attributable to parent company members and EUR -125 million (-11) to minority interests. The Group's return on capital employed for continuing operations was -7.5% (7.9),and the return on equity was -28.7% (6.2). Excluding non-recurring items, return oncapital employed was -4.9% (4.2) and return on equity was -19.3% (-2.0). Balance sheet and financing Metsäliitto Group's total liquidity at the end of June was EUR 1.6 billion (31 December 2008: 1.8). Of this, EUR 0.4 billion (0.6) was in liquid assets andinvestments, and EUR 1.2 billion (1.2) was in off-balance-sheet binding creditfacilities. In addition, the Group can satisfy short-term financial needs with nonbinding commercial paper schemes in Finland and abroad, as well as with credit limits amounting to approximately EUR 0.6 billion. The Group's equity ratio in June was 25.6 per cent and net gearing totalled 162 percent (31 December 2008: 26.0% and 149%). Interest-bearing net liabilities stood at EUR 2,348 million (31 December 2008: 2,666). The equity ratio of the parent company, Metsäliitto Cooperative, was 58.5 per cent at the end of June and the net gearing ratio was 34% (31 December 2008: 54.6% and 45%, respectively). M-real took out a pension premium loan (TyEL) of EUR 60 million in the second quarter. After the transaction, M-real has approximately EUR 260 million of undrawn pension premium loans. Metsäliitto Cooperative's members' capital grew by EUR 24.0 million in January-June. No changes took place in the actual members' capital, but the additional members' capital A increased by EUR 21.9 million and the additional members' capital B by EUR 2.1 million. EUR 84.7 million of the members' capital matured at the beginning of July. At the end of June, Metsäliitto Cooperative had 127,557 members (31 December 2008: 129,267). At its meeting on 22 April 2009, Metsäliitto Cooperative's Representative Council decided to pay an interest of 5.5 per cent (6.5) on the subscribed members' capital, 5.0 per cent (5.5) on the additional A series capital and 4.5 per cent (4.0) on the additional B series capital. The interest on members' capital totalled EUR 37.4 million (41.1) in 2008. Personnel The Group employed an average of 16,017 people (17,828) during the first half of the year. At the end of June, the number of personnel in the Group was 15,047 (31December 2008: 16,729). The parent company, Metsäliitto Cooperative, had a headcount of 2,995 (31 December 2008: 3,217). Investments Metsäliitto Group's capital expenditure totalled EUR 74 million (110). Divestment of Vapo On 5 May 2009, Metsäliitto Group agreed to sell its entire holding (49.9%) in Vapo to a Finnish consortium led by EPV Energy. The deal was concluded on 24 June 2009and amounted to EUR 165 million for which the parent company, Metsäliitto Cooperative, recorded a sales gain of EUR 27.3 million. The sales gain of Metsäliitto Group was EUR 8.0 million. M-real's structural change In February 2009, M-real launched a new profit improvement programme with an annual target of EUR 80 million. The improvement actions target at savings in the business areas and streamlining the support functions to reflect the new companystructure and size after the divestment of Graphic Papers. The full annual effect of the programme will be visible from 2011. The majority of the profit improvement measures relating to continuing operations are expected to be implemented in 2009, and the profit impact is estimated to be EUR 20-25 million in 2009. The related nonrecurring costs booked during 2009 are expected to be about EUR 18 million. M-real launched also a separate EUR 60 million programme to improve the 2009 cash flow including, e.g., the reduction of operating net working capital and cuts in investments. In 2008, M-real announced to be planning the discontinuation of the standard coated fine paper production at the Hallein and Gohrsmühle mills based on earlier examined strategic options. Both mills have been loss-making for a long period of time. At Hallein, Austria, paper production was discontinued at the end of April 2009. At the Gohrsmühle mill, the standard coated fine paper production was discontinued in April. At Gohrsmühle, Germany, the production of speciality papers as well as uncoated fine paper reels and folio sheets has been expanded. M-real continues to explore various options for the Hallein pulp mill. Business areas Wood Supply Wood Supply sales totalled EUR 577 million (960) in the review period and operating result amounted to EUR 9 million (22). The operating result does not include nonrecurring items (2). Wood Supply Finland accounted for EUR 441 million (654) of the sales and EUR 6 million (15) of the operating result. A marked decline in delivery volumes was the main reason for sales and operating result decreasing year-over-year. In early 2009, overall delivery volumes in Wood Supply amounted to 12.7 million square metres (18.5). In Finland, wood trade was exceptionally slack in the first half of 2009. In the first half of the year, Metsäliitto bought around half the amount purchased in the corresponding period the year before. Metsäliitto's market share grew nevertheless. The forest industry's overall January-June purchases from privately owned forests were third of the amount purchased in the corresponding period the year before. Production cuts at paper and pulp mills forced Metsäliitto to restrict its purchases of pulpwood in particular. Roundwood and forest energy acquisitions were active. A campaign aimed at enhancing the procurement of forest energy got rapidly underway and gave good results, especially i n the field of energy logs. The company decided to set up a separate business line for wood energy deliveries in conjunction with Wood Supply. In the Russian market, the supply of softwood log matched demand, but there was an oversupply of pulpwood and birch logs. The supply of softwood log decreased quickly at the end of the second quarter. Wood supply at the Metsä-Botnia Svir Timber sawmill was handled according to plans. Wood supplies from Russia to Finland remained low. Metsäliitto continued its measures to improve efficiency of its wood supply operations. In the Baltic countries, the wood trade of private forest owners was at a standstill throughout the first part of the year. Most of the wood was felled from state-owned forests. Metsäliitto's deliveries to Finland and Sweden decreased clearly, and the wood supply organisations were adjusted to match the new volumes. Swedish wood trade was slow in both roundwood and pulpwood. The wood supply of M-real's Husum mill was carried out as planned. Wood Products Industry The sales of Metsäliitto Wood Products Industry amounted to EUR 425 million (644), while operating result was EUR -35 million (-3). The operating result does not include non-recurring items. The drop in sales and the poor profitability resulted from weak demand, a low price level and the high costs of raw material purchased earlier years. Wood Products Industry faced an extremely difficult market situation throughout the first half of the year, with sales volumes and price levels remaining at a low level. The weak demand was noticeable especially in some industrial customer segments, such as the transport equipment industry. Construction and DIY sales picked up in the second quarter due to a seasonal increase in demand, among other things. The production restrictions on sawn goods led to the price of pine sawn goods increasing at the end of the review period. Temporary layoffs and other cost-saving measures were continued to improve profitability. In addition to sawn goods, restrictions were imposed on processed sawn goods, plywood and engineered wood products. Operations at the Karihaara sawmill in Kemi were suspended until further notice, and the personnel at all other operating sawmills were laid off temporarily for two to four weeks as an extension to summer vacations. Upgrading operations in Kaskinen will be reduced due to the contract manufacturing of consumer goods aimed at the United Kingdom DIY market being transferred to the UK. In line with its strategy, Metsäliitto Wood Products Industry raised the share of upgrading by introducing plywood products with increasingly advanced coatings to satisfy the needs of industrial customers. The Building Solutions division continued its development work related to low-energy construction. Pulp Pulp industry sales were EUR 585 million (810) in January-June, and the operating result amounted to EUR -90 million (120). The non-recurring items recognised in the first quarter totalled EUR -75 million and were related to the closure of the Kaskinen mill. Operating result including non-recurring items was EUR -165 million (120). The market situation and the continued rapid decline in the price of pulp at the beginning of the second quarter played a major role in the decrease in net sales and the result. The result was also weakened by production curtailment shutdowns at all the mills in Finland. Some of the shutdowns resulted from market conditions, while others were annual maintenance shutdowns. Thanks to the extensive maintenance work carried out during the one-month shutdown at the Joutseno mill, the volume of renewable energy sold by the mill will increase by 20 per cent. Foreign currency-denominated market prices for softwood pulp were, on average, 33 per cent lower compared with the first half last year. The average prices of hardwood pulp fell by 38 per cent. Pulp prices were at their lowest in April, when softwood pulp sold for USD 580 and birch and eucalyptus pulp for USD 480. Prices have risen since, standing at USD 630 for softwood pulp and USD 500 for birch and eucalyptus pulp at the end of June. New, higher prices have been announced for July. The close-down of old pulp mills continued around the world in the second quarter, and several mills restricted production due to the market conditions. At the end of the review period, global pulp stocks had dropped to near normal levels. M-real's result includes 30 per cent of the Pulp Industry's operating result. 53 per cent of the Pulp Industry's figures are consolidated into Metsäliitto Group's financial statements. The letter of intent published in July will also change the consolidation of Metsä-Botnia. The deal is expected to be concluded in the last quarter. Metsä-Botnia will become an associate of M-real and a subsidiary of Metsäliitto and will consequently be fully consolidated into the Group's figures. Board and Paper The sales of Board and Paper totalled EUR 1,208 million (1,688), and the operating result excluding non-recurring items was EUR -135 million (13). The operating result excluding non-recurring items decreased from last year's corresponding period due to the drop in delivery volumes following weaker demand, as well as the decrease in the values of product, wood and pulp inventories. The result was improved by price increases and cost savings. The demand for folding boxboard increased steadily in the second quarter, and operating levels approached normal levels. Price increases are under consideration to be implemented in the main markets. The order volumes of uncoated fine paper have increased, but prices have declined. It now seems, however, that the decline in prices is coming to an end. The demand for coated papers remains weak, but following the discontinuation of standard fine paper production in Hallein and Gohrsmühle, coated papers are no longer significant to M-real. M-real's net non-recurring items in January-June totalled EUR -56 million (95). Of these, EUR 22 million were related to the closure of the Metsä-Botnia Kaskinen mill, EUR 29 million to the closure of the Hallein paper mill, EUR 3 million to the streamlining of the sales network and EUR 2 million to various cost provisions. Operating result including non-recurring items was EUR -191 million (108). Net interest and other financial expenses totalled EUR 10 million (70), income from associates was EUR -13 million (-1) and net exchange gains/losses recognised as financial items were EUR 2 million (1). In the first quarter, M-real made a market repurchase with a nominal value of EUR 59.95 million of its EUR 400 million bond, which matures in December 2010. A profit of some EUR 31 million was recognised in the first-quarter result for the purchases. Income from associates includes a EUR 11 million non-recurring expense item related to the sale of Myllykoski Paper's Sunila shares. The result before tax was EUR -212 million (38), earnings per share were EUR -0.61 (0.10) and return on capital employed was -11.5 per cent (7.3). Excluding nonrecurring items, the result before taxes was EUR -145 million (-57), earnings per share were EUR -0.42 (-0.18) and the return on capital employed was -7.3 per cent (1.4). At the end of June, M-real's equity ratio was 29.4 per cent and net gearing amounted to 116 per cent (31 December 2008: 30.8% and 90%, respectively). Some of M-real's loan agreements set a 120 per cent limit on the company's net gearing ratio and a 30 per cent limit on the equity ratio. At the end of June, net gearing calculated as defined in the loan agreements was approximately 91 per cent and the equity ratio about 34 per cent. Tissue and Cooking Papers The January-June sales of Metsä Tissue, which produces tissue and cooking papers, totalled EUR 435 million (461), and its operating result was EUR 41 million (20). Sales were down some six per cent year-over-year due to changes in exchange rates (-4%) and lower sales volumes (-2%). The volumes of the company's own brands remained unchanged compared to the previous year. Both the company's own brands and private label brands were supported with summer campaigns and seasonal products. Operating result improved thanks to the efficiency improvement measures implemented in 2007 and 2008 and to lower raw material costs. The operating result does not include non-recurring items. In the second quarter, Metsä Tissue announced its intention to rebuild paper machine 10 at the Mänttä mill. The investment will be carried out in the first half of 2010 and it will further improve the quality of the Lambi, Serla and Katrin brands sold in the Nordic countries. Metsä Tissue has raised its energy efficiency and promoted sustainable development by enhancing its own operations. Energy efficiency was audited in Finland and Germany, and the companies in both countries were awarded energy efficiency certificates. Risks and uncertainties The estimates and statements in this interim report are based on current plans and estimates, they involve risks and uncertainties that may cause the outlook to materially differ from those expressed in such statements. The risks related to the Group's business have been explained more extensively in Metsäliitto Group's Annual report for 2008. Events after the review period Metsäliitto Group and UPM-Kymmene signed a letter of intent on 15 July 2009 concerning the sale of Metsä-Botnia's Uruguayan operations to UPM. The companies also agreed that UPM would reduce its ownership in Metsä-Botnia to approximately 17 per cent, with Metsäliitto getting a majority share in the company. Among other things, the letter of intent includes Metsäliitto Group's shares in the Fray Bentos pulp mill and in Forestal Oriental, a company specialised in the cultivation of eucalyptus. Following the arrangement, Metsäliitto Cooperative will own about 53% of Metsä-Botnia, M-real around 30% and UPM around 17%. Currently, Metsäliitto Cooperative has a 23%, M-real a 30% and UPM a 47% holding in Metsä-Botnia. The transaction will have a net cash effect of some EUR -100 million on Metsäliitto and it will increase net debt by approximately EUR 150 million. Cash proceeds to be received by M-real is around EUR 300 million. The deal will improve Metsäliitto Group's net gearing by some 23 percentage points and the equity ratio by approximately 2 percentage points. M-real's net liabilities will decrease by some EUR 550 million and its net gearing by some 40 percentage points. The company's equity ratio will improve over 3 percentage points. A definitive agreement still requires the Boards of both parties to approve it, the actual agreement to be signed, negotiations with financing parties to be concluded and the competition authorities to give their approval. The transaction is expected to be closed in the last quarter of 2009. Metsäliitto, M-real and UPM-Kymmene published detailed stock exchange releases about the deal on 15 July 2009. Near-term outlook The demand for forest energy and logging sites predominated by roundwood will remain good in Finland. The pulpwood market is also expected to return to normal. Wood Supply will monitor development in the market for finished goods. Prices of pine sawn goods have increased, and, due to smaller supply, the demand and supply should stay in better balance. Nevertheless, sawn goods production must be restricted if availability of wood raw material that is competitive in relation to the price level of finished goods is not sufficient in the autumn. The demand for plywood is not expected to improve this year, while the demand for KertoLVL depends partly on the extent to which stimulus measures will boost infrastructure construction. The costly raw materials purchased during earlier years have been mainly utilised which is expected to improve the result for the second half of the year. Globally, pulp stocks are returning to normal, and the recent price increases suggest slight signs of positive profit development for the second half of the year. However, the near future is overshadowed by the low utilisation rates of European and North American paper mills, as well as the support measures by the United States and Canada for their own pulp industries. M-real's internal profit improvement programmes, combined with declining wood and chemicals costs, will ease the challenges related to profitability. The letter of intent concerning the sale of Metsä-Botnia's Uruguayan operations, published in July, will improve M-real's financial position, if it becomes definitive. However, the 2009 fullyear result will be weighed down by the considerable operational expenses incurred from reducing operations and making them more profitable. Despite some recent signs of improvement, M-real's operating result for 2009, excluding non-recurring items, will be clearly weaker than last year's result, due to the company's weak performance in the first part of the year. The downturn notwithstanding, the sales volumes of tissue and cooking paper are expected to remain stable. The recession has had a bigger impact on the away-fromhome business than the consumer business. The latter has, in fact, shown growth potential in some segments and product categories. Higher raw material expenses and cautious growth expectations are predicted to make the latter half of the year more challenging than the first half. Demand is expected to remain challenging. Metsäliitto Group will continue to seek profitability and cash flow through its efficiency improvement measures and restructuring. Despite some recent, minor positive signs, the 2009 operating result excluding non-recurring items will be clearly weaker than last year. Espoo, 23 July 2009 Metsäliitto Group Board of Directors Further information: Ilkka Pitkänen, Group CFO, Metsäliitto Group, tel. +358 10 465 4260 Anne-Mari Achrén, Group CCO, Metsäliitto Group, tel. +358 10 465 4541 The figures are unaudited. METSÄLIITTO GROUP Condensed consolidated 2009 2008 2009 2008 2008 statement 1-6 1-6 Change Q2 Q2 1-12 of comprehensive income Continuing operations Sales 2 492 3 386 -894 1 213 1 676 6 434 Other operating income 84 172 -88 43 113 239 Operating expenses -2 569 -3 178 609 -1 227 -1 591 -6 189 Depreciation and impairment -200 -192 -9 -85 -93 -482 losses Operating result -193 189 -382 -56 105 2 Share of result in -10 4 -14 -8 2 6 associated companies Exchange gains and losses -4 0 -4 -1 -2 19 Other net financial items -50 -113 63 -30 -51 -260 Result before income tax -257 80 -337 -95 54 -233 Income tax 25 -8 33 7 -1 60 Result for the period from continuing operations 232 72 -304 -88 53 -172 Discontinued operations Result from discontinued -12 -64 52 -3 -46 -338 operations Result for the period -245 8 -252 -91 8 -511 Other comprehensive income Cash flow hedges 15 20 -5 18 27 -55 Available for sale -128 71 -199 -62 -1 97 financial assets Currency translation -2 3 -5 -12 12 13 differences Other items 0 1 -1 -2 0 -1 Income tax relating to components 31 -27 58 10 -6 -16 of other comprehensive income Other comprehensive income, net of tax -85 67 -152 48 32 39 Total comprehensive income for the period -329 74 -404 -139 40 -472 Result attributable to: Members of parent company -119 19 -138 -35 10 -213 Minority interest -125 -11 -114 -56 -2 -297 -245 8 -252 -91 8 -511 Total comprehensive income attributable to: Members of parent company -156 51 -206 -58 30 -199 Minority interest -173 24 -197 -81 10 -272 -329 74 -404 -139 40 -472 Unaudited Condensed consolidated balance sheet 2009 2008 2008 30.6. 30.6. 31.12. ASSETS Non-current Goodwill 165 327 176 Other intangible assets 77 110 88 Tangible assets 2 141 3 805 2 958 Biological assets 5 77 103 Investments in associated companies 102 137 139 Available for sale investments 330 438 493 Non-current financial assets 228 26 234 Deferred tax receivables 71 44 61 3 120 4 963 4 252 Current Inventories 668 1 144 943 Accounts receivables and other receivables 791 1 472 1 085 Cash and cash equivalents 350 183 619 1 850 2 799 2 647 Assets classified as held for sale 731 - - Total assets 5 660 7 762 6 899 MEMBERS' FUNDS AND LIABILITIES Members' funds Members' funds 937 1 335 1 104 Minority interest 510 992 682 1 447 2 326 1 786 Non-current liabilities Deferred tax liabilities 249 426 328 Post-employment benefit obligations 124 176 131 Provisions 92 57 111 Borrowings 2 393 2 907 2 854 Other liabilities 19 40 26 2 876 3 606 3 449 Current liabilities Current borrowings 378 743 690 Accounts payable and other liabilities 718 1 086 974 1 096 1 829 1 664 Liabilities classified as held for sale 240 - - Total liabilities 4 213 5 435 5 113 Total members' funds and liabilities 5 660 7 762 6 899 Unaudited Equity attributable to members of parent company Change in Fair members' Tran- value funds Share slation and Members' premium differ- other Retained Minority EUR mill. capital account ences reserves earnings Total interest Total Members' 574 30 -7 148 583 1 328 978 2 306 funds 1.1.2008 Dividends -38 -38 -13 -52 paid Change in -6 -6 -6 members' capital Change in 0 0 share premium account Change in 0 0 fair value reserve Transfer from unrestricted 6 -6 0 0 to restricted equity Business 0 4 4 arrangements Total comprehensive 1 30 19 51 24 74 income for the period Members' 569 30 -6 184 558 1 335 992 2 326 funds 30.6.2008 Members' 585 30 -5 165 329 1 104 682 1 786 funds 1.1.2009 Dividends -35 -35 -1 -37 paid Change in 24 24 24 members' capital Change in 0 0 share premium account Change in 0 0 fair value reserve Transfer from unrestricted 0 0 to restricted equity Business 2 -2 0 3 3 arrangements Total comprehensive -1 -35 -119 -156 -173 -329 income for the period Members' 609 30 -4 128 174 937 510 1 447 funds 30.6.2009 The change in the fair value of investments available for sale is based mainly on the decrease in the value of the Pohjolan Voima shares. The change in the fair value of the Pohjolan Voima shares relates mainly to the decrease of the 12 month moving average value of Nord Pool electricity futures used in the valuation. Unaudited Condensed consolidated cash flow statement 2009 2008 2008 1-6 1-6 1-12 Result for the period -245 8 -511 Total adjustments 209 248 832 Change in working capital 103 -187 88 Cash flow arising from operations 67 68 410 Net financial items -8 -126 -239 Income taxes paid 6 -57 -58 Net cash flow arising from operating activities 65 -115 113 Investments in tangible and intangible assets -74 -110 -272 Divestments of assets and other 155 154 511 Net cash flow arising from investing activities 80 44 239 Change in members' funds 24 -3 -1 Change in long-term loans and other financial items -376 -114 -101 Dividends paid -40 -55 -55 Net cash flow arising from financing activities -391 -173 -157 Changes in cash and cash equivalents -246 -243 195 Cash and cash equivalents at beginning of period 619 428 428 Translation difference 1 -1 -4 Changes in cash and cash equivalents -246 -243 195 Cash and cash equivalents in assets classified as held for sale -25 - - Cash and cash equivalents at end of period 350 183 619 Unaudited BUSINESS SEGMENTS Wood Supply 1-6/09 1-6/08 Q2/09 Q2/08 1-12/08 Sales 577 960 251 474 1 734 EBITDA 10 24 4 13 35 - " -, excl. non-recurring items 10 22 4 12 33 Depreciation and impairment -2 -3 -1 -1 -5 Operating result 9 22 4 12 30 - " -, excl. non-recurring items 9 20 4 11 28 Investments 1 3 0 2 4 Personnel at end of period 990 1 263 990 1 263 1 140 Wood Products Industry 1-6/09 1-6/08 Q2/09 Q2/08 1-12/08 Sales 425 644 224 329 1 162 EBITDA -15 18 0 9 -18 - " -, excl. non-recurring items -15 18 0 9 -11 Depreciation and impairment -20 -21 -10 -10 -57 Operating result -35 -3 -10 -1 -74 - " -, excl. non-recurring items -35 -3 -10 -1 -53 Investments 4 16 3 10 36 Personnel at end of period 3 871 4 643 3 871 4 643 4 199 Pulp Industry 1-6/09 1-6/08 Q2/09 Q2/08 1-12/08 Sales 585 810 282 413 1 591 EBITDA -38 188 -9 79 347 - " -, excl. non-recurring items -21 188 -9 79 347 Depreciation and impairment -126 -69 -33 -34 -138 Operating result -165 120 -42 44 209 - " -, excl. non-recurring items -90 120 -42 44 209 Investments 20 43 10 20 99 Personnel at end of period 1 753 2 014 1 753 2 014 1 815 The Metsäliitto Group consolidates 53% of the Pulp Industry (M-real 30% and Metsäliitto Cooperative 23%). Board and Paper Industry 1-6/09 1-6/08 Q2/09 Q2/08 1-12/08 Sales 1 208 1 688 585 829 3 236 EBITDA -71 223 -23 127 254 - " -, excl. non-recurring items -33 128 -20 55 192 Depreciation and impairment -120 -115 -51 -57 -315 Operating result -191 108 -73 71 -61 - " -, excl. non-recurring items -135 13 -70 -1 -35 Investments 32 51 16 30 128 Personnel at end of period 6 080 7 035 6 080 7 035 6 546 Unaudited Tissue and Cooking Papers 1-6/09 1-6/08 Q2/09 Q2/08 1-12/08 Sales 435 461 217 231 930 EBITDA 62 49 33 23 98 - " -, excl. non-recurring items 62 49 33 23 99 Depreciation and impairment -21 -29 -10 -13 -56 Operating result 41 20 22 11 42 - " -, excl. non-recurring items 41 20 22 11 44 Investments 11 10 7 7 33 Personnel at end of period 3 278 3 385 3 278 3 385 3 222 Other operations 1-6/09 1-6/08 Q2/09 Q2/08 1-12/08 Sales 164 169 73 77 315 EBITDA 23 16 8 6 29 - " -, excl. non-recurring items 23 16 8 6 24 Depreciation and impairment -10 -9 -5 -5 -20 Operating result 13 7 3 1 9 - " -, excl. non-recurring items 13 7 3 1 4 Investments 22 20 11 12 48 Personnel at end of period 425 1 403 425 1 403 1 204 Other operations include Vapo Group (49,9%) and Metsäliitto's service and holding functions. Internal sales and eliminations 1-6/09 1-6/08 Q2/09 Q2/08 QI-IV/08 Sales -903 -1 347 -418 -677 -2 534 EBITDA 36 -139 14 -59 -261 - " -, excl. non-recurring items 15 -137 6 -59 -259 Depreciation and impairment 98 54 26 27 109 Operating result 134 -85 40 -32 -152 - " -, excl. non-recurring items 67 -83 31 -32 -150 Metsäliitto Group 1-6/09 1-6/08 Q2/09 Q2/08 1-12/08 Sales 2 492 3 386 1 213 1 676 6 434 EBITDA 7 380 29 198 484 - " -, excl. non-recurring items 41 285 24 126 425 Depreciation and impairment -200 -192 -85 -93 -482 Operating result -193 189 -56 105 2 - " -, excl. non-recurring items -128 93 -61 33 45 Investments 74 110 38 66 272 Personnel at end of period 15 047 18 192 15 047 18 192 16 729 EBITDA = Operating result before depreciation and impairment losses. Unaudited Quarterly data 2009 2009 2008 2008 2008 2008 Q2 Q1 Q4 Q3 Q2 Q1 Sales Wood Supply 251 327 360 414 474 487 Wood Products Industry 224 202 239 279 329 315 Pulp Industry 282 303 359 421 413 398 Board and Paper Industry 585 623 722 826 829 859 Tissue and Cooking Papers 217 218 234 235 231 230 Other operations 73 90 87 60 77 91 Internal sales and eliminations -418 -485 -548 -639 -677 -670 Group sales 1 213 1 278 1 453 1 595 1 676 1 710 Operating result Wood Supply 4 5 4 4 12 10 Wood Products Industry -10 -25 -55 -16 -1 -2 Pulp Industry -42 -122 -13 102 44 75 Board and Paper Industry -73 -117 -161 -8 71 37 Tissue and Cooking Papers 22 19 10 13 11 9 Other operations 3 10 -1 3 1 6 Elimineringar 40 94 10 -78 -32 -52 Group operating result -56 -137 -206 19 105 84 - % of sales -4.6 -10.7 -14.2 1.2 6.3 4.9 Share of results in associated companies -8 -2 -6 8 2 2 Exchange gains and losses -1 -2 18 0 -2 2 Other net financial items -30 -20 -84 -63 -51 -62 Result before income tax -95 -163 -277 -35 54 26 Income tax 7 19 66 2 -1 -7 Result for the period from continuing operations -88 -144 -211 -33 53 19 Result from discontinued operations -3 -10 -62 -212 -45 -19 Result for the period -91 -153 -273 -245 8 0 Unaudited Change in tangible assets 1-6/09 1-6/08 1-12/08 Book value at beginning of period 2 958 4 021 4 021 Company acquisitions 1 - 4 Investments 68 105 255 Decrease -245 -85 -686 Assets classified as held for sale -447 - - Depreciation and impairment charges -187 -180 -438 - " - , discontinued operations - -38 -149 Translation differences and other changes -7 -19 -49 Book value at end of period 2 141 3 805 2 958 Depreciation and impairment charges of discontinued operations include the Graphic Papers business. Commitments Q2/09 Q2/08 Q4/08 On own behalf (incl. leasing liabilities) 353 319 318 On behalf of associated companies 4 3 3 On behalf of others 6 2 4 Total 363 324 325 Commitments related to fixed assets Q2/09 Q2/08 Q4/08 Payments due under 1 year 7 9 0 Payments due in subsequent years 2 1 1 Open derivative contracts Q2/09 Q2/08 Q4/08 Interest rate derivatives 1 074 1 498 1 158 Currency derivatives 2 160 2 680 2 346 Other derivatives 347 214 232 Total 3 581 4 392 3 735 The market value of open derivative contracts at the end of the review period was EUR -9 million (12/08: EUR 33 million). Open derivative contracts also include closed contracts to a total amount of EUR 715 million (12/08: EUR 787 million). Accounting policies The Financial Statements Bulletin was prepared in accordance with the IAS 34 standard Interim Financial Reporting and the accounting policies presented in Metsäliitto Group's Annual Report. The Group has adopted the following standards from the beginning of 2009: IAS 1 (Revised), 'Presentation of Financial Statements'. The revised standard is aimed at improving users' ability to analyse and compare the information given in financial statements by separating changes in equity of an entity arising from transactions with owners from other changes in equity. Non-owner changes in equity are presented in the statement of comprehensive income. IFRS 8, 'Operating Segments'. The new standard replaces IAS 14. The new standard requires a 'management approach', under which segment information is presented on the same basis as that used for internal reporting purposes. The segments reported by the Group as from Jan 1, 2009 are Wood Supply, Wood Products Industry, Pulp Industry, Board and Paper Industry, Tissue and Cooking Papers and Other operations. The figures for the comparative periods have been changed according to the new segments. |
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