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2011-10-19 08:00:00 CEST 2011-10-19 08:00:48 CEST REGULATED INFORMATION Rautaruukki - Interim report (Q1 and Q3)Rautaruukki Corporation Interim report Q1-Q3/2011: Weak quarter in the steel business - improved profitability in the solutions businessesRautaruukki Corporation Interim report 19 October 2011 at 9.00 EEST July-September 2011 (Q3/2010) - Order intake was up 18 per cent at EUR 678 million (576). - Comparable net sales were up 10 per cent at EUR 674 million (615). - Comparable operating profit was EUR 1 million (41), equating to 0.1 per cent of net sales. - Comparable result before taxes was -EUR 4 million (31), equating to -0.6 per cent of net sales. January-September 2011 (Q1-Q3/2010) - Order intake was up 21 per cent at EUR 2,024 million (1,679). - Comparable net sales were up 18 per cent at EUR 2,079 million (1,762). - Comparable operating profit was EUR 96 million (42), equating to 4.6 per cent of net sales. - Comparable result before taxes was EUR 72 million (20), equating to 3.5 per cent of net sales. Estimate of financial performance in 2011 Consolidated net sales in 2011 are estimated to grow approximately 15-20 per cent year on year. Profitability is estimated to improve compared to 2010. KEY FIGURES -------------------------------------------------------------------------------- Q3/11 Q3/10 Q1-Q3/11 Q1-Q3/10 2010 -------------------------------------------------------------------------------- Comparable figures Comparable net sales, EUR m 674 615 2 079 1 762 2 403 Comparable operating profit, EUR m 1 41 96 42 38 Comparable operating profit as % of net sales 0.1 6.6 4.6 2.4 1.6 Comparable result before income tax, EUR m -4 31 72 20 8 Reported figures Reported net sales, EUR m 675 614 2 080 1 774 2 415 Reported operating profit, EUR m -24 -6 69 -8 -12 Reported result before income tax, EUR m -29 -48 45 -63 -74 Net cash from operating activities, EUR m -62 -46 -49 -87 -64 Net cash before financing activities, EUR m -119 -83 -182 -208 -226 Earnings per share, EUR -0.15 -0.26 0.22 -0.35 -0.57 Return on capital employed (rolling 12 mths), % 3.3 -2.1 -0.3 Return on capital employed (annualised), % 4.5 -0.3 -0.3 Gearing ratio, % 68.2 42.9 44.7 Equity ratio, % 47.5 54.6 55.3 Personnel on average 12 111 11 923 11 930 11 796 11 693 -------------------------------------------------------------------------------- President & CEO Sakari Tamminen: Our third quarter was divided into two. Because of the general uncertainty caused by the debt crisis in Europe, mill deliveries in our steel business were well below expectations. Our steel business, and with it the operations of the entire company, posted a loss for the third quarter. On a positive note, there was continued strong order flow and improved profitability in our solutions businesses - construction and engineering. Our order intake was up 18 per cent year on year at EUR 678 million. There was good growth in demand in Finland and Central Eastern Europe, especially Poland, and also in Russia. Orders in the construction and engineering businesses showed favourable development and the level of activity in customer industries is good. On the other hand, mill deliveries in our steel business - where demand is based on long-term needs and wholesale demand - have been weaker than expected. Mill deliveries account for over half the total deliveries in the business area. Our net sales for the third quarter were up 10 per cent year on year at EUR 674 million. Relatively best net sales growth was in Central Eastern Europe, where growth came mostly from the construction business. The company's gearing ratio rose to around 68 per cent because of tied-up net working capital, investments and the loss made by the steel business. Delivery volumes in the steel business were too low to free up working capital at the rate we anticipated. One of the main targets is to free up working capital in our steel business to align the gearing ratio with the company's long-term target of 60 per cent. In the construction business, positive notes were improved operating profit, as well as growth in order volumes of residential roofing products in almost all market areas. Also commercial and industrial construction deliveries grew, especially in Finland, the other Nordic countries and Ukraine. In Russia, too, there was continued good demand for commercial and industrial construction. Capacity utilisation rates have improved in the construction business. In the engineering business, the markets in our main customer segments were good. Our engineering business moved back into the black during the third quarter and operating profit was up more than 30 per cent year on year. Growth was highest in delivery volumes of cabins, frames and booms for the lifting, handling and transportation equipment industry. Also deliveries to construction and mining equipment and forest machine manufacturers showed further growth. Growth levelled off in the steel markets mostly because of the uncertainty in the financial markets in Europe and cautious decision-making due to the weakened economic outlook. In our steel business, the fall in order intake was visible especially in mill deliveries. Service centre sales, where demand is based on short-term needs, remained at a good level. Net sales developed relatively well in the Nordic countries, Central Eastern Europe and Russia. Sales of special steel products remained at a good level in Western Europe, but in many new markets such as China deliveries decreased. Special steel products accounted for 32 per cent of net sales in the steel business for the third quarter. The loss posted for the third quarter was mainly due to higher raw material costs and a lower capacity utilisation rate in steel production, which was affected by modernisation of blast furnace 2 at the Raahe Steel Works. Production capacity in the European steel markets has been adjusted throughout the line. Utilisation rates are usually lower towards the end of the year than at the start. The capacity utilisation rate in our steel business is estimated to be around 80 per cent during the fourth quarter. This is why profitability of our steel business during the second half of the year will be weaker than during the corresponding period in 2010. In the solutions businesses, we anticipate that market conditions will remain reasonably good for the rest of the year. Based on this, we forecast the capacity utilisation rate in the construction and engineering businesses will be better in 2011 than in 2010. Consolidated net sales in 2011 are estimated to grow approximately 15-20 per cent year on year. Profitability is estimated to improve compared to 2010. Rautaruukki Corporation's full interim report for January-September 2011 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 A presentation in English for analysts and the media will be held on 19 October 2011 at 10.30 EEST at Ruukki, Suolakivenkatu 1, 00810 Helsinki. A live webcast of the event may be followed online starting at 10.30am on the company's website at www.ruukki.com/investors. The event may also be attended through a conference call. To attend through the conference call, please call the number given 5-10 minutes before the scheduled start time: +44 (0)20 7162 0125, access code: 904355. A replay of the webcast can be viewed on the company's website on 19 October 2011 from about 2pm EEST. An encore replay of the conference call can be accessed until 26 October 2011 at +44 (0)20 7031 4064, access code: 904355. Rautaruukki Corporation Taina Kyllönen SVP, Marketing and Communications Rautaruukki supplies metal-based components, systems and integrated systems to the construction and engineering industries. The company has a wide selection of metal products and services. Rautaruukki has operations in 27 countries and employs around 11,700 people. Net sales in 2010 totalled around EUR 2.4 billion. The company's share is quoted on NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS). The Corporation uses the marketing name Ruukki. DISTRIBUTION: NASDAQ OMX Helsinki Main media www.ruukki.com [HUG#1555912] |
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