2013-02-28 09:00:00 CET
2013-02-28 09:00:04 CET
REGULATED INFORMATION
Vaahto Group Plc Oyj - Financial Statement Release
VAAHTO GROUP’S FINANCIAL STATEMENT RELEASE FOR 1 SEPTEMBER 2011 - 31 DECEMBER 2012
Lahti, Finland, 2013-02-28 09:00 CET (GLOBE NEWSWIRE) -- VAAHTO GROUP PLC OYJ
FINANCIAL STATEMENT RELEASE 28.2.2013 at 10.00 am
VAAHTO GROUP'S FINANCIAL STATEMENT RELEASE FOR 1 SEPTEMBER 2011 - 31 DECEMBER
2012
Turnover from Vaahto Group's continuing operations for the financial year
closing in December 2012 was 40.1M EUR (comparative: 30.3M EUR) and the
operating loss from continuing operations 4.9M EUR (3.2M EUR). Scaled to annual
figures, the company's turnover showed a 1% increase from the reference period,
but the operating result was clearly weaker. The primary reason for the
negative result was Vaahto Paper Technology's weak order book and low
profitability. The Group's outstanding orders stood at 24.8M EUR (22.4M EUR) at
the closing of the financial year. The reference period is 12 months, while the
financial period now ending is 16 months.
Vaahto Group Plc Oyj's Extraordinary Meeting of Shareholders of 19 June 2012
approved an amendment to the company's bylaws whereby the company's financial
year changes to run from 1 January to 31 December. For this reason, the
duration of the financial period now being closed is 16 months (1 September
2011 to 31 December 2012).
Vaahto Paper Technology
Vaahto Paper Technology's turnover from continuing operations was 17.0M EUR
(14.6M EUR) and the net result an operating loss of 4.2M EUR (loss of 2.0M
EUR). Converted into annual terms, Vaahto Paper Technology's turnover decreased
by 13%, and the financial year's result was very weak.
Therefore, the Group decided in December 2012 to sell the project business
belonging to the Vaahto Paper Technology division and the spare-parts and
small-project business belonging to the service-business unit. The Group made a
preliminary contract with a buyer in January 2013, and the transaction is
expected to be completed by the end of the first quarter of 2013. Because the
sale was considered highly likely at the closing of the financial year, assets
and liabilities belonging to the project business are included on the balance
sheet as long-term assets on sale and related debts. In the income statement,
the project business is presented as discontinuing operations. Also, reference
data from the 2010-2011 financial period included in the income statement have
been adjusted accordingly. The operating loss from discontinuing operations in
the course of the financial period under review came to 1.6M EUR (the
comparative figure was a profit of 2.0M EUR).
The most significant new order during the period under review was for
modernisation of the pulp dryer at the Södra Cell Mönsterås pulp mill.
The financial year also saw continued efforts toward developing Vaahto Paper
Technology's service-business branch. Service and maintenance operations,
however, fell short of the objectives set for the period.
Vaahto Process Technology
Vaahto Process Technology's turnover was 24.1M EUR (15.7M EUR) and net result
an operating loss of 0.7M EUR (an improvement from the previous period's
operating loss of 1.2M EUR). Scaled to annual figures, turnover increased by
15% from the level of the reference period. Though up 0.5M EUR from that of the
reference period, the business result remained negative. The division's
negative operating result was principally caused by the low profitability of
the tank business in the first eight months of the financial year.
Vaahto Process Technology's market situation in the tank sector was weak but
improved substantially toward the end of the financial period. In August 2012,
Japrotek Oy Ab received an important order for the planning, manufacture, and
installation of eight large tank structures for Sasol Technology (Pty) Limited
in South Africa. As the end of the financial period approached, Japrotek's
order book was very strong, making the outlook for the next financial year
good.
Vaahto Process Technology's market situation in the agitator business was good,
and new orders were received steadily over the course of the period. The
business result of the agitator business unit is nearly in line with the
business objectives set, and the outlook for the next financial year is good.
Financing and solvency
The cash flow of the Group's business operations was -3.3M EUR (-3.8M EUR). The
Group's net financing costs came to 1.2M EUR (0.7M EUR). The cash flow for
investments made during the period under review was -1.0M EUR (7.1M EUR). The
Group's consolidated balance sheet total was 30.5M EUR (36.5M EUR), with an
equity ratio of -7.9% (17.8%).
The Group's financing situation remains tight and requires that the plans made
by the management succeed and that profitability improve. Plans must also be
made, however, to prepare for rearrangement of short-term payment programmes or
for obtaining additional funding. The Board of Directors has initiated
negotiations with financiers to rearrange present payment plans.
Loans from financial institutions entail repayment covenants linked to the
Group's solvency ratio. The Group's year-end accounts of 31 December 2012 are
in breach of a covenant, but the Group at the closing of the 2011-2012 fiscal
period received a commitment from the financier in question that no
consequences of the breach will arise for the Group. This commitment does not,
however, apply to the next 12 months, and for this reason debt to the financier
in question is classified as short-term debt in the year-end accounts of 31
December 2012.
Investments
The Group's capital expenditure during the period under review came to 1.3M EUR
(1.9M EUR). This figure consists mainly of machine and equipment investments
for the Vaahto Paper Technology division's service business.
Environmental affairs
In November 2012, Vaahto Paper Technology Oy received the Supreme
Administrative Court's decision of rejection of the company's appeal of the
decision made by the Häme Regional Environment Centre. The company's appeal
dealt with the Environment Centre's decision not to extend the time limit set
for the work required by the company's environmental permit for the processing
of drainage water in the courtyard areas of the company's production plant in
Hollola. Asphalting of the courtyard area and installation of storm drains at
the Hollola plant will therefore be completed in 2013 as the environmental
permit requires. The estimated cost of this operation is 500 thousand euros.
Research and development
The Group's research and development activities focused on expansion of Vaahto
Paper Technology's range of service products and improvements to the
competitive features of the key components of paper and cardboard machines. The
scope of the research and development activities remains at the previous
financial year's level.
Human resources
The average number of personnel employed by the Group during the period under
review was 333 (348), with discontinuing operations accounting for 69 employees
(91).
Extraordinary Meeting of Shareholders (19 June 2012)
Vaahto Group Plc Oyj's Extraordinary Meeting of Shareholders of 19 June 2012
nominated a new member, Sami Alatalo, to the Board of Directors. The
shareholders' meeting also approved an amendment of the company's bylaws that
changes the company's financial year to run from 1 January to 31 December. For
this reason, the duration of the financial period now ending is 16 months (from
1 September 2011 to 31 December 2012).
Risks and uncertainty factors
Demand for Vaahto Group's products is highly dependent on trends and other
developments in the global economy and the Group's main customer industries.
Attempts are made to balance out the risks caused by market fluctuations by
adapting the Group's sales operations to current trends in the relevant market
areas and customer industries.
Large-scale projects entail the risk of inaccurate assessment of project costs
and other risks inherent to projects in the tender stage, which may cause a
project's financial result to be lower than expected. Attempts are made to
control the risks involved in large-scale projects by means of several
quality-management systems, profitability analyses, operation guidelines, and
approval procedures.
The objective of the efforts to manage the Group's financing risks is to
minimise the negative impact of changes in financing markets on the Group's
result and to ensure the availability of internal and external capital on
competitive terms.
The risk of property losses, consequential losses, and liability losses caused
by business operations is addressed by means of appropriate insurance
arrangements.
Equity capital
The Annual General Meeting of 12 December 2011 authorised the Board of
Directors to decide on the issuing of new shares in one or more instalments.
The maximum number of shares that may be issued is 1,000,000. This
authorisation is valid until 31 December 2012 unless a general meeting amends
or revokes the authorisation before that date.
On 19 April 2012, the Vaahto Group Plc Oyj Board of Directors decided on two
separate share issues:
Private issue to selected investors
In deviation from the subscription right of the current shareholders, the
Vaahto Group Plc Oyj Board of Directors decided to issue an offering of 600,000
new shares in the company to a group of selected investors. The issue price
was set at 3.50 euros per share, for a total issue value of 2.1M EUR. The
issue sum paid for the new shares was allocated to the invested non-restricted
equity capital reserve.
Acquisition of shares in AP-Tela Oy and a private issue to minority
shareholders of AP-Tela Oy
The Vaahto Group Board of Directors also decided to approve a share-exchange
contract made with the company's subsidiary AP-Tela Oy, signed on 19 April
2012, and to arrange a private issue to carry out the share exchange as
specified in the contract. The share exchange was implemented as specified in
Article 52 of the Law on the Taxation of Business Income, with Vaahto Group Plc
Oyj issuing 317,602 new shares in Vaahto Group Plc Oyj to the minority
shareholders of AP-Tela Oy as payment for 47.92% ownership of AP-Tela Oy (230
shares therein) held by the minority shareholders of AP-Tela Oy. The issue
price of the shares issued in the share-exchange scheme was 3.50 euros per
share. The total issue value of the new shares, 1,111,607 euros, was allocated
to the invested non-restricted equity capital reserve.
New shares issued in both share issues, 917,602 shares in all, were entered in
the trade register on 23 April 2012. The new shares give their owners right of
ownership in the company with effect from the date of registration.
Private issue to Mikko Laakkonen
Additionally, the Vaahto Group Plc Oyj Board of Directors decided, on 2
December 2012, to issue 73,892 new shares of the company in a special rights
issue to Mikko Laakkonen. The subscription price of the shares issued to
Laakkonen was 2.03 euros per share, the closing rate for a share in the company
on the Helsinki stock exchange, operated by NASDAQ OMX Helsinki Oy, on 30
November 2012. The total issue price of the shares issued to Laakkonen was
150,000.76 euros. These new shares, 73,892 shares in all, were entered in the
trade register on 18 December 2012. The new shares give their owner a right of
ownership in the company from the date of registration. The issue sum of the
new shares was allocated to the invested non-restricted equity capital reserve.
The share issues did not affect the company's equity capital.
The Board of Directors has no authorisation to issue convertible bonds or
warrant bonds or for purchasing or transferring the Group's own stock.
Deferred tax liabilities and receivables
In total, 1.7M EUR of value adjustments for deferred tax liabilities from
confirmed business losses has been booked for the 2011-2012 financial period.
Administration
The Annual General Meeting of 12 December 2011 nominated the following members
for the Vaahto Group Plc Oyj Board of Directors:
Reijo Järvinen, as chairman
Rainer Häggblom, as deputy chairman
Topi Karppanen, as an ordinary member
Mikko Vaahto, as an ordinary member
Vaahto Group Plc Oyj's Extraordinary Meeting of Shareholders of 19 June 2012
nominated a new member, Sami Alatalo, to the Board of Directors.
The company's managing director was Anssi Klinga from 1 September 2011 to 4
April 2012. The acting managing director was Ari Viinikkala from 4 April 2012
to 30 November 2012. Viinikkala has held the title Managing Director since 30
November 2012.
The Group's accounts have been audited by certified auditing company Ernst &
Young Oy. The head auditor was Certified Public Accountant Panu Juonala.
The company follows the 2010 Corporate Governance Code issued for companies
listed on the NASDAQ OMX Helsinki exchange. A report on the Group's management
and steering system is available on the Group's Web site.
Development prospects
The development of the international economy has shown alarming signals, and
the market situation of Vaahto Group's main customer industries remains
uncertain. No significant change, however, has occurred in total demand for
Vaahto Group's products in the first few weeks of the new financial year, and
the volume of outstanding orders is higher than it was at the start of the
previous financial year. Vaahto Group's result is expected to increase
substantially from that of the previous financial period.
Events after the end of the fiscal year
On 16 January 2013, Vaahto Group signed an initial agreement for the sale of
the project business belonging to the Vaahto Paper Technology division and the
spare-parts and small-project business falling under the service-business
unit's operations for a new company to be established by the German company
Bellmer GmbH Maschinenfabrik. The transaction is expected to be completed by
the end of the first quarter of 2013. Vaahto Group and Bellmer GmbH are also
in the process of negotiating a collaboration agreement between the project
entity being sold and Vaahto Paper Technology's service-business unit.
Distribution of profit
The parent company's business loss for the financial year was 7,730,277.29
euros, and the company has no distributable funds.
The Board of Directors proposes to the general meeting that no dividend be
distributed and that the loss be covered with funds from the profit account.
The Annual General Meeting
The Annual General Meeting of Vaahto Group Plc Oyj will be held on 10 April
2013 at 1.00 p.m. in the Sibelius Hall, Lahti.
Interim management statement
Instead of the interim report for the first three months of the accounting
period 1 January - 31 December 2013, Vaahto Group Plc Oyj will disclose the
interim management statement on 16 May 2013.
VAAHTO GROUP CONSOLIDATED FIGURES
CONSOLIDATED 2011-2012 % of 2010-2011 % of
STATEMENT OF 16 turn- 12 turn-
COMPREHENSIVE months over months over
INCOME, IFRS
1000 EUR
CONTINUING OPERATIONS
NET TURNOVER 40 908 30 316
Change in finished
goods and work
in progress 1 385 373
Production
for own use 788 1 161
Other operating
income 96 119
Share of results of
affiliated companies 25 -4
Material and
services -19 459 -13 818
Employee benefits
expenses -17 194 -12 604
Depreciations -2 188 -1 573
Impairment
on goodwill -28
Other operating
expenses -9 229 -7 190
OPERATING PROFIT
OR LOSS -4 895 -12,0 -3 219 -10,6
Financing income 62 139
Financing expenses -1 270 -863
PROFIT BEFORE TAXES -6 103 -14,9 -3 944 -13,0
Tax on income
from operations -2 226 -172
PROFIT OR LOSS
FOR THE PERIOD,
CONTINUING
OPERATIONS -8 329 -20,4 -4 084 -13,5
DISCONTINUING
OPERATIONS
Profit or loss for the period,
discontinuing operations -1 597 1 965
PROFIT OR LOSS
FOR THE PERIOD -9 926 -2 118
OTHER COMPREHENSIVE
INCOME:
Translation
differences 38 -1
OTHER COMPREHENSIVE
INCOME, NET OF TAX 38 -1
TOTAL COMPREHENSIVE
INCOME -9 888 -2 120
Net profit or loss
attributable:
Equity holders
of the parent -9 926 -2 225
Non-controlling
interest 107
Total -9 926 -2 118
Total comprehensive
income attributable:
Equity holders
of the parent -9 888 -2 226
Non-controlling
interest 107
Total -9 888 -2 120
Earnings per share calculated on profit attributable
to equity holders of the parent:
EPS continuing operations
undiluted, euros/share -2,40 -1,42
diluted, euros/share -2,40 -1,42
EPS discontinuing operations
undiluted, euros/share -0,46 0,67
diluted, euros/share -0,46 0,67
Average number of
shares (1000 shares):
undiluted 3 463 2 953
diluted 3 463 2 953
CONSOLIDATED 31.12.2012 31.8.2011
BALANCE SHEET,IFRS
1000 EUR
ASSETS
NON-CURRENT ASSETS:
Intangible assets 233 1 030
Goodwill 1 692 1 702
Tangible assets 7 596 10 907
Shares in affiliated
companies 83 57
Available for sale
investments 44 44
Non-current trade
and other
receivables 3 11
Deferred tax asset 271 2 274
NON-CURRENT ASSETS 9 921 16 026
CURRENT ASSETS:
Inventories 5 783 5 601
Trade receivables
and other
receivables 5 483 7 305
Current receivables
for revenue recognised
in part prior to
project completion 1 293 6 818
Cash and bank 1 449 775
CURRENT ASSETS 14 007 20 500
NON-CURRENT ASSETS
HELD FOR SALE 6 557
TOTAL ASSETS 30 484 36 525
CONSOLIDATED 31.12.2012 31.8.2011
BALANCE SHEET, IFRS
1000 EUR
EQUITY AND
LIABILITIES
SHAREHOLDERS'
EQUITY:
Share capital 2 872 2 872
Share premium
account 6 6
Fair value reserve and
other reserves 5 063 1 995
Translation
differences 56 29
Retained earnings -10 160 -351
Equity attributable
to equity holders
of the parent -2 163 4 552
Non-controlling
interest 1 217
SHAREHOLDERS'
EQUITY -2 163 5 768
NON-CURRENT LIABILITIES:
Deferred
tax liability 699 624
Long-term
liabilities,
interest-bearing 3 608 6 831
Non-current
provisions 395 273
NON-CURRENT
LIABILITIES 4 701 7 728
CURRENT LIABILITIES:
Short-term
liabilities,
interest-bearing 14 045 8 269
Trade payables and
other liabilities 10 662 14 573
Tax liability,
income tax 264 186
CURRENT LIABILITIES 24 971 23 028
LIABILITIES OF DISPOSAL
GROUP HELD FOR SALE
Interest-bearing
liabilities held for sale 573
Interest-free
liabilities held for sale 2 402
LIABILITIES OF DISPOSAL
GROUP HELD FOR SALE 2 975
TOTAL EQUITY AND
LIABILITIES 30 484 36 525
KEY FIGURES, IFRS 2011-2012 2010-2011
Shareholders'
equity per share,
euros -0,54 1,52
Earnings per
share, euros 1) -1,37 -0,75
Equity ratio % -7,9 17,8
Gross investments 1 289 1 876
Total average
number of
personnel 333 348
Order backlog at
the end of the fiscal
period 2) 24 771 22 401
1) Earnings per share (EPS) has been calculated by converting the profit
or loss for the reporting period 1 September 2011 - 31 December 2012
to correspond the profit or loss for 12 months.
2) The amount of contract revenue recognized as revenue has been
deducted from the order backlog.
OTHER LIABILITIES 31.12.2012 31.8.2011
1000 EUR
Bank guarantees:
Bank guarantee
limits total 8 860 18 000
Bank guarantee
limits used 7 405 11 218
Lease liabilities,
excluded financial
lease liabilities:
Current lease
liabilities 272 246
Lease liabilities
maturing
in 1-5 years 296 275
Total 568 521
Rent liabilities:
Current lease
liabilities 804 804
Lease liabilities
maturing
in 1-5 years 3 216 3 216
Later 2 144 3 216
Total 6 164 7 236
Other liabilities:
Granted guarantees
to customers and
creditors 730 500
Guarantees granted
to secure bank
guarantee limits 8 860 17 600
Guarantees granted
to secure bank
guarantees 315 290
Guarantees granted
to secure bank loans 3 780 2 910
Guarantees granted
to secure guarantee
insurances 750
Guarantees granted
to secure trial
guarantees 1 500
Guarantees granted
to secure rent
guarantees 400 400
Total 16 335 21 700
Derivative contracts:
Currency forward agreements are as a rule used to hedge
against exchange rate risks. The currency forward agreements
have been used to protect receivables and future assets.
Interest rate agreements are used to hedge against the
changes of the interests.
The derivative agreements of the group are booked according
to IAS 39: Financial instruments. Derivative agreements are
initially recognized at their purchase cost which is
equivalent to the fair value and they are subsequently
remeasured at fair value.
Fair values Nominal Fair Fair Fair
of derivative value value, value, value
agreements pos. neg. total
31.12.2012
1000 EUR
Interest rate swap
agreements 4 581 0 -208 -208
Fair values of derivative agreements are determined by using
the market prices for the equivalent agreements on the day of
the closing of the accounts. Fair values state for the income
or expenses the group would book if the derivative agreements
were closed at the end of the fiscal period.
CONSOLIDATED FLOW 2011-2012 2010-2011
OF FUNDS 16 12
STATEMENT, IFRS months months
1000 EUR
Flow of funds
from operations:
Adjustments -9 926 -2 118
Change in working 2 865 2 429
capital 1 636 -3 470
Financial income and
expenses and taxes 2 091 -671
Flow of funds from
operations -3 333 -3 831
Flow of funds from
investments:
Investments in
tangible and
intangible assets -1 289 -1 879
Increase caused by the
change in the Group
structure -18
Income from sales
of tangible and
intangible assets 319 8 933
Payments of loans 8 1
Flow of funds from
investments -980 7 055
Flow of funds from
financial items:
Issue of shares 1 861
Withdrawals of
short-term loans 2 946 55
Payments of
short-term loans -1 136 -6 793
Withdrawals of
long-term loans 3 000 5 274
Payments of
long-term loans -1 685 -1 545
Flow of funds from
financial items 4 987 -3 009
Change of liquid
funds 674 215
Figures are in thousand euros unless stated otherwise. Figures are unaudited.
Lahti 28 February 2013
VAAHTO GROUP PLC OYJ
Board of Directors
Information:
Ari Viinikkala, CEO, Vaahto Group Plc Oyj +358 400 127664
www.vaaahto.fi
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