2010-02-19 08:00:00 CET
2010-02-19 08:00:04 CET
REGULATED INFORMATION
Honkarakenne Oyj - Financial Statement Release
HONKARAKENNE OYJ'S REPORT ON ACCOUNTS 1 January - 31 December 2009
HONKARAKENNE OYJ REPORT ON ACCOUNTS 19 February 2010 at 9:00 hours HONKARAKENNE OYJ'S REPORT ON ACCOUNTS 1 January - 31 December 2009 SUMMARY Interim Report October - December 2009 Honkarakenne Group's consolidated net sales for the last quarter of 2009 amounted to EUR 12.7 million, a decrease of 18.2% on the previous year's corresponding period (EUR 15.6 million). Profit before taxes showed a loss of EUR 1.6 million (loss of EUR 2.8 million) and the earnings/share ratio was a loss of EUR 0.53 (loss of EUR 0.58). The year 2009 Group's consolidated net sales for January to December 2009 amounted to EUR 52.3 million, a decrease of 33.2% on the previous year's figure (EUR 78.4 million). Profit before taxes showed a loss of EUR 3.7 million (loss of EUR 1.5 million) and the earnings/share ratio was a loss of EUR 1.06 (loss of EUR 0.32). The weakness in advance sales, evident from the end of 2008, reflected in the delivery volumes in all market areas of the Group. In Honkarakenne Group, ‘advance sales' refers to all orders received during the review period. -------------------------------------------------------------------------------- | KEY FIGURES | 10-12/ | 10-12/ | 1-12/ | 1-12/ | change % | | | 2009 | 2008 | 2009 | 2008 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, MEUR | 12.7 | 15.6 | 52.3 | 78.4 | -33.2 | -------------------------------------------------------------------------------- | Operating profit/loss, | -1.2 | -1.9 | -3.0 | -0.1 | -2943.7 | | MEUR | | | | | | -------------------------------------------------------------------------------- | Profit/loss before taxes, | -1.6 | -2.8 | -3.7 | -1.5 | -140.3 | | MEUR | | | | | | -------------------------------------------------------------------------------- | Average number of | | | 357 | 398 | | | personnel | | | | | | -------------------------------------------------------------------------------- | Earnings/share (EPS), EUR | | | -1.06 | -0.32 | | -------------------------------------------------------------------------------- | Equity ratio, % | | | 28.8 | 33.0 | | -------------------------------------------------------------------------------- | Return on equity, % | | | -26.3 | -6.6 | | -------------------------------------------------------------------------------- | Shareholders equity/share, | | | 3.5 | 4.5 | | | EUR | | | | | | -------------------------------------------------------------------------------- | Gearing, % | | | 149.0 | 121.6 | | -------------------------------------------------------------------------------- Review by Honkarakenne Oyj's President & CEO, Esa Rautalinko, in connection with the report on accounts: ”The prolonging of the global economic stagnation has reflected on Honkarakenne's sales in all its main markets. The decline in sales has been considerably more marked in the export markets than in the domestic markets. In the operating period, the trough has been the deepest in the eastern European and Russian markets as well as in Russia's neighbouring markets. In the financial year, Honkarakenne's advance sales decreased by 29% from the previous year's level. In domestic advance sales the decrease was 9% and in export sales 42%. The reported decrease in consolidated net sales was 33.2% on the previous year's figure. The cost adjustment and efficiency measures, launched in 2008, served to bring the business operations down to a lower level of net sales. The consolidated result for the year as a whole was weak. Towards the end of the financial year, a further efficiency boost was launched with a view to increasing the effectiveness of both operation and sales. The goal of the ongoing extensive improvement programme is to bring in a positive result for the Group in 2010 with the help of cost cuts amounting to around EUR 5 million. The full impact of the cost cutting measures will be achived from 2011. In total, the programme of improvements will target cost items of around EUR 8 million. It is anticipated that around three-quarters of the improved result will be attributable to savings made in fixed and variable costs in the different business areas and the rest will be achieved by streamlining corporate structures in 2010. The non-recurring cost items that the programme will involve may be significant. Developing the company's operational effectiveness is a key factor in securing its long-term success. Developing sales and marketing processes, improving the network of importers and distributors and developing the company's product model range will also be the focus of specific attention. Honkarakenne will focus on premium segments in selected markets and will further develop its customer-oriented service model. NET SALES Honkarakenne Group's consolidated net sales in 2009 amounted to EUR 52.3 million, compared to EUR 78.4 million in the same period last year. Net sales decreased by EUR 26.0 million and remained 33.2% below last year's figure. Domestic net sales decreased by EUR 7.0 million (-22,7%) and export net sales by EUR 19.1 million (-40,1%). Geographical distribution of net sales: -------------------------------------------------------------------------------- | DEVELOPMENT OF SALES | | | | -------------------------------------------------------------------------------- | Distribution of net | 1-12/200 | 1-12/2008 | | | | | sales, % | 9 | | | | | -------------------------------------------------------------------------------- | Finland | 45.5 % | 39.3 % | | | | -------------------------------------------------------------------------------- | Central Europe | 24.3 % | 21.1 % | | | | -------------------------------------------------------------------------------- | Far East | 11.0 % | 8.8 % | | | | -------------------------------------------------------------------------------- | Other countries | 19.2 % | 30.8 % | | | | -------------------------------------------------------------------------------- | Total | 100.0 % | 100.0 % | | | | -------------------------------------------------------------------------------- | | | | | | | -------------------------------------------------------------------------------- | Net sales, 1000 euros | 10-12/20 | 10-12/200 | 1-12/200 | 1-12/200 | change | | | 09 | 8 | 9 | 8 | % | -------------------------------------------------------------------------------- | Finland | 5 093 | 6 527 | 23 790 | 30 761 | -22.7 % | -------------------------------------------------------------------------------- | Central Europe | 2 732 | 3 359 | 12 700 | 16 556 | -23.3 % | -------------------------------------------------------------------------------- | Far East | 1 733 | 2 023 | 5 759 | 6 887 | -16.4 % | -------------------------------------------------------------------------------- | Other countries | 3 189 | 3 693 | 10 063 | 24 151 | -58.3 % | -------------------------------------------------------------------------------- | Total | 12 748 | 15 602 | 52 313 | 78 355 | -33.2 % | -------------------------------------------------------------------------------- The figures for ‘Central Europe' comprise Germany and France as well as the rest of Europe. The figures for ‘Far East' comprise Japan and Mongolia. The figures for ‘Other countries' comprise the CIS countries, USA and Estonia. The Group's order book was EUR 23.0 million at the end of December. The corresponding figure for last year was EUR 23.7 million. DEVELOPMENT OF PROFIT The operating result in 2009 amounted to a loss of EUR 3.0 million (loss of EUR 0.1 million), and profit before taxes showed a loss of EUR 3.7 million (loss of EUR 1.5 million). The significant decrease in net sales and the inadequacy of the cost adjustment and enhancement measures both contributed to the negative profit trend. The impact of the adjustment measures is evident in the partly achieved cost structure. The cost cutting has targeted the entire organization. In compliance with the requirements concerning goodwill impairment testing, the consolidated financial statements will recognize an impairment loss on goodwill amounting to EUR 0.4 million. FINANCING AND INVESTMENTS The Group's financial position weakened in the report period. The equity ratio stood at 28.8% (33.0%) and interest-bearing net liabilities at EUR 18.4 million (EUR 19.5 million). EUR 4.4 million of the interest-bearing net liabilities carries a 30% equity ratio covenant term. The next review is due on 31 March 2010. Group liquid assets totalled EUR 1.7 million (EUR 1.6 million). The Group also has a EUR 10.0 million bank overdraft facility, EUR 5.1 million of which had been drawn on at the end of the report period (EUR 9.3 million). Gearing stood at 149.0% (121.6%). Capital expenditure totalled EUR 2.5 million (EUR 5.1 million). Following the share issue executed in February 2010, the Group's liquidity has improved. MARKET DEVELOPMENT The total annual net sales in the log house construction industry as a whole amounted to EUR 231 million, a decrease of 27% on the previous year's level. Domestic sales accounted for EUR 143 million (-18%) and exports for EUR 88 million (-38%). As at 1 January 2010, the orderbook for the industry stood at EUR 122 million, which is a 6% increase on the figure for the start of the previous year. Honkarakenne experienced a decrease of 29% in advance sales in the 2009 financial year. The drop in domestic advance sales was 9% and in export advance sales it was 42% on the previous year's level. PRODUCTS AND MARKETING Two new products, the Honka Duo™ eco round log and the Honka Major™ multilaminated log were introduced in the during the year. Honka Duo™ is a round log which is split in the manufacturing process, before being dried, and is glued back together prior to the finishing work. This procedure achieves lower overall moisture of the wood, which reduces settling and splitting in the finished product. The manufacturing process is also more environmentally friendly due to more effective drying. Honka Major™ is a multilaminated log,measuring 27 centimetres in diameter. Its principal uses include public, large-scale log buildings and prestigious private dwellings. Deliveries of the innovative products began in the second and third quarters. The new products have been well received. The West European launch of the new Honka Fusion™ product and service concept was warmly welcomed by architects and end-users alike. The structural solution applied in the Honka Fusion™ product is an innovation of Honkarakenne: the log that does not settle. Due to the non-settling nature of this ecological log, it can be combined in construction with other materials, and the end result is both architecturally and structurally superior. Honka Fusion™ makes it more feasible to construct healthy solid wood houses, even in city environments and areas where building in stone is the norm. Honka Fusion™ houses are designed primarily as energy-efficient, low-energy housing. New energy-efficient solutions have been developed for diverse uses: the Honka Massive™ energy solution and the Honka LowE™ low-energy solution for residential houses and the Honka Weekend™ and Honka Zero™ energy solutions for leisure accommodation for vacation houses. The European Technical Approval (ETA) granted to Honkarakenne was updated in February to cover also the new products. During the operating year, Honkarakenne forged ahead with the marketing of vacation house extensions in Finland. The Honka Extension Service™ can be marketed not just to the owners of the 40,000 holiday cottages that Honkarakenne has delivered to domestic customers, but also to around 150,000 other Finnish holiday home owners. In its marketing globally, Honkarakenne focused on local events targeting certain product and client groups. In population-intensive market areas, the company's website has gained in significance and become the primary channel for reaching customers. The Internet enables cost-effective customer contact and allows the company to chart the customer's requirements right at the start of the relationship. Sales and marketing support systems were developed further as planned; The HonkaCRM customer relationship management system and the Honka Master offer calculation system were refined in order to assure effective implementation. HonkaCRM was adopted in Finland on 1 February 2010. HonkaNET, a combined extranet and intranet was constructed with the aim of improving internal communication. HonkaNET 2.0 was implemented globally on 2 January 2010. RESEARCH AND DEVELOPMENT In January-December, consolidated R&D expenditure was EUR 0.6 million euros (EUR 0.9 million), representing 1.2% of net sales (1.2%). In the report period, the Group did not capitalize any development expenditure. PRESIDENT & CEO AND STAFF Esa Rautalinko, M.Sc.(Econ.), took up the post of President & CEO of Honkarakenne Oyj on 1 November, 2009. Mr. Rautalinko came to Honkarakenne from TeliaSonera Finland Oyj, where his role had been that of President & CEO and Director of Mobility Services. Esko Teerikorpi resigned from Honkarakenne Oyj on 14 September 2009, having served four years as President & CEO. At the end of December, the Group employed on average 357 people. This is 41 less than at the same time in the previous year. The reduction was mostly from the parent company and the subsidiary Finwood Oy. As Finwood Oy's own production was terminated and transferred to the Group production facility in Karstula, the number of production personnel was cut by 18 at the end of the autumn; these were all employees who had been given notice on 9 April 2009. Honkarakenne is engaged in codetermination negotiations concerning staff throughout Finland. As a possible result of these negotiations personnel will be given notice and at most 90 employees may be laid off. Codetermination negotiations concluded in December 2009 resulted in an agreement on lay-offs of no more than 6 weeks in the first quarter of 2010. HONKARAKENNE OYJ'S ANNUAL GENERAL MEETING AND EXTRAORDINARY GENERAL MEETING 2009, BOARD OF DIRECTORS AND ACCOUNTANTS Honkarakenne Oyj's Annual General Meeting was held on Friday 3 April 2009. The General Meeting confirmed the financial statements of the parent company and the Group, and released the Board members and the President from liability for the year of 2008. The Annual General Meeting decided that no dividend would be payable for the 2008 financial year. The following Board members were elected to continue in office: Mauri Saarelainen, Tomi Laamanen, Mauri Niemi and Pirjo Ruuska. Lasse Kurkilahti and Marko Saarelainen were elected as new members. The Board meeting elected Lasse Kurkilahti as chairman. KPMG Oy Ab, Authorized Public Accountants, was selected to continue as the company's auditor with Ari Eskelinen as chief accountant. An Extraordinary General Meeting held on 8 December 2009 authorized the Board of Directors to decide on a rights or bonus issue on condition that the number of the new shares to be issued does not exceed in total 1,200,000 B shares. HONKARAKENNE OYJ'S OWN SHARES AND AUTHORIZATION TO THE BOARD OF DIRECTORS Honkarakenne Oyj repurchased 5,185 shares during the period under review, for an average price of EUR 2.68 per share. At the end of the review period the company held 213,885 of its B shares with a total nominal value of EUR 427,770.00 and a total purchase price of EUR 1,137,564.73. These shares represent 5.71% of the company's capital stock and 2.26% of the voting rights. The purchase cost has been deducted from shareholders' equity in the consolidated financial statements. The Board of Directors has been granted a share repurchase authorization, valid until 26 March 2010, to repurchase company shares following which the company and its subsidiaries would hold a maximum of 10% of the company's capital stock. The Board of Directors has also been granted authority, also valid until 26 March 2010, to dispose of a maximum of 374,896 B shares. The authorization granted to the Board of Directors by the Extraordinary General Meeting on 8 December 2009 entitles the company to depart, within legal provisions, from the shareholders' priority right to subscribe for new shares (directed issue). The authorization to issue shares, granted to the Board of Directors, remains valid until 26 March 2010 and it does not quash the authorization to issue shares, which was given on 3 April 2009 to the Board by the Annual General Meeting. OWNERSHIP CHANGES IN ASSOCIATED COMPANIES In December, Honkarakenne Oyj sold its 38% stake in Oy TimberHeart Ltd., a producer of wooden housing based in Lahti. TimberHeart Oy will continue to operate as an independent company, specializing in buildings constructed on the basis of the post and traverse frame system. The frame and timber components of TimberHeart houses will continue to be manufactured in Honkarakenne's factories. On 29 December 2009, Honkarakenne Oyj concluded an agreement to sell its 15% stake in PW-Windows Oy, a windows manufacturer based in Ikaalinen. The sale was concluded in accordance with the terms in January 2010. The financial result of the partly owned company is included in the 2009 consolidated financial statements. Honkarakenne relinquished its ownerships in TimberHeart Oy and PW-Windows Oy as part of the drive to streamline Group structure and improve purchasing operations. CORPORATE GOVERNANCE Honkarakenne Oyj observes the corporate governance code for listed companies issued by the Finnish Securities Market Association. The company's website, www.honka.com/investors, provides more information on the corporate governance systems. CHANGES IN IFRS REPORTING On 1 January 2009, the company adopted the revised IAS 1 standard for presenting financial statements and the new IFRS 8 Operating Segments standard. The application of the new standard will not change the data that is presented on the Group segments. Honkarakenne only reports on one segment: the manufacture, sale and marketing of log houses. Additional information is provided in accordance with the following geographical breakdown: Finland, Central Europe, Far East and other countries. FUTURE OUTLOOK It is believed that the decline in demand has now levelled off in all market areas, but in the Group's main market areas the situation remains difficult to predict. Domestic advance sales have seen sporadic spurts of activity towards the end of the review period. However, in the Russian, eastern European and Far Eastern markets, advance sales at the end of the review period clearly lagged behind the levels seen in the previous year. Demand in the European market area has not changed fundamentally from the level at the end of 2008. On the whole, demand in the construction sector is not expected to improve until in the spring of the current year, at the earliest. Any growth is expected to be very modest. FORTHCOMING RISKS AND UNCERTAINTIES The most significant operational risk factor lies in the prolonging of the global recession in the company's main market areas and in Russia, in particular. Due to the prolonged economic slump and the risk posed by weak demand for construction products, Honkarakenne will be forced to adjust costs by means of the improvement programme that it has put into motion, in order to maintain a sufficient finance base whatever the circumstances. The financial position will improve depending on business volumes as well as the success of the improvement programme. The consolidated financial statements include EUR 3.2 million of long-term receivables which are more than 180 days overdue, with no credit loss provision. The Group has one significant concentration of credit risk without credit loss provision, which concerns the sales receivable balance of a single importer. Payments in line with agreed terms have, however, been effected in respect of new transactions with the importer concerned. Deliveries are ongoing to the importer, and the open sales receivable balance has not increased in risk as at 31 December 2009. REPORTING This report contains statements that relate to the future; these statements are based on hypotheses that the company's management holds currently as well as the decisions and plans that are currently in place. Although the management believes that the hypotheses relating to the future are well-founded, there is no guarantee that the said hypotheses will prove to be correct. This report is prepared in line with the IFRS reporting standards, but not all of the requirements of the standard IAS 34 apply. The figures have not been examined by the auditor. EVENTS AFTER THE REVIEW PERIOD The issue of 1,200,000 B shares and the increase in share capital, which were decided by the Board of Directors of Honkarakenne Oyj on 26 January 2010, were implemented and entered in the Trade Register at the beginning of February 2010. The Board allocated the 1,200,000 B shares concerned to the subscribers at the subscription price of EUR 2.90 per share. The total subscription price of the new shares amounted to 3,480,000 euros, resulting in an increase of 2,400,000 euros in the share capital, with the remainder recorded in the invested non-restricted equity fund. Following the share issue, Honkarakenne Oyj's share capital comprises a total of 4,948,968 shares, of which 300,096 are A shares and 4,648,872 are B shares. Each B share carries one (1) vote and each A share carries twenty (20) votes. Hence, Honkarakenne's shares in aggregate carry a total of 10,650,792 votes. Following the increase in share capital, the company's total share capital is 9,897,936 euros. Trading in the new shares, alongside the old B shares, commenced on 15 February 2010. In connection with the directed issue, Honkarakenne sold some of the equity shares that it held to a restricted circle of the company's key personnel. The number of shares sold was 118,500 at EUR 2.90 per share. On 19 January 2010, Honkarakenne launched codetermination talks concerning its personnel in Finland. According to preliminary estimates by the company, the potential need for downsizing concerns at most 90 employees. OUTLOOK FOR 2010 Competition in the sector will remain fierce. Honkarakenne will systematically enforce the extensive improvement programme in order to improve profitability. Annual net sales are anticipated to remain at the same level as last year, and the objective is to achieve a positive result for the financial year. Honkarakenne's financial position and liquidity are satisfactory following the completed share issue, enabling the operational efficiency and development measures in 2010, provided however that business development is as expected. DIVIDENDS As at 31 December 2009, the parent company's unrestricted shareholders' equity stood at EUR 0.8 million, of which EUR 4.3 million was loss for the financial year. The Board of Directors shall propose to the General Meeting that a dividend not be paid from the company's disposable profit funds. HONKARAKENNE'S ANNUAL GENERAL MEETING Honkarakenne Oyj's Annual General Meeting will be held on Friday 26 March 2010, starting at 14:00 hours at the corporate headquarters in Tuusula, Finland. HONKARAKENNE OYJ Board of Directors Further information: Esa Rautalinko, President and CEO, tel. +358 400 740 997, esa.rautalinko@honka.com. This and previous bulletins are available to view on the company's website at www.honka.com/investors. In week 9, Honkarakenne will post on the company's website at www.honka.com/investors annual report information, which will include a summary of 2009, a report by the Board of Directors, the financial statements and a separate Corporate Governance Statement. The 2010 interim reports will be published on 14 May 2010, 13 August 2010 and 12 November 2010. DISTRIBUTION Stock Exchange OMX Helsinki Key media Financial Supervisory Authority www.honka.com -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF | | | | | | COMPREHENSIVE INCOME | | | | | -------------------------------------------------------------------------------- | (unaudited) | 10-12 | 10-12 | 1-12 | 1-12 | | | /2009 | /2008 | /2009 | /2008 | -------------------------------------------------------------------------------- | (MEUR) | | | | | -------------------------------------------------------------------------------- | Net sales | 12.7 | 15.6 | 52.3 | 78.4 | -------------------------------------------------------------------------------- | Other operating income | 1.0 | 0.2 | 1.6 | 1.1 | -------------------------------------------------------------------------------- | Change in inventories | 0.0 | -2.5 | -2.0 | -0.8 | -------------------------------------------------------------------------------- | Production for own use | 0.0 | 0.1 | 0.1 | 0.3 | -------------------------------------------------------------------------------- | Materials and services | -8.3 | -7.8 | -28.5 | -47.2 | -------------------------------------------------------------------------------- | Employee benefit expenses | -3.2 | -3.7 | -13.2 | -15.8 | -------------------------------------------------------------------------------- | Depreciations | -0.8 | -1.0 | -4.1 | -4.1 | -------------------------------------------------------------------------------- | Other operating expenses | -2.7 | -2.9 | -9.1 | -11.8 | -------------------------------------------------------------------------------- | Operating profit/loss | -1.2 | -1.9 | -3.0 | -0.1 | -------------------------------------------------------------------------------- | Financial income and expenses | -0.4 | -0.7 | -0.6 | -1.3 | -------------------------------------------------------------------------------- | Share of associated companies' | -0.0 | -0.1 | -0.2 | -0.1 | | profit | | | | | -------------------------------------------------------------------------------- | Profit/loss before taxes | -1.6 | -2.8 | -3.7 | -1.5 | -------------------------------------------------------------------------------- | Taxes | -0.3 | 0.7 | -0.0 | 0.4 | -------------------------------------------------------------------------------- | Profit/loss for the period | -1.9 | -2.1 | -3.7 | -1.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other comprehensive income: | | | | | -------------------------------------------------------------------------------- | Translation differences | 0.0 | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Total comprehensive | -1.9 | -2.1 | -3.7 | -1.1 | | Income for the period | | | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | -------------------------------------------------------------------------------- | Equity holders of the parent | -1.9 | -2.1 | -3.7 | -1.1 | -------------------------------------------------------------------------------- | Minority interest | 0.0 | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | | -1.9 | -2.1 | -3.7 | -1.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings/share (EPS), EUR | | | | | -------------------------------------------------------------------------------- | Basic | -0.53 | -0.58 | -1.06 | -0.32 | -------------------------------------------------------------------------------- | Diluted | -0.53 | -0.58 | -1.06 | -0.32 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET | 31.12.2009 | 31.12.2008 | | (unaudited) | | | -------------------------------------------------------------------------------- | (MEUR) | | | -------------------------------------------------------------------------------- | Assets | | | -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Property, plant and equipment | 24.3 | 26.0 | -------------------------------------------------------------------------------- | Goodwill | 0.0 | 0.5 | -------------------------------------------------------------------------------- | Other intangible assets | 1.3 | 1.5 | -------------------------------------------------------------------------------- | Investments in associated companies | 2.1 | 2.2 | -------------------------------------------------------------------------------- | Other investments | 0.2 | 0.2 | -------------------------------------------------------------------------------- | Receivables | 0.3 | 0.2 | -------------------------------------------------------------------------------- | Deferred tax assets | 1.5 | 1.4 | -------------------------------------------------------------------------------- | | 29.7 | 32.0 | -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Inventories | 9.4 | 12.5 | -------------------------------------------------------------------------------- | Trade and other receivables | 7.5 | 9.1 | -------------------------------------------------------------------------------- | Cash and bank receivables | 1.7 | 1.6 | -------------------------------------------------------------------------------- | | 18.6 | 23.2 | -------------------------------------------------------------------------------- | Total assets | 48.4 | 55.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 31.12.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | Shareholders' equity and liabilities | | | -------------------------------------------------------------------------------- | Equity attributable to equity holders | | | | of the parent | | | -------------------------------------------------------------------------------- | Capital stock | 7.5 | 7.5 | -------------------------------------------------------------------------------- | Share premium | 0.5 | 0.5 | -------------------------------------------------------------------------------- | Reserve fund | 5.3 | 5.3 | -------------------------------------------------------------------------------- | Translation differences | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Retained earnings | -1.0 | 2.7 | -------------------------------------------------------------------------------- | | 12.3 | 16.1 | -------------------------------------------------------------------------------- | Minority share | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Total equity | 12.3 | 16.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current liabilities | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 0.8 | 0.8 | -------------------------------------------------------------------------------- | Provisions | 0.4 | 0.4 | -------------------------------------------------------------------------------- | Intrest bearing debt | 15.6 | 19.2 | -------------------------------------------------------------------------------- | Non-intrest bearing debt | 1.0 | 0.6 | -------------------------------------------------------------------------------- | | 17.8 | 21.0 | -------------------------------------------------------------------------------- | Current liabilities | | | -------------------------------------------------------------------------------- | Trade and other payables | 14.3 | 16.2 | -------------------------------------------------------------------------------- | Tax liabilities | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Intrest bearing debt | 4.0 | 1.9 | -------------------------------------------------------------------------------- | | 18.3 | 18.1 | -------------------------------------------------------------------------------- | Total liabilities | 36.0 | 39.1 | -------------------------------------------------------------------------------- | Total equity and liabilities | 48.4 | 55.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF CHANGES IN EQUITY | | | (unaudited) | | -------------------------------------------------------------------------------- | 1000 EUR | Equity attributable to equity holders of the | | | | | parent | | | -------------------------------------------------------------------------------- | | a) | b) | c) | d) | e) | f) | Total | g) | Total | | | | | | | | | | | equit | | | | | | | | | | | y | -------------------------------------------------------------------------------- | Total | 7,49 | 520 | 5,31 | 179 | -942 | 6,037 | 18,60 | -8 | 18,60 | | equity | 8 | | 6 | | | | 8 | | 0 | | 1.1.2008 | | | | | | | | | | -------------------------------------------------------------------------------- | Translati | | | | -152 | | | -152 | | 152 | | on | | | | | | | | | | | differenc | | | | | | | | | | | e | | | | | | | | | | -------------------------------------------------------------------------------- | Dividends | | | | | | -1,06 | -1,06 | | -1,06 | | | | | | | | 7 | 7 | | 7 | -------------------------------------------------------------------------------- | Repurchas | | | | | -368 | | -368 | | -368 | | e of | | | | | | | | | | | own | | | | | | | | | | | shares | | | | | | | | | | -------------------------------------------------------------------------------- | Transfer | | | | | 186 | | 186 | | 186 | | of | | | | | | | | | | | own | | | | | | | | | | | shares | | | | | | | | | | -------------------------------------------------------------------------------- | Result of | | | | | | -1,15 | -1,15 | 16 | 1,135 | | the | | | | | | 1 | 1 | | | | period | | | | | | | | | | -------------------------------------------------------------------------------- | Total | 7,49 | 520 | 5,31 | 27 | -1,124 | 3,819 | 16,05 | 9 | 16,06 | | equity | 8 | | 6 | | | | 6 | | 5 | | 31.12.200 | | | | | | | | | | | 8 | | | | | | | | | | -------------------------------------------------------------------------------- | | a) | b) | c) | d) | e) | f) | Total | g) | Total | | | | | | | | | | | equit | | | | | | | | | | | y | -------------------------------------------------------------------------------- | Total | 7,49 | 520 | 5,31 | 27 | -1,124 | 3,819 | 16,05 | 9 | 16,06 | | equity | 8 | | 6 | | | | 6 | | 5 | | 1.1.2009 | | | | | | | | | | -------------------------------------------------------------------------------- | Translati | | | | 2 | | | 2 | | 2 | | on | | | | | | | | | | | differenc | | | | | | | | | | | e | | | | | | | | | | -------------------------------------------------------------------------------- | Repurchas | | | | | -14 | | -14 | | -14 | | e of | | | | | | | | | | | own | | | | | | | | | | | shares | | | | | | | | | | -------------------------------------------------------------------------------- | Result of | | | | | | -3,73 | -3,73 | 0 | -3,73 | | the | | | | | | 7 | 7 | | 7 | | period | | | | | | | | | | -------------------------------------------------------------------------------- | Total | 7,49 | 520 | 5,31 | 29 | -1,138 | 82 | 12,30 | 9 | 12,31 | | equity | 8 | | 6 | | | | 7 | | 6 | | 31.12.200 | | | | | | | | | | | 9 | | | | | | | | | | -------------------------------------------------------------------------------- a) Share capital b) Premium fund c) Reserve fund d) Translation difference e) Own shares f) Retained earnings g) Minority interest -------------------------------------------------------------------------------- | CONSOLIDATED CASH FLOW STATEMENT | 1.1.- | 1.1.-31.12.2008 | | (Unaudited) | 31.12.2009 | | -------------------------------------------------------------------------------- | (MEUR) | | | -------------------------------------------------------------------------------- | Cash flow from operations | 0.9 | 0.8 | -------------------------------------------------------------------------------- | Cash flow from investments, net | -0.6 | -4.9 | -------------------------------------------------------------------------------- | Total cash flow from financing | -0.2 | 3.7 | -------------------------------------------------------------------------------- | Increase in credit capital | 6.3 | 7.1 | -------------------------------------------------------------------------------- | Decrease in credit capital | -6.2 | -1.5 | -------------------------------------------------------------------------------- | Dividends paid | | -1.1 | -------------------------------------------------------------------------------- | Other financial items | -0.3 | -0.8 | -------------------------------------------------------------------------------- | Change in liquid assets | 0.1 | -0.4 | -------------------------------------------------------------------------------- | Liquid assets at the beginning of | 1.6 | 1.9 | | period | | | -------------------------------------------------------------------------------- | Liquid assets at the end of period | 1.7 | 1.6 | -------------------------------------------------------------------------------- NOTES TO THE REPORT Calculation methods The financial statements release has been prepared in compliance with the recognition and measurement policies of the IFRS, but requirements of 34 standards has not been fully followed. The figures have not been examined by the auditor. On 1 January 2009, the Group adopted the revised IAS 1 standard for presenting financial statements and the new IFRS 8 Operating Segments standard. Other revised standards or interpretations have no bearing on this interim report. The adoption of the IFRS 8 standard did not change the number of reported segments, only the notes to the interim report. Honkarakenne has only one operating segment: the manufacture, sale and marketing of log houses. Additional information is provided in accordance with the following geographical breakdown: Finland, Central Europe, Far East and other countries. Because the internal reporting procedures applied by the management are in line with IFRS reporting standards, additional detail is not required. -------------------------------------------------------------------------------- | TANGIBLE ASSETS | | -------------------------------------------------------------------------------- | (MEUR) | Tangible | -------------------------------------------------------------------------------- | (Unaudited) | assets | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Acquisition cost 1.1.2009 | 66.2 | -------------------------------------------------------------------------------- | Translation difference (+/-) | -0.1 | -------------------------------------------------------------------------------- | Increase | 2.3 | -------------------------------------------------------------------------------- | Decrease | -1.4 | -------------------------------------------------------------------------------- | Transfers between balance sheet items | -0.0 | -------------------------------------------------------------------------------- | Acquisition cost 31.12.2009 | 66.9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Accumulated depreciation 1.1.2009 | -40.2 | -------------------------------------------------------------------------------- | Translation difference (+/-) | 0.1 | -------------------------------------------------------------------------------- | Disposals and reclassifications | 0.8 | -------------------------------------------------------------------------------- | Depreciation for the period | -3.3 | -------------------------------------------------------------------------------- | Accumulated depreciation 31.12.2009 | -42.7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Book value 1.1.2009 | 26.0 | -------------------------------------------------------------------------------- | Book value 30.09.2009 | 24.3 | -------------------------------------------------------------------------------- Own shares Honkarakenne acquired during the period under review 5,185 of its own B shares, whose purchase price amounted to 13,8 meur. -------------------------------------------------------------------------------- | CONTINGENT LIABILITIES | | | -------------------------------------------------------------------------------- | (Unaudited) | | | -------------------------------------------------------------------------------- | MEUR | 31.12.2009 | 31.12.2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | For own loans | | | -------------------------------------------------------------------------------- | - Mortgages | 25.68 | 19.11 | -------------------------------------------------------------------------------- | - Pledged shares | | 0.37 | -------------------------------------------------------------------------------- | - Other quarantees | 3.29 | 3.12 | -------------------------------------------------------------------------------- | For others | | | -------------------------------------------------------------------------------- | - Guarantees | 0.82 | 1.09 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Leasing liabilities | 0,78 | 0.95 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Rent liabilities | 0.09 | 0.19 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Nominal values of forward exchange | | 3.37 | | contracts | | | -------------------------------------------------------------------------------- | Derivative contracts | 0.31 | | -------------------------------------------------------------------------------- Events in the circle of acquaintances The circle of acquaintances consists of subsidiaries associated companies and the company's management. The management included in the circle of acquaintances comprises the Board of Directors, CEO and the company's managing committee. There haven't been transactions with acquaintances during the reporting period. -------------------------------------------------------------------------------- | KEY INDICATORS | | | | -------------------------------------------------------------------------------- | | | 1-12 | 1-12 | -------------------------------------------------------------------------------- | (Unaudited) | | 2009 | 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings/share (EPS) | eur | -1.06 | -0.32 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on equity | % | -26.3 | -6.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity ratio | % | 28.8 | 33.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders equity/share | eur | 3.5 | 4.5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net debt | MEUR | 18.4 | 19.5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gearing | % | 149.0 | 121.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gross investments | MEUR | 2.5 | 5.1 | -------------------------------------------------------------------------------- | | % of net sales | 4.8 | 6.5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Order book | MEUR | 23.0 | 23.7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Average number of personnel | Staff | 176 | 195 | -------------------------------------------------------------------------------- | | Workers | 181 | 203 | -------------------------------------------------------------------------------- | | Total | 357 | 398 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CALCULATION OF KEY INDICATORS | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Profit for the period attributable to equity | | | | holders of parent | | -------------------------------------------------------------------------------- | Earnings/share | ----------------------------------------- | | | (EPS) | | | -------------------------------------------------------------------------------- | | Average number of outstanding shares | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Profit before taxes - taxes | | -------------------------------------------------------------------------------- | Return on equity % | ----------------------------------------- | x 100 | -------------------------------------------------------------------------------- | | Total equity, average | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Total equity | | -------------------------------------------------------------------------------- | Equity ratio, % | ----------------------------------------- | x 100 | -------------------------------------------------------------------------------- | | Balance sheet total - advances received | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net debt | Interest-bearing debt - cash and cash | | | | equivalents | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Interest-bearing debt - cash and cash | | | | equivalents | | -------------------------------------------------------------------------------- | Gearing, % | ----------------------------------------- | x 100 | -------------------------------------------------------------------------------- | | Total equity | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Shareholders' equity | | -------------------------------------------------------------------------------- | Shareholders | ----------------------------------------- | | | equity/share | | | -------------------------------------------------------------------------------- | | Number of shares outstanding at end of period | --------------------------------------------------------------------------------
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