2009-11-12 08:00:00 CET
2009-11-12 08:00:03 CET
REGULATED INFORMATION
Neomarkka - Interim report (Q1 and Q3)
Q3 Turnover at Q2 Level, Operating Result Shows a Loss
NEOMARKKA PLC INTERIM REPORT 12.11.2009 at 9.00 1(13) NEOMARKKA PLC INTERIM REPORT 1.1. - 30.9.2009 Q3 Turnover at Q2 Level, Operating Result Shows a Loss -------------------------------------------------------------------------------- | KEY FIGURES | 7-9 | 7-9 | 1-9 | 1-9 | | | /2009 | /2008 | /2009 | /2008 | -------------------------------------------------------------------------------- | Turnover, EUR million, of which | 17.7 | 31.2 | 52.7 | 91.0 | -------------------------------------------------------------------------------- | - Cable business | 17.7 | 31.2 | 52.7 | 91.0 | -------------------------------------------------------------------------------- | - Other operations | 0.0 | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Operating result, EUR million, of | -1.9 | -0.3 | -2.8 | 4.1 | | which | | | | | -------------------------------------------------------------------------------- | - Cable business | -1.2 | -0.1 | -1.8 | 4.9 | -------------------------------------------------------------------------------- | - Other operations | -0.7 | -0.2 | -1.0 | -0.9 | -------------------------------------------------------------------------------- | Profit or loss for the period, EUR | -1.2 | -0.8 | -2.5 | 0.4 | | million | | | | | -------------------------------------------------------------------------------- | Earnings per share, EUR | -0.19 | -0.12 | -0.40 | 0.07 | -------------------------------------------------------------------------------- Return on investment (ROI) during the nine months under review was -1.2% (3.5%). The equity ratio was 49.1% (48.7%). MAJOR EVENTS DURING THE REVIEW PERIOD Industrial Investments: Cable Business Turnover from cable operations in the third quarter was at the same level as in the second quarter, EUR 17.7 million. This was EUR 13.4 million lower than in Q3/2008. The third-quarter operating loss was EUR 1.8 million compared with an operating profit of EUR 4.9 million in Q3/2008. The result of the period under review was strongly influenced by the ongoing construction sector slump, which held down demand for cables. The volume of industrial investment also continued to be weak. Aluminium and copper prices rose throughout the period but their price level is still significantly lower than last year. Because of tough competition, the increase in raw material prices could not be fully passed on in sales prices. In Russia the financial crisis has continued to postpone purchasing decisions by customers. At the end of the quarter, cautious signs were visible of a revival in cable demand. Demand from the oil and gas sector was moderate throughout the third quarter. The rouble exchange rate remained weak, at the same level as in the second quarter. The company continued austerity measures, begun in the spring to improve profitability. Layoffs, begun in the second quarter, were in effect throughout the third quarter. Reka Cables announced in August that it was continuing to reorganise its production structure by expanding its Keuruu cable plant and concentrating the manufacture of copper wire at Keuruu. Wire production at Keuruu is due to begin in February 2010. Nestor Cables turnover continued to rise but the result for the period under review was still negative. OTHER OPERATIONS Neomarkka operations other than industrial investments consist mainly of investing cash funds. Its holdings in unquoted companies have remained unchanged but their relative share of all investments is small. The company has invested directly in corporate and government bonds as well as in bonds with a credit default swap agreement. The swap contracts are for under a year and concern financially sound companies. Funds have also been invested in time deposits. SHARE PRICES Neomarkka Plc B-shares are quoted on the main market of the Helsinki Stock Exchange, NASDAQ OMX. Their price at the end of the period was EUR 5.61 per share (EUR 9.00 on the same date in 2008). Their price at the end of 2008 was EUR 5.80 per share. B-share turnover in the review period was 175 563 shares (339 309), which was 2.9% (5.6%) of listed B-shares. Their lowest price during the period was EUR 4.45 (EUR 7.90) and their highest EUR 6.70 (EUR 10.50). On 30.9.2009 the market capitalisation of the company was EUR 33.7 million (EUR 54.3m). RESULT, FINANCIAL POSITION This report has been drawn up in accordance with IAS 34 requirements for interim reports. The same principles have been followed as in the financial statement for 2008 except for changes in IAS and IFRS standards in effect for financial periods beginning 1 January 2009 and later. Additionally, changes in the values of derivative instruments are now presented differently in the income statement. Derivatives that protect turnover are entered in Turnover and changes in metal derivatives related to customer orders are entered in Materials (previously in Other operating income and expenses). Also derivatives under 12 months that protect raw material purchases are entered in Materials. Those over 12 months continue to be recorded under Financial income and/or expenses. Since Neomarkka withdrew from its securities investment segment in 2009, profits and losses from securities investments in the Income Statement have no longer been recorded under Turnover but under Financial items. Investments are presented in the Statement of Financial Position under Other financial assets. The effects of exchange rate changes on long-term intra-group loans are handled as translation differences in the Consolidated Statement of Comprehensive Income and in the Statement of Shareholders' Equity in accordance with IAS 1. The interim report is unaudited. RESULT Consolidated turnover in the review period was EUR 52.7 million (EUR 91m in 2008). Operating profit in the period was EUR -2.8 million (EUR 4.1m), of which cable operations generated EUR -1.8 million (EUR 4.9m). The remaining loss of EUR 1.0 million came mostly from common administrative costs of the quoted Neomarkka company. The net result of the review period was EUR -2.5 million (EUR 0.4m). Earnings per share were EUR -0.40 (EUR 0.07). FINANCIAL POSITION In the consolidated statement of financial position, total assets at the end of the period were EUR 92.7 million (EUR 117.1m). At the end of the period, net assets per share were EUR 7.55 (EUR 9.49) and the equity ratio was 49.1% (48.7%). For financing of working capital, Reka Cables has revolving bank credit of EUR 6.0 million and factoring credit of EUR 7.5 million. The Group's liquidity is good. INVESTMENTS Investments made in the review period were in the cable business and totalled EUR 2.0 million (EUR 16.1m). Long-term leases have been recognised as fixed assets in line with IFRS. SHAREHOLDERS' MEETING AND GOVERNANCE Neomarkka's annual general meeting on 10 June 2009 confirmed the number of board members as six and reappointed the following directors: Matti Lainema as chairman; Pekka Soini as vice-chairman; Ilpo Helander, Taisto Riski, Risto Kyhälä and Matti Lappalainen as members. In accordance with the Board's proposal, the meeting authorised the board to buy back shares and to decide on distributing new B-shares and transferring existing B-shares held by the company, with or without payment. The meeting also authorised the board to decide on a script issue to the company itself. During the third quarter, the company did not exercise its right to buy back shares. Neomarkka Plc's book entry account with Euroclear Finland Oy holds company B-shares for which no registration has been demanded although the ten-year period for their registration came to a close of 29.9.2007. The meeting decided that ownership of the shares and the rights carried by them have been forfeited and that they will pass to the company in 2016, when the new Finnish Companies Act has been in force for ten years. The company's authorised public accountants are Ernst & Young Oy. The responsible auditor is Heikki Ilkka. The Board has appointed its members Taisto Riski, Pekka Soini and Ilpo Helander as members of its audit committee. The managing director of Neomarkka Plc is Markku E. Rentto. PERSONNEL The Group employed an average 505 people (367). On 30 September 2009 Group personnel numbered 517, of whom 514 were in the cable business. GROUP STRUCTURE AND SHAREHOLDERS Neomarkka Plc is the parent company of a group that includes wholly-owned subsidiaries Novalis Plc and Alnus Ltd and their subsidiaries. The domicile of the parent company is Hyvinkää. At the end of the review period, Neomarkka Plc had 12 685 shareholders (12 705). Its largest shareholder Reka Ltd held 50.76% of shares (unchanged) and 65.77% of votes (unchanged) at the end of the period. Neomarkka Plc is thus part of the Reka Group. Reka Ltd's domicile is Hyvinkää. At the end of the period, the combined holdings of the ten largest shareholders were 60.60% (60.05%) of all shares and 72.61% (72.18%) of all votes. MAJOR EVENTS AFTER THE REVIEW PERIOD Company management is not aware of events after the review period that have a significant effect on business operations. NEAR-TERM RISKS AND HEDGING MEASURES Neomarkka's main financial risks are currency, interest rate, commodity, liquidity, credit and investment market risks. Financial risks and measures to offset them are described in more detail in the notes to the financial statement for 2008. With the strategy revision of 2007, future risk factors are tied to the development of business operations by portfolio companies. At present there is only one portfolio business line, cables. The main risks in the business of Reka Cables and OAO Expokabel relate to changes in market conditions, fluctuating raw material prices and exchange rate movements. Reka Cables has carried out extensive risk analysis to chart these risks and hedge them. The company believes that the Russian cable market will grow and develop, and has made substantial investments to exploit business opportunities there. The investments contain the risk that growth in Russia will not live up to expectations. Nestor Cables faces cable business risks and start-up risks. NEAR-TERM PROSPECTS The near-term outlook for the cable sector is weak. The upcoming winter and the generally low level of construction will curb demand for the rest of the year. In the Russian market the sales outlook, particularly on the power network side, is distinctly better than in the previous quarter. However the result from cables for the rest of the year is expected to be negative. SUMMARISED FINANCIAL STATEMENT AND NOTES -------------------------------------------------------------------------------- | CONSOLIDATED INCOME STATEMENT (IFRS) | -------------------------------------------------------------------------------- | EUR 1,000 | 1.7. - | 1.7. - | 1.1. - | 1.1. - | | | 30.9.200 | 30.9.2008 | 30.9.2009 | 30.9.2008 | | | 9 | | | | -------------------------------------------------------------------------------- | TURNOVER | 17,736 | 31,178 | 52,707 | 90,981 | -------------------------------------------------------------------------------- | Change in inventories of | -663 | -1,700 | -67 | 4,245 | | finished products and | | | | | | production in progress | | | | | -------------------------------------------------------------------------------- | Production for own use | 18 | 58 | 26 | 116 | -------------------------------------------------------------------------------- | Materials and services | -11,497 | -21,750 | -31,767 | -69,845 | -------------------------------------------------------------------------------- | Personnel expenses | -3,358 | -3,916 | -11,028 | -11,269 | -------------------------------------------------------------------------------- | Depreciation and impairment | -1,034 | -972 | -3,500 | -2,776 | -------------------------------------------------------------------------------- | Other operating income and | -3,057 | -3,171 | -9,122 | -7,402 | | expenses | | | | | -------------------------------------------------------------------------------- | | -19,591 | -31,451 | -55,458 | -86,931 | -------------------------------------------------------------------------------- | Operating result | -1,855 | -273 | -2,751 | 4,050 | -------------------------------------------------------------------------------- | Financial income | 900 | 314 | 1,998 | 1,192 | -------------------------------------------------------------------------------- | Financial expenses | -138 | -457 | -1,464 | -3,341 | -------------------------------------------------------------------------------- | Share of the result of | 0 | -279 | -202 | -566 | | associates | | | | | -------------------------------------------------------------------------------- | Profit or loss before taxes | -1,092 | -695 | -2,418 | 1,335 | -------------------------------------------------------------------------------- | Taxes | -106 | -105 | -46 | -908 | -------------------------------------------------------------------------------- | Profit or loss for the period | -1,198 | -800 | -2,464 | 427 | -------------------------------------------------------------------------------- | Profit or loss attributable | | | | | | to | | | | | -------------------------------------------------------------------------------- | Equity holders of the parent | -1,162 | -710 | -2,389 | 420 | -------------------------------------------------------------------------------- | Minority interest | -36 | -90 | -75 | 7 | -------------------------------------------------------------------------------- | | -1,198 | -800 | -2,464 | 427 | -------------------------------------------------------------------------------- | Earnings per share (belonging to equity holders of the parent) (EUR) | -------------------------------------------------------------------------------- | Before dilution | -0.19 | -0.12 | -0.40 | 0.07 | -------------------------------------------------------------------------------- | After dilution | -0.19 | -0.12 | -0.40 | 0.07 | -------------------------------------------------------------------------------- | Number of shares | 6,014,47 | 6,020,360 | 6,014,476 | 6,020,360 | | | 6 | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS) | -------------------------------------------------------------------------------- | Profit or loss | -1,198 | -800 | -2,464 | 427 | -------------------------------------------------------------------------------- | Other comprehensive items | | | | | -------------------------------------------------------------------------------- | Translation differences | 73 | -8 | -730 | 12 | | related to foreign units | | | | | -------------------------------------------------------------------------------- | Direct book entry to equity | -38 | | -48 | 91 | -------------------------------------------------------------------------------- | Total | 35 | -8 | -778 | 103 | -------------------------------------------------------------------------------- | Total comprehensive income | -1,163 | -808 | -3,242 | 530 | -------------------------------------------------------------------------------- | Total comprehensive income attributable to | -------------------------------------------------------------------------------- | Equity holders of the parent | -1,127 | -808 | -3,153 | 523 | -------------------------------------------------------------------------------- | Minority interest | -36 | 0 | -89 | 7 | -------------------------------------------------------------------------------- | | -1,163 | -808 | -3,242 | 530 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS) | -------------------------------------------------------------------------------- | EUR 1,000 | 30.9.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | ASSETS | | | -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Goodwill | 3,517 | 4,587 | -------------------------------------------------------------------------------- | Other intangible non-current assets | 6,565 | 6,461 | -------------------------------------------------------------------------------- | Tangible non-current assets | 31,359 | 33,753 | -------------------------------------------------------------------------------- | Holdings in associates | 202 | 202 | -------------------------------------------------------------------------------- | Receivables | 338 | 414 | -------------------------------------------------------------------------------- | Deferred tax assets | 1,616 | 947 | -------------------------------------------------------------------------------- | Total non-current assets | 43,596 | 46,365 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Inventories | 16,897 | 17,903 | -------------------------------------------------------------------------------- | Available-for-sale financial assets | 3,733 | 3,733 | -------------------------------------------------------------------------------- | Sales receivables and other receivables | 16,278 | 13,831 | -------------------------------------------------------------------------------- | Tax receivables from the profit | 98 | 1,975 | -------------------------------------------------------------------------------- | Other financial assets | 4,970 | 0 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 7,092 | 22,319 | -------------------------------------------------------------------------------- | Total current assets | 49,068 | 59,761 | -------------------------------------------------------------------------------- | Total Assets | 92,664 | 106,125 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND LIBILITIES | | | -------------------------------------------------------------------------------- | Capital and reserves attributable to equity holders of the parent | -------------------------------------------------------------------------------- | Share capital | 24,082 | 24,082 | -------------------------------------------------------------------------------- | Premium fund | 66 | 66 | -------------------------------------------------------------------------------- | Reserve fund | 1,221 | 1,221 | -------------------------------------------------------------------------------- | Translation differences | -2,413 | -1,683 | -------------------------------------------------------------------------------- | Retained profit | 1,111 | 5,090 | -------------------------------------------------------------------------------- | Other unrestricted equity | 21,327 | 21,327 | -------------------------------------------------------------------------------- | Total equity attributable to equity holders | 45,394 | 50,103 | | of the parent | | | -------------------------------------------------------------------------------- | Minority interest | 57 | 159 | -------------------------------------------------------------------------------- | Total shareholders´ equity | 45,452 | 50,262 | -------------------------------------------------------------------------------- | Non-current liabilities | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 2,936 | 4,056 | -------------------------------------------------------------------------------- | Provisions | 629 | 802 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 19,533 | 21,193 | -------------------------------------------------------------------------------- | Current liabilities | | | -------------------------------------------------------------------------------- | Tax liabilities from the profit | 817 | 497 | -------------------------------------------------------------------------------- | Reserves | 163 | 163 | -------------------------------------------------------------------------------- | Short-term interest-bearing liabilities | 8,682 | 11,950 | -------------------------------------------------------------------------------- | Accounts payable and other liabilities | 14,452 | 17,202 | -------------------------------------------------------------------------------- | Total liabilities | 47,212 | 55,863 | -------------------------------------------------------------------------------- | Shareholders´ equity and liabilities | 92,664 | 106,125 | -------------------------------------------------------------------------------- --------------------------------------------------------------------------------| CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS´ EQUITY (IFRS) | -------------------------------------------------------------------------------- | EUR | Share | Pre | Rese | Trans | Other | Retain | Total | Mino | Share | | 1,000 | capit | miu | rve | latio | unrest | ed | | rity | holde | | | al | m | fund | n | ricted | profit | | | rs´ | | | | fun | | diffe | equity | | | | equit | | | | d | | rence | | | | | y | | | | | | s | | | | | total | -------------------------------------------------------------------------------- | Share | 24,08 | 66 | 1,22 | -145 | 21,327 | 13,056 | 59,607 | 68 | 59,67 | | holde | 2 | | 1 | | | | | | 5 | | rs' | | | | | | | | | | | equit | | | | | | | | | | | y | | | | | | | | | | | 31.12 | | | | | | | | | | | .2007 | | | | | | | | | | -------------------------------------------------------------------------------- | Total | | | | 12 | | 370 | 382 | 7 | 389 | | compr | | | | | | | | | | | ehens | | | | | | | | | | | ive | | | | | | | | | | | incom | | | | | | | | | | | e | | | | | | | | | | -------------------------------------------------------------------------------- | Divid | | | | | | -3,010 | -3,010 | | -3,01 | | ends | | | | | | | | | 0 | | paid | | | | | | | | | | -------------------------------------------------------------------------------- | Acqui | | | | | | | 0 | | 0 | | sitio | | | | | | | | | | | n of | | | | | | | | | | | own | | | | | | | | | | | share | | | | | | | | | | | s | | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | | 0 | 11 | 11 | | chang | | | | | | | | | | | es | | | | | | | | | | -------------------------------------------------------------------------------- | Share | 24,08 | 66 | 1,22 | -133 | 21,327 | 10,416 | 56,979 | 86 | 57,06 | | holde | 2 | | 1 | | | | | | 5 | | rs' | | | | | | | | | | | equit | | | | | | | | | | | y | | | | | | | | | | | 30.9. | | | | | | | | | | | 2008 | | | | | | | | | | -------------------------------------------------------------------------------- | EUR | Share | Pre | Rese | Trans | Other | Retain | Total | Mino | Share | | 1,000 | capit | miu | rve | latio | unrest | ed | | rity | holde | | | al | m | fund | n | ricted | profit | | | rs´ | | | | fun | | diffe | equity | | | | equit | | | | d | | rence | | | | | y | | | | | | s | | | | | total | -------------------------------------------------------------------------------- | Share | 24,08 | 66 | 1,22 | -1,68 | 21,327 | 5,091 | 50,104 | 159 | 50,26 | | holde | 2 | | 1 | 3 | | | | | 3 | | rs' | | | | | | | | | | | equit | | | | | | | | | | | y | | | | | | | | | | | 31.12 | | | | | | | | | | | .2008 | | | | | | | | | | -------------------------------------------------------------------------------- | Total | | | | -730 | | -2,438 | -3,167 | -76 | -3,24 | | compr | | | | | | | | | 3 | | ehens | | | | | | | | | | | ive | | | | | | | | | | | incom | | | | | | | | | | | e | | | | | | | | | | -------------------------------------------------------------------------------- | Divid | | | | | | -1,504 | -1,504 | | -1,50 | | ends | | | | | | | | | 4 | | paid | | | | | | | | | | -------------------------------------------------------------------------------- | Acqui | | | | | | -38 | -38 | | -38 | | sitio | | | | | | | | | | | n of | | | | | | | | | | | own | | | | | | | | | | | share | | | | | | | | | | | s | | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | | 0 | -26 | -26 | | chang | | | | | | | | | | | es | | | | | | | | | | -------------------------------------------------------------------------------- | Share | 24,08 | 66 | 1,22 | -2,41 | 21,327 | 1,111 | 45,394 | 57 | 45,45 | | holde | 2 | | 1 | 3 | | | | | 2 | | rs' | | | | | | | | | | | equit | | | | | | | | | | | y | | | | | | | | | | | 30.9. | | | | | | | | | | | 2009 | | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF CASH FLOWS (IFRS) | | | -------------------------------------------------------------------------------- | EUR 1,000 | 1.1. - | 1.1. - | | | 30.9.2009 | 30.9.2008 | -------------------------------------------------------------------------------- | Operating activities | | | -------------------------------------------------------------------------------- | Payments received from operating activities | 52,134 | 117,945 | -------------------------------------------------------------------------------- | Payments paid on operating activities | -54,469 | -102,515 | -------------------------------------------------------------------------------- | Paid interests and other financial expenses | -2,305 | -2,808 | -------------------------------------------------------------------------------- | Interests received and other financial | 521 | 545 | | incomes | | | -------------------------------------------------------------------------------- | Direct taxes paid | 1,394 | -1,502 | -------------------------------------------------------------------------------- | Total operating activities | -2,725 | 11,666 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Investing activities | | | -------------------------------------------------------------------------------- | Acquisition of subsidiaries and new business | -11 | -7,110 | -------------------------------------------------------------------------------- | Change in acquisition price of subsidiaries | 1,200 | 0 | -------------------------------------------------------------------------------- | Investments in tangible non-current assets | -2,291 | -7,362 | -------------------------------------------------------------------------------- | Loan notes | -4,970 | 0 | -------------------------------------------------------------------------------- | Repayment of loan receivables | 0 | 20,000 | -------------------------------------------------------------------------------- | Proceeds from ale of intangible assets | 84 | 0 | -------------------------------------------------------------------------------- | Total investing activities | -5,988 | 5,528 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Financing activities | | | -------------------------------------------------------------------------------- | Acquisition of own shares | -33 | 0 | -------------------------------------------------------------------------------- | Increase in loans | 1,142 | 7,084 | -------------------------------------------------------------------------------- | Decrease in loans | -5,509 | -1,307 | -------------------------------------------------------------------------------- | Payments of financial leasing | -562 | -464 | -------------------------------------------------------------------------------- | Dividends paid | -1,504 | -2,956 | -------------------------------------------------------------------------------- | Total financing activities | -6,465 | 2,357 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flow for the period | -15,178 | 19,551 | -------------------------------------------------------------------------------- | Liquid funds at beginning of the period | 22,319 | 3,086 | -------------------------------------------------------------------------------- | Exchange rate differences | -48 | 22 | -------------------------------------------------------------------------------- | Liquid funds at end of period | 7,092 | 22,659 | -------------------------------------------------------------------------------- NOTES This report has been drawn up in accordance with IAS 34 requirements for interim reports. PRINCIPLES USED The interim report applies the same principles as in the financial statement for 2008 except for changes in IAS and IFRS standards in effect for financial periods beginning 1 January 2009 and later. Additionally, changes in the value of derivative instruments are now presented differently in the consolidated income statement. Derivatives that protect turnover are entered in Turnover and the changes in metal derivatives related to customer orders are entered in Materials (previously in Other operating income and expenses). Also derivatives under 12 months that protect raw material purchases are entered in Materials. Those over 12 months continue to be recorded under Financial income and/or expenses. Since Neomarkka withdrew from its securities investment segment in 2009, profits and losses from securities investments in the Income Statement have no longer been recorded under Turnover but under Financial items. Investments are presented in the Statement of Financial Position under Other financial assets. The change in the IAS 1 standard affects the consolidated income statement, the consolidated statement of changes in shareholders' equity and the presentation of equity in the consolidated statement of financial position. According to the new IFRS 8 standard, segment reporting is based on the management's internal reporting. The accounting principles have not changed but assets and liabilities can be allocated more precisely. The distribution of turnover by product group and by sales area are presented as additional information. The reference data has been changed to correspond to changes that came into effect on 1 January 2009. Changes have also been made in IAS 23, IAS 27, IFRS 2 and IAS 32 standards with effect from financial periods beginning 1 January 2009, but these have no significant impact on the Group's figures. -------------------------------------------------------------------------------- | SEGMENT INFORMATION | -------------------------------------------------------------------------------- | 30.9.2009 | Industrial | Other | Eliminations | Group | | EUR 1,000 | Investment; | operations | and | total | | | Cable | | balancing | | | | business | | | | -------------------------------------------------------------------------------- | Turnover | 52,707 | 61 | -61 | 52,707 | -------------------------------------------------------------------------------- | Segment | -1,745 | | | -1,745 | | operating | | | | | | profit | | | | | -------------------------------------------------------------------------------- | Unallocated | | -1,006 | | -1,006 | | items | | | | | -------------------------------------------------------------------------------- | Operating | -1,745 | -1,006 | | -2,751 | | profit | | | | | -------------------------------------------------------------------------------- | Share of the | -202 | | | -202 | | result of | | | | | | associates | | | | | -------------------------------------------------------------------------------- | Unallocated | | | 489 | 489 | | items | | | | | -------------------------------------------------------------------------------- | Profit or loss | | | | -2,464 | | for the period | | | | | -------------------------------------------------------------------------------- | Assets | | | | | -------------------------------------------------------------------------------- | Segment assets | 77,936 | | 0 | 77,936 | -------------------------------------------------------------------------------- | Unallocated | | 15,462 | -734 | 14,728 | | items | | | | | -------------------------------------------------------------------------------- | Total assets | 77,936 | 15,462 | -734 | 92,664 | -------------------------------------------------------------------------------- | Liabilities | | | | | -------------------------------------------------------------------------------- | Segment | 52,368 | | | 52,368 | | liabilities | | | | | -------------------------------------------------------------------------------- | Unallocated | | 12,166 | -17,322 | -5,156 | | items | | | | | -------------------------------------------------------------------------------- | Total | 52,368 | 12,166 | -17,322 | 47,212 | | liabilities | | | | | -------------------------------------------------------------------------------- | Assets - | 25,568 | 3,296 | 16,588 | 45,452 | | liabilities | | | | | -------------------------------------------------------------------------------- | Investments | 2,034 | | 0 | 2,034 | -------------------------------------------------------------------------------- | Depreciations | -3,499 | | 0 | -3,499 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | 30.9.2008 | Industrial | Other | Eliminations | Group | | EUR 1,000 | Investment; | operations | and | total | | | Cable | | balancing | | | | business | | | | -------------------------------------------------------------------------------- | Turnover | 90,980 | 66 | -66 | 90,980 | -------------------------------------------------------------------------------- | Segment | 4,921 | 0 | | 4,921 | | operating | | | | | | profit | | | | | -------------------------------------------------------------------------------- | Unallocated | | -937 | 66 | -871 | | items | | | | | -------------------------------------------------------------------------------- | Operating | 4,921 | -937 | | 4,050 | | profit | | | | | -------------------------------------------------------------------------------- | Share of the | -566 | | | -566 | | result of | | | | | | associates | | | | | -------------------------------------------------------------------------------- | Unallocated | | | -3,057 | -3,057 | | items | | | | | -------------------------------------------------------------------------------- | Profit or loss | | | | 427 | | for the period | | | | | -------------------------------------------------------------------------------- | Assets | | | | | -------------------------------------------------------------------------------- | Segment assets | 91,444 | | 0 | 91,444 | -------------------------------------------------------------------------------- | Unallocated | | 25,690 | 0 | 25,690 | | items | | | | | -------------------------------------------------------------------------------- | Total assets | 91,444 | 25,690 | 0 | 117,134 | -------------------------------------------------------------------------------- | Liabilities | | | | | -------------------------------------------------------------------------------- | Tax liabilities | 26 | | | 26 | -------------------------------------------------------------------------------- | Long term debt | 11,826 | 12,467 | | 24,293 | -------------------------------------------------------------------------------- | Short term debt | 44,768 | 622 | -9,639 | 35,751 | -------------------------------------------------------------------------------- | Segment | 56,620 | | | 56,620 | | liabilities | | | | | -------------------------------------------------------------------------------- | Unallocated | | 13,089 | -9,639 | 3,450 | | items | | | | | -------------------------------------------------------------------------------- | Total | 56,620 | 13,089 | -9,639 | 60,070 | | liabilities | | | | | -------------------------------------------------------------------------------- | Assets - | 34,824 | 12,601 | 9,639 | 57,064 | | liabilities | | | | | -------------------------------------------------------------------------------- | Investments | 5,653 | 0 | 0 | 5,653 | -------------------------------------------------------------------------------- | Depreciations | -3,499 | -1 | 0 | -3,500 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cable business turnover per product group | 1-9/2009 | 1-9/2008 | -------------------------------------------------------------------------------- | EUR million | 20.4 | 29.4 | -------------------------------------------------------------------------------- | LV energy | 32.3 | 61.3 | -------------------------------------------------------------------------------- | Power cable | 0.0 | 0.3 | -------------------------------------------------------------------------------- | Others | 52.7 | 91.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cable business turnover per sales area | 1-9/2009 | 1-9/2008 | -------------------------------------------------------------------------------- | EUR million | 47.2 | 78.6 | -------------------------------------------------------------------------------- | EU-countries | 5.5 | 12.4 | -------------------------------------------------------------------------------- | Non-EU-countries | 52.7 | 91.0 | -------------------------------------------------------------------------------- The three largest customer groups for cable are Onninen, Rexel and Sonepar, each of which accounts for more than 10% of turnover. -------------------------------------------------------------------------------- | CHANGE IN NON-CURRENT ASSETS | | | -------------------------------------------------------------------------------- | EUR 1,000 | 1-09/2009 | 1-12/2008 | -------------------------------------------------------------------------------- | Book value at the beginning of the | 33,753 | 23,916 | | period | | | -------------------------------------------------------------------------------- | Investment | 1,367 | 14,784 | -------------------------------------------------------------------------------- | Increase through company acquisition | 101 | 4,942 | -------------------------------------------------------------------------------- | Decrease | 0 | -5,471 | -------------------------------------------------------------------------------- | Depreciations | -2,985 | -3,449 | -------------------------------------------------------------------------------- | Impairments | | 0 | -------------------------------------------------------------------------------- | Translation differences | -877 | -969 | -------------------------------------------------------------------------------- | Book value at the end of the period | 31,359 | 33,753 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONTINGENT LIABILITIES | | | -------------------------------------------------------------------------------- | 1 000 EUR | 30.9.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | Debts, on behalf corporate mortgages are given | | | -------------------------------------------------------------------------------- | Loans from financial institutions | 3,536 | 8,467 | -------------------------------------------------------------------------------- | Granted corporate mortgages | 15,000 | 15,000 | -------------------------------------------------------------------------------- | Debts, on behalf of securities or guarantees are | | | | given | | | -------------------------------------------------------------------------------- | Loans from financial institutions | 11,333 | 11,900 | -------------------------------------------------------------------------------- | Book value of pledged securities | 25,787 | 26,987 | -------------------------------------------------------------------------------- | Granted guarantees | 11,333 | 11,900 | -------------------------------------------------------------------------------- | Other collaterals | | | -------------------------------------------------------------------------------- | Bond guarantees | 0 | 1,326 | -------------------------------------------------------------------------------- | Gaurantees and payment commitments | 608 | 1,058 | -------------------------------------------------------------------------------- Payment commitments Sales receivables, which were EUR 5.3 million on 30.9.2009 (EUR 3.9m on 31.12.2008), are surety for factoring credit, which was EUR 4.7 million on 30.9.2009 (EUR 3.5m on 31.12.2008). Investment commitments Investment commitments on tangible non-current assets were EUR 0.6 million on 30.9.2009 (EUR 0.9m on 30.9.2008). -------------------------------------------------------------------------------- | DERIVATIVE CONTRACTS | | | -------------------------------------------------------------------------------- | EUR 1,000 | 30.9.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | Nominal values | | | -------------------------------------------------------------------------------- | Interest derivatives | 0 | 0 | -------------------------------------------------------------------------------- | Interest rate swaps | 0 | 14,590 | -------------------------------------------------------------------------------- | Interest rate ceiling derivatives | 9,800 | 9,800 | -------------------------------------------------------------------------------- | Foreign exchange derivatives | | | -------------------------------------------------------------------------------- | Currency options | 1,500 | 2,500 | -------------------------------------------------------------------------------- | Credit derivatives | | | -------------------------------------------------------------------------------- | Credit default swaps | 20,000 | 0 | -------------------------------------------------------------------------------- | Raw material derivatives | | | -------------------------------------------------------------------------------- | Price hedging for metals | 3,508 | 3,655 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Fair values | | | -------------------------------------------------------------------------------- | Interest derivatives | 0 | 0 | -------------------------------------------------------------------------------- | Interest rate swaps | 0 | -315 | -------------------------------------------------------------------------------- | Interest rate ceiling derivatives | 0 | 28 | -------------------------------------------------------------------------------- | Foreign exchange derivatives | | | -------------------------------------------------------------------------------- | Currency options | -37 | -21 | -------------------------------------------------------------------------------- | Credit derivatives | | | -------------------------------------------------------------------------------- | Credit default swaps | 18 | 0 | -------------------------------------------------------------------------------- | Raw material derivatives | | | -------------------------------------------------------------------------------- | Price hedging for metals | 375 | -1,433 | -------------------------------------------------------------------------------- The Group's loans are partly hedged with interest rate ceiling derivatives. The nominal and fair values of these derivatives are given above. The derivative contracts will expire in June 2010. -------------------------------------------------------------------------------- | RELATED PARTY EVENTS (REKA GROUP) | | | -------------------------------------------------------------------------------- | EUR 1,000 | 1-9/2009 | 1-9/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Sales to Reka Group | 26 | 91 | -------------------------------------------------------------------------------- | Dividends to Reka Group | -614 | -1,528 | -------------------------------------------------------------------------------- | Other purchases from Reka Group | -899 | -796 | -------------------------------------------------------------------------------- | Sales receivables and other receivables at end of | 999 | 348 | | period | | | -------------------------------------------------------------------------------- | Non-current debts (financial leases) at end of | -8,675 | -8,155 | | period | | | -------------------------------------------------------------------------------- | Other debts at end of period | -23 | -34 | -------------------------------------------------------------------------------- | Guarantees received | 0 | 1,327 | -------------------------------------------------------------------------------- OAO EXPOKABEL In 2009 Neomarkka increased its holding in OAO Expokabel with a public purchase offer. Before the offer it owned 81.27% and afterwards 83.34%. Below is the updated purchase price allocation after the public purchase offer. -------------------------------------------------------------------------------- | PURCHASE PRICE ALLOCATION | Acquiree's | Fair | Fair | | EUR 1,000 | carrying | value | value | | | amount before | adjustments | | | | combination | | | -------------------------------------------------------------------------------- | Net assets acquired | | | | -------------------------------------------------------------------------------- | Intangible assets | 0 | 3,995 | 3,995 | -------------------------------------------------------------------------------- | Tangible assets | 175 | 4,892 | 5,067 | -------------------------------------------------------------------------------- | Inventories | 685 | 0 | 685 | -------------------------------------------------------------------------------- | Current receivables | 244 | 0 | 244 | -------------------------------------------------------------------------------- | Cash in hand and at bank | 133 | 0 | 133 | -------------------------------------------------------------------------------- | Short-term liabilities | -884 | 0 | -884 | -------------------------------------------------------------------------------- | Deferred tax liability | 0 | -2,133 | -2,133 | -------------------------------------------------------------------------------- | Net assets acquired | | | 7,107 | -------------------------------------------------------------------------------- | Goodwill arising on acquisition | | | 236 | -------------------------------------------------------------------------------- | Total consideration, satisfied | | | 7,343 | | by cash | | | | -------------------------------------------------------------------------------- | Net cash flow arising on | | | | | acquisition: | | | | -------------------------------------------------------------------------------- | Cash consideration, expert fees | | | -7,343 | | and taxes | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents | | | 133 | | acquired | | | | -------------------------------------------------------------------------------- | Net cash flow arising on | | | -7,210 | | acquisition | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | AVAILABLE-FOR-SALE FINANCIAL ASSETS | Book value | Book value | -------------------------------------------------------------------------------- | EUR 1,000 | 30.6.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | Available-for-sale financial assets | | | -------------------------------------------------------------------------------- | Oulun Puhelin Holding Plc | 2,813 | 2,813 | -------------------------------------------------------------------------------- | Lännen Teletieto Ltd | 920 | 920 | -------------------------------------------------------------------------------- | Total available-for-sale financial assets | 3,733 | 3,733 | -------------------------------------------------------------------------------- CALCULATION OF KEY FIGURES Return on investment (ROI) % (Profit before taxes + interest and other financial expenses/ [Balance sheet total - obligatory provisions and non-interest bearing liabilities] (average)) x 100 Equity ratio, % (Shareholders' equity + minority interest minus deferred tax liabilities/ Balance sheet total - advances received) x 100 Earnings per share (EPS), EUR Profit for the period belonging to equity holders of the parent/ Number of shares adjusted for share issues (average) Equity/share, EUR Shareholders´ equity-minority interest minus deferred tax liabilities/ Number of shares adjusted for share issues at the end of the financial period Helsinki 12.11.2009 Neomarkka Plc Board of Directors Sari Tulander CFO Neomarkka Plc is an investment company that invests mainly in industrial companies with similar synergic benefits. The aim of investments is with active ownership to develop the purchased companies and establish additional value. Returns are sought both through dividend flow and an increase in value. The company may also invest in listed and unlisted securities and in real estates. Neomarkka's B shares are listed on the NASDAQ OMX Helsinki Oy main market. Comments made in this report that do not refer to actual facts that have already taken place are future estimates. Such estimates include expectations concerning market trends, growth and profitability, and statements that include the terms ‘believe', ‘assume', ‘will be', or a similar expression. Since these estimates are based on current plans and estimates, they involve risks and uncertainty factors which may lead to results differing substantially from current statements. Such factors include 1) operating conditions, e.g. continued success in production and consequent efficiency benefits, availability and cost of production inputs, demand for new products, changing circumstances in respect of the acquisition of capital under acceptable conditions; 2) circumstances in the sector such as the intensity of demand for products, the competition, current and future market prices for the Group's products and related pricing pressures, the financial situation of the Group's customers and competitors, competitors' possible new competing products and 3) the general economic situation such as economic growth in the Group's main geographical market areas or changes in exchange rates and interest rates.
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