2009-08-14 07:30:00 CEST
2009-08-14 07:30:03 CEST
REGULATED INFORMATION
Lännen Tehtaat - Interim report (Q1 and Q3)
INTERIM REPORT 1 January - 30 June 2009
LÄNNEN TEHTAAT PLC Interim report 14 August 2009 8.30 am
INTERIM REPORT 1 January - 30 June 2009
April-June, continuing operations:
- Consolidated net sales amounted to EUR 65.5 (101.0) million,
a year-on-year drop of 35%.
- Operating profit, excluding non-recurring items, came to EUR 1.6 (1.8)
million; non-recurring items totalled EUR -0.5 (0.0) million.
- Profit for the period came to EUR 0.8 (1.1) million, and earnings per share
amounted to EUR 0.12 (0.18).
January-June, continuing operations:
- Net sales amounted to EUR 130.2 (191.9) million, a year-on-year drop of 32%.
- Operating profit, excluding non-recurring items, came to EUR 0.9 (2.3)
million; non-recurring items totalled EUR -0.5 (4.9) million.
- Profit for the period came to EUR 0.5 (5.9) million, and earnings per share
amounted to EUR 0.08 (0.92).
The information in this interim report has not been audited.
Matti Karppinen, CEO:
“The Group's second-quarter operating profit from its continuing operations,
excluding non-recurring items, was considerably better than in the first quarter
and almost reached the level of a year ago. In all our operating segments the
operating result was an improvement on the first-quarter figures. The
year-on-year drop in consolidated net sales was mainly the result of the sharp
fall in grain and oilseed market prices.
”The strategy for Seafood's Finnish-based operations was updated in late spring,
and a review of the strategy for its foreign operations is in progress.
”The economic downturn has redirected demand for consumer products on the
Finnish market towards basic products with a lower added value and a lower
price. Sales of consumer-packaged fresh fillets of salmon and rainbow trout have
increased considerably and, correspondingly, sales of higher priced cold-smoked
and raw pickled products have fallen. In frozen food products, demand has risen
for traditional mixed vegetables and root vegetables, and for soups. In
Seafood's operations abroad, sales of the lower priced private label products
have grown, and demand in the hotel, restaurant and catering sector has fallen.
In the prevailing economic circumstances, it is reassuring that our product
range also includes basic food products that are currently attracting a great
many consumers.
”The company's balance sheet at the end of the second quarter showed a further
improvement, and cash flow increased too, which means we are well placed for
further development in line with the Group's strategy.”
KEY FIGURES ILLUSTRATING PERFORMANCE
Continuing operations
EUR mill. Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
2009 2008 2009 2008 2008
Net sales 65.5 101.0 130.2 191.9 349.1
Operating profit 1.1 1.8 0.4 7.2 13.9
Operating profit,
excluding non-recurring
items 1.6 1.8 0.9 2.3 5.4
Profit before taxes 1.0 1.4 0.6 6.1 10.7
Profit before taxes
excluding non-recurring
items 1.4 1.4 1.0 1.3 2.3
Profit for the period 0.8 1.1 0.5 5.9 10.0
Earnings per share, EUR 0.12 0.18 0.08 0.92 1.60
CHANGES IN GROUP STRUCTURE AND CORPORATE TRANSACTIONS
Maritim Food AS, which is a Norwegian subsidiary of the Lännen Tehtaat Group,
and Cinvest AS, which was the minority owner of fish-processing company
Sandanger AS, agreed a deal at the end of June, under which Cinvest AS's 49%
holding in Sandanger AS was transferred to the ownership of Maritim Food AS. The
acquisition cost of these minority shares was approximately EUR 1.2 million.
Following this, Maritim Food AS now owns the entire share capital of Sandanger
AS. The new ownership arrangement allow Maritim Food to benefit more effectively
from the synergies and to further develop the business as part of the Maritim
Food group.
NET SALES AND PROFIT
April-June:
Net sales from the continuing operations in April-June came to EUR 65.5 (101.0)
million, a decrease of 35% on the same quarter in 2008. The year-on-year drop in
second-quarter net sales was mainly the result of a drop in grain and oilseed
market prices.
The second-quarter operating profit from the continuing operations, excluding
non-recurring items, was EUR 1.6 (1.8) million. In the Frozen Foods and
Vegetable Oils businesses, the operating profit was up on the first-quarter
figure and also improved year-on-year. In the Seafood business and in Grain
Trading, the operating profit improved on the first quarter but was down
year-on-year. In the Other Operations segment, the operating profit was about
the same as a year earlier.
January-June:
Continuing operations
Net sales from the continuing operations for January-June amounted to EUR 130.2
(191.9) million, a year-on-year drop of 32%.
The January-June operating profit from the continuing operations, excluding
non-recurring items, was EUR 0.9 (2.3) million. The operating profit includes
the share of the profits of associated companies, which, excluding non-recurring
items, totalled EUR 0.4 (0.5) million. Non-recurring items totalled EUR -0.5
(4.9) million and concerned the sale of the Seafood business's Kerava property
in 2009. The non-recurring items for the same period in 2008 comprised EUR 4.9
million in EU sugar reform compensation recorded for the associated company
Sucros Ltd.
Financial income and expenses from the continuing operations totalled EUR +0.2
(-1.1) million. This figure includes valuation items of EUR +0.5 (+0.2) million
with no cash flow implications. The financial expenses also include EUR -0.3
(-0.4) million as the share of Avena Nordic Grain's profit attributable to the
Avena employee shareholders.
Profit before taxes from the continuing operations was EUR 0.6 (6.1) million.
Profit before taxes, excluding non-recurring items, was EUR 1.0 (1.3) million.
The continuing operations' profit for the period came to EUR 0.5 (5.9) million,
and the earnings per share amounted to EUR 0.08 (0.92).
Discontinued operations
The January-June 2008 income statement included the share of the profit of the
associated company Suomen Rehu under discontinued operations. The non-current
assets held for sale in the balance sheet figures for January-June 2009 include
Seafood's Kerava property, while the figure for the same period in 2008 included
the assets of Frozen Foods' jams and marmalades business.
The profit for the period from discontinued operations came to EUR 0.0 (0.4)
million.
Profit for the period
The profit for the period from both the continuing and discontinued operations
came to a total of EUR 0.5 (6.3) million, and the earnings per share amounted to
EUR 0.08 (0.98). The profit for the period from both the continuing and
discontinued operations, excluding non-recurring items, came to a total of EUR
0.9 (1.4) million, and the earnings per share amounted to EUR 0.14 (0.21).
FINANCING AND BALANCE SHEET
The consolidated balance sheet continued to strengthen in the second quarter and
the Group is now debt-free. Both the financing situation and liquidity are at a
good level.
The cash flow from operating activities in January-June after interest and taxes
amounted to EUR 21.2 (17.5) million. The impact of the change in working capital
was EUR 17.6 (14.6) million. The net cash flow from investing activities was EUR
-11.1 (1.0) million, of which EUR -9.0 (4.0) million was the investment of
liquid assets in short-term fixed income funds. The cash flow from financing
activities came to EUR -11.9 (-16.5) million, and this included EUR -5.3 (-5.6)
million in dividend payments.
At the end of the period, the Group had EUR 10.1 (23.4) million in
interest-bearing liabilities and EUR 21.0 (11.3) million in liquid assets. Net
interest-bearing liabilities totalled EUR -10.9 (12.1) million. The consolidated
balance sheet total stood at EUR 170.7 (183.9) million. At the end of June,
equity totalled EUR 130.7 (128.3) million and the equity ratio was 76.7%
(69.7%). Commercial papers issued for the Group's short-term financing stood at
a total value of EUR 3.0 (18.0) million at the end of June. The Group's
short-term liquidity over the next few years is secured with committed credit
facilities; a total of EUR 25 (25) million was available in credit at the end of
June. No credit facilities were used during the review period.
INVESTMENT
Gross investment in non-current assets in January-June came to EUR 1.5 (3.8)
million.
PERSONNEL
The average number of personnel in the continuing operations during January-June
was 655 (746). The number of personnel in Frozen Foods was 188 (229), in the
Seafood business 396 (440), in Vegetable Oils 34 (35), in Grain Trading 29 (30)
and in Other Operations 10 (13). The personnel at Apetit Suomi Oy have been
divided between Frozen Foods and Seafood in proportion to the service fees.
OVERVIEW OF OPERATING SEGMENTS
Frozen Foods
EUR mill. Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
2009 2008 2009 2008 2008
Net sales 11.4 12.5 24.2 26.0 49.3
Operating profit,
excluding non-recurring items 0.5 0.2 0.8 0.6 3.1
Like-for-like net sales in Frozen Foods, excluding the sale of jam and marmalade
products, grew by 3% in the second quarter, compared with the previous year's
figure. Sales were up substantially in the retail sector and in the hotel,
restaurant and catering sector. Retail frozen food sales were up by about 6%.
This growth was attributable to the increase in volume and average price. Among
these retail product groups, sales of frozen vegetables and pizzas did extremely
well, and growth was also good in frozen potato products. Sales in the hotel,
restaurant and catering sector were up by almost 10%, while sales to the food
industry and exports were down, year-on-year.
Frozen Foods' operating profit improved on the previous year's figure as a
result of higher productivity, centralisation of production and more efficient
operations. Introduction of the new enterprise resource planning system in
Frozen Foods at the start of May proceeded smoothly.
Like-for-like net sales in Frozen Foods for January-June were up on the previous
year by about 5%. Sales growth in retail frozen foods was approximately 8%. The
good sales growth in frozen mixed vegetables and root vegetables for soups
continued, and sales of the various new products increased. Examples of
extremely successful recent product launches include potatoes and chopped
vegetables for soups, a range of family soups, and lactose-free spinach soup.
Sales in the hotel, restaurant and catering sector were up by about 7%, while
sales to the food industry and exports were down, year-on-year.
The January-June operating profit of Frozen Foods, excluding non-recurring
items, was up on the previous year's figure, in line with expectations.
The number of Frozen Foods personnel in January-June was 188 (229). The
reduction in personnel was primarily a result of the sale of the jams and
marmalades business in autumn 2008, the discontinuation of the Turku factory at
the end of 2008, and the centralisation of functions at Säkylä.
Investment during January-June totalled EUR 1.2 (2.6) million. This was mainly
the completion of the investment arising from the centralisation of production
at Säkylä and the renewal of the enterprise resource planning system and the
contract grower data system.
Seafood
EUR mill. Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
2009 2008 2009 2008 2008
Net sales 18.3 23.1 36.8 44.6 89.7
Operating profit,
excluding non-recurring items -0.5 -0.1 -1.4 -0.6 -1.6
The second-quarter net sales of the Seafood business were down by 21% on the
figure for the same quarter a year earlier. This drop in net sales occurred in
both in Finland and in operations abroad.
The second-quarter operating result, excluding non-recurring items, was up on
the first-quarter figure but down year-on-year, and was recorded as a loss. In
Seafood's foreign operations, the operating result was down year-on-year but
improved considerably on the first-quarter figure. In Seafood's Finnish
operations, the operating result was almost unchanged from a year earlier.
Non-recurring items for January-June, totalling EUR -0.5 (0.0) million, were
from the sale of the Kerava property.
The drop in Seafood's net sales in Finland was a result of the reduction in
Kalatori service counters, the focus of consumer demand on campaign-price
products and lower added value fillet products, and also due to tougher
competition in consumer-packaged retail products.
The strategy for the Finnish-based Seafood operations was updated in the spring.
One of the profit improvement measures decided during the second quarter was to
improve the efficiency of logistics operations. In June, Apetit Kala Oy and
Swanline Oy agreed on a transfer of business, whereby the picking and dispatch
functions at Apetit Kala Oy's Kerava logistics centre were transferred to
logistics service operator Swanline Oy. The transfer occurred on 13 July 2009,
and as part of the business transfer 21 employees at Kerava also transferred to
Swanline Oy.
In the Finnish-based Seafood business the decision was also taken to sell the
Kerava property. A deal was agreed by Apetit Kala Oy in June, under which the
Kerava property would be sold to a Finnish industrial operator. The aim of the
property sale and the transfer of the logistics functions is to achieve improved
profits of around EUR 0.4 million annually. This figure is not expected to be
achieved in full until 2010. The sale will also release a significant amount of
tied-up capital. Non-recurring expenses of approximately EUR 0.5 million on the
property sale were recognised in the second-quarter operating result of the
Seafood business.
In Seafood's foreign operations, the year-on-year decrease in second-quarter
euro-denominated net sales was to a marked extent attributable to the weakening
of the Norwegian and Swedish currencies. Calculated in local currencies, the net
sales of Seafood's foreign operations were down by about 10%. This was a result
of the reduced sales of fresh fish products and processed fish products.
Shellfish sales continued to grow.
At the end of June, Maritim Food AS agreed a deal with Cinvest AS, the minority
owner of fish-processing company Sandanger AS, under which Cinvest AS's 49%
holding in Sandanger AS has been transferred to the ownership of Maritim Food
AS. The acquisition cost of these minority shares was approximately EUR 1.2
million. The new ownership arrangements will allow the Maritim Food group to
benefit more effectively from the synergies and to further develop the business
as part of the Maritim Food group.
Seafood's net sales for January-June were down by 17% on the same quarter in
2008. Its operating result, excluding non-recurring items, was also down and was
recorded as a loss.
The number of personnel in the Seafood business totalled 396 (440). The
reduction in personnel occurred mainly in Seafood's Finnish-based operations. To
bring production and costs into line, both blue-collar and white-collar
personnel at the Kuopio production plant were laid off for one to two weeks
during the review period.
As a result of renewing the management system in the Seafood business at the
start of the year, the directors of the Finnish-based processed fish products
business and concept business and the director of Seafood's business in Norway
and Sweden have been reporting directly to the CEO, Matti Karppinen. With the
transfer of Sandanger AS in full to Maritim Food AS, Jan Brevik was appointed
Managing Director of Sandanger AS at the start of July. He also continues as
Managing Director of Maritim Food AS and Maritim Food Sweden AB.
Investment in the Seafood business totalled EUR 0.1 (1.0) million.
Vegetable Oils
EUR mill. Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
2009 2008 2009 2008 2008
Net sales 12.2 15.9 24.9 30.1 62.0
Operating profit,
excluding non-recurring items 0.7 0.1 1.0 0.2 -0.0
Second—quarter net sales in the Vegetable Oils business decreased by 24% on the
same quarter in 2008. This drop in net sales was the result of significantly
lower market prices and smaller delivery volumes than a year earlier. Delivery
volumes fell both in sales of protein feeds and in vegetable oil exports. In
Finland, vegetable oil sales continued to be stable.
Operating profit in the Vegetable Oils business improved significantly
year-on-year. The improved result was a consequence of success in managing
changes in market prices and in developing processes, operating methods and the
organisation in general, and the good oil yield.
Net sales in January-June were down by 17% year-on-year, while operating profit
improved significantly on the previous year's figure.
In the current season the area of Finnish rapeseed under cultivation grew from
65,000 hectares to 80,000 hectares. With good growing conditions, the Finnish
oilseed crop is expected to be significantly better than the previous season's
crop. This will reduce the need to import oilseeds.
The number of personnel in the Vegetable Oils business was 34 (35). To bring
production and costs into line, the Vegetable Oils personnel were laid off for
about one week during January-June.
Investment in the Vegetable Oils business consisted of minor expenditure on
replacements, totalling EUR 0.1 (0.1) million.
Grain Trading
EUR mill. Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
2009 2008 2009 2008 2008
Net sales 23.8 49.6 44.5 91.7 148.5
Operating profit,
excluding non-recurring items 1.5 2.3 2.2 4.0 5.5
Second-quarter net sales in Grain Trading were down by 52% year-on-year. This
was a result of the significantly lower market prices and smaller sales volumes
than a year earlier. Sales in Finland were up on the previous year's figure.
Trade with third countries and the overall level of exports were down
year-on-year. Despite the drop in net sales, the second-quarter operating profit
reached a good level, improving significantly on the first-quarter figure.
Net sales in January-June were down by 51% year-on-year, and the operating
profit fell short of the record high of a year earlier. The internal efficiency
of operations was improved, and fixed costs were below those for January-June
2008.
In the season just ended there was a plentiful supply of grain on the world
market as a result of the good crops and slightly lower demand, which meant that
prices fell in comparison with a year earlier. The demand and supply situation
for soybeans continued to be tight, and prices for the 2008 crop have remained
high. The new grain crop is currently expected to be good in the most important
production regions. With no major crop problems likely and with stocks having
risen since 2008, the prices for the new crop have remained low.
The number of personnel in the Grain Trading business totalled 29 (30).
Investment in Grain Trading in January-June amounted to EUR 0.1 (0.0) million
and was for the renewal of its enterprise resource planning system. This system
was introduced during the second quarter.
Other Operations
EUR mill. Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
2009 2008 2009 2008 2008
Net sales 0.4 0.4 0.8 1.4 3.0
Operating profit,
excluding non-recurring items -0.6 -0.6 -1.6 -1.8 -1.6
Other Operations comprise the service company Apetit Suomi Oy, Group
Administration, items not allocated under any of the business segments, and the
associated companies Sucros Ltd and Ateriamestarit Oy. The cost impact of the
services produced by Apetit Suomi Oy is an encumbrance on the operating result
of the Group's businesses in proportion to the use of the services.
In the second quarter, net sales from the sale of services were at the previous
year's level. The reduction in January-June net sales was a result of the
discontinuation of service fees for sales and product development when they were
transferred from Apetit Suomi Oy to the business areas half way through the
January-June period in 2008.
The January-June operating profit, excluding non-recurring items, totalled EUR
-1.6 (-1.8) million. This figure includes EUR +0.4 (+0.5) million as the share
of the profits of associated companies.
Investment in Other Operations totalled EUR 0.0 (0.1) million.
DECISIONS OF THE ANNUAL GENERAL MEETING
Lännen Tehtaat plc's Annual General Meeting of 2 April 2009 adopted the parent
company's financial statements and the consolidated financial statements, and
discharged the members of the Board of Directors and of the Supervisory Board
and the Chief Executive Officer from liability for the financial year 2008.
Dividend distribution
The Annual General Meeting decided to pay a dividend of EUR 0.85 per share on
the profit for the financial year 2008. The dividend was paid on 17 April 2009.
Amendments to the Articles of Association
The Annual General Meeting approved the Board's proposals for amending article 2
of the Articles of Association, on the company's sphere of operations, and
article 10, paragraph 1, on the invitation to the AGM.
Authorisations to issue shares
The Annual General Meeting authorised the Board of Directors to decide on
issuing new shares and on the transfer of Lännen Tehtaat plc shares held by the
company, in one or more lots as a share issue of a total of no more than 761,757
shares. The share issue authorisation covers all of the Lännen Tehtaat plc
shares already in the company's possession, i.e. 130,000 shares. The maximum
number of new shares that can be issued is 631,757.
The authorisation is valid until the next Annual General Meeting.
The decisions of the Annual General Meeting are given in more detail in the
stock exchange release dated 2 April 2009 and in the Interim Report published on
7 May 2009.
USE OF THE AUTHORISATIONS GRANTED TO THE BOARD OF DIRECTORS
Authorisations to issue shares
The Board of Directors had not yet exercised the authorisation granted to it to
issue new shares or to transfer Lännen Tehtaat plc shares held by the company.
SHARES AND TRADING
The number of Lännen Tehtaat plc shares traded on the stock exchange during the
January-June was 692,388 (762,832), representing 11.0% (12.1%) of the total
number of shares. The euro-denominated share turnover was EUR 8.4 (10.9)
million. The highest share price quoted was EUR 14.43 (16.46) and the lowest EUR
11.90 (13.20). The average price of shares traded was EUR 12.17 (14.30).
At the end of June, the market capitalisation totalled EUR 77.0 (94.8) million.
FLAGGING ANNOUNCEMENTS
On 28 May 2009, Nordea Investment Fund Company Finland Ltd announced that on 27
May 2009 the level of ownership in Lännen Tehtaat plc held by investment funds
managed by Nordea Investment Fund Company Finland Ltd rose to over 5%; the
proportion of the votes and share capital at the time of flagging was 5.46%, or
345,325 shares.
SALE OF SHARES IN JOINT ACCOUNT
On 23 February 2009, a total of 51,910 Lännen Tehtaat plc shares that were in
the joint book-entry account were sold in trading on the NASDAQ OMX Helsinki Ltd
exchange. The sale was based on the decision of the Lännen Tehtaat plc Annual
General Meeting of 29 March 2007 to sell, on behalf of the respective holders,
the company's shares held in the joint book-entry account and not transferred to
the book-entry system.
The assets from the sale, less the expenses of notification and selling, were
deposited with the State Provincial Office of Western Finland. By presenting a
share certificate to the State Provincial Office, holders of shares that were in
the joint account, or other holders of the right, are entitled to a proportion
of the income from the share sale that corresponds to the shares they held. The
assets from the sale of the shares, less expenses, and the dividends for
2005-2007 come to EUR 15.69 per share. The assets are redeemable on or before 17
March 2019.
GOVERNING BODIES
At its organisational meeting on 17 April 2009, Lännen Tehtaat plc's Supervisory
Board elected Helena Walldén as its chairman and Juha Nevavuori as its deputy
chairman.
The Supervisory Board elected the following as members of the company's Board of
Directors: Harri Eela, Heikki Halkilahti, Aappo Kontu, Matti Lappalainen, Hannu
Simula, Soili Suonoja and Tom v. Weymarn. Tom v. Weymarn was elected chairman of
the Board of Directors and Matti Lappalainen was elected deputy chairman.
SEASONALITY OF OPERATIONS
In accordance with the IAS 2 standard, the historical cost of inventories
includes a systematically allocated portion of the fixed production overheads.
In production that focuses on seasonal crops, raw materials are processed into
finished products mainly during the final quarter, which means that the
inventory volumes and their balance-sheet values are at their highest at the end
of the year. Since the entry of the fixed production overheads included in the
historical cost as an expense item is deferred until the time of sale, most of
the Group's annual profit is accrued in the final quarter. The seasonal nature
of operations is most marked in Frozen Foods and in the associated company
Sucros, due to the link between production and the crop harvesting season.
Apetit Kala's sales peak at weekends and on seasonal holidays. As Easter can
take place in either the first or the second quarter, this can affect the
comparability of Seafood's net sales and profit from one year to the next. A
major proportion of the entire year's profit in the Seafood business depends on
the success of Christmas sales.
Net sales in Grain Trading vary from one year and quarter to the next, being
dependent on the demand and supply situation and on the price levels
domestically and on other markets.
SHORT-TERM RISKS AND UNCERTAINTIES
The most significant short-term risks for the Lännen Tehtaat Group are: the
effects of the economic downturn on demand from consumers and customers; the
solvency of customers and the delivery performance of suppliers; the quantity
and quality of Finnish vegetable, grain and oilseed crops; the management of raw
material price changes and currency risks; changes in the operating environments
of the Group's businesses and in customerships; and corporate acquisitions and
the subsequent integration processes.
SIGNIFICANT EVENTS SINCE THE END OF THE REVIEW PERIOD
Lännen Tehtaat has decided to combine the business operations of Avena Nordic
Grain Oy and Mildola Oy. The aim of this is to combine the commodity market
expertise of Avena Nordic Grain with Mildola's expertise in oil milling and to
achieve synergy benefits in purchasing, sales, logistics and administration.
This arrangement is explained in more detail in a separate stock exchange
release.
ASSESSMENT OF 2009
The net sales from Lännen Tehtaat's continuing operations will be affected
particularly by changes in the price level of grains and oilseeds. Based on
grain and oilseed prices in the first half of the year, the Group's net sales
for the third quarter and for the entire year are expected to be below the
corresponding figures for 2008.
The focus of consumer demand on lower priced basic products as a result of the
economic downturn is expected to have both negative and positive effects on the
profitability of the Group's businesses. Thanks to the measures taken to develop
the Group's different businesses, the third-quarter operating profit from the
continuing operations, excluding non-recurring items, is estimated to be at
about the same level as in 2008.
On the basis of the profit performance for the first half-year, the full-year
operating profit, excluding non-recurring items, from the Group's continuing
operations is expected to be at around the previous year‘s level. Due to the
seasonal nature of the Group's operations, a high proportion of the annual
profit is accrued in the final quarter of the year.
The need for investment in non-current assets is significantly less than in
2008.
CONSOLIDATED INCOME STATEMENT
EUR million 4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2009 2008 2009 2008 2008
Continuing operations
Net sales 65.5 101.0 130.2 191.9 349.1
Other operating income 0.3 0.3 0.7 0.6 3.8
Operating expenses -63.8 -98.7 -128.2 -188.1 -342.8
Depreciation -1.4 -1.3 -2.6 -2.6 -5.1
Impairments 0.0 - 0.0 - -0.2
Share of profits of
accociated companies 0.4 0.5 0.4 5.4 9.1
Operating profit 1.1 1.8 0.4 7.2 13.9
Financial income and expenses -0.1 -0.4 0.2 -1.1 -3.3
Profit before taxes 1.0 1.4 0.6 6.1 10,7
Income taxes -0.2 -0.3 -0.1 -0.3 -0.7
Profit for the period,
continuing operations 0.8 1.1 0.5 5.9 10.0
Discontinued operations
Profit for the period,
discontinued operations - 0.1 - 0.4 7.1
Profit for the period 0.8 1.3 0.5 6.3 17.1
Attributable to
Equity holders of the parent 0.7 1.3 0.5 6.2 17.0
Minority interests 0.1 0.0 - 0.1 0.1
Basic and diluted earnings per
share, calculated of the profit
attributable to the shareholders
of the parent company, EUR
Continuing operations 0.12 0.18 0.08 0.92 1.60
Discontinued operations - 0.02 - 0.07 1.13
Total 0.12 0.20 0.08 0.98 2.73
STATEMENT OF COMPREHENSIVE INCOME
EUR million 4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2009 2008 2009 2008 2008
Profit for the period 0.8 1.3 0.5 6.3 17.1
Other comprehensive income
Cash flow hedges -0.3 0.4 0.6 0.0 -1.6
Taxes related to cash flow hedges 0.1 -0.1 -0.2 0.0 0.4
Translation differences -0.1 0.0 0.6 -0.1 -2.1
Total comprehensive income 0.6 1.6 1.5 6.2 13.8
Attributable to
Equity holders of the parent 0.5 1.6 1.5 6.1 13.8
Minority interests 0.1 0.0 - 0.1 0.0
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR million 30 June 30 June 31 Dec
2009 2008 2008
ASSETS
Non-current assets
Intangible assets 6.1 5.5 5.3
Goodwill 6.4 7.1 5.9
Tangible assets 38.3 43.7 43.5
Investment in associated companies 25.4 45.2 25.0
Available-for-sale investments 0.1 0.1 0.1
Receivables 1.7 3.3 3.1
Deferred tax assets 1.5 1.2 1.4
Non-current assets total 79.4 106.1 84.3
Current assets
Inventories 42.0 40.4 55.1
Receivables 24.4 25.3 38.7
Income tax receivable 0.3 0.1 0.7
Financial assets at fair value
through profits 12.9 4.0 3.8
Cash and cash equivalents 8.1 7.2 9.9
Current assets total 87.7 77.1 108.0
Non-current assets classified
as held for sale 3.6 0.8 -
Total assets 170.7 183.9 192.3
EUR million 30 June 30 June 31 Dec
2009 2008 2008
EQUITY AND LIABILITIES
Equity attributable to the equity
holders of the parent company 130.7 127.7 135.1
Minority interest - 0.6 0.5
Total equity 130.7 128.3 135.6
Non-current liabilities
Deferred tax liabilities 3.8 4.1 4.5
Long-term financial liabilities 3.7 4.9 4.5
Non-current provisions 0.1 0.1 0.1
Other non-current liabilities 0.1 - 0.2
Non-current liabilities total 7.7 9.1 9.3
Current liabilities
Short-term financial liabilities 6.5 18.5 10.7
Income tax payable 1.1 1.3 0.7
Trade payables and other liabilities 24.7 26.8 36.1
Current liabilities total 32.3 46.5 47.4
Total liabilities 40.0 55.7 56.8
Liabilities directly associated with
non-current assets classified as held for sale - 0.0 -
Total equity and liabilities 170.7 183.9 192.3
CONSOLIDATED STATEMENT OF CASH FLOW
EUR million 1-6/ 1-6/ 1-12/
2009 2008 2008
Net profit for the period 0.5 6.3 17.1
Adjustments, total 4.1 -1.7 -8.5
Change in net working capital 17.6 14.6 -5.1
Interests paid -1.1 -1.2 -2.4
Interests received 0.4 0.3 0.4
Taxes paid -0.3 -0.9 -1.8
Net cash flow from operating activities 21.2 17.5 -0.4
Investments in tangible and intangible assets -1.5 -3.8 -8.1
Proceeds from sales of tangible
and intangible assets 0.4 0.1 3.0
Acquisition of subsidiaries deducted by cash - -0.4 -0.4
Transactions with minority -1.2 1.5 1.5
Acquisition of associated companies - -0.4 -0.4
Proceeds from sales of associated companies - - 27.0
Purchases of other investments -9.0 - -14.0
Proceeds from sales of other investments - 4.0 18.1
Dividends received from investing activities 0.2 - 3.6
Net cash flow from investing activities -11.1 1.0 30.3
Repayments of short-term loans -6.5 -9.8 -18.4
Repayments of long-term loans -0.2 -0.5 -0.1
Payment of financial lease liabilities 0.0 -0.1 -0.1
Purchases of own shares - -0.4 -1.0
Dividends paid to minority - -0.3 -0.3
Dividends paid -5.3 -5.3 -5.3
Cash flows from financing activities -11.9 -16.5 -25.1
Net change in cash and cash equivalents -1.7 2.2 4.8
Cash and cash equivalents at the
beginning of the the period 9.9 5.1 5.1
Cash and cash equivalents at the
end of the period 8.1 7.2 9.9
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
EUR million
A = Share capital
B = Share premium account
C = Net unrealised gains
D = Other reserves
E = Own shares
F = Translation differences
G = Retained earnings
H = Attributable to equity holders of the parent company
I = Minority interest
J = Shareholders' equity total
A B C D E F G H I J
Shareholders'
equity at
1 Jan 2008 12.6 23.4 0.4 7.2 -0.8 0.1 84.5 127.3 0.7 128.0
Transactions with
minority - - - - - - 0.4 0.4 - 0.4
Dividend
distribution - - - - - - -5.3 -5.3 -0.3 -5.6
Other changes - - - - -0.4 - -0.4 -0.8 - -0.8
Total comprehensive
income - - 0.0 - - -0.1 6.2 6.1 0.1 6.2
Shareholders'
equity at
30 June 2008 12.6 23.4 0.4 7.2 -1.2 0.0 85.3 127.6 0.6 128.3
Shareholders'
equity at
1 Jan 2009 12.6 23.4 -0.8 7.2 -1.8 -1.9 96.6 135.1 0.5 135.6
Transactions with
minority - - - - - - -0.7 -0.7 -0.5 -1.2
Dividend
distribution - - - - - - -5.3 -5.3 - -5.3
Total comprehensive
income - - 0.4 - - 0.6 0.5 1.6 - 1.6
Shareholders'
equity at
30 June 2009 12.6 23.4 -0.4 7.2 -1.8 -1.3 91.0 130.7 - 130.7
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The interim report has been prepared in accordance with IAS 34, Interim
Financial Reporting, as adopted by the EU. The accounting policies adopted are
consistent with those of the Group's annual financial statements for the year
ended 31 December 2008.
The amendment of IFRS 8 will not change the information shown in these segments
because the Group's earlier segment-based reporting was based on the Group's
internal reporting structures. The amendment of IAS 1 has an impact on the
presentation method of the profit and loss account and the changes in equity.
SEGMENT INFORMATION
A Frozen Foods
B Seafood
C Vegetable Oils
D Grain Trading
E Other Operations
F Continuing operations total
G Discontinued operations
H Total
Operating segments 1-6/2009
EUR million A B C D E F G H
Total external sales 24.2 36.8 24.9 44.5 0.8 131.3 - 131.3
Intra-group sales 0.0 0.0 0.0 -0.4 -0.7 -1.1 - -1.1
Net sales 24.2 36.8 24.9 44.1 0.1 130.2 - 130.2
Share of profits of
associated companies
included in operating
profit - - - - 0.4 0.4 - 0.4
Operating profit 0.8 -1.9 1.0 2.2 -1.6 0.4 - 0.4
Gross investments in
non-current assets 1.2 0.2 0.1 0.1 - 1.5 - 1.5
Corporate acquisitions
and other share
purchases - 1.2 - - - 1.2 - 1.2
Depreciations 0.9 1.0 0.3 0.0 0.4 2.6 - 2.6
Impairments - 0.0 - - - 0.0 - 0.0
Personnel 188 396 34 29 10 655 - 655
Operating segments 1-6/2008
EUR million A B C D E F G H
Total external sales 26.0 44.6 30.1 91.7 1.4 193,8 - 193.8
Intra-group sales -0.1 -0.1 0.0 -0.6 -1.1 -1.9 - -1.9
Net sales 25.9 44.5 30.1 91.1 0.3 191.9 - 191.9
Share of profits of
associated companies
included in operating
profit - - - - 5.4 5.4 - 5.4
Operating profit 0.5 -0.6 0.2 4.0 3.1 7.2 - 7.2
Share of profits of
associated companies - - - - - - 0.4 0.4
Gross investments in
non-current assets 2.6 1.0 0.1 0.0 0.1 3.8 - 3.8
Corporate acquisitions
and other share
purchases - - - 0.4 - 0.4 - 0.4
Depreciations 0.7 1.1 0.3 0.0 0.5 2.6 - 2.6
Impairments - - - - - - - -
Personnel 229 440 35 30 13 746 - 746
Operating segments 1-12/2008
EUR million A B C D E F G H
Total external sales 49.3 89.7 62.0 148.5 3.0 352.4 - 352.4
Intra-group sales -0.1 0.0 0.0 -1.1 -2.1 -3.3 - -3.3
Net sales 49.2 89.7 62.0 147.4 0.9 349.1 - 349.1
Share of profits of
associated companies
included in operating
profit - - - - 9.1 9.1 - 9.1
Operating profit 5.1 -2.4 -0.1 5.4 5.8 13.9 6.6 20.5
Share of profits of
associated companies - - - - - - 0.5 0.5
Gross investments in
non-current assets 6.0 1.5 0.2 0.3 0.2 8.1 - 8.1
Corporate acquisitions
and other share
purchases - 0.1 - 0.4 - 0.5 - 0.5
Depreciations 1.4 2.1 0.7 0.0 0.8 5.1 - 5.1
Impairments - 0.2 - - - 0.2 - 0.2
Personnel 237 441 35 30 12 755 - 755
Net sales by geographical segment
Net sales
EUR million 1-6/ 1-6/ 1-12/
2009 2008 2008
Finland 93.5 100.3 209.9
Scandinavia 21.3 39.7 65.8
Baltic countries and Russia 1.8 3.7 7.6
Other countries 13.5 48.1 65.9
Discontinued operations total 130.2 191.9 349.1
DISCONTINUED OPERATIONS
The sale of the majority holding of 51% in Suomen Rehu Ltd was completed at the
start of June 2007, when Suomen Rehu and its subsidiaries were transferred to
Hankkija-Maatalous Oy. Lännen Tehtaat plc and SOK subsidiary Hankkija-Maatalous
Oy signed an agreement on 1 September 2008, transferring the remaining 49% of
shares owned by Lännen Tehtaat in Suomen Rehu Ltd to Hankkija-Maatalous Oy.
Lännen Tehtaat recognized a non-recurring tax-free profit of EUR 6.6 million for
the sale of these minority shares in its financial performance for the 2008
third quarter.
NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Non-current assets classified as held for sale in the reporting period belong to
Apetit Kala Oy's logistics functions located in Kerava that will be sold during
the fourth quarter in 2009.
Non-current assets classified as held for sale in the comparison period belong
to Apetit Pakaste Oy's jams and marmalades business that was sold to Saarioisten
Säilyke Oy in autumn 2008.
IMPAIRMENT TEST
An impairment test has been performed in Seafood's domestic operations based on
the updated strategy. The impairment test did not result in an impairment of
assets.
KEY INDICATORS
30 June 30 June 31 Dec
2009 2008 2008
Shareholders' equity per share, EUR 21.12 20.51 21.83
Equity ratio, % 76.7 69.7 70.5
Gearing, % -8.3 9.5 1.1
Gross investments in non-current
assets, EUR million,
continuing operations 1.5 3.8 8.1
Corporate acquisitions and other
share purchases, EUR million,
continuing operations 1.2 0.4 0.5
Average number of personnel,
continuing operations 655 746 755
Average number of shares, 1 000 pcs 6 188 6 249 6 221
The key figures in this interim financial report are calculated with same
accounting principles than presented in year 2008 annual financial statements.
CONTINGENT LIABILITIES
EUR million 30 June 30 June 31 Dec
2009 2008 2008
Mortgages given for debts
Real estate mortgages 7.7 9.5 8.6
Corporate mortgages - 1.3 -
Guarantees 10.0 10.1 10.8
Non-cancellable other leases,
minimum lease payments
Real estate leases 4.8 4.4 5.1
Other leases 0.7 0.7 0.9
DERIVATIVE INSTRUMENTS
Outstanding nominal values of
derivative instruments
Forward currency contracts 3.8 5.0 6.3
Commodity derivative instruments 10.4 6.7 13.3
INVESTMENT COMMITMENTS
Lännen Tehtaat has investment commitments in Frozen Foods a total of EUR 0.6
million as of 30 June 2009.
CHANGES IN TANGIBLE ASSETS
EUR million 1-6/ 1-6/ 1-12/
2009 2008 2008
Book value at the beginning of the period 43.5 43.5 43.5
Acquisitions 0.8 2.9 5.9
Disposals and transfers to assets
classified as held for sale -4.1 -0.2 -0.2
Depreciations and impairments -2.3 -2.4 -5.3
Other changes 0.4 -0.1 -0.5
Book value at the end of the period 38.3 43.7 43.5
TRANSACTIONS WITH ASSOCIATED COMPANIES AND JOINT VENTURES
EUR million
1-6/ 1-6/ 1-12/
2009 2008 2008
Sales to associated companies 0.2 8.8 13.4
Sales to joint ventures 3.9 4.0 8.5
Purchase from associated companies 1.3 0.3 0.7
Purchase from joint ventures 0.0 0.1 0.3
Long-term receivebles from associated companies 0.0 2.6 2.7
Trade receivables and other
receivables from associated companies 1.5 2.7 1.6
Trade receivables and other
receivables from joint ventures 0.6 0.8 0.6
Trade payables and other liabilities
to associated companies 0.0 0.1 0.0
LÄNNEN TEHTAAT PLC
Board of Directors
Further information: CEO Matti Karppinen, tel. +358 10 402 4001
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