2016-10-27 09:00:43 CEST
2016-10-27 09:00:43 CEST
REGLAMENTUOJAMA INFORMACIJA
Aspo - Interim report (Q1 and Q3)
Aspo Group interim report, January 1 to September 30, 2016
ASPO Plc STOCK EXCHANGE RELEASE October 27, 2016, at 10:00 a.m.
ASPO GROUP INTERIM REPORT, JANUARY 1 TO SEPTEMBER 30, 2016
Aspo: Net sales increased, operating profit remained at the comparative period's
level, EUR 14.1 (14.4) million
(Figures from the corresponding period in 2015 are presented in brackets.)
January-September 2016
- Aspo's net sales amounted to EUR 332.9 (323.7) million.
- Operating profit stood at EUR 14.1 million (EUR 14.4 million including a
goodwill impairment loss of EUR 1.3 million).
- Profit for the period was EUR 10.7 (16.1) million. The profit for the
comparative period includes a goodwill impairment loss of EUR 1.3 million and a
sales gain of EUR 4.9 million recognized in financial items.
- Earnings per share were EUR 0.32 (0.50).
July-September 2016
- Aspo's net sales amounted to EUR 118.2 (111.5) million.
- Operating profit stood at EUR 6.0 (7.3) million.
- Profit for the quarter was EUR 5.0 (5.8) million.
- Earnings per share were EUR 0.16 (0.18).
- The operating profit of ESL Shipping stood at EUR 3.4 (4.4) million. The
operating profit of Leipurin was EUR 0.4 (0.8) million. The operating profit of
Telko stood at EUR 2.3 (3.2) million and the operating profit of Kauko was EUR
0.5 (0.1) million.
Outlook for 2016
The general market development will continue to be poor, and the operating
environment remains challenging. Dry bulk freight rates remain at a low level,
which also reduces the profitability of ESL Shipping's Supramax vessels. Signs
of recovery can be seen in the industrial production of Aspo's customer
companies operating in the EU area. The steep decline in the economies of
Russia, Ukraine and other CIS countries has decelerated. Because of a slight
increase in oil prices the Russian ruble has strengthened and the decrease in
the Russian GDP is expected to have slowed down or turn to growth. Interest
rates are expected to remain at an unusually low level resulting in moderate
financial expenses in Aspo.
Aspo specifies its guidance
New guidance: Aspo's operating profit will be approximately EUR 19-22 (20.6)
million in 2016.
Previous guidance: Aspo's operating profit will be EUR 17-24 (20.6) million in
2016.
KEY FIGURES
7-9/ 7-9/ Change 1-9/ 1-9/ Change 1-12/
2016 2015 % 2016 2015 % 2015
Net sales, MEUR 118.2 111.5 6.0 332.9 323.7 2.8 445.8
Operating profit, MEUR
*) 6.0 7.3 -17.8 14.1 14.4 -2.1 20.6
Operating profit, % 5.1 6.5 4.2 4.4 4.6
Profit before taxes,
MEUR **) 5.2 6.3 -17.5 11.7 17.4 -32.8 21.3
Profit for the period,
MEUR **) 5.0 5.8 -13.8 10.7 16.1 -33.5 19.8
Earnings per share, EUR 0.16 0.18 -11.1 0.32 0.50 -36.0 0.61
Net cash from operating
activities, MEUR 8.5 14.8 -42.6 -2.5 10.7 -123.4 25.0
Equity per share, EUR 3.59 3.34 3.36
Return on equity, %
(ROE) 13.4 20.8 19.1
Equity ratio,% 35.6 33.5 33.8
Gearing, % 103.8 104.5 101.4
ESL Shipping, operating
profit, MEUR 3.4 4.4 -22.7 8.5 10.2 -16.7 14.7
Leipurin, operating
profit, MEUR 0.4 0.8 -50.0 1.3 2.0 -35.0 2.4
Telko, operating profit,
MEUR *) 2.3 3.2 -28.1 7.6 8.5 -10.6 10.4
Kauko, operating profit,
MEUR *) 0.5 0.1 400.0 -0.1 -1.8 94.4 -1.2
Items affecting comparability 1-9/2015
*) The operating profit includes an impairment loss of EUR 1.3 million related
to Kauko goodwill.
**) The profit includes an impairment loss of EUR 1.3 million related to Kauko
goodwill and a sales gain of EUR 4.9 million recognized in financial items.
Items affecting comparability 1-12/2015
*) The operating profit includes an impairment loss of EUR 1.3 million related
to Kauko goodwill, and EUR 0.6 million in charges imposed on Telko by Finnish
Customs and related advisor fees.
**) The profit includes an impairment loss of EUR 1.3 million related to Kauko
goodwill, a sales gain of EUR 4.9 million recognized in financial items, and EUR
2.0 million in charges imposed by Finnish Customs and related advisor fees.
AKI OJANEN, CEO OF ASPO GROUP COMMENTS ON THE THIRD QUARTER AND CLARIFIES THE
GUIDANCE
"The increased net sales and the operation profit generated at Aspo can be
considered a good achievement. In spite of the difficult operating environment,
the operating profit for the third quarter was, as expected, significantly
better than the operating profit for the first or second quarter, even if it
fell short of the comparative period's figure. After the third quarter, our
operating profit amounts to EUR 14.1 million which is almost at the comparative
period's level (14.4). The operating profit guidance given earlier for 2016 had
a large range of variation, EUR 17-24 million. We are now able to give a more
specific guidance because the time period for forecasting the market uncertainty
has become shorter towards the end of the year. We are specifying our guidance
by reducing the range of variation of operating profit and now expect operating
profit to amount to approximately EUR 19-22 million in 2016 (20.6).
The weak net cash from operating activities during the first half of the year
was caused by working capital tied in the growth of Telko. During the third
quarter part of the working capital was released and the net cash from operating
activities turned positive. We expect the positive cash flow to continue during
the rest of the year.
The growth of Leipurin in Russia and the positive development of profitability
in bakery raw materials, the strong overall growth of Telko, the development of
Kauko into a mobile knowledge work company and the decrease of general
administrative costs in the Group to the target level can be considered as
particular successes in the quarter.
The operating profit of ESL Shipping continued to be strong in its line of
business. The new LNG-fueled dry bulk carriers are built at Sinotrans' Jinlingin
shipyard and will be ready to sail in 2018. The new vessels will improve the
profitability of ESL Shipping.
Telko's net sales is growing, although particularly the sales prices of plastic
raw materials decreased considerably in the third quarter. Telko operates as a
regional stockpiling company and that is why the decreasing prices weakened the
sales margin particularly in the eastern growth markets causing a temporary
decrease of the operating profit rate in the eastern market. Telko's net sales
in the eastern markets increased by 16% from the comparative period.
The machinery operations of Leipurin made a loss. A local agreement has been
concluded with the entire personnel at the Nastola plant regarding flexible
working hours. The order book of Leipurin's own production is growing, and the
long period of loss-making in the machinery operations is now expected to be
behind.
Kauko grew and turned out a good result for the third quarter. We expect the
positive development of Kauko to continue, but the result will still vary from
one quarter to the next.
The Groups' general administrative costs are now at the target level of EUR 4
million per year and approximately 0.8 % of net sales. In the future, further
improvement of efficiency will materialize through the Group's increased net
sales and operating profit."
ASPO GROUP
NET SALES
Net sales by segment
7-9/2016 7-9/2015 Change 1-9/2016 1-9/2015 Change 1-12/2015
MEUR MEUR % MEUR MEUR % MEUR
ESL Shipping 17.9 19.9 -10.1 50.8 56.3 -9.8 76.2
Leipurin 27.0 28.3 -4.6 82.0 86.3 -5.0 117.8
Telko 63.8 56.5 12.9 175.4 161.7 8.5 215.3
Kauko 9.5 6.8 39.7 24.7 19.4 27.3 36.5
Other
operations 0.0 0.0 - 0.0 0.0 - 0.0
Total 118.2 111.5 6.0 332.9 323.7 2.8 445.8
There is no considerable inter-segment net sales.
Net sales by market area
7-9/2016 7-9/2015 Change 1-9/2016 1-9/2015 Change 1-12/2015
MEUR MEUR % MEUR MEUR % MEUR
Finland 38.9 35.0 11.1 110.7 108.9 1.7 147.7
Scandinavia 12.0 15.6 -23.1 35.4 40.2 -11.9 51.8
Baltic
countries 13.1 12.8 2.3 37.7 37.8 -0.3 50.4
Russia, Ukraine
+ other CIS
countries 38.9 35.0 11.1 103.6 93.6 10.7 128.3
Other
countries 15.3 13.1 16.8 45.5 43.2 5.3 67.6
Total 118.2 111.5 6.0 332.9 323.7 2.8 445.8
The largest growth of net sales in relative terms was achieved in the Other
countries market area, where the increased net sales of Telko in Poland was a
particular growth factor. During the comparative period, the Scandinavian steel
industry invoicing was bigger than normal at ESL Shipping.
EARNINGS
Operating profit by segment
7-9/2016 7-9/2015 Change 1-9/2016 1-9/2015 Change 1-12/2015
MEUR MEUR % MEUR MEUR % MEUR
ESL Shipping 3.4 4.4 -22.7 8.5 10.2 -16.7 14.7
Leipurin 0.4 0.8 -50.0 1.3 2.0 -35.0 2.4
Telko 2.3 3.2 -28.1 7.6 8.5 -10.6 10.4
Kauko 0.5 0.1 400.0 -0.1 -1.8 94.4 -1.2
Other operations -0.6 -1.2 50.0 -3.2 -4.5 28.9 -5.7
Total 6.0 7.3 -17.8 14.1 14.4 -2.1 20.6
Earnings per share
Earnings per share were EUR 0.32 (0.50) for January-September. Equity per share
was EUR 3.59 (3.34). The result for the comparative period was significantly
improved by a sales gain of EUR 4.9 million recognized in financial items
through the sale of shares in Alandia Insurance owned by ESL Shipping. Its
effect on earnings per share was approximately EUR 0.16.
Financial targets
Aspo's objective is to reach an average return on equity of over 20%, gearing of
up to 100% and an operating profit of 7% with the current structure.
The operating profit rate for January-September was 4.2% (4.4), return on equity
was 13.4% (20.8), and gearing was 103.8% (104.5).
OUTLOOK FOR THE REST OF THE YEAR 2016
The international economic uncertainty has continued which has reflected
particularly strongly in the demand for basic raw materials and kept their
prices low. The international dry bulk freight rates of vessels have been
particularly low. The economic cycle is expected to remain weak for at least the
rest of the year.
General uncertainty will continue in the eastern growth markets that are
important for Aspo, even though the general expectation is that the decline of
the national economy in Russia has slowed down and will turn to growth in 2017.
It is difficult to estimate the future development of Russia, Ukraine and other
CIS countries and the financial impact of general uncertainty. Historically, the
developments in other CIS countries have followed the economic development in
Russia. The currency exchange rates have been more stable in 2016 than in
previous years, but even major changes may be seen in exchange rates in the
future.
Industrial production in the western markets has picked up slightly, and this
development is expected to continue during the rest of the year.
The price of oil will probably remain low despite a slight increase. In general,
prices of production raw materials are expected to remain low. The Group will
continue increasing its market shares profitably in the strategically important
eastern growth markets. While international dry bulk freight rates are expected
to remain low, the shipping company has secured the use of its capacity during
the rest of the year through long-term agreements.
Aspo specifies its guidance. New guidance: Aspo's operating profit will be
approximately EUR 19-22 (20.6) million in 2016.
ASPO'S BUSINESS OPERATIONS
ESL SHIPPING
ESL Shipping is the leading dry bulk cargo company in the Baltic Sea region. At
the end of the review period, the company's fleet consisted of 14 vessels, of
which the company owned 13 in full and one was leased.
7-9/2016 7-9/2015 Change % 1-9/2016 1-9/2015 Change % 1-12/2015
Net sales,
MEUR 17.9 19.9 -10.1 50.8 56.3 -9.8 76.2
Operating
profit, MEUR 3.4 4.4 -22.7 8.5 10.2 -16.7 14.7
Operating
profit, % 19.0 22.1 16.7 18.1 19.3
The services of ESL Shipping are based on the company's ability to operate
efficiently and reliably in the arctic ice regions and load and unload ships at
sea. During the third quarter, the company's vessels have mainly operated in the
Baltic Sea and in Europe and performed loading and unloading operations at sea.
The transportation operations in the Baltic Sea and the North Sea are mainly
based on long-term customer agreements and established customer relationships.
The cargo traffic and freight volumes in the Baltic sea have been at normal
levels. Apart from the Supramax vessels, the company's fleet has operated in the
Baltic Sea and the North Sea. Throughout the third quarter, the Supramax vessels
have operated in international traffic between third countries, part of the time
time-chartered. One of the two Supramax vessels has carried raw materials from
Baffinland in the arctic ice regions of Canada to Europe. Due to difficult
loading and unloading conditions, the vessel's profitability was weaker than
expected. The import license regulations regarding Norwegian crushed stone
aggregate have for their part prevented aggregate transports in the arctic
regions of Russia. One vessel was docked as planned during the third quarter.
ESL Shipping's net sales in July-September stood at EUR 17.9 (19.9) million. The
decrease in net sales was due to the market situation of Supramax vessels being
weaker than in the comparative period. Profitability of the shipping company's
other vessels improved from the comparative period. Given the challenging market
situation of the large vessels, the shipping company's relative profitability
was satisfactory, and operating profit for July-September amounted to EUR 3.4
(4.4) million, 19% (22) of net sales. The Supramax vessel class made a loss
during the third quarter in spite of the fact that the actual freight rate level
of the vessels was significantly better than the prevailing general spot market
level of freight rates.
ESL Shipping transported 2.8 (3.0) million tons of cargo in July-September. The
freight volumes declined since the Supramax vessels sailed longer distant routes
than in the previous year. In the Baltic Sea traffic, the freight volumes
increased slightly from the comparative period. The steel industry freight
volumes were at the previous year's level. The freight volumes of energy
industry increased, and almost all transports were destined to CHP plants. Other
transportation made up a higher relative share from operating days than in the
comparative period. In line with its strategy, the shipping company has
succeeded in establishing its position in the transportation of biofuels in the
Baltic Sea and in expanding its operations to the Canadian arctic area.
The shipping company and Sinotrans & CSC Shipbuilding Industry Corporation have
agreed to an amendment in which the energy efficient LNG-fueled dry bulk
carriers of ESL Shipping will be built at the Jinling main shipyard located in
Nanjing, China. The amendment will ensure the timely delivery and high quality
of the vessels and has no effect on the contract price.
ESL Shipping's net sales for January-September stood at EUR 50.8 (56.3) million
and its operating profit was EUR 8.5 (10.2) million.
Outlook for ESL Shipping in 2016
International dry bulk freight rates are expected to remain low. The market
freight rates of large dry cargo vessels have remained at a low level,
regardless of the recent stabilization in prices. During the open water period
of the rest of the year, the situation will also weaken the price levels of
large ice-strengthened vessels, and the market situation will remain challenging
for the company's Supramax vessels. The other Supramax vessel is likely to
operate in the Baltic Sea traffic while the other is in international traffic,
and the two vessels' profitability is expected to be good taking into account
the international level of freight rates.
Most of the shipping company's transportation capacity has been secured in the
Baltic Sea and Northern Europe through long-term agreements, and the shipping
company's capacity utilization is estimated to be high. Total transportation
volumes in the energy industry are expected to be higher than in the previous
year because of the transportation of both biofuels and coal. Transportation
volumes of steel industry are expected to develop positively during the rest of
the year. If required, the capacity will be adapted according to the demand by
chartering additional external capacity. Demand for the loading and unloading of
large vessels at sea is expected to be high.
According to its strategy, the shipping company will continue to expand its
customer base, in particular, to customer transportation where both the
company's range of different cargos and its operating area can be expanded,
while utilizing the independent load handling capability and the exceptionally
high ice strengthening of its vessels. During the last quarter of 2016, two
vessel units will be docked as planned.
LEIPURIN
Leipurin is a unique provider of solutions for bakery and confectionery
products, the food industry and, according to its revised strategy, the out of
home (OOH) market. The solutions offered by Leipurin range, for example, from
product development, recipes, raw materials, training and equipment all the way
to the design of sales outlets. As part of its full-range services, Leipurin
designs, delivers and maintains production lines for the baking industry, baking
units and other machinery and equipment required in the food industry. Leipurin
uses leading international manufacturers as its raw material and machinery
supply partners. Leipurin operates in Finland, Russia, the Baltic countries,
Poland, Ukraine, Kazakhstan and Belarus.
7-9/2016 7-9/2015 Change % 1-9/2016 1-9/2015 Change % 1-12/2015
Net sales,
MEUR 27.0 28.3 -4.6 82.0 86.3 -5.0 117.8
Operating
profit, MEUR 0.4 0.8 -50.0 1.3 2.0 -35.0 2.4
Operating
profit, % 1.5 2.8 1.6 2.3 2.0
The prices of sugar and dairy-based products are increasing in the western
markets. When compared with the comparative period, the prices of vegetable oil-
based products have also increased. The prices of grain-based and other major
raw materials have mainly remained at the comparative period's level. In
Finland, the market for bakery products has been growing slightly, thanks to the
OOH market, pastries and confectionery products. In Estonia, the market for
bakery products has declined, particularly due to decreased exports. The market
situation remained unchanged in other EU countries where Leipurin operates. In
the Baltic region, the use of frozen products is increasing, particularly at in-
store bakeries.
In Russia, retail sales have fallen by approximately 6% compared to the
comparative period, with the consumption and price level of industrial bread
falling along with the general trend. The increasing range of breads of lower
price categories offered by in-store bakeries has shifted the consumption of
bread towards low-cost products. In Russia, the bakery industry has attempted to
replace raw materials with less expensive and locally produced materials. In the
Russian OOH sector, the change in consumer behavior regarding consumption of
bakery products has contributed to the general growth of the sector. Inflation
in food products has slowed down in Russia and was approximately 7% during the
early part of the year. In other eastern market operating countries of Leipurin,
the general market situation has improved from the beginning of the year.
Net sales of Leipurin for the third quarter fell from the comparative period,
totaling EUR 27.0 (28.3) million. Operating profit stood at EUR 0.4 (0.8)
million. The operating profit rate during the quarter was 1.5% (2.8). The raw
material operations of Leipurin improved its results from the comparative period
both in the western and eastern markets. Due to the timing of machinery sales
and the challenging market situation, sales of machinery was extremely weak
during the third quarter, and consequently the result of the machinery
operations was clearly below the comparative period and loss-making. In
addition, the Leipurin business incurred higher costs due to increased
investments for developing Leipurin's OOH strategy.
During the third quarter, the net sales of bakery raw materials fell slightly
short of the comparative period's figure in the western markets. In Finland, net
sales of bakery raw materials remained at the comparative period's level, and
sales in the OOH customer segment, associated with the new strategy, continued
to grow. In addition to the test bakery business, Leipurin has opened a pilot
cafeteria to test the consumer behavior in the OOH customer segment. With this
cafeteria, Leipurin can develop and test its OOH offering for its entire
operational area.
Net sales of bakery raw materials in the eastern markets, i.e. in Russia,
Ukraine and other CIS countries, increased by approximately 13% during the third
quarter. Sales of the range of frozen products launched in the OOH market in
Russia continued its rapid growth. The operating profit of bakery raw materials
in Russia improved from the comparative period, being approximately 10%. In the
Baltic countries, net sales remained at the level of the comparative period.
During the third quarter, net sales in Russia, Ukraine and other CIS countries,
including machinery sales, amounted to EUR 7.2 (7.1) million, with operating
profit rate being approximately 7% (7).
Machinery and equipment investments remained at a low level in all operating
countries of Leipurin during the third quarter. Net sales of the machinery
operations remained at a low level in all main markets, and resulted in a
clearly negative operating profit while the business had made a positive
operating profit in the comparative period. With regard to principal equipment
sales, net sales decreased due to the poor investment demand for large baking
lines in the core market areas, and the result of principal equipment sales was
negative. Net sales of own production decreased and made a loss in spite of
earnings improvement programs and adaptation of resources. The order book has
improved, and deliveries will take place during the fourth quarter and 2017.
Leipurin's net sales for January-September stood at EUR 82.0 (86.3) million and
its operating profit was EUR 1.3 (2.0) million. Net sales from Russia, Ukraine
and other CIS countries totaled EUR 20.9 (21.4) million.
Outlook for Leipurin for 2016
The market situation is expected to remain challenging in key markets of
Leipurin. The market position is expected to remain strong in the industrial
baking sector in Finland, the Baltic region and Russia, with growth being
expected in the OOH sector in all market areas.
Leipurin will significantly improve its profitability during the fourth quarter.
The weakening of economic situation in Russia is estimated to have stopped but
inflation to remain high due to which willingness to invest will be at a low
level in Russia. The consumers' purchasing power is expected to gradually stop
weakening. The local procurement of bakery raw materials has been increased to
replace imported raw materials. The purpose is to respond to changes in demand
by developing a product range with more competitive prices. The objective is to
increase the share of local raw materials above 50%. Local procurement has been
decentralized and, currently there are already dozens of significant regional
production partners. In the fourth quarter, Leipurin will start its own
industrial production in Russia, initially with the small scale production of
fillings and jams for the bakery industry. Leipurin will maintain its high
profitability and strengthen its market position in the area.
The OOH market comprises a significant new operating area for Leipurin, and
during the rest of the year, Leipurin will continue its expansion in the OOH
market.
Machinery operations will continue developing its operations, an example of
which is the local agreement concluded with the entire personnel at the Nastola
plant regarding flexible working hours. Operating profit for the last quarter is
expected to be clearly positive due to the fact that many deliveries are
scheduled for that period.
TELKO
Telko is a leading expert and supplier of plastic raw materials and industrial
chemicals. Business is based on representation of the best international
principals and on the expertise of the personnel. Telko operates mainly through
its subsidiaries in the western markets of Finland, the Baltic countries,
Scandinavia, Poland, the Czech Republic and Slovakia, as well as in its eastern
markets of Russia, Belarus, Ukraine, Kazakhstan, Azerbaijan, Georgia and China.
7-9/2016 7-9/2015 Change % 1-9/2016 1-9/2015 Change % 1-12/2015
Net sales,
MEUR 63.8 56.5 12.9 175.4 161.7 8.5 215.3
Operating
profit,
MEUR *) 2.3 3.2 -28.1 7.6 8.5 -10.6 10.4
Operating
profit, % 3.6 5.7 4.3 5.3 4.8
*) The operating profit 1-12/2015 includes EUR 0.6 million in charges imposed by
Finnish Customs and related advisor fees.
The prices of plastic raw materials took a downward turn in June, and the
decline continued during the third quarter. The prices of volume plastics fell
by 5-8%. The price level of industrial chemicals remained clearly below the
previous year's level and long-term average levels, mainly due to the continuing
low level of oil prices. The decline of Russian national economy has levelled
out, but investments in industrial production have continued to decrease.
Inflation has slowed down but is still approximately 7%.
Net sales of Telko grew by 13% in the third quarter, amounting to EUR 63.8
(56.5) million. Net sales of the eastern markets grew by 16%, and its relative
share of Telko's total net sales was 49%. The growth of net sales in the eastern
market was mainly due to new customers.
Operating profit for the third quarter was EUR 2.3 (3.2) million. Operating
profit rate decreased to 3.6% (5.7%). Operating profit increased considerably in
the western markets. In the eastern markets, operating profit decreased
considerably and operating profit rate fell clearly short of 5%. The main
reasons for the poor profitability in the eastern markets are the relatively
higher share of volume products of net sales and the decrease of their prices.
In addition, the changes in currency exchange rates between the sale and
procurement dates of products sold during the period weakened the profitability
of products sold in the eastern markets.
Chemicals, plastics and lubricants all increased their respective net sales,
with the growth being strongest in chemicals. The relative profitability of
chemical business remained close to the level of the comparative period. The
profitability of plastics business decreased. Transfer of the Castrol automotive
motor oil customer accounts to Telko in Finland progressed as planned during the
third quarter.
Telko's net sales for January-September amounted to EUR 175.4 (161.7) million.
Operating profit decreased to EUR 7.6 (8.5) million. Net sales in Russia,
Ukraine and other CIS countries increased by 12% to EUR 79.3 (70.6) million.
Outlook for Telko for 2016
The prices of oil and oil-based raw materials sold by Telko are not expected to
significantly increase in spite of the fact that the prices of chemical raw
materials and plastic raw materials are at a low level. The future development
of market prices is difficult to forecast.
Telko will increase its sales in the western markets. Forecasting the
development of sales in the eastern markets remains a challenge. Telko believes
that the weaker-than-normal profitability in the eastern markets during the
third quarter was a temporary phenomenon, caused by a decrease of sales prices.
In the eastern markets, the decline in industrial demand for products supplied
by Telko seems to have stopped. There is no significant increase of industrial
demand in the horizon, and Telko's growth will continue to be mainly based on
increasing its market shares. No final investment decision has been made
regarding the logistics terminal planned by Telko for St. Petersburg due to
permit negotiations between the owner of the building plot and local authorities
which will continue at least until the second quarter of 2017. In Finland, the
transfer of Castrol automotive lubricant customer accounts to Telko will be
completed by the end of 2016, which will increase net sales and improve relative
profitability in Finland.
KAUKO
Kauko is a specialist in demanding mobile knowledge work environments. It
supplies the best tools, solutions for improving productivity and services for
securing effective use for the needs of healthcare services, industries,
logistics and the authorities. Kauko solutions combine customized applications,
devices and services. Its product range also includes products that improve
energy efficiency. Kauko's key market areas are Finland and Germany.
7-9/2016 7-9/2015 Change % 1-9/2016 1-9/2015 Change % 1-12/2015
Net sales,
MEUR 9.5 6.8 39.7 24.7 19.4 27.3 36.5
Operating
profit, MEUR
*) 0.5 0.1 400.0 -0.1 -1.8 94.4 -1.2
Operating
profit, % 5.3 1.5 -0.4 -9.3 -3.3
*) In 2015 the operating profit included a EUR 1.3 million goodwill impairment
loss recognized in the first quarter.
The business operations of Kauko developed as planned during the third quarter.
Net sales grew by 40% and stood at EUR 9.5 (6.8) million. Operating profit stood
at EUR 0.5 (0.1) million. Net sales and profitability have developed positively
both in mobile knowledge work and energy-efficiency equipment.
Net sales of mobile knowledge work grew strongly compared with the comparative
period, particularly as a result of agreements concluded in the second quarter,
their deliveries mainly taking place during the third quarter. New key employees
have been recruited for mobile knowledge work. The German business concentrating
on health technology is making a loss due to its start-up phase.
The sales of energy-efficiency equipment developed positively compared with the
comparative period, and its profitability improved. Solar power systems
experienced the fastest growth. The air source heat pump business grew as
planned.
Net sales of Kauko for January-September increased by 27% to EUR 24.7 (19.4)
million. Operating profit stood at EUR -0.1 (-1.8) million. The operating result
was reduced in the comparative period by the sale of the Industrial business, in
conjunction with which Aspo assessed the goodwill of the Kauko segment, and
recognized an impairment loss of EUR 1.3 million.
Kauko's outlook for 2016
In Finland, the development of mobile knowledge work and energy-efficiency
markets is at an interesting stage. Kauko will invest in the development and
sale of solutions for demanding mobile knowledge work. Several new business
development projects have been initiated for further developing the operations.
These require the additional recruitment of technical and commercial
professionals and the further development of internal operating models.
Total solutions for mobile knowledge work and maintenance agreements in
accordance with the new strategy are expected to make up larger shares of net
sales. Kauko will invest in total solutions which combine customized
applications, devices and services. The authorities and the fields of logistics,
industry and healthcare, in particular, are expected to show high demand for the
mobile knowledge work solutions offered by Kauko, at first in Finland and
Germany, followed by other European markets.
The volumes and profitability of energy products are expected to improve, in
particular, through the growing demand for solar power systems. The order book
for 2017 is very good.
Kauko GmbH, a company established in Germany, will first focus on the healthcare
sector and the sales of the mobile workstation developed by Kauko in the
healthcare sector in Germany. The computer designed by Kauko for the healthcare
sector is undergoing a certification process and expected to be ready during the
fourth quarter. The operations in Germany will produce a loss during the initial
stages, but they are expected to become profitable in 2017.
OTHER OPERATIONS
Other operations include Aspo Group's administration, the financial and ICT
service center, and a small number of other functions not covered by business
units.
7-9/2016 7-9/2015 Change % 1-9/2016 1-9/2015 Change % 1-12/2015
Net sales,
MEUR 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Operating
profit, MEUR -0.6 -1.2 50.0 -3.2 -4.5 28.9 -5.7
The operating profit of other operations was EUR -0.6 (-1.2) million for the
third quarter and EUR -3.2 (-4.5) million for January-September.
FINANCING
The Group's cash and cash equivalents totaled EUR 18.6 million (12/2015: EUR
23.9 million). The consolidated balance sheet included a total of EUR 132.6
million in interest-bearing liabilities (12/2015: EUR 127.9 million). The
average rate of interest-bearing liabilities was 1.7% at the end of the review
period (12/2015: 1.7%). Non-interest-bearing liabilities totaled EUR 68.9
million (12/2015: EUR 74.3 million).
Aspo Group's gearing was 103.8% (12/2015: 101.4%) and its equity ratio was
35.6% (12/2015: 33.8%). At the end of the third quarter of 2015, gearing was
104.5% and the equity ratio was 33.5%.
The Group's net cash from operating activities was negative in January-
September, totaling EUR -2.5 (10.7) million. During the review period, the
change in working capital stood at EUR -21.6 (-10.3) million. Working capital
has been tied, in particular, to the strong growth of Telko. Net cash from
investing activities totaled EUR -3.1 (0.3) million. Sales gain from shares had
a positive impact on net cash from investing activities during the comparative
period. The Group's free cash flow (net cash from operating activities + net
cash from investing activities) was EUR -5.6 (11.0) million.
The amount of committed revolving credit facilities signed between Aspo and its
main financing banks stood at EUR 60 million at the end of the review period.
The revolving credit facilities remained fully unused at the end of the review
period. No significant credit agreements will mature during 2016. EUR 12 million
of Aspo's EUR 80 million commercial paper program were in use.
On May 27, 2016, Aspo issued a new hybrid bond of EUR 25 million. The fixed
coupon rate of the bond is 6.75% per annum. The bond has no specified maturity
date, but the company may exercise an early redemption option after four years
of its issuance date. On May 26, 2016, Aspo announced the result of a voluntary
tender offer for a hybrid bond it issued in November 2013. EUR 15.4 million of
the total loan capital of EUR 20 million was accepted for purchase by Aspo. On
October 17, 2016, Aspo announced that it will redeem the outstanding loan
capital on November 18, 2016 in compliance with the terms and conditions of the
loan.
Aspo has hedged its interest rate risk by means of an interest rate swap. Its
fair value on September 30, 2016 was EUR -0.7 million. The financial instrument
is on level 2 of the fair value hierarchy.
Aspo Group has hedged its currency-denominated cash flows associated with the
acquisition of new vessels using currency forward agreements, to which hedge
accounting is applied. The nominal value of these currency forward agreements is
EUR 38.5 million, and their fair value was EUR -0.5 million on September
30, 2016. The financial instrument is on level 2 of the fair value hierarchy.
INVESTMENTS
The Group's investments stood at EUR 1.5 (2.4) million in the third quarter,
consisting mainly of maintenance and replacement investments.
Investments by segment, acquisitions excluded
7-9/2016 7-9/2015 Change 1-9/2016 1-9/2015 Change 1-12/2015
MEUR MEUR % MEUR MEUR % MEUR
ESL Shipping 1.0 2.1 -52.4 2.6 3.5 -25.7 13.2
Leipurin 0.0 0.1 -100.0 0.1 0.4 -75.0 0.5
Telko 0.3 0.1 200.0 0.8 0.6 33.3 1.0
Kauko 0.0 0.1 -100.0 0.0 0.1 -100.0 0.1
Other operations 0.2 0.0 - 0.2 0.1 100.0 0.3
Total 1.5 2.4 -37.5 3.7 4.7 -21.3 15.1
PERSONNEL
Personnel by segment, period-end
9/2016 9/2015 Change % 12/2015
ESL Shipping 225 222 1.4 223
Leipurin 320 286 11.9 299
Telko 269 258 4.3 265
Kauko 51 44 15.9 46
Other operations 23 24 -4.2 24
Total 888 834 6.5 857
At the end of the period, Aspo Group had 888 employees (834). The number of
personnel has increased, particularly in the Leipurin and Telko companies in
Russia and other CIS countries. The personnel of Kauko has increased as a result
of its new operations in Germany.
Rewarding
In 2015, the Board of Directors of Aspo Plc approved a share-based incentive
plan for about 30 persons. The plan includes three earnings periods, the
calendar years 2015, 2016 and 2017. The Board of Directors will decide on the
plan's performance criteria and required performance levels for each criterion
at the beginning of each earnings period.
The reward from the earnings period 2015 was based on the Group's earnings per
share (EPS). On the basis of the 2015 earnings period, employees included in the
plan received 88,970 treasury shares as a share-based reward, as well as cash
equaling the value of the shares in order to pay taxes.
The reward from the 2016 earnings period will be based on the Group's earnings
per share (EPS). The possible reward from the 2016 earnings period will be paid
in 2017, partly in treasury shares and partly in cash to cover any taxes and
tax-related costs arising from the reward. At most 112,250 treasury shares will
be granted, and the amount paid in cash will correspond at most to the value of
the shares on the payment date.
In accordance with the rules of incentive plans, a total of 5,275 treasury
shares, originally granted on the basis of share-based incentive plans, were
returned during January-September due to ended contracts of employment.
RISKS AND RISK MANAGEMENT
Aspo has operated in an exceptionally challenging business environment
throughout the year. The basic premises of economy continue to be poor in Aspo's
operating countries, but during the third quarter they only weakened slightly or
even improved in certain countries. The GNP is growing slowly in western
countries and while the decline has decelerated in the east, inflation remains
high. Freight rates are low, even though they have taken a slight upward turn.
Despite a modest turn for the better, the general economic uncertainty maintains
risks in all of Aspo's businesses.
The results of operations in Russia may suffer as a consequence of the general
uncertainty in the region and the exceptionally high profitability resulting
from the unstable market in Ukraine has returned to normal. Particularly the
uncertainty in eastern markets and any changes in exchange rates may have an
impact on demand for and the competitiveness of products. Growth both in eastern
and western markets is limited by the slow demand for investment assets.
Strategic risks
In addition to the western markets, Aspo is operating in areas where the economy
may increase or decrease and, as a result of this development, business
preconditions may either improve or weaken significantly.
As a result of an increase in the prices of imported products, consumer demand
has slowed down and the economy has contracted in Russia and Ukraine. According
to estimates, the Russian economy will turn to growth during the next year. Even
though any weakening currencies decelerate euro-denominated growth in net sales,
euro-denominated costs will also decrease in Russia and Ukraine. Weaker
consumption demand affects trade, in addition to which the weakened economic
situation is reflected in the financial markets, payments and the companies'
investment willingness in Russia and Ukraine.
In Russia, the increase in the prices of imported goods and any impact of
sanctions are reduced through local procurement and production operations. Raw
materials and products made in Russia are increasingly used in industrial
production despite poorer quality. This may reduce the position of imported raw
materials in the value chain and lower the margin level.
A key element in Aspo's strategy is the implementation of various structural
changes. If the current economic situation continues, structural changes within
Aspo may become more difficult.
Financial sanctions or any other obstacles caused by the current situation in
Russia may, in part, reduce transportation volumes from Russia, and decrease
unloading services for large ocean liners at sea. The social objective to reduce
the consumption of coal in energy production has increased in significance,
which may reduce the need to transport coal. The need for replacement energy
products may correspondingly increase transportation volumes and, for this
reason, it is difficult to estimate future volumes. The low level of
international freight indices and the increases in international vessels in
particularly in large size categories have increased uncertainty over the long-
term profitability of shipping companies.
In addition to the internationally poor economic situation and the political
atmosphere, strategic risks are caused by the outlook and production solutions
of industrial customers. Decisions on energy production structures affected by
the environmental policy and other political choices may cause changes in
industry and energy production that may decrease the use of fossil fuels and
increase the use of alternative forms of energy. The flow of goods in the Baltic
Sea may change as a result of steel production, cost structures, changes in the
customer structure, such as centralization of ownership, or for other reasons.
These changes may have negative consequences on operations as the need for
transportation decreases, but they can also be seen as significant
opportunities. As a result of low cargo prices in global maritime transport,
competition for cargo may become more intense in the Baltic Sea area, as well.
Strategic risks are affected by long-term changes in cargo prices, investment
trends, and changes in trade structures, especially in western markets. In
eastern markets, risks are increased by such factors as political instability,
social structures or their lack of reaction to the difficulties encountered by
business operations. The accumulation and discharge of investments may cause
long-term changes in the competitive situation and customer behavior.
Rapid changes in economic structures may cause risks due to changes in the
customer or principal structure or technologies, and due to unutilized
opportunities that require a quick response. Despite the aggravation of the
political situation and the alarming direction of economic development, Aspo's
strategic risks are evened out by the distribution of business operations over
four segments, its engagement in business operations in a broad geographical
area, and its ability to react quickly to changing situations.
Operational risks
Even though economic uncertainty in Aspo's operating environment has decreased
during the review period, operational risks have remained unchanged. These
include risks related to supply chains and persons.
The focus of Aspo's growth has for long been on emerging market areas, where
risks decelerating growth are affected by factors such as exchange and interest
rates, the level of and changes in the global market prices of raw materials,
industrial and commercial investments, customer liquidity, changes in
legislation and import regulations, and the inactivity, lack of neutrality or
corruption of public authorities.
Economic growth and, alternatively, any decrease in production may have an
impact on demand for raw materials in the eastern markets. The political and
economic instability is disturbing commercial activities and, if the situation
continues, the growth of Aspo's business operations in Ukraine will slow down.
There may be a similar trend in Russia and other CIS countries if purchasing
power decreases. Furthermore, consumer behavior is reflected in the risks
generated through b-to-b customers and their risk levels. The growth
opportunities presented by emerging markets are encouraging interest among
competitors in starting or expanding business operations in these areas. The
challenging emerging markets and the escalated situation in Ukraine have also
caused competitors to withdraw from the area, which has created new potential
for Aspo's businesses, increased their market shares and, in some business
areas, even improved profitability. Some normalization of competition has
already taken place in Ukraine, for example.
Hedging against exchange rate changes is not possible in all conditions, and
especially without interruptions. Changes in exchange rates may also weaken
results and reduce equity on the balance sheet as a result of translation
differences. Then again, changes in exchange rates may also strengthen the
result and balance sheet. As changes in credit loss risks are diversified across
businesses and customers, Aspo's businesses have not been subjected to any
significant credit losses. However, the limits of credit insurers have become
tighter and, in general, credit loss risks have increased and been realized to
some extent.
The quantity and probability of the Group's loss risks are regularly assessed.
The amounts insured are sufficient in view of the scope of Aspo's operations,
but insurance companies may restrict the validity of insurance policies as a
result of risks increasing for various reasons.
Internal control and risk management
One of the responsibilities of Aspo's Audit Committee is to monitor the
efficiency of the Group's internal control, internal audits, and risk management
systems. The Audit Committee monitors the risk management process and carries
out necessary measures to prevent strategic risks in particular. In accordance
with the internal control principles approved by the Board of Directors, risk
management is part of Aspo's internal control, and its task is to ensure the
implementation of the Group's strategy, development of financial results,
shareholder value, dividend payment ability, and continuity in business
operations. The operational management of the business areas is responsible for
risk management. The management is responsible for specifying sufficient
measures and their implementation, and for monitoring and ensuring that the
measures are implemented as part of day-to-day management of operations. Risk
management is coordinated by Aspo's CFO, who reports to the Group CEO.
Aspo Group's financing and financial risk management are centralized in the
parent company in accordance with the treasury policy approved by the Board of
Directors.
A more detailed account of the risk management policy and the most significant
risks has been published in the Year 2015 report and on the company's website.
More detailed information on financing risks can be found in the notes to the
financial statements.
SHARE CAPITAL AND SHARES
Aspo Plc's share capital on September 30, 2016 was EUR 17,691,729.57 and the
total number of shares was 30,975,524 of which the company held 396,226 shares;
that is, 1.3% of the share capital. Aspo Plc has one share series. Each share
entitles the shareholder to one vote at the shareholders' meeting. Aspo's share
is quoted on Nasdaq Helsinki Oy's Mid Cap segment under industrial products and
services.
During January-September 2016, a total of 1,867,994 Aspo Plc shares with a
market value of EUR 12.7 million were traded on Nasdaq Helsinki, in other words,
6.0% of the shares changed hands. During the review period, the share price
reached a high of EUR 7.59 and a low of EUR 6.00. The average price was EUR
6.81 and the closing price at period-end was EUR 7.01. At the end of the review
period, the market value excluding treasury shares was EUR 214.4 million.
The number of Aspo Plc shareholders was 9,230 at period-end. A total of 659,013
shares, or 2.1% of the share capital, were nominee registered or held by non-
domestic shareholders.
Aspo Plc's new trading code (stock symbol) in Nasdaq Helsinki is ASPO.
Previously it was ASU1V. The new trading code was effective on June 27, 2016.
Flagging notification
On May 31, 2016 shareholder Tatu Vehmas informed that Aatos Vehmas and Liisa
Vehmas have authorized him to use the voting rights of Aspo shares owned by them
so that his share of the voting rights in Aspo Plc has increased above five per
cent (5%).
EVENTS AFTER THE REVIEW PERIOD
On October 17, 2016, Aspo decided to redeem the outstanding share of the EUR 20
million hybrid bond. The outstanding share amounts to EUR 4.58 million. The bond
was issued in November 2013. The redemption will be made on November 18, 2016 in
accordance with the terms and conditions of the hybrid bond. Due to the
subordinate nature of the hybrid bond, the outstanding share is recognized in
the equity of Aspo Group until the redemption.
SHAREHOLDERS' MEETING
Dividend
The Annual Shareholders' Meeting of Aspo Plc on April 7, 2016, approved the
payment of a dividend totalling EUR 0.41 per share according to the Board's
proposal. The dividend's payment date was April 18, 2016.
Board of Directors and Auditor
The Annual Shareholders' Meeting re-elected to the Board of Directors LL.M, MBA
Mammu Kaario, LL.M. Roberto Lencioni, B.Sc. (Econ.), eMBA Gustav Nyberg and
M.Sc. (Tech.) Risto Salo and M.Sc. (Econ.) Mikael Laine and D.Sc. (Econ.) Salla
Pöyry were elected as new members of the Board of Directors. At the Board's
organizing meeting held after the Annual Shareholders' Meeting, Gustav Nyberg
was elected as Chairman of the Board and Roberto Lencioni as Vice-Chairman. At
the meeting the Board also decided to appoint Roberto Lencioni Chairman of the
Audit Committee and Mammu Kaario, Mikael Laine and Salla Pöyry as committee
members. The authorized public accounting firm Ernst & Young Oy was elected as
company auditor.
Shareholders' Nomination Board
The Annual Shareholders' Meeting decided to establish a permanent Shareholders'
Nomination Board to prepare proposals to the Annual Shareholders' Meeting for
the election and remuneration of the members of the Board of Directors and the
remuneration of the Board committees. In addition, the Meeting adopted the
Charter of the Shareholders' Nomination Board.
In October, the following members have been appointed to Aspo's Shareholders'
Nomination
Board: Veronica Timgren, Member of the Board, Oy Havsudden Ab; Reima Rytsölä,
Executive Vice-President, Varma Mutual Pension Insurance Company; Tatu Vehmas,
Student of Economics, Vehmas family and Mikko Mursula, Chief Investment Officer,
Ilmarinen Mutual Pension Insurance Company. In addition, Gustav Nyberg, Chairman
of Aspo Board of Directors, acts as an expert member of the Nomination Board.
The Nomination Board elects a Chairman from among its members.
The Shareholders' Nomination Board prepares and presents to the Annual
Shareholders' Meeting proposals on the remuneration, number and members of the
Board of Directors. The Nomination Board will forward its proposals for the
2017 Annual Shareholders' Meeting to the Board of Directors by January 1, 2017.
Board authorizations
Authorization of the Board of Directors to decide on the acquisition of treasury
shares
The Annual Shareholders' Meeting on April 7, 2016 authorized the Board of
Directors to decide on the acquisition of no more than 500,000 of the treasury
shares using the unrestricted equity of the company. The authorization includes
the right to accept treasury shares as a pledge. The authorization will remain
in force until the Annual Shareholders' Meeting in 2017 but not more than 18
months from the approval at the Shareholders' Meeting. The Board of Directors
has not used the authorization.
Authorization of the Board of Directors to decide on a share issue of treasury
shares
The Annual Shareholders' Meeting on April 9, 2015, authorized the Board of
Directors to decide on a share issue, through one or several installments, to be
executed by conveying treasury shares. An aggregate maximum amount of 900,000
shares may be conveyed based on the authorization. The authorization will remain
in force until September 30, 2018.
The Board of Directors has used the authorization on March 18, 2016 and granted
88,970 treasury shares to employees included in the earnings period 2015 of the
share-based incentive plan 2015-2017.
Authorization of the Board of Directors to decide on a rights issue
The Annual Shareholders' Meeting on April 9, 2015, authorized the Board of
Directors to decide on a rights issue for consideration. The authorization is
proposed to include the right of the Board of Directors to decide on all of the
other terms and conditions of the conveyance and thus also includes the right to
decide on a directed share issue, in deviation from the shareholders' pre-
emptive right, if a compelling financial reason exists for the company to do so.
The total number of new shares to be offered for subscription may not exceed
1,500,000. The authorization will remain in force until September 30, 2018. The
Board of Directors has not used the authorization.
ASPO BOARD OF DIRECTOR'S DECISION CONCERNING THE DIVIDENDS STARTING FROM 2017
Following the global trend, the Board of Directors of Aspo Plc has decided to
propose to the Annual Shareholders' Meeting that a twice-a-year distribution
policy be adopted starting from 2017.
Aspo Board of Directors has also confirmed that Aspo will maintain its current
dividend policy, whereby the company distributes in dividends at least half of
the annual profit on average.
LEGAL PROCEEDINGS
On February 27, 2015, the Helsinki District Court announced its judgement in the
case between ESL Shipping and the Finnish State regarding fairway dues levied
during the years 2001-2004. According to the judgement, the Finnish State will
be required to refund to ESL Shipping approximately EUR 3.0 million in
accordance with the company's claim, as well as legal expenses and interest. The
State lodged an appeal against the District Court's judgement and, in its ruling
issued on August 8, 2016, the Court of Appeal overruled the Helsinki District
Court's judgement and dismissed ESL Shipping's legal action as time-barred. The
company has applied for a leave to appeal from the Supreme Court.
The shipping company won legal proceedings against Indian ABG Shipyard
concerning the compensation payable for repairs made to m/s Alppila during the
warranty period. The vessel was delivered to ESL Shipping in 2011. According to
the ruling of the arbitration court, ABG Shipyard was required to refund the
repair expenses and interest to ESL Shipping according to the company's claims.
The impact of ruling will be taken into account in the interim report during the
period over which the imposed payment is received.
Helsinki October 27, 2016
ASPO Plc
Board of Directors
ASPO GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
7-9/2016 7-9/2015
MEUR % MEUR %
Net sales 118.2 100.0 111.5 100.0
Other operating income 0.3 0.3 0.1 0.1
Materials and services -88.1 -74.5 -78.9 -70.8
Employee benefit expenses -9.3 -7.9 -9.5 -8.5
Depreciation, amortization and impairment losses -2.9 -2.5 -2.9 -2.6
Other operating expenses -12.2 -10.3 -13.0 -11.7
Operating profit 6.0 5.1 7.3 6.5
Financial income and expenses -0.8 -0.7 -1.0 -0.9
Profit before taxes 5.2 4.4 6.3 5.7
Income taxes -0.2 -0.2 -0.5 -0.4
Profit for the period 5.0 4.2 5.8 5.2
Other comprehensive income
Items that may be reclassified to profit or loss
in subsequent periods:
Translation differences -0.4 -3.5
Cash flow hedges -0.1 0.0
Available-for-sale financial assets 0.0
Reclassification 0.0
Income tax on other comprehensive income 0.0 0.0
Other comprehensive income for the period, net
of taxes -0.5 -3.5
Total comprehensive income 4.5 2.3
Profit attributable to shareholders 5.0 5.8
Total comprehensive income attributable to
shareholders 4.5 2.3
Earnings per share, EUR 0.16 0.18
Diluted earnings per share, EUR 0.16 0.18
1-9/2016 1-9/2015 1-12/2015
MEUR % MEUR % MEUR %
Net sales 332.9 100.0 323.7 100.0 455.8 100.0
Other operating income 0.9 0.3 1.0 0.3 1.2 0.3
Materials and services -243.7 -73.2 -229.5 -70.9 -318.2 -71.4
Employee benefit expenses -29.9 -9.0 -30.6 -9.5 -41.0 -9.2
Depreciation, amortization and
impairment losses -8.6 -2.6 -9.6 -3.0 -12.5 -2.8
Other operating expenses -37.5 -11.3 -40.6 -12.5 -54.7 -12.3
Operating profit 14.1 4.2 14.4 4.4 20.6 4.6
Financial income and expenses -2.4 -0.7 3.0 0.9 0.7 0.2
Profit before taxes 11.7 3.5 17.4 5.4 21.3 4.8
Income taxes -1.0 -0.3 -1.3 -0.4 -1.5 -0.3
Profit for the period 10.7 3.2 16.1 5.0 19.8 4.4
Other comprehensive income
Items that may be reclassified
to profit or loss in subsequent
periods:
Translation differences 1.1 -3.0 -5.8
Cash flow hedges -0.8 0.1 0.3
Available-for-sale financial
assets 1.8 1.8
Reclassification -4.9 -4.9
Income tax on other
comprehensive income 0.0 0.6 0.6
Other comprehensive income for
the period, net of taxes 0.3 -5.4 -8.0
Total comprehensive income 11.0 10.7 11.8
Profit attributable to
shareholders 10.7 16.1 19.8
Total comprehensive income
attributable to shareholders 11.0 10.7 11.8
Earnings per share, EUR 0.32 0.50 0.61
Diluted earnings per share, EUR 0.32 0.50 0.61
ASPO GROUP CONSOLIDATED BALANCE SHEET
9/2016 9/2015 Change 12/2015
MEUR MEUR % MEUR
Assets
Other intangible assets 9.7 11.3 -14.2 11.1
Goodwill 42.6 42.7 -0.2 42.7
Tangible assets 112.8 108.7 3.8 116.4
Available-for-sale financial assets 0.2 0.2 0.0 0.2
Receivables 3.7 3.7 0.0 3.8
Total non-current assets 169.0 166.6 1.4 174.2
Inventories 59.4 52.8 12.5 48.4
Accounts receivable and other receivables 64.3 58.0 10.9 58.3
Cash and cash equivalents 18.6 32.5 -42.8 23.9
Total current assets 142.3 143.3 -0.7 130.6
Total assets 311.3 309.9 0.5 304.8
Equity and liabilities
Share capital 17.7 17.7 0.0 17.7
Other equity 92.1 84.1 9.5 84.9
Total equity 109.8 101.8 7.9 102.6
Non-current liabilities 114.6 98.2 16.7 121.1
Current liabilities 86.9 109.9 -20.9 81.1
Total shareholders' equity and liabilities 311.3 309.9 0.5 304.8
ASPO GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
A = Share capital F = Translation differences
B = Share premium G = Retained earnings
C = Fair value reserve H = Total
D = Other reserves
E = Treasury shares
MEUR A B C D E F G H
Equity Jan. 1, 2016 17.7 4.3 -0.3 31.9 -2.7 -21.8 73.5 102.6
Comprehensive income:
Profit for the period 10.7 10.7
Translation differences 1.1 1.1
Cash flow hedges* -0.8 -0.8
Total comprehensive income -0.8 1.1 10.7 11.0
Transactions with owners:
Dividend payment -12.5 -12.5
Change in hybrid instruments 9.6 -1.1 8.5
Share-based incentive plan 0.4 -0.2 0.2
Transfer of reserves 0.1 -0.1 0.0
Total transactions
with owners 9.7 0.4 -13.9 -3.8
Equity Sept. 30, 2016 17.7 4.3 -1.1 41.6 -2.3 -20.7 70.3 109.8
Equity Jan. 1, 2015 17.7 4.3 1.9 32.0 -3.4 -16.0 67.6 104.1
Comprehensive income:
Profit for the period 16.1 16.1
Translation differences -3.0 -3.0
Cash flow hedges* 0.1 0.1
Available-for-sale financial
assets* -2.5 -2.5
Total comprehensive income -2.4 -3.0 16.1 10.7
Transactions with owners:
Dividend payment -12.2 -12.2
Interest on hybrid instrument -1.0 -1.0
Share-based incentive plan 0.7 -0.5 0.2
Transfer of reserves -0.1 0.1 0.0
Total transactions
with owners -0.1 0.7 -13.6 -13.0
Equity Sept. 30, 2015 17.7 4.3 -0.5 31.9 -2.7 -19.0 70.1 101.8
* net of taxes
ASPO GROUP CONSOLIDATED CASH FLOW STATEMENT
1-9/2016 1-9/2015 1-12/2015
MEUR MEUR MEUR
CASH FLOWS FROM OPERATING ACTIVITIES
Operating profit 14.1 14.4 20.6
Adjustments to operating profit 8.7 10.2 13.4
Change in working capital -21.6 -10.3 -4.2
Interest paid -2.7 -2.5 -3.1
Interest received 0.3 0.6 0.6
Income taxes paid -1.3 -1.7 -2.3
Net cash from operating activities -2.5 10.7 25.0
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in tangible and intagible assets -3.1 -4.3 -5.5
Advance payments for vessels -0.1 -9.2
Proceeds from sale of tangible assets 0.1 0.1 0.1
Proceeds from available-for sale financial
assets 4.9 4.9
Subsidiaries acquired, contigent consideration -0.3 -0.3
Business operations and subsidiaries sold -0.1 0.1
Net cash from investing activities -3.1 0.3 -9.9
CASH FLOWS FROM FINANCING ACTIVITIES
Change in current loans 10.8 -1.2 -21.9
Change in non-current loans -6.6 15.9 25.6
Repayments of hybrid instrument -15.7
Hybrid instrument, interests -0.6 -1.4
Proceeds from hybrid instrument issue 24.8
Dividends distributed -12.5 -12.2 -12.2
Net cash from financing activities 0.2 2.5 -9.9
Change in cash and cash equivalents -5.4 13.5 5.2
Cash and cash equivalents Jan. 1 23.9 19.3 19.3
Translation differences 0.1 -0.3 -0.6
Cash and cash equivalents at period-end 18.6 32.5 23.9
ASPO GROUP ASSETS AND LIABILITIES BY SEGMENT
Segments' assets, MEUR
9/2016 9/2015 12/2015
ESL Shipping 120.2 116.3 123.8
Leipurin 59.9 62.2 61.8
Telko 83.2 75.0 65.7
Kauko 23.4 21.4 26.8
Unallocated items 24.6 35.0 26.7
Total 311.3 309.9 304.8
Segments' liabilities, MEUR
9/2016 9/2015 12/2015
ESL Shipping 9.3 9.9 11.0
Leipurin 12.3 15.1 14.9
Telko 32.0 27.3 27.1
Kauko 7.6 7.4 12.6
Unallocated items 140.3 148.4 136.6
Total 201.5 208.1 202.2
ACCOUNTING PRINCIPLES
Aspo Plc's interim report report has been prepared in accordance with the
principles of IAS 34 Interim Financial Reporting. As of January 1, 2016, Aspo
applies certain new or amended IFRS standards and IFRIC interpretations as
described in the 2015 financial statements. The adoption of these new or amended
standards has not had any substantial impact on the reported figures. In other
respects, the same accounting principles have been adopted in the interim report
as in the consolidated financial statements on December 31, 2015. The
information in this report is unaudited.
Aspo Plc has adopted the guidance on alternative key figures issued by the
European Securities and Market Authority (ESMA). In addition to IFRS figures,
the company releases other commonly used key figures which are mainly derived
from the statement of comprehensive income and balance sheet. According to the
management, key figures clarify the picture drawn by the statement of
comprehensive income and balance sheet of Aspo's financial performance and
financial position. The calculation formulas of key figures have been described
on page 70 of the Year 2015 report.
SEGMENT REPORTING
Aspo Group's operational segments are ESL Shipping, Leipurin, Telko and Kauko.
Other operations consists of Aspo Group's administration, the financial and ICT
service center, and a small number of other functions not covered by business
units.
The Group reports its net sales on the basis of the following geographical
division: Finland; Scandinavia; the Baltic countries; Russia, Ukraine and other
CIS countries; and other countries.
PRESS AND ANALYST CONFERENCE
A press and analyst conference will be arranged today, Thursday October
27, 2016 at 14.00 at the Paavo Nurmi cabinet at Hotel Kämp, Pohjoisesplanadi
29, 00100 Helsinki.
Helsinki, October 27, 2016
ASPO Plc
Aki Ojanen Arto Meitsalo
CEO CFO
For more information: Aki Ojanen, 09 521 4010, 0400 106 592, aki.ojanen
(a)aspo.com
DISTRIBUTION:
Nasdaq Helsinki
Key media
www.aspo.com
Aspo is a conglomerate that owns and develops businesses in Northern Europe and
growth markets focusing on demanding B-to-B customers. The aim of our strong
corporate brands - ESL Shipping, Leipurin, Telko and Kauko - is to be the market
leaders in their sectors. They are responsible for their own operations,
customer relationships and the development of these. Together they generate
Aspo's goodwill. Aspo's Group structure and business operations are developed
persistently without any predefined schedules.
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