Neo Industrial Oyj - Interim report (Q1 and Q3)

NEO INDUSTRIAL´S INTERIM REPORT FOR JANUARY-JUNE 2012 (H1/ 2011)

Neo Industrial Plc                     STOCK EXCHANGE RELEASE          27 July
2012 at 1.00 p.m. 



NEO INDUSTRIAL´S INTERIM REPORT FOR JANUARY-JUNE 2012 (H1/ 2011)

The Cable segment recorded a positive result, and Avilon's corporate
reorganisation programme was confirmed. Working capital funding continued to be
a challenge. 


- The Neo Industrial Group's net sales were EUR 57.7 million (67.9 million in
2011), decreasing by 15 percent. 

- Operating result improved by 193 percent to EUR 8.6 million (-9.2 million).

- Result for the period improved by 114 percent to EUR 1.6 million (-11.7
million). 

Net sales for the Cable segment in January-June were EUR 55.6 million (52.9
million). Sales developed favourably in Finland and other Nordic countries
throughout the review period. However, competition remained tough, and price
levels were lower than expected in power plant sales in Finland as well as in
the Baltic countries in general. The Cable segment's operating result for the
first half of the year was EUR 1.4 million (-0.9 million) of which EUR 0.9
million resulted from the conversion of  Reka Cables' leases for premises into
open-ended contracts. 

Net sales for the Viscose Fibres segment in January-June were 2.1 EUR million
(15.0 million). Avilon's production standstill continued throughout the review
period. The District Court of Pirkanmaa accepted Avilon's proposal for a
corporate reorganisation programme. Avilon's debts decreased by a total of EUR
14.5 million. The segment recorded a positive operating result of EUR 7.6
million (-7.8 million). 

Finndomo, the company that constitutes the Single Family Housing segment, filed
for corporate reorganisation during the review period. Omatalo Ltd acquired the
industrial premises and business operations of Finndomo's Sonkajärvi plant in
April. Neo Industrial recorded its EUR 6.4 million share in Finndomo as a
write-off in its balance sheet in June. The Single Family Housing segment is
reported separately for the last time in this interim report. 

KEY FIGURES

                              Q2/2012  Q2/2011  Change  H1/2012  H1/2011  Change
Net sales (EUR million)          31.4     36.3    -13%     57.7     67.9    -15%
Operating result (EUR            10.6     -2.0    629%      8.6     -9.2    193%
 million)                                                                       
Profit for the period (EUR        4.1     -4.2    197%      1.6    -11.7    114%
 million)                                                                       
Earnings per share, EUR          0.50    -0.66             0.13    -1.92        
ROI                                                        5.7%   -15.4%        
Equity ratio                                              19.3%    23.4%        

MANAGING DIRECTOR MARKKU E. RENTTO:

The proposals for corporate reorganisation programmes for the Viscose Fibres
and Single Family Housing segments were prepared during the first half of the
year, and the programme for the Viscose Fibres segment was confirmed. The Cable
segment's improved result had a positive effect on the Group's financial
performance. 

Working capital management was a key challenge for the Cable segment. The
growth outlook for the Cable segment is affected by the uncertain European
economy. However, underground cabling in Finland and European investments in
new energy forms show promise for the future. 

In the Viscose Fibres segment, Avilon's corporate reorganisation programme was
confirmed in June, which improved the company's debt structure and future
prospects. The company continued to make preparations for launching the
production of antimicrobial products. Moreover, it entered into a marketing
agreement related to the PPV technology marketing and license sales. 

In June, Neo Industrial decided to write off its shares in Finndomo Oy and
discontinue its Single Family Housing segment, which is reported separately for
the last time in this interim report. 

NEAR-TERM OUTLOOK

The outlook for the autumn is uncertain due to the economic situation in
Europe. In the Cable segment, investments in renewable energy create a great
number of new opportunities, as does increased cabling as a result of storms.
The Cable segment is expected to record a positive operating result also in the
second half of the year as well. 

In the Viscose Fibres segment, Avilon is expected to launch the production of
antimicrobial products in August, after the investment in post-processing has
been completed. Viscose production will be launched after the operating
conditions, right product mix and funding have been secured. In licensing
negotiations related to technologies, the first agreement is expected to be
concluded in the third quarter of 2012. 

DISCLOSURE POLICY OF INTERIM REPORT

Neo Industrial discloses relevant information related to its Interim Report
with this Stock Exchange Release. Neo Industrial's Interim Report Q2/ 2012 is
attached to this release and is also available on company's website at
www.neoindustrial.fi. 

Helsinki, 27 July 2012


Neo Industrial Plc

Board of Directors



More information:

Markku E. Rentto, Managing Director, tel. +358 20 720 9191

Sari Tulander, CFO, tel. +358 20 720 9192



www.neoindustrial.fi

Neo Industrial's strategy is to invest mainly in industrial companies with
similar synergic benefits. The aim of investments is with active ownership to
develop the purchased companies and establish additional value. Returns are
sought through both dividend flow and an increase in value. Neo Industrial's
class B shares are listed on the NASDAQ OMX Helsinki Stock Exchange. Neo
Industrial's business segments are Cable and Viscose Fibres. 

ENCL: Neo Industrial Interim Report Q2 2012

Attachments:

Neo Industrial Interim Report Q2 2012.pdf