2007-08-07 09:30:00 CEST
2007-08-07 09:30:00 CEST
REGULATED INFORMATION
Okmetic Oyj - Quarterly report
OKMETIC'S INTERIM REPORT 1 JANUARY - 30 JUNE 2007
OKMETIC OYJ STOCK EXCHANGE RELEASE 7 AUGUST 2007 1(16)
OKMETIC'S INTERIM REPORT 1 JANUARY - 30 JUNE 2007
Okmetic is a technology Company which manufactures and processes
silicon wafers for sensor and semiconductor industries worldwide.
The Company also sells technology. During the period under review,
Okmetic's net sales amounted to 32.9 million euro (31.8 million euro).
Operating profit was 2.6 million euro (2.6 million euro).
REVIEW IN BRIEF
- Net sales amounted to 32.9 million euro (31.8 million euro). The
comparable net sales for the period were 31.9 million euro.
- Operating profit was 2.6 million euro (2.6 million euro).
- The equity ratio strengthened, amounting to 56.8 percent (45.5%).
- Net sales and operating profit for the latter half of the year are
expected to come in at a level similar to the first half, minus the
1.0 million euro earned from technology sales during the first half
of the year.
- Okmetic and Nordea Bank Finland Plc signed an agreement concerning a
financial arrangement that helped to refinance Okmetic's syndicated
bank facility of around 20 million euro.
- The Company paid out 3.4 million euro worth of interest on
subordinated loans and 4.7 million euro worth of capital repayments.
KEY FIGURES
1,000 euro 1.1.07- 1.1.06- 1.1.06- 1.1.05- 1.1.04-
30.6.07 30.6.06 31.12.06 31.12.05 31.12.04
Net sales 32,935 31,784 63,694 49,822 54,524
Operating profit/loss 3,339 3,848 9,877 580 -5,735
% of net sales 10.1 12.1 15.5 1.2 -10.5
Earnings per share, 0.16 0.15 0.41 -0.10 -0.50
euro
Net cash flow from
operating activities 1,213 7,388 17,945 3,125 3,655
Return on equity, % 12.8 14.8 18.6 -5.1 -22.2
Gearing, % 35.8 75.4 31.3 99.5 116.9
Equity ratio, % 56.8 45.5 51.1 41.1 36.9
Average number of
personnel during the 361 350 360 359 446
period
PROJECTIONS FOR THE NEAR FUTURE
Volume-wise the most important market for Okmetic's sensor wafers is
the manufacture of pressure sensors and accelerometers. Demand for
these sensor types is expected to continue to grow steadily this year
as well.
The market situation within the semiconductor industry is expected to
remain unchanged. Annual forecasts have been revised downwards
somewhat in recent months. The current estimate for annual growth is
between two and six percent. The forecasts anticipate stronger growth
in 2008. (SIA, WSTS, Gartner, IC Insights)
2
Demand for silicon wafers grows hand in hand with the sales figures of
the customer industries. According to prevailing industry estimates,
the total volume of wafer shipments is expected to grow by around ten
percent in 2007. The growth will be most prominent in wafers with a
300 mm diameter. Demand for other wafer sizes, including those that
are important to Okmetic, are expected to experience more moderate
growth than the 300 mm wafers on an annual level. Okmetic's order book
for the rest of the year is nevertheless looking good.
Net sales and operating profit for the latter half of the year are
expected to come in at a level similar to the first half, minus the
1.0 million euro earned from technology sales during the first half of
the year.
MARKETS
Demand for micro-mechanical sensors worldwide grew steadily during the
first half of the year. On average sensor shipments grew by just over
ten percent per year (SIA). New, more advanced sensor products are
being introduced to the market on a regular basis, which is also
boosting the market potential of Okmetic's extensive customer base.
Within the semiconductor industry the market situation remained stable
throughout the first half of the year. Between January and May
semiconductor sales increased by a couple of percent from the
corresponding period of the previous year (WSTS, SIA). Okmetic's
customers experienced short-term fluctuations in their demand.
The growth in the demand for silicon wafers was unsteady during the
first half of the year. Growth mostly affected large wafer sizes.
Demand for the wafer sizes that Okmetic manufactures experienced a
passing period in the spring during which customers revised their
stock levels. Fluctuations in the shipment volumes of sensor wafers
were less significant.
SALES
The Group's net sales amounted to 32.9 million euro (31.8 million
euro). As a result of technology sales, comparable net sales for the
period amounted to 31.9 million euro.
Sales per customer segments
2007 (2006)
from beginning of year (on average)
Sensors 33% (34%)
Semiconductors 58% (59%)
Technology 9% (7%)
Okmetic's sensor business progressed in line with the set targets.
Sensor wafers are used in the automotive, aviation and pharmaceutical
industries, for example, as well as in consumer applications.
Sales of semiconductor wafers remained at the previous level.
Typically, semiconductor wafers are used in consumer electronics,
computers, telecommunications and automotive applications.
3
Technology sales comprise both manufacturing technology and crystal
sales.
Net sales per market area
2007 (2006)
from beginning of year (on average)
North America 52% (55%)
Europe 31% (28%)
Asia 17% (17%)
PROFIT
Okmetic Group's profit was 2.6 million euro (2.6 million euro).
Earnings per share amounted to 0.16 euro (0.15 euro). A 0.2 million
euro loss, which resulted from decommissioning a piece of production
machinery towards the end of the period, weakened the profit.
FINANCING
The Group's financial situation is good. Net cash flow from operating
activities amounted to 1.2 million euro (7.4 million euro). Advance
payments made with reference to long-term raw material supply
agreements signed during the period and interest payments relating to
subordinated loans that have been recorded as debt weakened the cash
flow by 4.5 million euro.
The Company paid out 3.4 million euro worth of interest on
subordinated loans and 4.7 million euro worth of capital repayments.
Okmetic and Nordea Bank Finland Plc signed an agreement concerning a
financial arrangement that helped to refinance Okmetic's syndicated
bank facility of around 20 million euro in June.
The Group's investment costs amounted to a total of 4.8 million euro.
The largest costs resulted from the extension that is being built at
the Vantaa plant as part of a technology sale agreement and from
increasing the production capacity of the plant in Texas.
At the end of the period, cash and cash equivalents amounted to 8.2
million euro (4.9 million euro). Return on equity amounted to 12.8
percent (14.8%). The Group's equity ratio strengthened, amounting to
56.8 percent (45.5%). Shareholders' equity per share amounted to 2.49
euro (2.11 euro).
PRODUCT DEVELOPMENT
Product development accounted for 2.9 percent (2.6%) of Okmetic's net
sales.
Persistent product and process development efforts materialised in the
form of launching mass production of demanding SOI sensor wafers.
PERSONNEL
The average number of employees at Okmetic was 361 (350). At the end
of the period, 321 of these were located in Finland, 46 in the US and
two in Japan.
4
BUSINESS RISKS
The majority of Okmetic's sales are concluded in US dollars and a
small proportion in Japanese yen. Both currencies have weakened during
the first half of the year. Despite hedging, the Company remains
vulnerable to exchange rate fluctuations.
Okmetic believes that the availability of polycrystalline silicon, the
principal raw material of silicon wafers, will remain low and that the
increase in prices will continue. The Company has continued to secure
access to the raw material through long-term purchase agreements.
In June, Okmetic and Tokuyama Corporation, a Japanese manufacturer of
polycrystalline silicon, signed an agreement whereby Tokuyama will
supply Okmetic with polycrystalline silicon. The agreement will
improve the availability of Okmetic's raw material significantly and
is worth around 60 million dollars. It covers the years 2008-2012 and
includes a total of around 4.4 million dollars' worth of advance
payments, which will be made between now and next year.
SHARE PRICE DEVELOPMENT, TRADING AND STATUTORY DISCLOSURES
A total of 8.4 million shares (10.8 million shares) were traded
between 1 January and 30 June 2007, representing 50.0 percent (64.1%)
of the share total of 16.9 million. The lowest quotation of the period
was 3.34 euro (1.80 euro) and the highest was 4.67 euro per share
(3.70 euro), with an average of 4.06 euro (2.93 euro). The closing
quotation of the period was 4.40 euro (3.25 euro). The total market
value of the share capital amounted to 74.3 million euro (54.9 million
euro) at the end of the period.
At the end of June, the mutual investment fund OP-Suomi Arvo's holding
in Okmetic had increased to 6.29 percent, while the life insurance
company Henki-Sampo's holding had decreased to 4.47 percent and Etra-
Invest Oy's holding to 2.96 percent.
By the end of June, foreign investors' ownership of Okmetic's share
capital had increased from the 8.7 percent that it was at the
beginning of the year to 20.7 percent.
OWN SHARES
The Company has not repurchased its own shares and the Board of
Directors has not been authorised to repurchase or convey the
Company's own shares.
OPTIONS
The Company currently has no options on issue. The subscription period
for shares under the old option rights expired on 31 May 2007.
5
BOARD OF DIRECTORS' AUTHORISATION TO INCREASE SHARE CAPITAL
The Annual General Meeting held on 29 March 2007 authorised the Board
of Directors to decide on new issues and other share entitlements
according to the first paragraph of section 10 of the Finnish
Companies Act. The aggregate number of shares issued on the basis of
the authorisation may not exceed 3,377,500 shares, which represents
approximately 20 percent of all the shares of the Company. The Board
of Directors is authorised to decide on all the terms and conditions
concerning the issue of shares and other share entitlements. The
authorisation relates to the issuance of new shares. Issuance of
shares and other share entitlements can be carried out as a directed
issue. The authorisation is effective until the following Annual
General Meeting of Shareholders, however no later than 29 March 2008.
Vantaa, 7 August 2007
Board of Directors
6
FINANCIAL STATEMENTS JANUARY 1 - JUNE 30 2007 (unaudited)
ACCOUNTING PRINCIPLES
This Interim Report has been prepared in accordance with the IAS 34
standard. The accounting policies adopted are consistent with those
followed in the preparation of the Group's annual Financial Statements
for the year 2006 with the exception that Okmetic has adopted the
following new or amended standards on 1 January 2007:
- IFRS 7 Financial Instruments: Disclosures (effective in financial
years commencing after 1 January 2007)
- IAS 1 (amendment): IAS 1 Presentation of Financial Statements -
Capital Disclosures (effective in financial years commencing after 1
January 2007)
- IFRIC 8: Scope of IFRS 2 (effective in financial years commencing
after 1 May 2006)
- IFRIC 9: Reassessment of Embedded Derivatives (effective in
financial years commencing after 1 June 2006)
- IFRIC 10: Interim Financial Reporting and Impairment (effective in
financial years commencing after 1 November 2006).
The adoption has not had any significant impact on the information
presented in this Interim Report.
CONDENSED CONSOLIDATED INCOME STATEMENT
1,000 euro 1.4.- 1.4.- 1.1.- 1.1.- 1.1.-
30.6.07 30.6.06 30.6.07 30.6.06 31.12.06
Net sales 15,613 15,872 32,935 31,784 63,694
Cost of sales -13,442 -13,130 -26,100 -25,142 -48,165
Gross profit 2,170 2,742 6,835 6,642 15,529
Other income and -1,508 -1,599 -3,496 -2,794 -5,652
expenses
Operating profit 662 1,142 3,339 3,848 9,877
Financial income and
expenses -455 -735 -806 -1,280 -3,198
Profit before taxes 207 407 2,533 2,568 6,679
Income taxes 1) 5 - 95 - 206
Profit for the period 212 407 2,627 2,568 6,885
Basic and diluted
earnings per share 0.02 0.02 0.16 0.15 0.41
1) In addition to deferred tax assets and liabilities, the estimated
income taxes for the period of 2007 include the tax loss carry-
forwards of the Group Companies.
7
CONDENSED CONSOLIDATED BALANCE SHEET
1,000 euro June 30, June 30, December 31,
2007 2006 2006
Assets
Non-current assets
Property, plant and equipment 47,307 54,148 47,821
Available-for-sale financial 1,054 2,029 1,502
assets
Other receivables 1,233 238 123
Total non-current assets 49,593 56,415 49,446
Current assets
Inventories 6,643 6,728 7,915
Receivables 9,635 10,414 9,036
Cash and cash equivalents 8,162 4,882 13,184
Total current assets 24,440 22,025 30,135
Total assets 74,033 78,439 79,581
Equity and liabilities
Equity
Share capital 11,821 11,821 11,821
Other equity 30,201 23,728 28,259
Total equity 42,023 35,549 40,080
Liabilities
Non-current liabilities 20,679 15,524 21,294
Current liabilities 11,332 27,366 18,206
Total liabilities 32,011 42,890 39,501
Total equity and liabilities 74,033 78,439 79,581
8
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
1,000 euro January 1- January 1- January-
June 30, June 30, December 31,
2007 2006 2006
Cash flows from operating
activities:
Profit before taxes 2,533 2,568 6,679
Adjustments 5,089 5,142 10,259
Change in working capital -2,392 706 2,652
Interest and dividends 228 72 172
received
Interest paid and other
financial items -4,182 -1,099 -1,818
Taxes paid -63 - -
Net cash from operating 1,213 7,388 17,945
activities
Cash flows from investing
activities:
Proceeds from investing 912 102 4,777
activities
Capital expenditure -4,344 -440 -1,203
Net cash used in investing -3,432 -338 3,574
activities
Cash flows from financing
activities:
Payments of long-term -20,665 -3,594 -6,916
borrowings
Proceeds of long-term 18,000 - 10,000
borrowings
Payments of finance lease -99 -7 -343
liabilities
Payments of short-term - -3,000 -15,500
borrowings
Net cash used in financing -2,764 -6,601 -12,759
activities
Increase (+) / decrease (-) in
cash and cash equivalents -4,983 449 8,760
Exchange rate changes -39 -19 -27
Cash and cash equivalents at
the beginning of the period 13,184 4,452 4,452
Cash and cash equivalents at
the end of the period 8,162 4,882 13,184
9
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
1,000 euro Share Share Trans- Fair Re- Total
capital premium lation value tained equity
differ- reserve earnings
ences
Balance at Jan
1, 2007 11,821 20,256 669 -1,042 8,376 40,080
Available-for-
sale financial
assets:
Fair value
gains/
losses -448 -448
recognised
directly in
equity
Translation -167 -167
differences
Equity component
of convertible
loan notes -70 -70
Net income
recognised
directly in - -70 -167 -448 - -686
equity
Profit/loss for
the period 2,627 2,627
Total recognised
income and - -70 -167 -448 2,627 1,942
expenses
Balance at June
30,2007 11,821 20,185 502 -1,491 11,004 42,023
Balance at Jan
1,2006 11,821 36,401 759 -340 -14,654 33,987
Available-for-
sale financial
assets:
Fair value
gains/
losses -185 -185
recognised
directly in
equity
Translation
differences -821 -821
Losses offset
from previous
financial years -16,145 16,145 0
Net income
recognised
directly in - -16,145 -821 -185 16,145 -1,005
equity
Profit/loss for
the period 2,568 2,568
Total recognised
income and - -16,145 -821 -185 18,713 1,562
expenses
Balance at June
30,2006 11,821 20,256 -62 -525 4,059 35,549
10
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
1,000 euro January 1- January 1- January 1-
June 30, June 30, December 31,
2007 2006 2006
Carrying amount at the
beginning 47,821 58,629 58,629
of the period
Additions 4,753 407 1,671
Disposals -1,044 0 -3,118
Depreciation -4,059 -4,265 -8,486
Exchange differences -164 -624 -875
Carrying amount at the end
of the period 47,307 54,148 47,821
CHANGES IN INTEREST-BEARING LIABILITIES
-
1,000 euro January 1- January 1- January 1-
June 30, June 30, December 31,
2007 2006 2006
Carrying amount at the
beginning 25,731 38,279 38,279
of the period
Proceeds of loans from
financial institutions 17,974 - 9,962
Repayments of loans from
financial institutions -15,962 -6,578 -22,403
Repayments of subordinated -4,591 - -
loans
Changes in finance lease 43 -23 -107
liabilities
Carrying amount at the end
of the period 23,194 31,679 25,731
11
COMMITMENTS AND CONTINGENCIES
1,000 euro June 30, June 30, December
2007 2006 31,2006
Loans secured by mortgages
or pledges 17,500 24,618 18,870
Mortgages 34,046 40,701 30,610
Other pledges - 8,908 8,908
Off-balance sheet lease
commitments 253 750 322
Nominal values of derivative
contracts:
Currency forward agreements 2,000 2,402 3,355
Interest-rate swap contracts - 9,000 -
Electricity derivatives 2,388 2,306 2,580
Fair values of derivative
contracts:
Currency forward agreements 11 48 117
Interest-rate swap contracts - -2 -
Electricity derivatives 209 556 80
The contract price of the derivatives has been used as the nominal
value of the underlying asset. Derivative contracts are held for
hedging.
RELATED PARTY TRANSACTIONS
Key management compensation during the period under review amounted to
664 thousand euro (706 thousand euro).
12
KEY FIGURES SHOWING FINANCIAL PERFORMANCE
January 1 - January 1 - January 1 -
June 30, June 30, December 31,
2007 2006 2006
Net sales 32,935 31,784 63,694
Change in net sales compared
to the previous year's 3.6 30.9 27.8
period, %
Export and foreign operations
share of net sales, % 94.5 95.7 95.7
Operating profit 3,339 3,848 9,877
% of net sales 10.1 12.1 15.5
Profit before taxes 2,533 2,568 6,679
% of net sales 7.7 8.1 10.5
Return on equity, % 12.8 14.8 18.6
Return on investment, % 10.8 10.3 14.2
Non-interest bearing 8,817 11,212 13,770
liabilities
Gearing, % 35.8 75.4 31.3
Equity ratio, % 56.8 45.5 51.1
Capital expenditure 4,753 407 1,671
% of net sales 14.4 1.3 2.6
Depreciation 4,059 4,265 8,486
Research and development
expenditure 1) 970 835 1,731
% of net sales 2.9 2.6 2.7
Average number of personnel
during the period 361 350 360
Personnel at the end of the 369 379 365
period
1) Research and development expenditure has been presented in gross
figures and only long-term projects based on research program have
been taken into account.
13
KEY FIGURES PER SHARE
June 30, June 30, December 31,
2007 2006 2006
Continuing operations:
Earnings per share basic
and diluted, euro 0.16 0.15 0.41
Equity per share, euro 2.49 2.11 2.37
Dividend per share, euro 0.00 0.00 0.00
Dividend/earnings, % - - -
Price/earnings (P/E) 28.3 21.4 9.3
Share price development (Jan
1 -)
Average trading price 4.06 2.93 3.11
Lowest trading price 3.34 1.80 1.80
Highest trading price 4.67 3.70 3.75
Trading price at the end 4.40 3.25 3.69
of the period
Market capitalisation at the
end of the period, 1,000 euro 74,305 54,884 62,315
Trading volume (Jan 1-)
Trading volume, transactions 8,441,471 10,818,550 16,500,162
In relation to weighted
average number of shares, % 50.0 64.1 97.7
Trading volume, euro 34,266,428 31,740,705 51,312,696
The weighted average number
of shares during the period
under review adjusted by the 16,887,500 16,887,500 16,887,500
share issue
The number of shares at the
end of the period adjusted by
the share issue 16,887,500 16,887,500 16,887,500
14
QUARTERLY KEY FIGURES
10-12/07 7-9/07 4-6/07 1-3/07
Net sales 15,613 17,322
Compared to previous -9.9 8.2
quarter, %
Operating profit 662 2,677
% of net sales 4.2 15.5
Profit before taxes 207 2,326
% of net sales 1.3 13.4
Net cash flow generated from:
Operating activities -414 1,628
Investing activities -1,582 -1,850
Financing activities -3,582 817
Increase/decrease in cash -5,578 595
and cash equivalents
Personnel at the end of the 369 360
period
10-12/06 7-9/06 4-6/06 1-3/06
Net sales 16,008 15,903 15,872 15,912
Compared to previous 0.7 0.2 -0.3 13.7
quarter, %
Operating profit 3,339 2,690 1,142 2,706
% of net sales 20.9 16.9 7.2 17.0
Profit before taxes 1,774 2,338 407 2,161
% of net sales 11.1 14.7 2.6 13.6
Net cash flow generated from:
Operating activities 4,863 5,694 3,431 3,957
Investing activities 3,996 -84 -329 -9
Financing activities -3,190 -2,968 -5,017 -1,584
Increase/decrease in cash 5,669 2,641 -1,915 2,364
and cash equivalents
Personnel at the end of the 365 368 379 337
period
15
DEFINITIONS OF KEY FINANCIAL
FIGURES
Return on equity, % (ROE) = Profit/loss for the period from
continuing operations x 100/
Equity (average for the period)
Return on investment, % = (Profit/loss before tax + interest and
(ROI) other financial expenses) x 100/
Balance sheet total - non-interest
bearing liabilities (average for the
period)
Equity ratio (%) = Total equity x 100/
Balance sheet total - advances received
Gearing (%) = (Interest-bearing liabilities - cash and
cash equivalents) x 100/
Equity
Earnings per share = Profit/loss for the period attributable
to the equity holders of the Parent
Company/
Adjusted weighted average number of
shares in issue during the period
Equity per share = Equity attributable to the equity holders
of the Parent Company/
Adjusted number of shares at the end of
the period
Price/earnings ratio (P/E) = Last adjusted trading price at the end of
the period/
Earnings per share
Average share price = Total traded amount in euro/
Adjusted number of shares traded during
the period
Market capitalisation at = Number of shares at the end of the period
the end of the period x trading price at the end of the period
Trading volume = Number of shares traded during the period/
Weighted average number of shares during
the period
All figures of the financial tables are rounded, and consequently the
sum of individual figures can deviate from the presented sum figure.
16
The figures are unaudited. In the written report, the figures in
parenthesis refer to the corresponding period in the previous year.
OKMETIC OYJ
Antti Rasilo
President
For further information, please contact:
President Antti Rasilo, Okmetic Oyj,
Tel. +358 40 746 1351, email: antti.rasilo@okmetic.com
Senior Vice President, Finance Esko Sipilä, Okmetic Oyj,
Tel. +358 9 5028 0286, email: esko.sipila@okmetic.com
Distribution:
Helsinki Exchanges
Principal media
IN BRIEF
Okmetic - Take it higher
Okmetic is a technology Company that manufactures and carries out
further processing on high-quality silicon wafers for the sensor and
semiconductor industries. The Company also sells technology. Okmetic's
wafers are part of a further processing chain, which produces end
products that improve human interaction and quality of life.
Okmetic's products are based on innovative product development, an
efficient production process and a strong partner network. The Company
offers its customers solutions that enhance their competitiveness and
profitability.
Okmetic has plants in Vantaa, Finland and in Allen, Texas in North
America. The Company is quoted on the Helsinki Stock Exchange (Nordic
Small Cap list: OKM1V). More information about the Company can be
found at www.okmetic.com.
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