2010-10-26 09:45:26 CEST
2010-10-26 09:45:42 CEST
REGULATED INFORMATION
Aspo - Interim report (Q1 and Q3)
ASPO GROUP INTERIM REPORT JANUARY 1 TO SEPTEMBER 30, 2010
ASPO Plc STOCK EXCHANGE RELEASE October 26, 2010 at 10:45 a.m.
ASPO: Strong growth in net sales and operating profit
January-September
- Aspo Group's net sales in January-September grew by 20% and amounted to EUR
286.8 million (EUR 239.3 million)
- Comparable operating profit grew by 65% to EUR 12.4 million (comparable
operating profit EUR 7.5 million plus EUR 3.8 million in non-recurring items)
- Profit before tax amounted to EUR 9.4 million (EUR 7.7 million)
- Earnings per share stood at EUR 0.27 (EUR 0.23)
July-September
- Aspo Group's net sales grew by 30% and amounted to EUR 104.2 million (EUR
80.0 million)
- Comparable operating profit grew by 150% to EUR 6.0 million (comparable
operating profit EUR 2.4 million plus a non-recurring item of EUR 3.2 million)
- Earnings per share stood at EUR 0.14 (EUR 0.13)
Aspo improved its full-year outlook for 2010 on September 13, 2010, because of
the favorable profit development.
Aspo maintains its guidance unchanged. Aspo will increase its net sales
significantly and improve its earnings per share.
KEY FIGURES
1-9/2010 1-9/2009 1-12/2009
Net sales, MEUR 286.8 239.3 329.4
Operating profit, MEUR 12.4 11.3 15.3
Share of net sales, % 4.3 4.7 4.6
Profit before tax, MEUR 9.4 7.7 11.7
Share of net sales, % 3.3 3.2 3.6
Personnel at the end of period 720 707 717
Earnings per share, EUR 0.27 0.23 0.33
EPS adjusted for dilution, EUR, 0.28 0.22 0.33
Comparable earnings per share, EUR 0.06 0.16
Equity per share, EUR 2.45 2.45 2.59
Equity ratio, % 30.0 32.4 34.6
Gearing, % 123.7 113.2 87.9
AKI OJANEN, ASPO'S CEO:"Aspo's favorable profit development continued in the third quarter. After
reviewing the profit figures for August, we improved our outlook for 2010.
Uncertainty has decreased in the industrial sectors we represent, and the
Group's investments in the growth markets have improved Aspo's profit
development. The uncertainty of the financial market was particularly visible
during the review period as changes in the external value of currencies.
It is important to Aspo that all of the businesses develop according to their
confirmed strategies and achieve the set profit targets. After the second
quarter we predicted that the second half of the year would be stronger than the
first. During the review period, all business segments developed in line with
the targets and we achieved a good operating profit. I am particularly pleased
that by carrying out our day-to-day business we have already exceeded the
earnings per share for the corresponding period in 2009, although last year's
operating profit included a total of EUR 5.5 million in non-recurring sales
gains and losses. The operating margin for the third quarter, 5.8%, exceeded the
Group's minimum target of 5.0%.
The change to the tonnage tax legislation confirmed in Finland is still being
considered by the European Commission. Experts have estimated that a decision
could be expected by the end of 2010. Aspo will monitor the situation. The
possible change to the tonnage tax legislation has not been taken into account
in our guidance. If the change to the tonnage lax legislation enters into force
it will have a positive effect on Aspo's profit after tax and earnings per
share."
ASPO AS A COMPANY
Aspo is a conglomerate that owns and develops business operations in northern
Europe and growth markets, focusing on demanding B-to-B customers. Aspo's strong
company brands - ESL Shipping, Leipurin, Telko and Kaukomarkkinat - aim 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
continually developed without any predefined schedules.
Aspo's operating segments are ESL Shipping, Leipurin, Telko and Kaukomarkkinat.
Other operations include Aspo Group's administration and other operations not
belonging to the business units.
The Group monitors its net sales on the basis of the following geographical
division: Finland, the Nordic countries, the Baltic countries, Russia and other
CIS countries (including Ukraine), and other countries.
OPERATIONAL PERFORMANCE
General uncertainty in the markets has decreased. The prices of sold raw
materials have stabilized and the transport volumes of industrial raw materials
important for Aspo have grown.
The national economies in Aspo's market areas are expected to have made an
upturn. General uncertainty in the financial markets has continued and it is
still difficult to estimate future developments. There have been changes in the
value of currencies during the review period.
ESL Shipping
ESL Shipping is the leading dry bulk shipping company operating in the Baltic
Sea area. At the end of the review period, the fleet consisted of 15 vessels, of
which the shipping company owns 12 in full. Two are rented and one is partially
owned.
7-9/2010 7-9/2009 Change 1-9/2010 1-9/2009 1-12/2009
Net sales, MEUR 20,6 13,8 6,8 59,6 46,2 63,8
Operating profit, MEUR 3,7 1,8 1,9 8,5 11,1 14,7
Personnel 197 201 -4 197 201 194
The international dry bulk cargo market saw an upturn during the review period.
ESL Shipping's operations are largely based on long-term agreements, and thus
the cargo income of the vessels remained on a good level throughout the review
period. The capacity was in full and efficient use. Concerning important
industrial sectors, the growth in the production of the Scandinavian steel
industry increased the volume of transports; at the same time, however, coal
transports in the energy industry declined from the previous year.
ESL Shipping's operating profit for the review period improved to EUR 3.7
million (1.8). The cargo market was normal for ESL Shipping and operations were
conducted as planned in good weather conditions. During the review period, the
pusher Alfa and the barge Para-Uno were removed from traffic for scrapping. The
write-down had a negative impact of EUR 0.2 million on the profit.
The cargo volume carried by ESL Shipping in July-September amounted to 3.4
million tons (2.5). The share of the steel industry was 2.3 million tons (1.4),
and the energy industry represented 0.9 million tons (1.0).
The 18,800 dwt ice-strengthened 1A Super class vessel ordered from India was
christened m/s Alppila at the shipyard. The vessel is being equipped for test
runs and deliver, and it is expected to be in use in the spring of 2011. In May,
two 56,150 dwt ice-strengthened Supramax class vessels were ordered from the
Korean company Hyundai Mipo. The project proceeds according to plan and, inter
alia, ice testing has been completed for the model vessel. The schedule for the
first vessel is being specified and the vessel is likely to be delivered already
in 2011. A financing agreement was signed for the vessel during the review
period. The second vessel will be completed in the spring of 2012. An option for
two more vessels has also been agreed on. The option remains valid until the end
of 2010.
Leipurin
Leipurin serves the baking and other sectors of food industry by supplying
ingredients, production machinery, and production lines, as well as related
expertise. Leipurin operates in Finland, Russia, Poland, the Baltic countries,
Ukraine, and Kazakhstan. In Russia, Leipurin has operations in several large
cities in addition to St. Petersburg and Moscow. Procurement operations are
international.
7-9/2010 7-9/2009 Change 1-9/2010 1-9/2009 1-12/2009
Net sales, MEUR 26.5 23.4 3.1 78.1 71.8 99.3
Operating profit, MEUR 0.9 0.6 0.3 2.2 2.1 3.2
Personnel 217 191 26 217 191 218
Raw material prices and demand in the food industry remained stable. The bakery
lines project deliveries agreed in the summer have started, and they will be
recognized as income in the fourth quarter and in early 2011.
The operating profit of the Leipurin business for the review period was EUR 0.9
million (0.6). Profit development in Russia continued to be good. During the
review period, a company was established in Kazakhstan and preparations were
started to launch business operations in Belarus. The sales and profitability of
bakery raw materials developed well, while no major project deliveries were
recognized in machinery sales.
Telko
Telko is the leading expert and supplier of industrial chemicals and plastic raw
materials in the Baltic Sea region. It operates in Finland, the Baltic
countries, Scandinavia, Poland, Ukraine, Russia, Belarus, and China. Procurement
operations are international. Business is based on representation by the best
international principals and on the expertise of the personnel. Telko develops
the production and competitiveness of its customers' products in cooperation
with them.
7-9/2010 7-9/2009 Change 1-9/2010 1-9/2009 1-12/2009
Net sales, MEUR 47.6 35.3 12.3 127.3 95.1 128.8
Operating profit, MEUR 1.8 4.9 -3.1 5.1 3.2 3.1
Personnel 202 202 0 202 202 193
The increase in sold raw material prices, which started in the fall of 2009,
leveled off, and prices partially declined in the third quarter. Demand
continued to be good in all market areas. The strengthening of the euro and the
10% decrease in the value of the ruble and the Ukrainian hryvnia weakened the
profit for the review period. Net sales growth continued to be strong in the
third quarter at the rate of 35%. Of the growth, 47% was attributable to volume
growth and 53% to higher prices.
Telko's operating profit for the review period was EUR 1.8 million (comparable
operating profit EUR 1.7 million plus a non-recurring sales gain of EUR 3.2
million on the divestment of the terminal services in Hamina). Demand increased
and operating profit improved both in industrial chemicals and plastic raw
materials. The demand for lubricants increased slightly.
The launch of operations in China has gone well. In the first phase, Telko will
focus on offering services to European customers operating in China who use
plastic raw materials, as well as serving as Telko's regional procurement
office. The most important industrial segments in China are telecommunications,
machine and equipment manufacturers, and subcontractors. In line with its
strategy, Telko has continued its growth in Russia and established offices in
the metropolitan areas of Yaroslavl and Samara.
Kaukomarkkinat
Kaukomarkkinat specializes in energy efficiency technology, solutions to improve
efficiency in the process industry, and security and digital products.
Operations are based on the products of the best companies in the industry and
the willingness of the company's own experts to improve the operations and
efficiency of its customers. Kaukomarkkinat operates in Finland, Poland, Russia,
China, and Vietnam.
7-9/2010 7-9/2009 Change 1-9/2010 1-9/2009 1-12/2009
Net sales, MEUR 9.5 7.4 2.1 21.8 25.1 36.4
Operating profit, MEUR 0.6 -0.1 0.7 -0.2 0.0 0.5
Personnel 90 88 2 90 88 90
The order book for industrial project deliveries and the sales of energy
efficiency products improved during the review period. The sales and
profitability of energy efficiency products developed well as the hot summer
boosted the demand for air-conditioning equipment. The Panasonic brand
represented by Kaukomarkkinat was ranked high in heating and energy efficiency
tests, which increased sales and advance orders for the rest of the year. No Far
East project deliveries were recognized as income in the review period. In
Finland, the sales of security and digital products remained on a normal level.
Kaukomarkkinat's operating profit for the review period was EUR 0.6 million (-
0.1).
Other operations
Other operations include Aspo Group's administration and other operations not
belonging to the business units.
7-9/2010 7-9/2009 Change 1-9/2010 1-9/2009 1-12/2009
Net sales, MEUR 0.0 0.1 -0.1 0.0 1.1 1.1
Operating profit, MEUR -1.0 -1.6 0.6 -3.2 -5.1 -6.2
Personnel 14 25 -11 14 25 22
The Group's administrative costs have decreased as planned since the
acquisitions in the spring of 2008.
NET SALES
January-September
Aspo Group's net sales in January-September 2010 amounted to EUR 286.8 million
(239.3). ESL Shipping's net sales grew in spring, particularly after a harsh icy
winter, and have remained on a good level. Leipurin's net sales grew as the
volume of bakery raw material sales increased. No bakery lines were delivered
during the review period, which slowed down net sales growth. Telko's net sales
grew heavily as a result of volume growth and price strengthening.
Kaukomarkkinat's net sales, which declined in the first half of the year, saw an
upswing as demand recovered in the latter half of the review period.
July-September
Aspo Group's net sales in July-September amounted to EUR 104.2 million compared
with EUR 80.0 million in the corresponding period last year.
Net sales by segment, MEUR
7-9/2010 7-9/2009 Change 1-9/2010 1-9/2009 1-12/2009
ESL Shipping 20.6 13.8 6.8 59.6 46.2 63.8
Leipurin 26.5 23.4 3.1 78.1 71.8 99.3
Telko 47.6 35.3 12.3 127.3 95.1 128.8
Kaukomarkkinat 9.5 7.4 2.1 21.8 25.1 36.4
Other operations 0.0 0.1 -0.1 0.0 1.1 1.1
Total 104.2 80.0 24.2 286.8 239.3 329.4
There is no considerable inter-segment net sales.
Net sales by market area, MEUR
7-9/2010 7-9/2009 Change 1-9/2010 1-9/2009 1-12/2009
Finland 44.6 37.7 6.9 120.7 113.0 151.8
Nordic countries 13.6 7.0 6.6 39.5 20.4 30.0
Baltic countries 11.7 9.8 1.9 31.2 27.8 37.0
Russia + other CIS
countries 24.0 14.0 10.0 63.3 38.2 56.2
Other countries 10.3 11.5 -1.2 32.1 39.9 54.4
Total 104.2 80.0 24.2 286.8 239.3 329.4
The strong growth of Russia, CIS countries, and Ukraine continued, and this
market area reached record net sales. In the Nordic region, net sales almost
doubled from the corresponding period last year. The recession continued in the
Baltic market area, which meant net sales growth was moderate.
If ESL Shipping's raw material exports from Russia are included in the Russian
net sales, the sales for Russia increased to EUR 30.0 million (20.4) during the
review period. The transport volume for Russia-based coal was below the 2009
level.
MEUR 7-9/2010 7-9/2009 Change 1-9/2010 1-9/2009 1-12/2009
Russia + other CIS
countries 30.0 20.4 9.6 80.7 64.0 87.9
EARNINGS
January-September
Aspo Group's operating profit in January-September was EUR 12.4 million (11.3),
i.e. 4.3% of net sales. Planned depreciation totaled EUR 6.1 million (6.8). The
Group's net financial costs totaled EUR 3.0 million (3.6). January-September
profit before tax was EUR 9.4 million (7.7), and profit for the period amounted
to EUR 7.0 million (6.1). Return on equity was 14.3% (12.5).
July-September
Aspo Group's operating profit in July-September was EUR 6.0 million (EUR 2.4
million plus EUR 3.2 million of non-recurring sales gains), i.e. 5.8% of net
sales. ESL Shipping's operating profit was EUR 3.7 million (1.8). Leipurin's
operating profit was EUR 0.9 million (0.6). Telko's operating profit was EUR
1.8 million (comparable operating profit EUR 1.7 million plus a non-recurring
sales gain of EUR 3.2 million). Kaukomarkkinat's operating profit was EUR 0.6
million (-0.1). The operating profit of other operations was EUR -1.0 million (-
1.6).
Operating profit by segment, MEUR
7-9/2010 7-9/2009 Change 1-9/2010 1-9/2009 1-12/2009
ESL Shipping 3.7 1.8 1.9 8.5 11.1 14.7
Leipurin 0.9 0.6 0.3 2.2 2.1 3.2
Telko 1.8 4.9 -3.1 5.1 3.2 3.1
Kaukomarkkinat 0.6 -0.1 0.7 -0.2 0.0 0.5
Other operations -1.0 -1.6 0.6 -3.2 -5.1 -6.2
Total 6.0 5.6 0.4 12.4 11.3 15.3
Earnings per share January-September
Earnings per share was EUR 0.27 (0.23) and diluted earnings per share was EUR
0.28 (0.22). Equity per share was EUR 2.45 (2.45).
INVESTMENTS
Group investments in January-September amounted to EUR 11.9 million (5.2), of
which a majority was prepayments for ESL Shipping's vessel orders. Other
investments include dockings of ESL Shipping's vessels and ICT investments of
other business operations as well as smaller investments required for
operational expansion.
Investments by segment, acquisitions excluded, MEUR
7-9/2010 7-9/2009 Change 1-9/2010 1-9/2009 1-12/2009
ESL Shipping 0.1 0.6 -0.5 10.5 2.9 3.1
Leipurin 0.1 0.1 0.0 0.2 0.4 0.5
Telko 0.4 0.3 0.1 0.7 0.9 2.5
Kaukomarkkinat 0.1 0.1 0.0 0.4 0.4 0.6
Other operations 0.0 0.2 -0.2 0.1 0.6 0.7
Total 0.7 1.3 -0.6 11.9 5.2 7.4
FINANCING
The Group's financing position weakened slightly from the comparison period.
Compared with the second quarter, the financing position remained unchanged. The
Group's cash and cash equivalents amounted to EUR 10.7 million (7.2). There was
a total of EUR 89.2 million (78,9) in interest-bearing liabilities on the
consolidated balance sheet. The increase in interest-bearing liabilities was due
to prepayments for ESL Shipping's vessel orders which were financed with a bank
loan. Interest-free liabilities totaled EUR 61.6 million (55.3).
Aspo Group's gearing was 123.7% (113.2) and the equity ratio was 30.0% (32.4).
The main factors affecting equity in the review period were the Group's good
result and exchange rate losses on derivatives which fall under hedge
accounting. The balance sheet total grew from the comparison period as a result
of the prepayments for vessel investments.
The Group's cash flow from operations amounted to EUR 2,2 million (8.6) in
January-September. The cash flow was weakened from the comparison period due to
the commitment of working capital as a result of strong business growth. At the
end of the period the change in working capital stood at EUR -10.4 million
(6.3).
Cash flow from investments was EUR -10.7 million so the Group's free cash flow
in January-September was EUR -8.5 million. The cash flow from investments was
affected by the approximately EUR 10 million prepayments related to the vessel
investment made during the second quarter.
The dollar denominated cash flow of the approximately EUR 60 million vessel
order signed by ESL Shipping during the second quarter is largely hedged with
financial instruments. Because the currency derivatives used in the hedging fall
under hedge accounting the exchange losses or gains caused by exchange rate
fluctuations are mainly recognized as changes in equity.
The amount of binding revolving credit facilities signed between Aspo and its
main financing banks stood at EUR 50 million at the end of the period. At the
end of the period the binding revolving credit facilities remained fully unused.
The commercial papers issued totaled EUR 15 million. A loan agreement for vessel
financing was signed with Pohjola Bank in August. The value of the agreement is
EUR 25 million, and the loan period is 12 years.
Convertible capital loan
Aspo Plc has EUR 14,400,000 in a convertible capital loan issued in 2009. The
original principal of the loan was EUR 15,000,000. The loan period is June
30, 2009-June 30, 2014.
The loan units can be converted into Aspo shares. Each EUR 50,000 subscription
of the loan entitles the loan unit holder to convert the loan unit to 7,690 Aspo
Plc shares. The conversion rate is EUR 6.50. The loan can be converted annually
between January 2 and November 30. The conversion period ends on June 15, 2014.
As of September 30, 2010, a total of 92,280 new Aspo Plc shares corresponding
with 12 loan units have been subscribed from the convertible capital loan.
RISKS AND RISK MANAGEMENT
The economic upturn has further reduced the Group's risks in its main business
areas. Among Aspo's market areas, market uncertainty still affects industrial
demand in Western countries. The Group is growing, in particular, in developing
market areas where growth risks are also affected by investments, interest rate
levels, exchange rates, and customers' liquidity, as well as rapid changes in
legislation and import regulations.
In operational risks, the main risks, in terms of likelihood and effect, are
connected to the permanence of customer relationships, equipment sufficiency,
maintaining the balance level, and key personnel, as well as the application of
internal guidelines. Risks connected to goodwill are monitored with segment
specific impairment tests that are carried out at least once a year.
The Group has avoided considerable exchange rate losses due to active hedging of
currency positions and currency flow. The general credit loss risk is still high
but is normalizing as the economic situation among customers improves. The
currency risks related to vessel investments have largely been hedged and
brought within the scope of the Group's hedge accounting, and prepayments are
secured with guarantees.
Risk management is part of Aspo's internal supervision 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 defining sufficient measures,
implementation, and for monitoring and ensuring that the measures are
implemented as part of day to day operational control. Risk management is
coordinated by Aspo's CFO, who reports to the Group CEO.
Aspo Group's financing and financing risk management is centralized in the
parent company in accordance with the financing policy approved by the Board of
Directors.
PERSONNEL
Aspo Group's number of personnel stood at 720 (707) at the end of September. The
biggest change in the total number of personnel compared to the comparison
period was caused by the increase in personnel in the Leipurin segment in Latvia
due to a business acquisition, and the personnel for new units in Russia and
Ukraine.
Personnel by segment
7-9/2010 7-9/2009 Change 1-9/2010 1-9/2009 1-12/2009
ESL Shipping 197 201 -4 197 201 194
Leipurin 217 191 26 217 191 218
Telko 202 202 0 202 202 193
Kaukomarkkinat 90 88 2 90 88 90
Other operations 14 25 -11 14 25 22
Total 720 707 13 720 707 717
Rewarding
Aspo Group has a profit bonus system. Part of the Group's profit is paid as a
profit bonus to the personnel fund. The aim is that the personnel fund uses the
majority of the profit bonuses to purchase Aspo Plc shares. The long-term goal
is that the personnel will become a considerable shareholder group in the
company. All persons working at Aspo Group's Finnish subsidiaries are members of
the personnel fund. Aspo's business areas pay part of their earnings as bonuses
to the personnel. The calculation principles for the bonuses are decided on by
business area.
In 2009, Aspo decided on a new management shareholding program where the
potential gain is based on the earnings per share during 2009-2011. The
management shareholding program encompasses about 40 people in Aspo's management
and key personnel.
SHARE CAPITAL AND SHARES
Aspo Plc's registered share capital on September 30, 2010, was EUR
17,691,729.57, and the total number of shares was 26,498,343, of which the
company held 576,870 shares, i.e. 2.18% of the share capital. Aspo Plc has one
share series. Each share entitles the shareholder to one vote at the
shareholder's meeting. Aspo's share is quoted on NASDAQ OMX Helsinki Ltd's
medium-sized companies group under industrial products and services.
From the convertible capital loan issued by Aspo Plc in 2009, 30,760 new shares
corresponding with four loan units have been subscribed in July-September. The
new shares were entered into the trade register on September 3, 2010, and were
traded from September 6, 2010.
From January to September 2010 a total of 3,632,822 Aspo Plc shares with a
market value of EUR 26.5 million were traded on NASDAQ OMX Helsinki, in other
words, 13.7% of the stock changed hands. In January-September, the stock reached
a high of EUR 8.06 and a low of EUR 5.91. The average price was EUR 7.23 and the
closing price at the end of the period was EUR 8.00. At the end of the period,
the market capitalization excluding treasury shares was EUR 207.4 million.
At the end of the period, the number of Aspo Plc shareholders was 5,513. A total
of 725,536 shares, or 2.7 % of the total share capital, were nominee registered
or held by non-domestic shareholders.
DECISIONS AT THE ANNUAL SHAREHOLDERS´ MEETING
Board authorizations
The Annual Shareholders' Meeting authorized the Board to decide on the
acquisition of company-held shares using the unrestricted shareholders' equity
of the company. The authorization covers a maximum of 500,000 own shares. The
shares shall be acquired through public trading, for which reason the shares are
acquired otherwise than in proportion to the holdings of the shareholders and
the consideration paid for the shares shall be the market price of Aspo's share
at the time of repurchase. The authorization does not exclude the Board's right
to resolve on a directed repurchase.
The shares shall be acquired to be used to finance or carry out possible
acquisitions or other arrangements, to balance the financial risk of the
company's share-ownership program or for other purposes determined by the Board.
The Board may not exercise the authorization if, after the acquisition, the
company or its subsidiary were to possess or have as a pledge more than 10% of
the company's stock.
The Annual Shareholders' Meeting also authorized the Board of Directors to
decide on a share issue, through one or several installments, to be executed by
conveying shares held by the company. An aggregate maximum amount of 1,120,000
shares may be conveyed based on the authorization. The authorization will be
used to finance and complete any acquisitions or other transactions, to carry
out the company's share-ownership programme or for other purposes to be
determined by the Board.
The authorization includes the right for the Board to decide on all the terms
and conditions of the conveyance, and thus also includes the right to decide on
a directed share issue deviating from the shareholders' pre-emptive right on the
conditions provided by law.
The authorizations are valid until the Annual Shareholders' Meeting in 2011, but
no more than 18 months from the approval at the Shareholders' Meeting. The Board
of Directors has not utilized the authorizations granted in 2010 before October
26, 2010.
OUTLOOK ON FUTURE DEVELOPMENT
Market outlook
Aspo estimates that the general economic situation is improving. The national
economies in northern Europe and in the growth markets, which are strategically
important for the Group, are recovering. Estimates are still made difficult by
the uncertainty that prevails on the financial markets.
Aspo's 2010 outlook
Aspo Group's current structure creates a good basis for growth in net sales and
profitability. The Group's costs are estimated to be considerably lower than in
2009. A possible change to the tonnage tax legislation would considerably
improve the Group's profit after tax and earnings per share. Changes in the
value of currencies outside the euro area may affect the company's net sales.
Aspo maintains its guidance unchanged. Aspo will increase its net sales
significantly and improve its earnings per share.
ESL Shipping
The aim of the shipping company is to maintain its position as the leading dry
cargo shipping company and transporter on the Baltic Sea by renewing its fleet.
M/s Alppila, the 18,800 dwt Eira class vessel being built in India, is late. The
vessel is being equipped for test runs and delivery, and it is expected to be in
use in the spring of 2011. Two 56,150 dwt Supramax class vessels are to be built
at the Hyundai-Vinashin shipyard. The project proceeds according to plan and,
inter alia, ice testing has been completed for the model vessel. The completion
schedule for the first vessel is being specified and the vessel is likely to be
completed in 2011. The second vessel will be completed in the spring of 2012.
The first vessel has binding financing. When these vessels are completed, the
shipping company's capacity will grow by over 50%.
The cargo markets are expected to remain at the current level on the Baltic Sea
during the late fall. A considerable share of the transportation capacity of
2010 has been covered with long-term agreements. The cargo volumes of the steel
industry are estimated to exceed 2009 levels and coal transports in the energy
sector are expected to decline from the previous year.
The amendment to the tonnage tax legislation that is awaiting approval from the
EU commission would have a considerable positive effect on ESL Shipping's profit
after tax if applied. Experts estimate that the new tonnage tax legislation will
become retroactively valid from January 1, 2010.
Leipurin
Organic growth in Leipurin's bakery raw material business is expected to
continue. The prices of cereal-based products are expected to rise by some
5-15% by the end of 2010 and at the beginning of 2011. Leipurin will continue to
establish itself in Russia's growing metropolitan areas and in Belarus. A new
customs union between Russia, Kazakhstan, and Belarus entered into force on July
1, 2010. The new offices create a good foundation for several years of growth.
Raw material sales to other food industry actors aim to expand to the Baltic,
Russian, and Kazakhstan markets. The positive financial effects of the expansion
will become visible in 2011.
The machine unit agreed on three significant project deliveries during the
review period, which will be recognized as income in the fourth quarter and
partially in 2011.
Telko
Telko will continue its profitable growth, with the focus continuing to rest on
Russia, Ukraine, and the CIS area. The Chinese unit established in the spring is
looking to achieve a profitable operational level in the fourth quarter. The
cost savings effect from the reorganization completed in 2009 is estimated to be
approximately EUR 2 million in 2010 fixed costs.
A new customs union between Russia, Belarus, and Kazakhstan entered into force
on July 1, 2010. Telko has established a subsidiary in Belarus and is preparing
to start operating in Kazakhstan during 2010. The company also aims to expand by
means of carefully targeted acquisitions.
Kaukomarkkinat
A stronger order book and completed project deliveries in China are expected to
improve Kaukomarkkinat's operating profit in the fourth quarter.
The company has also launched new strategic work with the aim of ensuring that
the company's operational profitability improves. Of the current operations,
Kaukomarkkinat will invest particular resources in energy efficiency products,
and expansion into new equipment solution and service packages is being
investigated. The aim is to expand the product and service portfolio to new
local energy solutions even before the year-end.
The need for energy efficiency products and services will increase heavily as
new Finnish- and EU-wide energy efficiency regulations for greenfield
construction and a new national energy policy are adopted, and as energy prices
increase.
Other operations
Other operations include Aspo Group's administration and other operations not
belonging to the business units. The related costs are expected to decrease
significantly from last year.
Operational risks
The general economic situation is affecting industrial demand in northern Europe
and the growth markets. It is difficult to foresee whether the growth in demand
in Aspo's market areas will continue, or whether there will be any other sudden
changes in business preconditions. Changes in the financial markets and in the
value of currencies may have an effect on the Group's future profit development.
A more detailed account of the risk management policy and the main risks have
been published in the 2009 annual report and on the company's website. A more
detailed account of the financial risks can be found in the notes to the 2009
annual report.
Helsinki, October 26, 2010
ASPO Plc
Board of Directors
ASPO GROUP INCOME STATEMENT
7-9/2010 7-9/2009
MEUR % MEUR %
Net sales 104.2 100 80.0 100
Other operating income 0.3 0.3 3.4 4.3
Depreciation and write-downs -2.0 -1.9 -2.3 -2.9
Operating profit 6.0 5.8 5.6 7.0
Financial income and expenses -1.2 -1.2 -1.3 -1.6
Profit before taxes 4.9 4.7 4.3 5.4
Profit for the period 3.6 3.5 3.5 4.4
Other comprehensive income
Translation differences -0.6 0.1
Cash flow hedges -3.4 -0.5
Income tax on other comprehensive income 0.9 0.2
Other comprehensive income for the year, net of
taxes -3.1 -0.2
Total comprehensive income 0.5 3.3
Profit attributable to shareholders 3.5 3.4
Non-controlling interest 0.1 0.1
Total comprehensive income attributable to
shareholders 0.4 3.2
Non-controlling interest 0.1 0.1
1-9/10 1-9/09 1-12/09
MEUR % MEUR % MEUR %
Net sales 286.8 100.0 239.3 100.0 329.4 100.0
Other operating income 1.0 0.3 7.3 3.1 10.5 3.2
Depreciation and write-downs -6.1 -2.1 -6.8 -2.8 -8.9 -2.7
Operating profit 12.4 4.3 11.3 4.7 15.3 4.6
Financial income and expenses -3.0 -1.0 -3.6 -1.5 -3.6 -1.1
Profit before taxes 9.4 3.3 7.7 3.2 11.7 3.6
Profit for the period 7.0 6.1 8.6
Other comprehensive income
Translation differences 0.6 -0.5 -0.1
Cash flow hedges -1.5 -0.5 0.4
Net result recoqnized directly to equity 0.2
Income tax on other comprehensive income 0.4 0.2 -0.1
Other comprehensive income for the year,
net of taxes -0.5 -0.8 0.4
Total comprehensive income 6.5 5.3 9.0
Profit attributable to shareholders 6.9 6.0 8.5
Non-controlling interest 0.1 0.1 0.1
Total comprehensive income attributable
to shareholders 6.4 5.2 8.9
Non-controlling interest 0.1 0.1 0.1
ASPO GROUP BALANCE SHEET
09/10 09/09 Change 12/09
MEUR MEUR % MEUR
Assets
Non-current assets
Intangible assets 15.8 15.9 -0.6 16.6
Goodwill 40.4 39.9 1.3 40.2
Tangible assets 55.4 61.2 -9.5 50.1
Available-for-sale assets 0.2 0.2 0.0 0.2
Long-term receivables 1.5 1.4 7.1 0.6
Shares in associated companies 1.3 0.9 44.4 1.6
Total non-current assets 114.6 119.5 -4.1 109.3
Current assets
Inventories 40.1 27.1 48.0 29.3
Sales and other receivables 49.0 43.7 12.1 44.7
Cash and bank deposits 10.7 7.2 48.6 11.5
Total current assets 99.8 78.0 27.9 85.5
Total assets 214.4 197.5 8.5 194.8
Shareholders' equity and liabilities
Shareholders' equity
Share capital 17.7 17.7 0.0 17.7
Other shareholders' equity 45.8 45.5 0.7 49.2
Shareholders' equity attributable to equity holders of
the parent 63.5 63.2 0.5 66.9
Non-controlling interest 0.1 0.1 0.0 0.0
Long-term liabilities 59.8 80.2 -25.4 57.1
Short-term liabilities 91.0 54.0 68.5 70.8
Total shareholders' equity and liabilities 214.4 197.5 8.6 194.8
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
A = Share capital F = Translation difference
B = Premium fund G = Retained earnings
C = Fair value fund H = Total
D = Other funds I = Non-controlling interest
E = Repurchased shares J = Total shareholders' equity
MEUR A B C D E F G H I J
Balance at
31.12.2009 17.7 4.3 0.0 2.8 -3.7 -1.6 47.5 67.0 -0.1 66.9
Comprehensive income:
Profit for the period 6.9 0.1
Translation difference 0.6
Cash flow hedge, net of taxes -1.1
Total comprehensive income -1.1 0.6 6.9 6.4 0.1
Transactions with owners:
Dividend payment -10.8
Share based payment 0.2 0.1 0.1
Conversion of convertible bond 0.5
Total transactions with owners 0.7 0.1 -10.7 -9.9
Balance at 30.9.2010 17.7 4.3 -1.1 3.5 -3.6 -1.0 43.7 63.5 0.1 63.6
Balance at
31.12.2008 17.7 4.3 -0.3 0.5 -3.7 -1.5 49.0 66.0 0.0 66.0
Comprehensive income:
Profit for the period 6.0 0.1
Translation difference -0.5
Cash flow hedge, net of taxes -0.3
Total comprehensive income -0.3 -0.5 6.0 5.2 0.1
Transactions with owners:
Dividend payment -10.8
Share based payment 0.4
Equity share of convertible
bond, net of taxes 2.4
Total transactions with owners 2.4 -10.4 -8.0
Balance at 30.9.2009 17.7 4.3 -0.6 2.9 -3.7 -2.0 44.6 63.2 0.1 63.3
ASPO GROUP CASH FLOW STATEMENT
1-9/10 1-9/09 1-12/09
MEUR MEUR MEUR
OPERATIONAL CASH FLOW
Operating profit 12.5 11.3 15.3
Adjustments to operating profit 6.3 0.6 1.7
Change in working capital -10.4 6.3 6.8
Interest paid -4.6 -4.5 -5.5
Interest received 1.2 0.4 0.2
Taxes paid -2.8 -5.5 -5.5
Total operational cash flow 2.2 8.6 13.0
INVESTMENTS
Investments in tangible and
intangible assets -11.2 -5.3 -3.8
Gains on the sale of tangible and intangible assets 0.3 3.0 13.8
Gains on the sale of business operations 11.1 11.1
Purchases of subsidiary shares -1.2
Sale of the subsidiary shares 1.0 1.0
Associated companies acquired 0.2
Total cash flow from investments -10.7 9.8 20.9
FINANCING
Change in short-term borrowings 17.1 -46.5 -32.7
Change in long-term borrowings 1.4 33.5 8.5
Dividends paid -10.8 -10.8 -10.8
Total financing 7.7 -23.8 -35.0
Increase / Decrease in liquid funds -0.8 -5.4 -1.1
Liquid funds in beginning of year 11.5 12.6 12.6
Liquid funds at period end 10.7 7.2 11.5
KEY FIGURES AND RATIOS
1-9/2010 1-9/2009 1-12/2009
Earnings per share, EUR 0.27 0.23 0.33
EPS adjusted for dilution, EUR 0.28 0.22 0.33
Comparable earnings per share, EUR 0.06 0.16
Equity per share, EUR 2.45 2.45 2.59
Equity ratio, % 30.0 32.4 34.6
Gearing, % 123.7 113.2 87.9
ACCOUNTING PRINCIPLES AND FINANCIAL REPORTING
Aspo Plc's interim report has been compiled in accordance with the principles of
IAS 34 Interim Financial Reporting. The same accounting principles have been
adopted in the interim report as in the Financial Statements on December
31, 2009. The calculation formulas for key indicators are explained on page 82
of the 2009 financial statements. The information in this report is unaudited.
PRESS AND ANALYST CONFERENCE
A press and analyst conference will be arranged today, Tuesday October 26, 2010
at 14.30 at the Paavo Nurmi cabinet at Hotel Kämp, Pohjoisesplanadi 29, 00100
Helsinki.
ASPO Plc
Aki Ojanen Arto Meitsalo
CEO CFO
For more information:
Aki Ojanen, +358 9 521 4010, +358 400 106 592
aki.ojanen@aspo.com
DISTRIBUTION:
NASDAQ OMX Helsinki
Key media
www.aspo.com
[HUG#1455131]
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