2009-11-13 09:00:00 CET
2009-11-13 09:00:01 CET
REGULATED INFORMATION
Vaahto Group Plc Oyj - Financial Statement Release
VAAHTO GROUP'S PREVIEW OF RESULTS FOR FISCAL YEAR 1.9.2008-31.8.2009
VAAHTO GROUP PLC OYJ STOCK EXCHANGE BULLETIN 13.11.2009 at 10.00 VAAHTO GROUP'S PREVIEW OF RESULTS FOR FISCAL YEAR 1.9.2008-31.8.2009 Vaahto Group's turnover for the fiscal period was 75.7 MEUR (73.2 MEUR) and operating loss 2.3 MEUR (operating profit 0.6 MEUR). Earnings per share were -0.81 euros. The Board of Directors will propose that no dividends be paid. Business developments Vaahto Group's turnover for the fiscal period ending in August 2009 was 75.7 million euros (comparative: 73.2 million euros), with an operating loss of 2.3 million euros (operating profit of 0.6 million euros). The loss accumulated during the first half of the fiscal year, when the turnover was clearly below the previous year's levels. In the latter half of the fiscal year, the economic development improved as a consequence of recognition of delivery projects and cost-adjustment procedures. With the project deliveries completed at the end of the fiscal year, Vaahto Group's order backlog decreased clearly in the final months of the period, coming to 17.1 million euros (54.4 million euros) on August 31. Pulp & Paper Machinery The Pulp & Paper Machinery division's turnover for the period under review was 52.1 million euros (39.5 million euros), with an operating loss of 2.4 million euros (operating loss of 3.3 million euros). The division's loss in the period under review was accumulated in the first half of the fiscal year. In the latter half of the fiscal year, the turnover increased as a result of recognition of delivery projects completed at the end of the period. Cost-adjustment procedures also contributed to the improved development. The division's result for the second half was slightly to the positive. During the period under review, the forest industry's investment rate has been at a very low level throughout the world. In this difficult market situation, the period's most significant orders for the Pulp & Paper Machinery division were for the tissue machine rebuild at Metsä Tissue's Mänttä mill, the rebuild of the board factory at Stora Enso's Inkeroinen mill, and the headbox project for Stora Enso's mill in Imatra. Also, the division received an additional order from the Kama paper mill, in Russia. This order is related to the contract concluded in August 2008 for paper machine modernization, which involves conversion of the machine in question from newsprint to LWC paper production. The fiscal year saw the division merge its Vaahto Roll Service Oy with Vaahto Oy. The purpose of the merger was to simplify the Group's structure, reduce costs, and streamline the operations of the Pulp & Paper Machinery division. Following the merger, the division has two profit centers: Vaahto Projects and Vaahto Service. Vaahto Pulp & Paper Machinery's goal is to keep strengthening its position as one of the leading suppliers of technology and services in the demanding international paper and board machine markets. In pursuit of this goal, one measure is to establish a production unit in China, which was approved by the Board of Directors of the parent company after the end of the fiscal year. The objective is to start production in China during 2010. Process Machinery The Process Machinery division's turnover for the fiscal year was 24.7 million euros (34.4 million euros), with an operating profit of 0.1 million euros (4.0 million euros). The turnover decreased by 28.3% from that of the previous period, making the result lower than in the 2007-2008 fiscal year. The division's market situation was very weak during the period under review, and the order book was adversely affected for both vessels and agitators. The market picked up slightly at the end of the fiscal year, and the number of projects in the offer phase has been on the increase. Results Vaahto Group's operating loss for the fiscal period was 2.3 million euros, compared to an operating profit of 0.6 million euros in the previous fiscal year. The operating loss for the period was 3.1% (operating profit of 0.9%) of the group's turnover. The main reason for the result, which was lower than in the previous fiscal year, was the considerable decrease in the Process Machinery division's turnover and profitability. The Pulp & Paper division's poor figures in the first half of the fiscal year also undermined the result. Financing The Group's cash flow totaled 16.5 million euros (1.2 million euros), and its net financial expenses were 0.9 million euros (0.7 million euros), or 1.2% (1.0%) of turnover. Investment cash flow for the fiscal year was -3.6 million euros (-4.4 million euros). The decrease in interest-bearing debt was 0.9 million euros. Total assets and liabilities on the consolidated balance sheet stood at 50.1 million euros (41.8 million euros), and the parent company's balance sheet showed 23.0 million euros (17.0 million euros). The Group's equity ratio decreased to 23.2% (37.3%). The Group's gearing increased to 11.1% (99.8%). The increase in the balance sheet total is mostly because of a payment received at the end of the fiscal year for delivery of a significant project, but payments to suppliers have been made, for the most part, during the current fiscal year. This is also reflected in the operating cash flow and key figures in the cash flow calculation. Investments The Group's investments in capital assets for the fiscal period totaled 3.7 million euros (4.6 million euros). The most significant investments were acquisition of a broaching drill for Vaahto Oy and AP-Tela Oy's office building. Other investments consisted mainly of smaller machinery and equipment acquisitions. Information systems The Group's information systems and information management were developed further, in accordance with the centralized operations model. Research and development The Group's research and development activities were focused for the most part on improvement in the competitiveness of roll servicing and of the Pulp & Paper Machinery division's key components for paper and board machines. The scope of the Group's R&D activities remained the same as in the previous fiscal period. Personnel Group personnel averaged 410 (426) over the fiscal year and numbered 392 (424) at the end of the period. Risks and business uncertainties Demand for Vaahto Group products depends largely on economic cycles and developments in the world economy and the customer industries. Risk caused by fluctuations in demand is being compensated for through adjustment of the Group's sales operations in line with the economic cycles of various markets and customer industries. Large-scale projects involve the risk of the final result falling short of expectations, since the project's future costs and other risks that could affect the delivery cannot be assessed explicitly enough at the tender stage. Risks associated with large projects can be managed by applying various quality management systems, profitability analyses, directives, and acceptance procedures. The Group's financial risk management objectives are to minimize harmful effects on the Group's result caused by fluctuations in financial markets and to ensure that the Group can gain equity and liability financing on competitive terms. Business-related risks of material, consequential, and liability losses are covered by appropriate insurance policies. Shareholders' equity Information concerning Vaahto Group Plc Oyj's shares is provided in item 24 of the Notes to the Consolidated Financial Statements, “Notes on the shareholders' equity.” The Board of Directors has no authority to issue new shares, convertible bonds, or bonds with warrants, nor the authorization to obtain or surrender shares. Administration The Annual General Meeting of December 15, 2008, elected the following to the Board of Vaahto Group Plc Oyj: Seppo Jaatinen, chairman Mikko Vaahto, vice-chairman Martti Unkuri, member Antti Vaahto, member Antti Vaahto served as CEO until April 30, 2009, and Anssi Klinga has been CEO since May 1, 2009. The Group companies have been audited by the certified public auditing firm Ernst & Young Oy, with Panu Juonala, CPA, as chief auditor. The company follows the NASDAQ OMX Helsinki Corporate Governance Code (2008) for Finnish listed companies. The Corporate Governance Statement of the Group has been published on the Group's Web site. Forecast of developments The international financial climate led to great insecurity in the markets and to postponement of investment decisions. Some signs of improvement have been detected lately in the market in Asia, particularly in China. In Europe and North America, on the other hand, the market situation is still quite difficult and the forest industry, in particular, is investing very cautiously. However, the international market situation is expected to improve in the next fiscal year. Vaahto Group's order backlog decreased during the period under review, and the starting point for the new fiscal year is difficult. In the course of the period under review, the Group companies have performed extensive measures to adjust their operations to the weaker demand and market situation. As a consequence of the poor order book, the first half of the current fiscal year will be challenging. Since the international market situation seems to be picking up, the development of Vaahto Group's results is expected to improve towards the end of the fiscal year and to show a small profit for the entire fiscal year. Proposal for distribution of profits Parent company funds available for distribution of profits total 3,553,365.18 euros, of which 285,281.45 euros represents profits for the fiscal period. The Board will propose to the Annual General Meeting that no dividends be paid and that the operating profit be transferred to the earnings account. The Annual General Meeting The Annual General Meeting of Vaahto Group Plc Oyj will be held on December 16, 2009 at 1.00 p.m. in the Sibelius Hall, Lahti. Interim management statement Instead of the interim report for the first three months of the accounting period, Vaahto Group Plc Oyj will disclose the interim management statement on January 15, 2010. VAAHTO GROUP CONSOLIDATED FIGURES CONSOLIDATED 2008/09 % of 2007/08 % of INCOME 12 turn- 12 turn- STATEMENT,IFRS months over months over 1000 EUR NET TURNOVER 75 694 73 207 Change in finished goods and work in progress -3 109 92 Production for own use 834 693 Other operating income 401 688 Share of results of affiliated 13 14 companies Material and services -43 503 -39 404 Employee benefits expenses -19 708 -21 082 Depreciations -2 423 -2 220 Other operating expenses -10 520 -11 339 OPERATING PROFIT OR LOSS -2 320 -3,1 649 0,9 Financing income and expenses -915 -726 PROFIT BEFORE TAXES -3 235 -4,3 -77 -0,1 Tax on income from operations 857 396 PROFIT OR LOSS FOR THE PERIOD -2 378 -3,1 320 0,4 Net profit attributable: To equity holders of the parent -2 316 238 To minority interest -62 82 Total -2 378 320 Earnings per share calculated on profit attributable to equity holders of the parent: EPS undiluted, euros/share -0,81 0,08 EPS diluted, euros/share -0,81 0,08 Average number of shares (1000 shares): undiluted 2 872 2 872 diluted 2 872 2 872 CONSOLIDATED 31.8.09 31.8.08 BALANCE SHEET,IFRS 1000 EUR ASSETS NON-CURRENT ASSETS: Intangible assets 2 495 3 127 Goodwill 1 702 1 702 Tangible assets 16 012 14 198 Shares in affiliated companies 50 39 Non-current trade and other receivables 12 13 Other long-term investments 44 44 Deferred tax asset 1 225 471 NON-CURRENT ASSETS 21 540 19 594 CURRENT ASSETS: Inventories 4 627 8 508 Trade receivables and other receivables 11 519 12 392 Tax receivable, income tax 0 624 Cash and bank 12 400 730 CURRENT ASSETS 28 546 22 253 TOTAL ASSETS 50 086 41 847 CONSOLIDATED 31.8.09 31.8.08 BALANCE SHEET, IFRS 1000 EUR EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY: Share capital 2 872 2 872 Share premium account 6 6 Other reserves 1 835 2 006 Retained earnings 4 960 7 537 Equity attributable to equity holders of the parent 9 673 12 421 Minority share 1 229 1 336 SHAREHOLDERS' EQUITY 10 902 13 757 NON-CURRENT LIABILITIES: Deferred tax liability 528 736 Long-term liabilities, interest-bearing 6 928 7 378 Non-current provisions 355 271 NON-CURRENT LIABILITIES 7 812 8 385 CURRENT LIABILITIES: Short-term liabilities, interest-bearing 6 679 7 087 Trade payables and other liabilities 24 628 12 618 Tax liability, income tax 65 1 CURRENT LIABILITIES 31 372 19 705 TOTAL EQUITY AND LIABILITIES 50 086 41 847 KEY FIGURES, IFRS 2008/09 2007/08 Shareholders' equity per share, euros 3,37 4,32 Earnings per share, euros -0,81 0,08 Solidity, % 23,2 37,3 Gross investments, 1000 EUR 3 656 4 613 Total average number of personnel 410 426 Order backlog at the end of the fiscal period, 1000 EUR 17 098 54 384 The amount of contract revenue recognized as revenue has been deducted from the order backlog. OTHER LIABILITIES 31.8.09 31.8.08 1000 EUR Bank guarantees: Bank guarantee limits total 33 700 33 700 Bank guarantee limits used 18 038 16 523 Lease liabilities, excluded financial lease liabilities: Current lease liabilities 516 208 Lease liabilities maturing in 1-5 years 801 242 Total 1317 450 Other liabilities: Granted guarantees 1 603 38 Guarantees granted to secure bank guarantees 31 000 31 000 Guarantees granted to secure loans 1 040 1 300 Derivative contracts: Currency forward agreements are as a rule used to hedge against exchange rate risks. The currency forward agreements have been used to protect receivables and future assets. Interest rate agreements are used to hedge against the changes of the interests. The derivative agreements of the group are booked according to IAS 39: Financial instruments. Derivative agreements are initially recognized at their purchase cost which is equivalent to the fair value and they are subsequently remeasured at fair value. Fair values Nominal Fair Fair Fair of derivative value value, value, value agreements pos. neg. total 31.8.2009 1000 EUR Interest rate swap agreements 5 380 0 -349 -349 Fair values of derivative agreements are determined by using the market prices for the equivalent agreements on the day of the closing of the accounts. Fair values state for the income or expenses the group would book if the derivative agreements were closed at the end of the fiscal period. CONSOLIDATED FLOW 2008/09 2007/08 OF FUNDS 12 12 STATEMENT, IFRS months months 1000 EUR Flow of funds from operations: Profit before taxes -3 235 -77 Adjustments 3 199 1 817 Change in working capital 17 453 336 Financial income and expenses and taxes -960 -840 Flow of funds from operations 16 456 1 236 Flow of funds from investments: Investments in tangible and intangible assets -3 656 -4 613 Income from sales of tangible and intangible assets 61 650 Payments of loans 1 0 Flow of funds from investments -3 595 -3 963 Flow of funds from financial items: Withdrawals of short-term loans 5 000 5 688 Payments of short-term loans -5 000 -5 840 Withdrawals of long-term loans 2 349 4 878 Payments of long-term loans -3 207 -1 515 Dividends -333 -1 287 Flow of funds from financial items -1 191 1 923 Change of liquid funds 11 670 -804 Lahti November 13, 2009 VAAHTO GROUP PLC OYJ Anssi Klinga President (CEO) Information: Anssi Klinga CEO, Vaahto Group Plc Oyj tel. +358 50 4661470
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