2013-05-08 14:00:00 CEST
2013-05-08 14:00:04 CEST
REGULATED INFORMATION
Honkarakenne Oyj - Interim report (Q1 and Q3)
HONKARAKENNE OYJ’S INTERIM REPORT, 1 JANUARY – 31 MARCH 2013
HONKARAKENNE OYJ INTERIM REPORT 8 May 2013 at 3:00 p.m.
HONKARAKENNE OYJ'S INTERIM REPORT, 1 JANUARY - 31 MARCH 2013
SUMMARY
Net sales in the first quarter were slightly higher than in the previous
year.The Group's result was better than over the same period of the previous
year.Profitability improved due to started efficiency-boosting measures related
to the consolidation of operations.The Group's result before taxes after the
first quarter was a loss, as expected, due to seasonal variations.
January - March 2013
-- Honkarakenne Group's consolidated net sales for the first quarter of the
year amounted to MEUR 7.3 (MEUR 7.0 in 2012). Net sales were slightly
higher than in the previous year, increase of 4 %.
-- Operating loss was MEUR -1.5 (MEUR -2.3). Operating loss before
non-recurring items was MEUR -1.5 (MEUR -2.3).
-- Profit/loss before taxes was MEUR -1.3 (MEUR -2.1).
-- Earnings per share amounted to EUR -0.21 (EUR -0.31).
Honkarakenne reiterates its previous outlook: in year 2013 Honkarakenne expects
its net sales to be at same level than in previous year and the result before
non-recurring items and taxes to be close to zero.
KEY INDICATORS 1-3/ 1-3/ 1-12/ Change %
2013 2012 2012
Net sales, MEUR 7.3 7.0 46.2 4
Operating profit/loss, MEUR -1.5 -2.3 -4.3
Operating profit before non-recurring items, MEUR -1.5 -2.3 -0.8
Profit/loss before taxes, MEUR -1.3 -2.1 -4.4
Average number of personnel 245 260 257
Personnel in person-years, average 175 175 198
Earnings/share (EPS), EUR -0.21 -0.31 -0.90
Equity ratio, % 45 50 47
Return on equity, % -8 -9 -28
Shareholders' equity/share, EUR 2.46 3.37 2.69
Gearing, % 42 43 11
Mikko Kilpeläinen, President and CEO of Honkarakenne Oyj, in connection with
the interim report:
“The Group's net sales were not at a satisfactory level, in spite of growth of
4 % compared with the corresponding period of the previous year. The Group's
order book was stronger than in the previous year, amounting to MEUR 18.9, a
year-on-year improvement of 15 %. As expected, the Group's result before taxes
after the first quarter was a loss due to seasonal variations.
In the early months of the year, we made a decision to consolidate production
and main operations such as planning in Karstula. The related measures are
ongoing. Operations at the Alajärvi plant will end this year. By means of this
consolidation, we seek significant improvement in operational efficiency and
improved flow of information.
In Finland & Baltics, we continued to focus on the detached house market in
Finland. In the holiday home segment, sales of a collection designed for the S
Group began under the Mainio brand in Finland.
A new Russian manager was appointed to head up Russia & CIS. We appointed a
Russian manager with a view to improving our local knowledge in order to
develop our understanding of customers and business operations in this market
area. In the CIS countries, we focused on market development in Kazakhstan and
Ukraine.”
NET SALES
Honkarakenne Group's net sales for the first quarter of 2013 rose by 4 per cent
to MEUR 7.3 (7.0).
Geographical distribution of net sales:
DEVELOPMENT OF SALES
Distribution of 1-3/2013 1-3/2012
net sales, %
Finland & Baltics 53 % 47 %
Russia & CIS 26 % 14 %
Global Markets 21 % 38 %
Total 100 % 100 %
Net sales, MEUR 1-3/2013 1-3/2012 Change % 1-12/2012
Finland & Baltics 3.9 3.3 18 % 19.0
Russia & CIS 1.9 1.0 90 % 14.7
Global Markets 1.5 2.7 -44 % 12.5
Total 7.3 7.0 4 % 46.2
Finland & Baltics includes the following countries:Finland, Latvia, Lithuania
and Estonia.It also includes process waste sales for recycling.
Russia & CIS includes the following countries:Russia, Azerbaijan, Kazakhstan,
Ukraine and other CIS countries.
Global Markets includes countries other than the abovementioned.
The Group's order book stood at MEUR 18.9 at the end of March.In the
corresponding period of the previous year, it was MEUR 16.4.
DEVELOPMENT OF PROFIT AND PROFITABILITY
Operating profit in January-March was MEUR -1.5 (MEUR -2.3) and profit before
taxes was MEUR -1.3 (MEUR -2.1).
The operating result changed primarily due to the implementation of
efficiency-boosting measures
FINANCING AND INVESTMENTS
In the course of the period under review, the financial position of the Group
remained satisfactory. The equity ratio stood at 45 % (50 %) and net financial
liabilities at MEUR 5.1 (MEUR 7.0). MEUR 2.1 (3.3) of the financial liabilities
carries a 30 % equity ratio covenant term. Group liquid assets totalled MEUR
1.6 (MEUR 2.0). The Group also has a MEUR 8.0 (MEUR 8.0) bank overdraft
facility, MEUR 1.5 (MEUR 1.6) of which was had been drawn on at the end of the
report period. Gearing stood at 42 % (43 %).
The Group's capital expenditure totalled MEUR 0.1 (MEUR 0.3).
MARKET DEVELOPMENT
According to a report commissioned by RTS Oy, Finnish log house production is
expected to contract by 5 % this year.The figure includes production for
Finland and for overseas export.
PRODUCTS AND MARKETING
Finland & Baltics launched the 2013 house collections for the residential and
holiday home markets. Sales of a house collection designed for the S Group
began under the Mainio brand in Finland.
Russia & CIS sought to improve its market and customer knowledge by appointing
a Russian sales manager. In the CIS countries, we focused on market development
in Kazakhstan and Ukraine.
Global Markets held a major marketing event in Paris, France.
RESEARCH AND DEVELOPMENT
In research and development, we developed the energy-efficiency of buildings
and processes related to facilitating construction.
In the January-March period, the Group's R&D expenditure totalled MEUR 0.1
(MEUR 0.1), representing 1.2 % of net sales (1.4 %). The Group did not
capitalise any development expenditure during the report period.
STAFF AND MANAGEMENT
During the first quarter, the Group employed a total of 175 (175) people on
average in terms of person-years.
The Group had an average of 245 (260) employees during the first quarter, a
year-on-year decrease of 15.
In January, the company concluded negotiations under the act on co-operation.
As a result, a decision was taken to consolidate production in Karstula and to
make 68 employees redundant. It was also agreed that the company's personnel
in Finland can be temporarily laid off for a maximum of 90 days until the end
of September 2013.
On 30 January 2013, Petr Morinov, Bachelor of Science, was appointed as the
company's Vice President Sales for Business Area Russia & CIS and a member of
the Executive Group.
On 29 April 2013, Tanja Rytkönen-Romppanen, 41, was appointed as Vice
President, Design and a member of the Executive Group. The Vice President
Design will be in charge of Design, Group Marketing and R&D. Vice President
Sanna Wester does not continue working for the company.
HONKARAKENNE OYJ'S 2013 ANNUAL GENERAL MEETING, BOARD OF DIRECTORS, AND AUDITORS
The Annual General Meeting (AGM) of Honkarakenne Oyj was held at the company's
headquarters in Tuusula on 5 April 2013. The AGM confirmed the financial
statements of the parent company and Group, and discharged from liability the
board members and CEO for 2012. The AGM decided that no dividends be paid for
the 2012 financial year. The AGM decided that a repayment of capital totalling
EUR 0.08 per share be paid from the Fund for invested unrestricted equity.
Anders Adlercreutz, Lasse Kurkilahti, Mauri Saarelainen, Marko Saarelainen and
Teijo Pankko were re-elected to the Board of Directors. The Board's constituent
meeting appointed Lasse Kurkilahti the Chairman of the Board. Mauri Saarelainen
will serve as the Deputy Chairman. Board of Directors decided not to set up any
committees.
PricewaterhouseCoopers Oy, member of the Finnish Institute of Authorised Public
Accountants, was appointed as auditor of the company, with Maria Grönroos, APA,
as chief auditor.
HONKARAKENNE OYJ'S OWN SHARES AND AUTHORISATIONS OF THE BOARD OF DIRECTORS
Honkarakenne has not acquired its own shares during the report period. At the
end of the report period, the Group held 364,385 of its Honkarakenne B shares
with a total purchase price of EUR 1,381,750.23. These shares represent 7.05 %
of the company's capital stock and 3.35 % of all votes. The purchase cost has
been deducted from shareholders' equity in the consolidated financial
statements.
On 5 April 2013, the AGM decided that the Board of Directors will be authorised
to acquire a maximum of 400,000 of the company's own B shares with assets
included in the company's unrestricted equity. In addition, the AGM authorised
the Board to decide on a rights issue or bonus issue and on granting special
rights to shares referred to in Section 1 of Chapter 10 of the Limited
Liability Companies Act in one or more instalments. By virtue of the
authorisation, the Board may issue a maximum total of 400,000 new shares and/or
relinquish old B shares held by the company, including those shares that can be
issued by virtue of special rights. Both authorisations will be valid until 25
March 2014.
CORPORATE GOVERNANCE
Honkarakenne Oyj follows the Limited Liability Companies Act and the Finnish
Corporate Governance Code, 1 October 2010, for listed companies issued by the
Finnish Securities Market Association. The company's website, www.honka.com,
provides more information on the corporate governance systems.
FUTURE OUTLOOK
The market situation remains uncertain.General macroeconomic uncertainty
factors, such as the situation in the eurozone, are being reflected in
customers' unwillingness to make decisions on construction projects.There is an
estimation of 2.4 % increase in GDP in Russia, but even in Russia the
estimation of increase in GDP was lowered from previous increase of 3.6 %.
Sales figures are still impacted by the longer sales periods and the scarcity
of longer-term orders.
At the end of March, the Group's order book amounted to MEUR 18.9, up 15 % on
the corresponding period of the previous year, when it was MEUR 16.4.The order
book refers to orders whose delivery date falls within the next 24 months.Some
orders may include a financing or building permit condition.
FORTHCOMING RISKS AND UNCERTAINTIES
Although the Group's order book is better than in the previous year, there is
still the risk that the Group will not be able to accelerate its sales in line
with its targets.
The Group has one significant concentration of credit risks in sales
receivables, concerning the open sales receivables of one importer. No
provision for doubtful debt has been made for this.A payment plan has been made
with this importer. The importer has complied with this plan andwill continue
making payments until 2015.
The valuation of amounts in the balance sheet is based on current assessment by
the management.If these assessments are changed, this may result in changes to
the Group's result.
REPORTING
This report contains statements that relate to the future, and these statements
are based on hypotheses that the company's management hold currently as well as
on the decisions and plans that are currently in place.Although the management
believes that the hypotheses relating to the future are well-founded, there is
no guarantee that the said hypotheses will prove to be correct.
This interim report release has been drafted in line with IFRS recognition and
valuation principles. However, not all of the requirements of IAS 34 have been
complied with in its drafting.The interim report should be read together with
the 2012 financial statements.The figures have not been examined by the
auditor.
OUTLOOK FOR 2013
Honkarakenne reiterates its previous outlook: in year 2013 Honkarakenne expects
its net sales to be at same level than in previous year and the result before
non-recurring items and taxes to be close to zero.
HONKARAKENNE OYJ
Board of Directors
Further information:
Mikko Kilpeläinen, President and CEO, tel. +358 50 542 5884,
mikko.kilpelainen@honka.com or
Mikko Jaskari, CFO, tel. +358 400 535 337, mikko.jaskari@honka.com.
This and previous releases are available for viewing on the company's website
at www.honka.com. The next 2013 interim reports will be published on 8 August
2013 and 31 October 2013.
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
Financial Supervisory Authority
www.honka.com
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
unaudited 1-3 1-3 1-12
/2013 /2012 /2012
MEUR
Net sales 7.3 7.0 46.2
Other operating income 0.2 0.4 0.8
Change in inventories of finished and unfinished goods 1.2 0.8 -0.2
Production for own use 0.0 0.0 0.0
Materials and services -5.2 -5.3 -25.2
Employee benefit expenses -2.4 -2.6 -12.4
Depreciations and amortisation -0.6 -0.8 -3.0
Impairment -0.0 -0.0 -1.8
Other operating expenses -1.9 -2.0 -8.7
Operating profit/loss -1.5 -2.3 -4.3
Financial income 0.2 0.3 0.6
Financial expenses -0.0 -0.1 -0.7
Share of result of associated companies 0.0 0.0 -0.0
Profit/loss before taxes -1.3 -2.1 -4.4
Income taxes 0.3 0.6 0.1
Profit/loss for the period -1.0 -1.5 -4.3
Other comprehensive income:
Translation differences -0.1 -0.2 -0.2
Total comprehensive -1.1 -1.7 -4.6
income for the period
Comprehensive income attributable to:
Equity holders of the parent -1.1 -1.7 -4.6
Non-controlling interest -0.0 -0.0 0.0
-1.1 -1.7 -4.6
Earnings/share (EPS) calculated on the profit
attributable to equity holders
of the parent, EUR
Basic -0.21 -0.31 -0.90
Diluted -0.21 -0.31 -0.90
CONSOLIDATED BALANCE SHEET
unaudited
MEUR 31.3.2013 31.3.2012 31.12.2012
Assets
Non-current assets
Property, plant and equipment 14.0 18.1 14.6
Goodwill 0.1 0.1 0.1
Other intangible assets 0.6 0.7 0.6
Investments in associated companies 0.3 0.3 0.3
Available-for-sale financial assets 0.1 0.1 0.1
Receivables 0.3 0.3 0.3
Deferred tax assets 1.4 1.6 1.1
16.8 21.3 17.0
Current assets
Inventories 7.6 7.6 6.5
Trade and other receivables 7.4 7.4 5.9
Cash and cash equivalents 1.6 2.0 4.8
16.6 17.1 17.2
Total assets 33.4 38.4 34.2
Equity and liabilities 31.3.2013 31.3.2012 31.12.2012
Equity attributable to equity holders
of the parent company
Share capital 9.9 9.9 9.9
Share premium account 0.5 0.5 0.5
Reserve fund 0.0 5.3 0.0
Fund for invested unrestricted equity 6.8 1.9 6.8
Own shares -1.4 -1.4 -1.4
Translation differences 0.1 0.3 0.2
Retained earnings -4.2 -0.3 -3.2
11.8 16.2 12.9
Non-controlling interests 0.2 0.2 0.2
Total equity 12.0 16.4 13.1
Non-current liabilities
Deferred tax liabilities 0.0 0.1 0.0
Provisions 0.5 0.3 0.5
Financial liabilities 4.1 6.8 3.9
4.7 7.2 4.4
Current liabilities
Trade and other payables 13.2 12.6 12.6
Current tax liabilities 0.0 0.0 0.0
Provisions 0.9 0.0 1.6
Current financial liabilities 2.6 2.2 2.4
16.7 14.8 16.7
Total liabilities 29.9 22.0 21.1
Total equity and liabilities 33.4 38.4 34.2
STATEMENT OF CHANGES IN EQUITY abridged
unaudited
1000 eur Equity attributable to equity holders of
the parent
a) b) c) d) e) f) g) Total h) Total equity
Total equity 9898 520 5316 1896 462 -1382 1152 17861 242 18103
1.1.2012
Profit/loss for -1489 -1489 -4 -1493
the period
Translation -168 -168 -168
difference
Purchase of -35 -35
non-controlling
interests
Total equity 9898 520 5316 1896 295 -1382 -341 16202 203 16405
31.3.2012
a) b) c) d) e) f) g) Total h) Total
equity
Total equity 9898 520 0 6828 224 -1382 -3178 12909 209 13117
1.1.2013
Profit/loss for -1011 -1011 1 -1010
the period
Translation -96 -96 -96
difference
Total equity 9898 520 0 6828 128 -1382 -4189 11802 211 12012
31.3.2013
a) Share capital
b) Share premium account
c) Reserve fund
d) Fund for invested unrestricted equity
e) Translation difference
f) Own shares
g) Retained earnings
h) Non-controlling interests
CONSOLIDATED STATEMENT OF CASH FLOWS 1.1.- 1.1.- 1.1.-
abridged 31.3.2013 31.3.2012 31.12.2012
unaudited
MEUR
Cash flow from operating activities -3.5 -0.4 5.5
Cash flow from investing activities, net -0.1 -0.3 -0.1
Total cash flows from financing activities: 0.4 0.1 -3.1
Repayment of capital -0.4
Proceeds from borrowings 1.6 2.8 2.1
Repayment of borrowings -1.1 -2.6 -4.6
Other financial items -0.1 -0.1 -0.2
Change in cash and cash equivalents -3.2 -0.6 2.2
Cash and cash equivalents at the beginning of 4.8 2.6 2.6
period
Cash and cash equivalents at the close of 1.6 2.0 4.8
period
NOTES TO THE REPORT
Accounting principles
This interim report release has been drafted in line with IFRS recognition and
valuation principles. However, not all of the requirements of IAS 34 have been
complied with in its drafting.The interim report should be read together with
the 2012 financial statements.The new revised standards or interpretations
effective as of 1 January 2013 have no bearing on the figures presented for the
report period.The figures have not been examined by the auditor.
Honka Management Oy, which is owned by the senior management of Honkarakenne
Oyj and was established in 2010, is included in the consolidated financial
statements due to the terms and conditions of the shareholder agreement
concluded between it and Honkarakenne Oyj.
Honkarakenne has one operating segment, the manufacture, sales and marketing of
log houses.Geographically, the sales of the Group are divided as
follows:Finland & Baltics, Russia & CIS and Global Markets.The internal
reporting of the management is in line with IFRS reporting. For this reason,
separate reconciliations are not presented.
PROPERTY, PLANT AND EQUIPMENT
Unaudited Property, plant and
equipment
MEUR
Cost 1.1.2013 63.9
Translation differences (+/-) -0.0
Increase 0.0
Disposals -0.3
Reclassifications -0.0
Cost 31.3.2013 63.7
Accumulated depreciation 1.1.2013 -49.4
Translation differences (+/-) 0.0
Accumulated depreciation of disposals and 0.3
reclassifications
Depreciation for the period -0.6
Accumulated depreciation 31.3.2013 -49.7
Carrying amount 1.1.2013 14.6
Carrying amount 31.3.2013 14.0
Own shares
Honkarakenne Oyj has not acquired its own shares during the report period.At
the end of the report period, the Group held 364,385 of its Honkarakenne B
shares with a total purchase price of EUR 1,381,750.23. These shares represent
7.05 % of the company's capital stock and 3.35 % of all votes.
Contingent liabilities
unaudited 31.3.2013 31.3.2012
MEUR
For own loans
- Mortgages 25.7 23.7
- Other quarantees 2.7 2.0
For others
- Guarantees 0.1 0.2
Leasing liabilities 0.2 0.3
Nominal values of forward exchange contracts 2.0 2.4
Derivative contracts 0.4 0.3
Events with related parties
The Group's related parties consist of subsidiaries, associated companies as
well as key management and the companies in which they exercise influence.Key
management comprises the Board of Directors, the CEO and the company's
Executive Group.The pricing of goods and services in related party transactions
is based on market prices.
During the report period, ordinary business transactions with related parties
were made as follows: the sales to the related parties were EUR 104 thousand
and the purchases from the related parties were EUR 132 thousand.In 2010 and
2011, Honkarakenne Oyj granted long-term loans totalling MEUR 0.9 to Honka
Management Oy, which is owned by the company's senior management.
Key Indicators
1-3 1-3 1-12
unaudited 2013 2012 2012
Earnings/share (EPS) eur -0.21 -0.31 -0.90
Return on equity % -8 -9 -28
Equity ratio % 45 50 47
Shareholders equity/share eur 2.46 3.37 2.69
Net debt MEUR 5.1 7.0 1.5
Gearing % 42 43 11
Gross investments MEUR 0.1 0.3 0.9
% of net sales 1.3 4.5 1.9
Order book MEUR 18.9 16.4 15.9
Average number of personnel Staff 119 121 123
Workers 126 139 134
Total 245 260 257
Personnel in person-years, average Staff 103 111 117
Workers 72 64 81
Total 175 175 198
Adjusted number of shares ('000) At year-end 4805 4805 4805
Average during period 4805 4805 4805
Calculation of key indicators
Profit for the period attributable to equity
holders of parent
Earnings/share (EPS) ---------------------------------------------
Average number of outstanding shares
Result before taxes - taxes
Return on equity % --------------------------------------------- x 100
Total equity, average
Total equity
Equity ratio, % --------------------------------------------- x 100
Balance sheet total - advances received
Net financial Financial liabilities - cash and cash equivalents
liabilities
Financial liabilities - cash and cash equivalents
Gearing, % ------------------------------------------- x 100
Total equity
Shareholders' equity
Shareholders ---------------------------------------------
equity/share
Number of shares outstanding at the close of period
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