Dovre Group Oyj - Company Announcement

DOVRE GROUP TRADING STATEMENT JANUARY 1 – MARCH 31, 2016

Espoo, Finland, 2016-04-28 07:45 CEST (GLOBE NEWSWIRE) -- 
Dovre Group Plc                    Company announcement                        
 April 28, 2016 at 8.45 a.m. 

DOVRE GROUP TRADING STATEMENT JANUARY 1 – MARCH 31, 2016

ADAPTING TO THE MARKET SITUATION, GROUP LOWERS GUIDANCE

Dovre Group Plc issues today a trading statement on the Group’s operating
performance for the first quarter  of 2016. As of January 1, 2016, Dovre Group
applies the possibility allowed by amendments to the Finnish Securities Markets
Act entered into force on November 26, 2015 not to release an interim report
for the first three months and the first nine months of the financial year.
Instead, the company will release a quarterly trading statement for each period
in question. 

The figures presented in this trading statement are not audited. Last year’s
corresponding period in parentheses. Comparatives for Q1/2015 not including
Norwegian Petroleum Consulting Group AS (NPC). NPC’s financials reported as
part of Dovre Group’s Project Personnel business area as of May 28, 2015. 

Key highlights January – March 2016:

  -- Net sales EUR 25.0 (26.2) million – decline 4.6%
  -- Project Personnel: net sales EUR 23.2 (24.1) million – decline 3.6%
  -- Consulting: net sales EUR 1.7 (2.1) million – decline 16.3%
  -- Operating result EUR 0.0 (-0.1) million
  -- Net cash flow from operating activities EUR 0.2 (0.0) million
  -- Seven new frame agreements secured

New guidance for 2016:Net sales are expected to be EUR 80 - 100 million and
operating result is expected to be positive. 

PATRICK VON ESSEN, CEO:

“Our Project Personnel business is facing the most challenging year in a
decade. Volumes and margins are depressed and declining. In addition, weak
currencies in our main markets, Norway and Canada, impact our top line. The
price of oil remains low and volatile. However, the oil price has trended
upwards since a ten year low in February. In its latest forecast, U.S. Energy
information Administration predicts that global consumption of liquid fuels
catches up with production in 2017. Based on this and similar forecasts from
other independent market analysts, we believe that the oil & gas service market
will bottom out in 2016. We expect a gradual increase in demand starting in
2017. 

In fierce international competition, we secured two new frame agreements with
oil and gas clients during the first quarter. Our diversification into new
client segments is gaining momentum, and we secured five new frame agreements
during the first quarter. We target clients and major projects in power
generation, power transmission, infrastructure, petrochemical industry, metals
& mining, and pulp & paper. Our new clients value our experience with large
projects, our network of project professionals, our global reach and our
efficient service. The new client sales pipeline strengthened throughout the
first quarter. Although volumes are still low, we are encouraged by these
achievements. We are on track to reach 25% of sales in new client segments by
the end of the year. This new business only partly mitigates the decrease in
demand in upstream oil and gas. 

In Project Personnel, we continue to focus on new client acquisition and cost
efficiency. We have taken further steps to gear our organization towards sales,
while at the same reducing our fixed cost. The target is to reduce fixed costs
by more than EUR 0.5 million per annum, which will have full effect starting Q3
of this year. In addition, we continue to improve and digitalize our work
processes. 

Our Consulting business has had a good start to the year. The decline in
Consulting’s net sales compared to Q1/2015 was primarily due to the impact of
the weaker Norwegian crown and the sale of the Group’s consulting business in
Sweden in Q4/2015. Norway continues with solid profitability, and Finland’s
profitability has improved significantly. Both business units continue to have
a strong order stock.” 

GUIDANCE FOR 2016

The Group lowers its guidance for 2016. We are seeing further reductions in
rates and volumes combined with low visibility. We will also discontinue a
partnership in Norway, which has yielded significant volume at low margin. The
impact is lower net sales but improved relative gross margin. 

New guidance for 2016:Net sales are expected to be EUR 80 - 100 million and
operating result is expected to be positive. 

Previous guidance: Net sales are expected to exceed EUR 100 million and
operating result is expected to be positive. 

NET SALES

In Q1, Dovre Group’s net sales were EUR 25.0 (26.2) million. Project Personnel
accounted for 93 (92) % and Consulting for 7 (8) % of the Group’s net sales.
Project Personnel’s net sales were EUR 23.2 (24.1) million, while net sales for
Consulting totalled EUR 1.7 (2.1) million. In Q1/2015, the Group’s net sales
including NPC (pro forma) would have been EUR 39.9 million. 

Net sales by reporting segment   1-3   1-3  Change    1-12
EUR million                     2016  2015       %  2015
----------------------------------------------------------
Project Personnel             23.2  24.1    -3.6   108.8
----------------------------------------------------------
Consulting                       1.7   2.1   -16.3     7.1
----------------------------------------------------------
Group total                     25.0  26.2    -4.6   115.9
----------------------------------------------------------

PROFITABILITY

In Q1, the Group’s operating result was EUR 0.0 (-0.1) million. Project
Personnel’s operating result was EUR 0.3 (0.5) million. Consulting business
area’s operating result was EUR 0.2 (0.2) million. The operating result of the
Group’s Other functions was EUR -0.4 (-0.7) million. In Q1/2015, the Group
reported EUR 0.3 million as non-recurring costs related to external advisory
services under Other functions. 

Operating result      1-3   1-3  Change    1-12
EUR million          2016  2015       %  2015
-----------------------------------------------
Project Personnel   0.3   0.5   -38.2     1.0
-----------------------------------------------
Consulting            0.2   0.2     6.0     0.8
-----------------------------------------------
Other functions      -0.4  -0.7    38.2    -1.9
-----------------------------------------------
Unallocated          -0.1   0.0  -102.1    -0.8
-----------------------------------------------
Group total           0.0  -0.1    57.1    -0.9
-----------------------------------------------

PERSONNEL

On March 31, 2016, Dovre Group employed 617 (473) people, 570 (420) of which
were employed by Project Personnel, 41 (48) by Consulting and 6 (5) by Other
functions. 

CASH POSITION

On March 31, 2016, the Group’s cash and cash equivalents totaled EUR 10.2
(10.5) million. The Group’s interest-bearing liabilities were EUR 6.0 (1.5)
million, a total of EUR 3.9 (1.5) million of which were current and a total of
EUR 2.1 (0.0) million non-current. In Q1, net cash flow from operating
activities was EUR 0.2 (0.0) million, which includes EUR 0.4 (0.3) million
change in working capital. In Q1, the Group paid a total of EUR 1.0 (0.0)
million in dividends. 

OTHER EVENTS

Dovre Group Plc’s listing prospectus concerning the listing of a total of
36,453,018 new shares in the company, issued as direct issue as part of the
acquisition of NPC in May 2015, was approved by the Finnish Financial
Supervisory Authority on March 8, 2016. The shares were listed on the official
list of Nasdaq Helsinki Ltd on March 10, 2016. The shares are subject to a
three (3) year lock-up period from the date of issue, lasting until May 28,
2018. 



Espoo, April 27, 2016

Dovre Group Plc
Board of Directors


For additional information, please contact:

Dovre Group Plc

Patrick von Essen, CEO
(patrick.essen@dovregroup.com)

Heidi Karlsson, CFO
(heidi.karlsson@dovregroup.com)

tel. +358-20-436 2000
www.dovregroup.com



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www.dovregroup.com