2011-02-17 07:45:00 CET
2011-02-17 07:45:03 CET
REGULATED INFORMATION
Proha - Financial Statement Release
PROHA FINANCIAL STATEMENTS (IFRS) JANUARY 1 - DECEMBER 31, 2010
Espoo, Finland, 2011-02-17 07:45 CET (GLOBE NEWSWIRE) -- Proha Plc
Financial Statements
February 17, 2011 at 8.45am
Clear improvement in Proha's operating result in the financial year 2010
(Unless otherwise stated, last year's corresponding period in parentheses.)
SUMMARY
Financial year January - December 2010
-- Net sales EUR 70.8 (60.7) million - growth 16.5%
-- Oil & Gas Services: net sales EUR 64.1 (54.9) million - growth 16.9%
-- Software Solutions: net sales EUR 6.9 (5.9) million - growth 16.3%
-- Operating result EUR 3.4 (0.3) million - increase EUR 3.1 million
-- Result for the period EUR 2.3 (-0.7) million - increase EUR 3.0 million
-- Gain on disposal of investment from sale of ProCountor International Oy
(ProCountor) shares increased the operating result and the result by EUR
1.0 million
-- Earnings per share EUR 0.04 (-0.01)
-- Net cash flow from operating activities EUR 3.4 (-1.3) million
October - December 2010
-- Net sales EUR 18.6 (15.3) million - growth 21.5%
-- Oil & Gas Services: net sales EUR 16.8 (13.6) million - growth 23.6%
-- Software Solutions: net sales EUR 1.9 (1.8) million - growth 6.2%
-- Operating result EUR 0.2 (0.2) million
-- Result for the period EUR 0.1 (-0.3) million
-- Earnings per share EUR 0.00 (0.00)
-- Operating result impacted by a EUR 0.3 (0.1) million increase of Norwegian
pension liabilities
-- The defined benefit pension plan will be closed in Q1/2011. In the balance
sheet of Proha Group the defined pension plan liability was EUR 1.7 (1.3)
million at the end of 2010. In Q1/2011 the release of the liability is
estimated to have a EUR 1.0 million positive impact on the result of Proha
Group after the deduction of related costs and taxes.
-- Net cash flow from operating activities EUR 1.5 (0.1) million
Net sales and operating result in 2011 are expected to grow from 2010.
The financial information presented in the financial statements are based on
the company's audited financial statements. The auditor's report was issued on
February 16, 2011.
KEY RATIOS
10-12 10-12 1-12 1-12
(EUR million) 2010 2009 2010 2009
Net sales 18.6 15.3 70.8 60.7
Operating result 0.2 0.2 3.4 0.3
% of Net sales 1.2% 1.5% 4.8% 0.4%
Result for the period 0.1 -0.3 2.3 -0.7
% of Net sales 0.5% -1.8% 3.3% -1.2%
Net cash flow from operations 1.5 0.1 3.4 -1.3
Debt-equity ratio (Gearing), % -27.2% -2.0% -27.2% 2.0%
Earnings per share, EUR
Basic 0.00 -0.00 0.04 -0.01
Diluted 0.00 0.00 0.04 -0.01
ILKKA TOIVOLA, CEO
Proha's net sales continued growing in Q4, increasing 21.5% from Q4/2009. The
company's operating result in Q4 was EUR 0.2 million. The operating result was
weakened by an increase in Norwegian pension liabilities. The defined benefit
based pension plan will be closed in Q1/2011, and the existing provisions will
be released. This will improve the company's result in Q1/2011. The company's
cash flow developed well. The company's net cash flow from operating activities
was EUR 1.5 million in Q4 and EUR 3.4 million in the financial year 2010.
Proha's operating result for the financial year was satisfactory. Compared to
2009, the company's operating result increased by EUR 2.0 million excluding the
EUR 1.0 million gain on disposal of investment regarding the company's sale of
its share in ProCountor. We have managed to turn all our business units
profitable. This provides a good platform for further improvement in operating
profit. Both business divisions have also increased their net sales. This
improvement is reflected in their operating result, too. In accordance with
Proha's current guidance, we will continue improving the company's operating
result in 2011.
In 2010, the net sales of the Oil & Gas Services division grew by 17% compared
to 2009. Growth in net sales was strongest in Canada. While net sales decreased
in Norway in 2010, profitability of the Norwegian business unit improved
compared to 2009. Overall improvement across the division was supported by the
Group's newly established, and already profitable, operations in Australia and
Russia.
The two units comprising the company's Software Solutions division improved
their net sales in 2010 by over 16% compared to 2009. Both units had a good
operating result in 2010 compared to 2009.
In accordance with the company's new strategy, we will strengthen our existing
position as a service provider to oil and gas industry and expand our business
to energy industry in general. Markets in nuclear energy and renewable energy
in particular, with both expecting above average growth, provide a significant
business opportunity. In addition, we will establish a single business division
that brings together the company's existing consulting competence and
resources. We believe that consulting will bring us new contracts and
customers, which would also create new assignments for the Group's other
divisions.
Our customer deliveries have been successful, which has also helped us to win
further orders. We are committed to customer satisfaction as one of the
cornerstones of our business. The measures implemented in 2009 and 2010 to
develop the Group's business operations provide a good foundation for continued
growth in 2011.
FUTURE OUTLOOK
The total amount of investment in energy industry has been estimated to reach
USD 33,000 billion by 2035, with USD 5,700 billion directly to renewable
energy. This provides an opportunity for growth in the project management
business. In addition, the key market areas of Proha's business - Canada, the
United States, the Nordic Countries, Russia, and Australia - all expect their
gross domestic product to grow.
Based on market forecasts, we expect the Oil & Gas Services' business to grow
in 2011. Major oil and gas companies have indicated increased investments in
new projects 2011-2013. Oil price has been holding between USD 80 to 100 per
barrel for some time now, thus providing a good foundation for continuing
investment. We expect demand for the divisions' services to grow in particular
in North America, Norway, Australia, Papua New Guinea, and Russia.
IT sector, which is significant for Proha's Software Solutions division, is
estimated to grow 7-9% in most North European countries. Both Safran and Camako
expect growth in 2011, as the need for software solutions and related services
is projected to grow.
The Group continues the measures to improve the organizational and functional
efficiency of those business units that are not yet performing as expected.
Net sales and operating result in 2011 are expected to grow from 2010.
This future outlook is based on forecasts approved by Proha's Board of
Directors.
NET SALES
October - December, 2010
In Q4, the Group's net sales increased by 21.5% totaling EUR 18.6 (15.3)
million. The Oil & Gas Services division accounted for 90 (89) % and the
Software Solutions division for 10 (11) % of the Group's net sales. Net sales
for Oil & Gas Services increased by 23.6% totaling EUR 16.8 (13.6) million. Net
sales for Software Solutions grew by 6.2% totaling EUR 1.9 (1.8) million.
January - December, 2010
During the financial year, the Group's net sales increased by 16.5% totaling
EUR 70.8 (60.7) million. The Oil & Gas Services division accounted for 91(90) %
and the Software Solutions division for 9 (10) % of the Group's net sales. Net
sales for Oil & Gas Services increased by 16.9% totaling EUR 64.1 (54.9)
million. Net sales for Software Solutions grew by 16.3% totaling EUR 6.9 (5.9)
million.
Approximately two thirds of the growth in net sales incurred from positive
variations in exchange rates. Especially the Canadian dollar and the Norwegian
crown strengthened in comparison to euro. While net sales in Canada, Russia and
Australia grew significantly, net sales in Norway and the US fell compared to
January - December, 2009.
Net sales by reporting segment
10-12 10-12 Change 1-12 1-12 Change
(EUR million) 2010 2009 % 2010 2009 %
Oil & Gas Services 16.8 13.6 23.6 64.1 54.9 16.9
Software Solutions 1.9 1.8 6.2 6.9 5.9 16.3
Other operations 0.3 -0.1 322.4 0.6 0.1 759.8
Net sales between segments -0.3 0.1 -549.3 -0.9 -0.2 470.7
Group total 18.6 15.3 21.5 70.8 60.7 16.5
Net sales by market area
10-12 10-12 1-12 1-12
(EUR million) 2010 2009 2010 2009
*) *)
EMEA 8.8 8.7 33.5 34.8
AMERICAS 9.0 6.5 34.9 26.5
APAC 1.0 0.2 3.1 0.7
Net sales between market areas -0.2 -0.2 -0.7 -1.3
Group total 18.6 15.3 70.8 60.7 10-12 10-12 1-12 1-12
(% of net sales) 2010 2009 2010 2009
*) *)
EMEA 47.5% 57.3% 47.3% 57.3%
AMERICAS 48.3% 42.9% 49.4% 43.6%
APAC 5.3% 1.2% 4.3% 1.2%
Net sales between market areas -1.1% -1.3% -1.0% -2.1%
Group total 100.0% 100.0% 100.0% 100.0%
*) Information for 2009 has been updated.
PROFITABILITY
Operating result October - December, 2010
In Q4, the Group's operating result was EUR 0.2 (0.2) million. Oil & Gas
Services' operating result was EUR 0.3 (0.6) million. Software Solutions'
operating result was EUR 0.2 (0.1) million. Operating result for other
operations was EUR -0.2 (-0.4) million.
The operating result was impacted by a EUR 0.3 (0.1) million increase of the
Norwegian pension liability.
Operating result January - December, 2010
The operating result was EUR 3.4 (0.3) million. Oil & Gas Services' operating
result was EUR 2.9 (1.6) million. Software Solutions' operating result was EUR
0.5 (-0.3) million. Operating result for other operations was EUR 0.1 (-0.8)
million.
In addition to the gain on disposal of investment from the sale of ProCountor
shares, the improvement in the Group's operating result was due to overall
growing demand and to increased efficiency of operations.
Operating result by reporting segments
10-12 10-12 Change 1-12 1-12 Change
(EUR million) 2010 2009 % 2010 2009 %
Oil & Gas Services 0.3 0.6 -49.3 2.9 1.6 86.2
Software Solutions 0.2 0.1 112.0 0.5 -0.3 251.9
Other operations -0.2 -0.4 47.7 0.1 -0.8 117.5
Operating result between segments 0.0 0.0 14.6 -0.2 -0.2 -11.7
Group total 0.2 0.2 -7.6 3.4 0.3 1 184.1
Result October - December, 2010
The Group's result before taxes was EUR 0.2 (0.2) million and after taxes EUR
0.1 (-0.3) million.
The Group's earnings per share was EUR 0.00 (0.00).
The Group's return on investment (ROI) was 10.2 (15.4) %.
Result January - December, 2010
The Group's result before taxes was EUR 3.4 (-0.1) million and after taxes EUR
2.3 (-0.7) million. The gain on disposal from the sale of Proha's share in
ProCountor improved the result by EUR 1.0 million.
The Group's earnings per share was EUR 0.04 (-0.01).
The Group's return on investment (ROI) was 22.9 (6.7) %.
CASH FLOW, FINANCING AND INVESTMENTS
On December 31, 2010, the Proha Group balance sheet total was EUR 30.8 (29.9)
million.
The cash and cash equivalents for the Group totaled EUR 5.5 (3.8) million at
the end of the financial year. In addition, the parent company and the
subsidiaries have unused credit limits. The Group's cash and cash equivalents
increased by EUR 1.8 (0.6) million during the financial year.
The equity ratio was 55.5 (46.5) %. The debt-equity ratio (gearing) was -27.2
(-2.0) %. On December 31, 2010, the interest-bearing liabilities amounted to
EUR 1.0 (3.5) million, accounting for 3.2 (11.7) % of the Group's shareholders'
equity and liabilities. Of the interest-bearing liabilities, EUR 0.4 (0.6)
million were non-current and EUR 0.6 (2.9) million current.
The net cash flow from operating activities was EUR 3.4 (-1.3) million. This
includes the EUR 0.8 (-1.5) million change in working capital. EUR 0.6 million
were paid in taxes.
The net cash flow from investing activities was EUR 0.4 (-0.2) million. Gross
investments totaled EUR 0.2 (0.5) million.
The net cash flow from financing activities was EUR -2.0 (2.1) million. The
Group drew new loans worth of EUR 0.3 (2.5) million and paid back existing
loans worth of EUR 2.3 (0.3) million.
The balance sheet goodwill totaled EUR 7.4 (7.0) million on December 31, 2010.
No indications of impairment of assets exist.
RESEARCH AND DEVELOPMENT
The Group's research and development costs were EUR 0.7 (0.8) million,
representing 0.9 (1.3) % of the Group's net sales. A total of EUR 0.1 (0.1)
million of capitalized research and development costs were in the Group's
balance sheet at the end of the financial year.
The Group's R&D costs consist of the R&D of Safran and Camako in the Software
Solutions division. The development of Safran Project 3.7 version was completed
in Q4/2010. Camako EPM 4.2.2 version was released in Q3/2010. Camako has
started the development work on a version of Camako EPM that is compatible with
the newest SharePoint 2010 platform. First installations of the upgraded
version will take place during Q1/2011.
CHANGES IN THE PROHA GROUP
The employment of Proha Plc's Executive Vice President Janne Rainvuori ended on
February 1, 2010.
Heidi Karlsson was nominated Senior Vice President, Corporate Functions as of
June 1, 2010. She is responsible for Proha's and its Oil & Gas Services
division's international administration. Heidi is based in Finland. The former
CFO for Dovre Group AS, Are Njåstein, left the company on July 30, 2010.
In the Oil & Gas Services division, the new Vice President of Operations,
Robert Terrell, was appointed to lead Dovre Group Inc. in the United States as
of June 1, 2010. His predecessor, Gunnar Nordahl, transferred to another
position outside of the company.
In the Software Solutions division, Juha Pennanen was nominated as Managing
Director for Safran Software Solutions AS as of June 1, 2010. Juha is based in
both Stavanger, Norway and Espoo, Finland. The former Managing Director of
Safran Software Solutions, Svein Blomsø, left the company on June 30, 2010.
PERSONNEL
The Group's personnel expenses were EUR 63.8 (55.7) million in January 1 -
December 31, 2010.
The personnel expenses of the Oil & Gas Services division were EUR 58.2 (50.7)
million. The personnel expenses of the Software Solutions division were 4.8
(4.5) million. The personnel expenses of the other operations were EUR 0.8
(0.5) million.
During the period under review, the number of personnel averaged 414 (402).
Personnel by reporting segment (average)
10-12 10-12 Change 1-12 1-12 Change
2010 2009 % 2010 2009 %
Oil & Gas Services 356 344 3.6 352 334 5.3
Software Solutions 59 63 -5.6 58 63 -7.9
Other operations 5 6 -16.7 4 5 -20.0
Total 420 412 1.9 414 402 2.9
On December 31, 2010, Proha employed 418 (408) people worldwide. Of these, 355
(355) were employed by the Oil & Gas Services division, 58 (55) by the Software
Solutions division, and 5 (6) by the Group administration.
BUSINESS PERFORMANCE
The demand for the services of the Oil & Gas Services division was growing
globally and developed well both during 2010 and the last quarter of the year.
In Canada, Dovre Group's success in 2010 centered on market growth in offshore
and oil sands development projects. Operations grew also in Russia and
Australia. In Canada, new major projects, including Nalcor's Hydro-Electric
Project, various developing oil sands projects in Alberta as well as some
offshore oil projects, such as Hebron and Hibernia Southern Expansion, are
planned for 2011. We also expect continued demand for providing personnel to
new projects managed in areas such as Houston, Papua New Guinea, and Australia.
To respond to customer demand, Dovre is investigating the possibility of
establishing itself in the Middle East.
In Norway, the oil and gas market shows increased investment activity. Dovre
Norway has gained eight new customers in 2010, including new assignments with
Statoil in Korea and Singapore. In addition, restructuring measures in Norway
have increased the unit's profitability. However, the planned growth in sales
has not yet been achieved. This is mainly due to a high turnover of personnel.
Proha's subsidiaries in Norway have been involved in management consulting in
both the public and the private sector since 2001. In Norway, we have managed
to establish ourselves as one of the best consulting companies involved in
major investment projects and their review. Our success in management
consulting continued in 2010, and, in accordance with the new Group strategy,
we will be expanding our consulting business under our new Consulting -division
outside Norway, starting with the rest of Scandinavia and then later to other
selected countries.
Western Australia and Papua New Guinea have seen some of the world's largest
natural gas discoveries, and with the emergence of liquefied natural gas (LNG)
technology and gas shipping, these areas are seeing heavy investment to develop
these resources. The natural gas resources are close to the high consuming
markets of China and India.
The net sales of the Software Solutions division grew in Q4. Safran is actively
developing its business by continuing market expansion outside Norway. The
company has progressed well in developing sales channels in new countries and
is expecting first partner contracts as well as new export sales during
Q1/2011. Safran aims to establish new customer contacts in energy industry and
shipbuilding.
Camako met its financial targets both in Finland and Sweden during Q4 and made
a positive result. In Finland, Camako achieved an important entry to the energy
industry, and in Sweden Camako obtained new customers.
The work to streamline the Group structure has proceeded according to plan. The
reorganization of the Group's legal structure has begun globally and is
estimated to be completed during 2011. The Group's financing and financial
management will be developed towards a global Group structure instead of
separate companies. Also, the harmonization of the Group's financial reporting
processes and systems has begun. The improvement of the cost structure across
all business units continues.
SHARES, SHARE CAPITAL, AND AUTHORIZATION TO ISSUE SHARES
On January 1, 2010 and on December 31, 2010, the share capital of Proha was EUR
15,916,854.20 and the total number of shares 61,961,751.
Trading and market capitalization
In October - December, 2010, approximately 3.0 million Proha shares were traded
on the NASDAQ OMX Helsinki Ltd., corresponding to an exchange of approximately
EUR 1.2 million.
In January - December, 2010, approximately 32.7 million Proha shares were
traded on the NASDAQ OMX Helsinki Ltd., corresponding to an exchange of
approximately EUR 11.9 million.
From October 1 to December 31, 2010, the lowest quotation was EUR 0.39 and the
highest quotation was EUR 0.44.
From January 1 to December 31, 2010, the lowest quotation was EUR 0.29 and the
highest quotation was EUR 0.44. On December 31, 2010, the closing quotation was
EUR 0.44.
The period-end market capitalization was approximately EUR 27.3 million.
Shareowners
On December 31, 2010, the number of registered shareholders of Proha Plc
totaled 3,028 including nominee registers (7). 1.2% of the Group's shares are
nominee-registered.
Option rights
No shares were subscribed for with Proha Plc's option rights during the
financial year.
On May 27, 2010, Proha's Board of Directors approved a new option plan 2010
based on the authorization given by the 2007 Annual General Meeting. Under this
plan, a total of 2,450,000 stock options are offered for subscription to key
persons in Proha Group. The dilution effect of the stock option plan is about
4% of the total number of Proha shares. Each stock option entitles the holder
to subscribe for one share in Proha. The option plan is divided into three
series, of which a maximum of 900,000 stock options can be given under the
A-series. The subscription price for 2010 A-series is the average rating in
Q1/2010 and the subscription period is March, 1, 2012 - February, 28, 2015.
In Q4/2010, a key person was granted 20,000 option rights under the 2010
A-series option plan.
During the financial year 2010, Proha Plc management and key persons were
granted 880,000 option rights under the 2010 A-series option plan and 200,000
option rights under the 2007 C-series option plan.
The 2006 option plan expired on May 25, 2010.
At the end of the financial year, a total of 2,450,000 options were outstanding
under the 2010 option plan. The company has in reserve 1,570,000 of these. In
addition, a total of 1,977,000 options were outstanding under the 2007 option
plan at the end of the financial year. The company has in reserve 384,000 of
these.
The Authorization of the Board of Directors
The Board of Directors has the authorization to issue shares through issuance
of shares or special rights entitling to shares until April 17, 2012.
In the beginning of the financial year, a total of 11,500,653 shares or special
rights entitling to shares were remaining of the authorization. At the end of
the period, a total of 10,620,653 shares or special rights entitling to shares
were remaining of the authorization. This change was due to the number of 2010A
options granted in Q3 and Q4/2010.
CORPORATE GOVERNANCE
Proha Plc Annual General Meeting on March 17, 2010, set the number of Board
members to four. The following four members were elected to continue as the
members of the Board: Ilari Koskelo, Antti Manninen, Leena Mäkelä and Hannu
Vaajoensuu. Authorized public accountants Ernst & Young Oy continued as the
Group's auditor, with APA Ulla Nykky as the auditor in charge.
A separate stock exchange bulletin outlining the decisions of the Annual
General Meeting was issued on March 17, 2010.
The Corporate Governance Statement for 2010 has been composed in accordance
with Recommendation 51 of the new Corporate Governance Code of the Finnish
Securities Market Association. The Corporate Governance Statement has been
issued separately from the Annual Review by Proha Plc Board of Directors.
Proha's corporate governance principles are available on the company website at
www.proha.com.
SHORT-TERM RISKS AND UNCERTAINTIES
The success of the Oil & Gas Services division is influenced by the energy
sector market as well as investment levels in the oil and gas industry. Oil &
Gas Services expands its business to new markets. Growth in new markets
requires investment and also includes operational risks.
A significant share of the Oil & Gas Services' net sales comes from a few major
clients. Dovre has extensive global delivery agreements with these clients.
Dovre is thus highly dependent on its key customers and the long-term frame
agreements signed with them.
The oil and gas industry in general involves risks, and single projects may
experience delays or accidents. Such situations may affect the net sales of the
Oil & Gas Services division.
As for the Software Solutions division, IT market forecasts indicate that
investment levels are growing, although individual clients' financial situation
varies. However, customers seem to consider the development of project
management as a very important competitive advantage.
During the financial year, Proha did not use any currency hedging. The euro,
the Norwegian crown, the US dollar, and the Canadian dollar are the most
important currencies for the Group. Currency fluctuations can affect the
company's net sales. Receivables and payables in foreign currencies can also
result in translation profits or losses.
STRATEGY
Proha has defined its new growth strategy and long-term objectives. The Group
has gained a solid market position as the provider of project personnel for
major oil and gas companies' large investment projects. The Group will expand
its capabilities and know-how to serve the energy industry at large, with a
special focus on nuclear and renewable energy sectors. The Group will expand
its international operations by entering into new market areas during 2011 -
2014. Consulting units currently operating in several countries will be
combined into one division in order to create strategic openings and to enable
the planned growth. In accordance with the strategy, the name of the Group will
be changed. The new name proposed by the Board is Dovre Group Plc. A worldwide
unified brand for the Group will be developed.
To achieve the strategic objectives the Group has established three strategic
development programs: Expansion of its services to the energy industry;
Expansion of its international operations; and Development of its service
portfolio.
Expansion to the Energy Industry
Investments in the energy industry will significantly increase in the future.
This development will generate considerable growth opportunities for project
management service providers.
The fastest growing sectors - renewable and nuclear energy - will be Dovre
Group's target markets in addition to the oil and gas industry. The Group
already has assignments in both sectors, and our objective is to invest
systematically in the growth within these sectors. Dovre Group has previously
been commissioned as a consultant in wind and hydro power projects and has
delivered its first assignments within nuclear energy. The energy industry
presents a significant growth opportunity for Dovre Group, and the Group will
broaden its service portfolio and capabilities in the industry to capture the
opportunities.
Expansion of International Operations
International expansion is one of the Group's core strategic programs. The
target is to establish operations in the Middle East in 2011 and to serve
customers on all the continents by 2014. The Group's global expansion will be
supported by acquisitions.
The management consulting unit in Norway and the project management consulting
units in Finland and Sweden will be merged. In this way, we can offer a broader
service portfolio to our customers in all Scandinavian countries as well as in
other target markets.
The Group continues the development of its project management software. Safran
is recognized in the oil and gas, and shipbuilding industries as a key partner
for planning and managing large investment projects. Safran's customer base
includes major Norwegian corporations, and the company has succeeded in
receiving orders also in North America. The aim is further international
growth.
Previously started strategic initiative to become a global corporation will be
strengthened with a unified corporate name and brand. The Board will propose to
the Annual General Meeting to change the name from Proha Plc to Dovre Group
Plc. If the meeting approves the name change, the new name will be implemented
during the second quarter.
Global processes and ICT solutions will be further developed for efficient
international operations. During 2011 financial processes of the Group will be
standardized, and the specific financial systems will be implemented during
2012.
Organization and Development of the Service Portfolio
The Group's organization will be changed so as to consist of three divisions:
Project Personnel, Consulting, and Software (previously two divisions: Oil &
Gas Services and Software Solutions). The reorganization involves dividing the
Group's existing Oil & Gas Services division into two new divisions that will
focus on project personnel services (Project Personnel division) and management
consulting services (Consulting division). Camako Oy and Camako Data AB, both
previously part of the Group's Software Solutions division, will be integrated
into the Consulting division. Safran Software Solutions AS continues under the
Group's new Software division. The reorganization will be implemented in early
2011.
Developing the service portfolio is aimed at providing a broader service
offering based on the customer needs in each target market. The new consulting
division is able to offer an expanded service portfolio to our customers in all
Scandinavian countries. The broadened service portfolio will create a distinct
competitive advantage and bring added value to our clients. This will deepen
and widen our customer relations and enable long-term customer relationships.
We will concentrate on the quality of the service as well as on the continuing
improvement of customer satisfaction.
Long-term Objectives
The Group's long-term objectives are an annual growth of more than 10% in
operations and a continuous improvement in the operating result to the level of
5-10% of net sales. In addition, we aim to achieve highest score in customer
and staff satisfaction in our industry.
OTHER EVENTS
Proha Plc changed its GICS classification with NASDAQ OMX Helsinki Ltd. on
November 1, 2010. The Group's new sector is Industrials and the new
sub-industry code is 20202020 (Research and Consulting Services). Proha was
previously classified under the Information Technology sector. The Group
applied for the change because 90% of the Group's net sales is generated by the
Oil & Gas Services division.
EVENTS AFTER THE FINANCIAL PERIOD
The board of Dovre Group AS, a Norwegian subsidiary of Proha Plc, has decided
to change from a defined benefit pension plan to a contribution pension plan.
The board of Proha Plc approved the decision in its meeting on February 16,
2011. The board of Dovre Group AS includes also employee representatives. The
decision was made in order to improve competitiveness in Norway and to avoid
the unpredictability of the pension costs. In the balance sheet of Proha Group
the defined pension plan liability was EUR 1.7 million at the end of 2010. In
Q1/2011 the release of the liability is estimated to have a EUR 1.0 million
positive impact on the result of Proha Group after the deduction of related
costs and taxes.
Proha's Board of Directors proposes to the Annual General Meeting a reduction
of Proha Plc's share capital. The purpose of the proposal is to set off the
accumulated losses from the prior financial years of Proha Plc (the parent
company of the Group) which will enable to distribute dividends in the future
with the restrictions as set forth in the Limited Liability Companies Act.
Proha's CFO Sirpa Haavisto is leaving the company on February 28, 2011. She is
transferring to another position outside the Group. Heidi Karlsson, SVP
Corporate Functions, will take over the CFO's duties.
As of March 1, 2011, the Proha Executive Team consists of Ilkka Toivola (CEO),
Heidi Karlsson (Senior Vice President, Corporate Functions), Petri Karlsson
(Strategy & Business Development), Mike Critch (Executive Vice President,
Project Personnel), Arve Jensen (Executive Vice President, Project Personnel),
and Juha Pennanen (Managing Director, Software).
BOARD OF DIRECTORS' PROPOSAL FOR THE USE OF PROFITS
Proha's Board of Directors proposes to the Annual General Meeting that the
profit for the financial year is entered into shareholders' equity and no
dividend is paid.
Summary of financial statements and notes to the financial statements are
presented in a separate document. The release of financial statements can also
be found on Proha's website, www.proha.com.
Espoo, February 16, 2011
Proha Plc
Board of Directors
For additional information, please contact:
PROHA PLC
Ilkka Toivola, CEO
Tel. +358 (0)20 436 2000
ilkka.toivola@proha.com
Analyst and Press Briefing
Proha arranges a briefing on the Financial Statements for 2010 for the press
and analysts at Radisson Blu Plaza Hotel, Boardroom Cabinet, Mikonkatu 23,
Helsinki, today, February 17, 2011 at 2:00pm.
Financial Reporting in 2011
Proha Plc's Annual Report for 2010, including the Group's audited Financial
Statements for 2010, will be published on the company's website by March 4,
2011.
Interim report release dates in 2011:
-- Interim Report January - March 2011 (Q1) on Thursday, April 28, 2011
-- Interim Report January - June 2011 (Q2) on Thursday, July 28, 2011
-- Interim Report January - September 2011 (Q3) on Thursday, October 27, 2011
Annual General Meeting
Proha Plc's Annual General Meeting has been planned to be held on Thursday,
March 17, 2011 starting at 1:00pm at Suomalainen Klubi (“The Finnish Club”) in
Helsinki, Kansakoulunkuja 3, Helsinki.
Distribution:
NASDAQ OMX Helsinki Ltd.
Major media
www.proha.com
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