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2011-10-25 08:00:00 CEST 2011-10-25 08:00:07 CEST REGULATED INFORMATION This message has been corrected. Click here to view the corrected message Ponsse Oyj - Interim report (Q1 and Q3)PONSSE'S INTERIM REPORT FOR 1 JANUARY - 30 SEPTEMBER 2011Vieremä, Finland, 2011-10-25 08:00 CEST (GLOBE NEWSWIRE) -- PONSSE PLC, STOCK EXCHANGE RELEASE, 25 OCTOBER 2011, 9:00 a.m. PONSSE'S INTERIM REPORT FOR 1 JANUARY - 30 SEPTEMBER 2011 - Net sales amounted to EUR 225.5 (Q1-Q3/2010 171.8) million. - Q3 net sales were EUR 72.3 (Q2/2008 54.7) million. - Operating result totalled EUR 18.6 (Q1-Q3/2008 15.3) million, equalling 8.2 (8.9) per cent of net sales. The result includes a write-down of EUR 2.6 million on external trade receivables in South America. - Q3 operating result was EUR 8.2 (Q2/2010 5.4) million, equalling 11.4 (10.0) per cent of net sales. - Profit before taxes was EUR 14.1 (Q1-Q4/2009 16.7) million. - Cash flow from business operations was positive at EUR 5.7 (14.4) million. - Earnings per share were EUR 0.22 (0.59). - Equity ratio was 41.1 (42.9) per cent. - Order books stood at EUR 110.8 (77.4) million. PRESIDENT AND CEO JUHO NUMMELA: In the third quarter, the demand for forest machines was good despite the increase in economic uncertainty. At the end of the period under review, the company's order books totalled EUR 110.8 (77.4) million, which is 43.1 per cent higher compared with the corresponding period. There were no problems with customer financing in the past quarter. During the third quarter, the Group's net sales grew by 32 per cent compared with the corresponding period and stood at EUR 72.3 (54.7) million. Net sales for the period under review amounted to EUR 225.5 (171.8) million, representing a growth of 31.2 per cent compared with the corresponding period. The service business continued to show growth compared with the corresponding period. The operating result was positive in the third quarter, amounting to EUR 8.2 (5.4) million. The operating result came to 11.4 per cent of net sales in the past quarter. Operating costs (staff costs, depreciation and amortisation and other operating costs), excluding the impairment losses related to trade receivables, showed a planned increase of 26.5 per cent during the period under review. The continuing improvement of profitability is clearly showing results. During the period under review, cash flow from business operations was positive at EUR 5.7 (14.4) million. As business operations have grown, more capital has been tied up in inventories. The capital is mainly tied up in raw materials and consumables and new machines on their way to customers. The reduction in the departure days of domestic railway transportation hampered the implementation of deliveries and slowed down the logistics regarding new machines. In addition, exchange rate differences in the period under review affected profit, diminishing the cash flow. The factory operated as planned during the period under review. The number of machines was increased temporarily through working hours arrangements, and it was possible to deliver machines from the factory normally. The availability of materials was good throughout the period. NET SALES Consolidated net sales for the period under review amounted to EUR 225.5 (171.8) million, which was 31 per cent more than in the comparison period. International business operations accounted for 67.9 (68.7) per cent of net sales. Net sales were regionally distributed as follows: Northern Europe 51.1 (50.6) per cent, Central and Southern Europe 19.2 (17.3) per cent, Russia and Asia 14.6 (11.5) per cent, North and South America 15.1 (20.5) per cent and other countries 0.0 (0.1) per cent. PROFIT PERFORMANCE The operating result amounted to EUR 18.6 (15.3) million. The operating result equalled 8.2 (8.9) per cent of net sales for the period under review. An impairment loss worth about EUR 2.6 million related to external trade receivables in South America was recognised as an expense during the period. Consolidated return on capital employed (ROCE) stood at 18.0 (20.9) per cent. Staff costs for the period totalled EUR 35.9 (26.6) million, including an expense item of EUR 1.9 million, which included, among other things, a profit bonus paid to Group personnel. Other operating expenses stood at EUR 25.2 (18.8) million. The net total of financial income and expenses amounted to EUR -4.3 (1.7) million. Exchange rate gains and losses with a net effect of EUR -3.2 (2.5) million were recognised under financial items for the period. The impact of the Adjustment Board decisions concerning the taxation of the parent company for the period amounts to EUR -1.5 (1.5) million. Profit for the period under review totalled EUR 7.3 (17.8) million. Diluted and undiluted earnings per share (EPS) came to EUR 0.22 (0.59). The interest on the subordinated loan for the period, less tax, has been taken into account in the calculation of EPS. STATEMENT OF FINANCIAL POSITION AND FINANCING ACTIVITIES At the end of the period under review, the total consolidated statements of financial position amounted to EUR 177.0 (165.5) million. Inventories stood at EUR 88.3 (78.5) million. Trade receivables totalled EUR 32.6 (29.7) million, while liquid assets stood at EUR 8.5 (12.1) million. Group shareholders' equity stood at EUR 71.8 (69.9) million and parent company shareholders' equity at EUR 65.4 (55.0) million. Group shareholders' equity includes a hybrid loan of EUR 19 million issued on 31 March 2009. The interest paid on the hybrid loan (EUR 5.7 million) and the allocated interest for the following year according to the dividend distribution decision (EUR 1.1 million), totalling EUR 6.8 million, less tax, are recognised as a deduction from Group equity. The amount of interest-bearing liabilities was EUR 45.9 (49.9) million. The company has used 21 per cent of its credit facility limit. The parent company's net receivables from other Group companies stood at EUR 72.0 (66.7) million. The parent company's receivables from subsidiaries mainly consisted of trade receivables. Consolidated net liabilities totalled EUR 35.1 (35.2) million, and the debt-equity ratio (gearing) was 63.8 (71.5) per cent. The equity ratio stood at 41.1 (42.9) percent at the end of the period under review. Cash flow from business operations amounted to EUR 5.7 (14.4) million. Cash flow from investment activities came to EUR -5.5 (-2.4) million. ORDER INTAKE AND ORDER BOOKS Order intake for the period totalled EUR 269.8 (229.7) million, while period-end order books were valued at EUR 110.8 (77.4) million. The minimum order commitments for retailers are not included in the order book total. DISTRIBUTION NETWORK No changes took place in the Group structure during the period under review. The subsidiaries included in the Ponsse Group are: Epec Oy, Finland; OOO Ponsse, Russia; Ponsse AB, Sweden; Ponsse AS, Norway; Ponsse Asia-Pacific Ltd, Hong Kong; Ponsse China Ltd, China; Ponsse Latin America Ltda, Brazil; Ponsse North America, Inc., the United States; Ponssé S.A.S., France; Ponsse UK Ltd, the United Kingdom; and Ponsse Uruguay S.A., Uruguay. Sunit Oy, based in Kajaani, Finland, is an affiliated company in which Ponsse Oyj has a holding of 34 per cent. CAPITAL EXPENDITURE AND R&D During the period under review, the Group's R&D expenses totalled EUR 6.3 (4.1) million, of which EUR 1.8 (1.1) million was capitalised. Capital expenditure totalled EUR 5.5 (2.4) million. It mainly consisted of ordinary maintenance and replacement investments for machinery and equipment. MANAGEMENT Sigurd Skotte (48), Master of Forestry, took up his post as the President and CEO of Ponsse AS on 1 September 2011. A separate release was issued on the appointment on 31 May 2011. Clément Puybaret (30), forest engineer, took up his post as the President and CEO of Ponssé S.A.S. on 15 August 2011. A separate release was issued on the appointment on 14 June 2011. PERSONNEL The Group had an average staff of 936 (813) during the period and employed 970 (846) people at period-end. SHARE PERFORMANCE The company's registered share capital consists of 28,000,000 shares. The trading volume of Ponsse Plc shares for 1 January - 30 September 2011 totalled 1,924,361, accounting for 6.9 per cent of the total number of shares. Share turnover amounted to EUR 19.4 million, with the period's lowest and highest share prices amounting to EUR 5.85 and EUR 11.85, respectively. At the end of the period, shares closed at EUR 7.15, and market capitalisation totalled EUR 200.2 million. At the end of the period under review, the company held 212,900 treasury shares. ANNUAL GENERAL MEETING A separate release was issued on 12 April 2011 regarding the authorisations given to the Board of Directors and other resolutions at the AGM. GOVERNANCE In its decision-making and administration, the company observes the Finnish Limited Liability Companies Act, other regulations governing publicly listed companies and the company's Articles of Association. The company's Board of Directors has adopted the Code of Governance that complies with the Finnish Corporate Governance Code approved by the Board of the Securities Market Association in 2010. The purpose of the code is to ensure that the company is professionally managed and that its business principles and practices are of a high ethical and professional standard. The Code of Governance is available on Ponsse's website in the Investors section. RISK MANAGEMENT Risk management is based on the company's values, as well as strategic and financial objectives. Risk management aims to support the achievement of the objectives specified in the company's strategy, as well as to ensure the financial development of the company and the continuity of its business. Furthermore, risk management aims to identify, assess and monitor business-related risks which may influence the achievement of the company's strategic and financial goals or the continuity of its business. Decisions on the necessary measures to anticipate risks and react to observed risks are made on the basis of this information. Risk management is a part of regular daily business, and it is also included in the management system. Risk management is controlled by the risk management policy approved by the Board. A risk is any event that may prevent the company from reaching its objectives or that threatens the continuity of business. On the other hand, a risk may also be a positive event, in which case the risk is treated as an opportunity. Each risk is assessed on the basis of its impact and probability. Methods of risk management include avoiding, mitigating and transferring risks. Risks can also be managed by controlling and minimising their impact. SHORT-TERM RISK MANAGEMENT The rapid escalation of the problems in the economies of Europe and the United States in the financial market may have an impact on the availability of customer financing. The parent company monitors the changes in the Group's internal and external trade receivables and the associated risk of impairment. The key objective of the company's financial risk management policy is to manage liquidity, interest and currency risks. The company ensures its liquidity through credit limit facilities agreed with a number of financial institutions. The effect of adverse changes in interest rates is minimised by utilising credit linked to different reference rates and by concluding interest rate swaps. The negative effects of currency rate fluctuations are mitigated though derivative contracts. Changes taking place in the fiscal and customs legislation in countries to which Ponsse exports may hamper the company's export trade or its profitability. OUTLOOK FOR THE FUTURE Strong order books mean there will be positive development of the company's business operations towards the end of 2011. The culmination of economic problems may have a rapid impact on the sales of new machines through problems in customer financing. The weakening of the economy may slow down the making of investment decisions on forest machines. The profitability of the Group's business operations during the entire year is expected to develop positively and improve compared to 2010. Cash flow from business operations will amount to the same level as in 2010. The factory and maintenance are operating at full capacity. The development of operating expenses will be monitored in an enhanced manner, and the investments for the end of the year will be implemented as planned. PONSSE GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1,000) IFRS IFRS IFRS 1-9/11 1-9/10 1-12/10 NET SALES 225,484 171,819 262,416 Increase (+)/decrease (-) in inventories of 9,918 6,561 476 finished goods and work in progress Other operating income 812 678 898 Raw materials and services -152,738 -114,572 -170,810 Expenditure on employment-related benefits -35,870 -26,638 -38,243 Depreciation and amortisation -3,799 -3,806 -5,079 Other operating expenses -25,206 -18,790 -27,984 OPERATING RESULT 18,600 15,252 21,674 Share of results of associated companies -185 -232 5 Financial income and expenses -4,273 1,717 2,769 RESULT BEFORE TAXES 14,142 16,738 24,448 Income taxes -6,860 1,052 -1,111 NET RESULT FOR THE PERIOD 7,282 17,790 23,338 OTHER ITEMS INCLUDED IN TOTAL COMPREHENSIVE RESULT: Translation differences related to foreign units -157 -654 -904 TOTAL COMPREHENSIVE RESULT FOR THE PERIOD 7,125 17,136 22,434 Diluted and undiluted earnings per share (* 0.22 0.59 0.78 IFRS IFRS 7-9/11 7-9/10 NET SALES 72,278 54,705 Increase (+)/decrease (-) in inventories of 2,975 2,198 finished goods and work in progress Other operating income 375 176 Raw materials and services -48,842 -35 530 Expenditure on employment-related benefits -10,499 -8,328 Depreciation and amortisation -1,246 -1,277 Other operating expenses -6,818 -6,500 OPERATING RESULT 8,222 5,443 Share of results of associated companies -42 -131 Financial income and expenses -1,003 -3,443 RESULT BEFORE TAXES 7,177 1,870 Income taxes -2,526 -610 NET RESULT FOR THE PERIOD 4,651 1,260 OTHER ITEMS INCLUDED IN TOTAL COMPREHENSIVE RESULT: Translation differences related to foreign units -493 687 TOTAL COMPREHENSIVE RESULT FOR THE PERIOD 4,158 1,947 Diluted and undiluted earnings per share (* 0.16 0.03 (* The interest on the subordinated loan for the period, less tax, was taken into account in this figure. CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 1,000) IFRS IFRS ASSETS 30.9.11 31.12.10 NON-CURRENT ASSETS Intangible assets 8,138 6,571 Goodwill 3,440 3,440 Property, plant and equipment 24,596 24,443 Financial assets 111 111 Investments in associated companies 1,290 1,625 Non-current receivables 1,724 3,144 Deferred tax assets 2,759 1,712 TOTAL NON-CURRENT ASSETS 42,059 41,045 CURRENT ASSETS Inventories 88,297 72,391 Trade receivables 32,333 32,125 Income tax receivables 655 623 Other current receivables 5,178 4,483 Cash and cash equivalents 8,492 11,036 TOTAL CURRENT ASSETS 134,955 120,659 TOTAL ASSETS 177,015 161,704 SHAREHOLDERS' EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY Share capital 7,000 7,000 Other reserves 19,030 19,030 Translation differences -1,189 -1,032 Treasury shares -2,228 -2,228 Retained earnings 49,226 52,396 EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS 71,839 75,166 NON-CURRENT LIABILITIES Interest-bearing liabilities 28,557 16,155 Deferred tax liabilities 153 469 Other non-current liabilities 27 128 TOTAL NON-CURRENT LIABILITIES 28,737 16,752 CURRENT LIABILITIES Interest-bearing liabilities 17,308 20,603 Provisions 4,842 4,706 Tax liabilities for the period 2,251 215 Trade creditors and other current liabilities 52,038 44,263 TOTAL CURRENT LIABILITIES 76,438 69,787 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 177,015 161,704 CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1,000) IFRS IFRS 1-9/11 1-9/10 CASH FLOW FROM BUSINESS OPERATIONS: Net result for the period 7,282 18,010 Adjustments: Financial income and expenses 4,273 -1,717 Share of the result of associated companies 185 232 Depreciation and amortisation 3,799 3,806 Income taxes 7,298 -589 Other adjustments -47 4 Cash flow before changes in working capital 22 791 19,746 Change in working capital: Change in trade receivables and other receivables 289 -8,122 Change in inventories -15,906 -11,519 Change in trade creditors and other liabilities 7,885 13,263 Change in provisions for liabilities and charges 136 -835 Interest received 134 373 Interest paid -853 -805 Other financial items -3,434 2,342 Income taxes paid -5,294 -31 NET CASH FLOW FROM BUSINESS OPERATIONS (A) 5,747 14,411 CASH FLOW FROM INVESTMENTS Investments in tangible and intangible assets -5,521 -2,437 Investments in other assets 0 0 Repayment of loan receivables 0 0 Dividends received 0 0 CASH OUTFLOW FROM INVESTMENT ACTIVITIES (B) -5,521 -2,437 FINANCING Acquisition of treasury shares 0 -1,564 Hybrid loan 0 0 Interest paid, hybrid loan -2,280 -2,280 Withdrawal/Repayment of non-current loans -463 -1,940 Change in current interest-bearing liabilities 78 73 Withdrawal/Repayment of non-current loans 9,873 96 Payment of finance lease liabilities -403 -505 Change in non-current receivables 150 -140 Dividends paid -9,725 -4,193 NET CASH OUTFLOW FROM FINANCING (C) -2,771 -10,454 Change in cash and cash equivalents (A+B+C) -2,545 -1,521 Cash and cash equivalents on 1 January 11,036 10,626 Cash and cash equivalents on 30 September 8,492 12,147 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR 1,000) A = Share capital B = Share premium and other reserves C = Translation differences D = Treasury shares E = Retained earnings F = Total shareholders' equity EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS A B C D E F SHAREHOLDERS' EQUITY 1 JAN 2011 7,000 19,030 -1,032 -2,228 52,396 75,166 Adjustment for previous periods 960 960 regarding the hybrid loan interest Adjusted shareholders' equity 1 7,000 19,030 -1,032 -2,228 53,356 76,126 Jan 2011 Translation differences -157 -157 Result for the period 7,282 7,282 Total comprehensive income for -157 7,282 7,125 the period Direct entries to retained -1,687 -1,687 earnings *) Dividend distribution -9,725 -9,725 Purchase of treasury shares 0 Other changes 0 SHAREHOLDERS' EQUITY 30 SEP 2010 7,000 19,030 -1,189 -2,228 49,226 71,839 SHAREHOLDERS' EQUITY 1 JAN 2010 7,000 19,030 -128 ,-665 34,329 59,566 Translation differences -654 -654 Result for the period 17,790 17,790 Total comprehensive income for -654 17,790 17,136 the period Direct entries to retained -1,078 -1,078 earnings *) Dividend distribution -4,193 -4,193 Purchase of treasury shares -1,563 -1,563 Other changes 0 SHAREHOLDERS' EQUITY 30 SEP 2010 7,000 19,030 -782 -2,228 46,848 69,868 *) Consists of the interest paid for the hybrid loan classified as equity. 30.9.11 30.9.10 31.12.10 1. LEASING COMMITMENTS (EUR 1,000) 4,323 5,224 4,991 2. CONTINGENT LIABILITIES (EUR 1,000) 30.9.11 30.9.10 31.12.10 Guarantees given on behalf of others 857 684 425 Repurchase commitments 1,841 3,280 2,501 Other commitments 4,249 1,964 2,659 TOTAL 6,947 5,928 5,585 3. PROVISIONS (EUR 1,000) Guarantee provision 1 January 2011 4,706 Provisions added 770 Provisions cancelled -635 30 September 2011 4,842 KEY FIGURES AND RATIOS 30.9.11 30.9.10 31.12.10 R&D expenditure, MEUR 6.3 4.1 5.9 Capital expenditure, MEUR 5.5 2.4 4.8 as % of net sales 2.4 1.4 1.8 Average number of employees 936 813 825 Order books, MEUR 110.8 77.4 68.3 Equity ratio, % 41.1 42.9 46.9 Diluted and undiluted earnings per share (EUR) 0.22 0.59 0.78 Equity per share (EUR) 2.56 2.50 2.68 FORMULAE FOR FINANCIAL INDICATORS Average number of employees: Average of the number of personnel at the end of each month. The calculation has been adjusted for part-time employees. Equity ratio, %: Shareholders' equity + Non-controlling interests --------------------------------------------- Balance sheet total - advance payments received * 100 Earnings per share: Net income for the period - Non-controlling interests - Interest on hybrid loan for the period less tax ---------------------------------------------- Average number of shares during the accounting period, adjusted for share issues Equity per share: Shareholders' equity ---------------------------------------------- Number of shares on the balance sheet date, adjusted for share issues ORDER INTAKE, MEUR 1-9/11 1-9/10 1-12/10 Ponsse Group 269.8 229.7 311.2 The interim report has been prepared observing the recognition and valuation principles of IFRS standards, but not all of the requirements of IAS 34, Interim Financial Reporting, have been complied with. The same accounting principles were observed for the interim report as for the annual financial statements dated 31 December 2010, with the exception, however, that the following new standards, interpretations and amendments adopted by the EU were introduced from 1 January 2011: IAS 24 (revised) - Related Party Disclosures; IAS 32 (amendment) - Classification of Rights Issue; IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments; and IFRIC 14 (amendment) - Prepayments of a Minimum Funding Requirement. These new standards, interpretations and amendments have no impact on the Group's interim report. In July 2010, the IASB published improvements to seven standards or interpretations as part of its annual improvements. The Group will adopt the amendments, after EU approval, in its financial statements for 2011: IFRS 3 (amendment) - Business Combinations; IFRS 7 (amendment) - Financial Instruments: Disclosures; IAS 1 (amendment) - Presentation of Financial Statements; IAS 27 (amendment) - Consolidated and Separate Financial Statements; IAS 34 (amendment) - Interim Financial Reporting; IFRIC 13: Customer Loyalty Programmes; IFRS 9 - Classification and measurement of financial assets and liabilities; IAS 12 (amendment) - Deferred taxes; these improvements may have an impact on the consolidated interim reports. The above figures have not been audited. The above figures have been rounded and may therefore differ from those given in the official financial statements. This communication includes future-oriented statements that are based on the assumptions currently made by the company's management and its current decisions and plans. Although the management believes that the future expectations are well founded, there is no certainty that these expectations will prove to be correct. This is why the results may significantly deviate from the assumptions included in the future-oriented statements as a result of, among other things, changes in the economy, markets, competitive conditions, legislation or currency exchange rates. Vieremä, 25 October 2011 PONSSE PLC Juho Nummela President and CEO FURTHER INFORMATION Juho Nummela, President and CEO, tel. +358 20 768 8914 or +358 400 495 690 Petri Härkönen, CFO, tel. +358 20 768 8608 or +358 50 409 8362 DISTRIBUTION NASDAQ OMX Helsinki Ltd Principal media www.ponsse.com Ponsse Plc is a company specialising in the sales, manufacture, servicing and technology of cut-to-length method forest machines and is driven by genuine interest in its customers and their business. Ponsse develops and manufactures sustainable and innovative harvesting solutions based on customers' needs. The company was established by forest machine entrepreneur Einari Vidgrén in 1970, and it has been a leader in timber harvesting solutions based on the cut-to-length method ever since. Ponsse is headquartered in Vieremä, Finland. The company's shares are quoted on the NASDAQ OMX Nordic List. |
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