2014-05-08 16:30:00 CEST
2014-05-08 16:30:02 CEST
REGULATED INFORMATION
Honkarakenne Oyj - Interim report (Q1 and Q3)
HONKARAKENNE OYJ’S INTERIM REPORT, 1 JANUARY – 31 MARCH 2014
HONKARAKENNE OYJ INTERIM REPORT 8 May 2014 at 5:30 p.m.
HONKARAKENNE OYJ'S INTERIM REPORT, 1 JANUARY - 31 MARCH 2014
SUMMARY
Net sales in the first quarter grew by 21% on the previous year. The Group's
operating result increased by 12% in comparison to the previous year. The
economic situation affected profitability negatively. Net sales in Russia and
CIS have developed as expected in spite of the situation in Ukraine.
January-March 2014
-- The Honkarakenne Group's net sales for the first quarter amounted to MEUR
8.9 (MEUR 7.3 in 2013). Net sales rose by 21% on the previous year.
-- The operating result was MEUR -1.3 (MEUR -1.5).
-- The loss before taxes was MEUR -1.3 (MEUR -1.3).
-- Earnings per share amounted to EUR -0.21 (EUR -0.21).
AVAINLUVUT 1-3/ 1-3/ 1-12/ change %
2014 2013 2013
Net sales, MEUR 8,9 7,3 48,3 21
Operating profit/loss, MEUR -1,3 -1,5 -1,7
Operating profit before non-recurring items, MEUR -1,3 -1,5 -1,1
Profit/loss before taxes, MEUR -1,3 -1,3 -1,7
Average number of personnel 173 245 213
Personnel in person-years, average 160 175 185
Earnings/share (EPS), EUR -0,21 -0,21 -0,32
Equity ratio, % 37 45 38
Return on equity, % -10 -8 -13
Shareholders' equity/share, EUR 2,00 2,46 2,20
Gearing, % 88 42 57
Mikko Kilpeläinen, President and CEO of Honkarakenne Oyj, in connection with
the interim report:
“The Group's net sales growth was 21% on the previous year. Net sales increased
in all markets. The result for the first quarter of 2014 was in the red due to
seasonal variations in our business.
In R&D we finalised Honka model collection of ready-to-move-in detached houses
for Finnish market and the model collection sales started right at the
beginning of the second quarter. The Länsituuli (West Wind) model from the
latter model collection was voted as Finland's best detached house in a
competition on the rakentaja.fi website. The ready-to-move-in concept is built
in such a way that the purchase is as easy as possible.
The net sales grew in Russia and CIS during the first quarter. I am happy to
say that the order book for Russia and CIS is up on the previous year in spite
of crisis in Ukraine.
Honkarakenne launched sales in China and received first orders during the first
quarter. We believe there will be demand for Finnish high-quality, solid timber
houses. Wellbeing and a healthy and ecological living environment are global
megatrends. Out product range meets these requirements very well.
Production was centralized in Karstula last year. Centralization and
modernization investments of approximately four million made in Karstula
affected gearing ratio. Investments and organizational changes will improve our
competitiveness in future.”
NET SALES
The Honkarakenne Group's net sales for the first quarter of 2014 rose by 21 per
cent to MEUR 8.9 (MEUR 7.3).
Geographical distribution of net sales:
DEVELOPMENT OF SALES
Distribution of 1-3/2014 1-3/2013
net sales, %
Finland & Baltics 49 % 53 %
Russia & CIS 27 % 26 %
Global Markets 24 % 21 %
Total 100 % 100 %
Net sales, MEUR 1-3/2014 1-3/2013 change % 1-12/2013
Finland & Baltics 4,4 3,9 12 % 20,3
Russia & CIS 2,4 1,9 22 % 12,8
Global Markets 2,1 1,5 40 % 15,2
Total 8,9 7,3 21 % 48,3
Finland & Baltics includes the following countries: Finland, Estonia, Latvia
and Lithuania. It includes also Process waste sales for recycling which was
reported separately before.
Russia & CIS includes the following countries: Russia, Azerbaijan, Kazakhstan,
Ukraine and other CIS countries.
Global Markets includes other countries than above-mentioned.
The Group's order book stood at MEUR 18.7 at the end of December. In the
previous year at the same time period it was MEUR 18.9.
TRENDS IN PROFIT AND PROFITABILITY
The operating loss for the January-March period was MEUR -1.3 (MEUR -1.5) and
the result before taxes was MEUR -1.3 (MEUR -1.3).
The main factors affecting the operating result were a favourable rise in net
sales and unfavourable price competition in the Finnish market.
FINANCING AND INVESTMENTS
The financial position of the Group remained satisfactory during the report
period. The equity ratio stood at 37 % (45 %) and net financial liabilities at
MEUR 8.7 (MEUR 5.1). MEUR 3.1 (MEUR 2.1) of the financial liabilities carry a
30 % equity ratio covenant term. Group liquid assets totalled MEUR 1.4 (MEUR
1.6). The Group also has a MEUR 8.0 (MEUR 8.0) bank overdraft facility, MEUR
4.6 of which had been drawn on at the end of the report period (MEUR 1.5).
Gearing stood at 88 % (42%).
The Group's capital expenditure totalled MEUR 0.2 (MEUR 0.1). With regard to
production, we have been focusing on the introduction and launch of production
investments during late 2013 and early 2014. Production efficiency is expected
to improve during late 2014.
MARKET DEVELOPMENT
On the basis of a report commissioned by RTS Oy, Finnish log house production
is expected to grow by 4% this year. This figure includes production for both
Finland and overseas export. The construction industry expects that the
construction of 7,500 detached homes will be begun this year, which is the
lowest number in almost twenty years.
PRODUCTS AND MARKETING
In the Finland & Baltics market area, price competition continued to be tough
due to the difficult market situation. A new holiday home model collection and
a new detached house model collection were both launched during the first
quarter. The Länsituuli (West Wind) model from the latter model collection was
voted as Finland's best detached house in a competition on the rakentaja.fi
website.
In the Russia & CIS market area, favourable trends were seen in area
development projects in particular. The situation in Ukraine has not impacted
Honkarakenne's operations in Russia. The order book for Russia has also been
increasing on the previous year. Net sales in Ukraine will also be higher in
2014 than in 2013.
In the Global Markets market area, the focus has been on developing the Chinese
market. Sales in China were launched in February. The first deal for a few
houses was already signed during the first quarter, and the houses will be
delivered to China later this year. In Japan there were good trends seen in
sales.
RESEARCH AND DEVELOPMENT
R&D focused on creating new solutions for the Finnish detached house market.
One of these, a ready-to-move-in model collection, was launched right at the
beginning of the second quarter. The special features of the Chinese market
were another focal point for development.
In the January-March period, the Group's R&D expenditure totalled MEUR 0.1
(MEUR 0.1), representing 1.1 % of net sales (1.2 %). The Group did not
capitalise any development expenditure during the report period.
STAFF
During the first quarter, the Group employed a total of 160 (175) people on
average in terms of person-years. The Group had an average of 173 (245)
employees during the first quarter, representing a year-on-year decrease of 72.
On the basis of the co-operation negotiations that ended in December 2013, the
company has the authorisation to implement temporary lay-offs of a maximum of
90 days affecting all of its personnel in Finland until the end September 2014.
LONG-TERM INCENTIVE PLAN
In the second quarter of 2013, the Board of Directors decided on a long-term
share-based incentive plan for members of the Executive Group. The performance
period of the new plan began on 1 January 2013 and will end on 31 December
2016. The potential reward for the performance period is based on the
cumulative earnings per share (EPS) for 2013 - 2016 and on the average return
on capital employed (ROCE) for 2013 - 2016. Any rewards for the performance
period 2013 - 2016 will be paid partly as B shares and partly in cash in 2017.
The rewards to be paid on the basis of the performance period will correspond
to a total maximum of about 340,000 B shares, including the amount to be paid
in cash.
During report period the amount of allocated shares was 5,315. These allocated
shares are recognized as follows: 16 thousand euros employee benefit expenses,
2 thousand euros deduction in taxes and increase in deferred tax assets and 8
thousand euros in retained earnings.
HONKARAKENNE OYJ'S 2014 ANNUAL GENERAL MEETING, BOARD OF DIRECTORS, AND AUDITORS
The Annual General Meeting of Honkarakenne Oyj was held at the company's
headquarters in Tuusula on 4 April 2014. The AGM approved the parent company's
and the consolidated Financial Statements, and discharged the members of the
Board of Directors and the CEO from liability for 2013. The AGM decided not to
pay a dividend for the 2013 financial year.
Teijo Pankko and Mauri Saarelainen were re-elected to the Board of Directors.
Arto Tiitinen, Anita Saarelainen and Hannu Krook were elected to the Board as
new members. At the Board's constituent meeting, Arto Tiitinen was elected
Chairman of the Board. Mauri Saarelainen was elected as Deputy Chairman. The
Board of Directors decided not to elect any committees from among its members.
PricewaterhouseCoopers Oy, member of the Finnish Institute of Authorised Public
Accountants, was re-appointed as auditor of the company, with Maria Grönroos,
APA, as chief auditor.
HONKARAKENNE OYJ's DIRECTED ISSUE, OWN SHARES AND BOARD AUTHORISATIONS
On the basis of an authorisation to issue shares granted to the Board of
Directors at the Annual General Meeting of 5 April 2013, the Board decided (on
10 January 2014) to arrange a directed issue to Honkarakenne employees. The
Board approved a total of 42,451 subscriptions for new Series B shares through
the directed issue. The Series B shares subscribed for through the directed
issue represent about 0.9 per cent of the total number of Series B shares and
the voting rights conferred by them. 62 company employees subscribed for shares
through the directed issue. Shares were offered to a total of 146 employees.
The total number of Series B shares increased to 4,911,323 shares after the new
shares were registered in the Trade Register.
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 6.99 %
of the company's all shares and 3.34 % of all votes. The purchase cost has been
deducted from shareholders' equity in the consolidated financial statements.
On 4 April 2014, the AGM decided that the Board of Directors will be authorisedto 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 2015.
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.
OUTLOOK
The market situation remains uncertain. The Finnish market is being impacted by
a general fall in construction in both the detached house and holiday home
sectors. The situation in Ukraine and its associated sanctions are causing
uncertainty in the Russian market.
At the end of March, the Group's order book stood at MEUR 18.7, down 1% on the
corresponding period of the previous year, when it stood at MEUR 18.9. The
order book refers to orders whose delivery date falls within the next 24
months. Some orders may include terms and conditions relating to financing or
building permits.
FORTHCOMING RISKS AND UNCERTAINTIES
Changes in the Russian market in particular may lead to amendments to the
full-year outlook. However, sales have thus far been better than last year.
The Group has one concentration of credit risks in sales receivables,
concerning the open sales receivables of one dealer. No provision for doubtful
debt has been made for this. A payment plan has been made with this dealer. The
payment plan is intended to be completed in 2014.
The assessment 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 2013 financial statements. The figures have not been examined by the
auditor.
THE OUTLOOK FOR 2014
In the first quarter the net sales grew in all market areas and Honkarakenne
expects its full-year net sales to increase. Honkarakenne is revising its
outlook concerning the full year result. Honkarakenne expects its result before
non-recurring items and taxes to improve from the previous year. Changes in the
situation in Ukraine may affect the outlook for year 2014.
Honkarakenne's previous outlook was the following: the company expects its net
sales to increase and its result before non-recurring items and taxes to be
positive.
HONKARAKENNE OYJ
Board of Directors
Further information:
Mikko Kilpeläinen, President and CEO, tel. +358 50 542 5884,
mikko.kilpelainen@honka.com
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. Interim Reports for 2014 will be published on 7 August 2014
and 30 October 2014.
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
Financial Supervisory Authority
www.honka.com
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
unaudited 1-3 1-3 1-12
/2014 /2013 /2013
MEUR
Net sales 8,9 7,3 48,3
Other operating income 0,1 0,2 0,4
Change in inventories -0,6 1,2 0,9
Production for own use 0,0 0,0 0,0
Materials and services -5,4 -5,5 -30,9
Employee benefit expenses -2,0 -2,4 -10,9
Depreciations and amortisation -0,5 -0,6 -2,3
Impairment -0,0 -0,0 -0,2
Other operating expenses -1,6 -1,6 -6,9
Operating profit/loss -1,3 -1,5 -1,7
Financial income 0,0 0,2 0,8
Financial expenses -0,1 -0,0 -0,7
Share of associated companies' result 0,0 0,0 -0,0
Profit/loss before taxes -1,3 -1,3 -1,7
Taxes 0,3 0,3 0,1
Profit/loss for the period -1,0 -1,0 -1,5
Other comprehensive income:
Translation differences 0,0 -0,1 -0,4
Total comprehensive -1,0 -1,1 -2,0
income for the period
Result for the period attributable to:
Equity holders of the parent -1,0 -1,1 -2,0
Non-controlling interest -0,0 -0,0 0,0
-1,0 -1,1 -2,0
Calculated from the result for the period attributable to
equity holders of parent
Earnings/share (EPS), EUR
Basic -0,21 -0,21 -0,32
Diluted -0,21 -0,21 -0,32
Honkarakenne Oyj has two series of shares: A shares and B shares, which have
different right to dividend. Profit distribution of 0.20 EUR per share will be
paid first for B shares, then 0.20 EUR per share for A shares, followed by
equal distribution of remaining profit distribution between all shares.
CONSOLIDATED BALANCE SHEET
unaudited
MEUR
31.3.2014 31.3.2013 31.12.2013
Assets
Non-current assets
Property, plant and equipment 15,6 14,0 15,9
Goodwill 0,1 0,1 0,1
Other intangible assets 0,5 0,6 0,5
Investments in associated companies 0,3 0,3 0,3
Other investments 0,0 0,1 0,0
Receivables 0,2 0,3 0,2
Deferred tax assets 1,8 1,4 1,5 18,5 16,8 18,4
Current assets
Inventories 6,4 7,6 7,1
Trade and other receivables 5,7 7,4 5,2
Cash and bank receivables 1,4 1,6 3,2
13,6 16,6 15,6
Total assets 32,1 33,4 34,0
Shareholders' equity and liabilities 31.3.2014 31.3.2013 31.12.2013
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
Fund for invested unrestricted equity 6,5 6,8 6,4
Own shares -1,4 -1,4 -1,4
Translation differences -0,2 0,1 -0,2
Retained earnings -5,7 -4,2 -4,7
9,7 11,8 10,6
Non-controlling interests 0,2 0,2 0,2
Total equity 9,9 12,0 10,8
Non-current liabilities
Deferred tax liabilities 0,0 0,0 0,1
Provisions 0,5 0,5 0,5
Financial liabilities 8,5 4,1 7,5
Other liabilities 0,0 0,0 0,0
9,0 4,7 8,1
Current liabilities
Trade and other payables 10,9 13,2 12,3
Current tax liabilities 0,1 0,0 0,2
Provisions 0,5 0,9 0,9
Current financial liabilities 1,6 2,6 1,8
13,1 16,7 15,1
Total liabilities 22,1 21,4 23,2
Total equity and liabilities 32,1 33,4 34,0
STATEMENT OF CHANGES IN EQUITY
abridged
unaudited
EUR thousand Equity attributable to equity holders of
the parent
a) b) c) d) e) f) Total g) Total
equity
Total equity 9898 520 6828 224 -1382 -3178 12909 209 13117
1.1.2013
Profit/loss for the -1002 -1002 1 -1001
period
Translation -96 -96 -96
difference
Total equity 9898 520 6828 128 -1382 -4180 11811 211 12022
31.3.2013
EUR thousand Equity attributable to equity holders of the parent
a) b) c) d) e) f) Total g) Total
equity
Total equity 9898 520 6444 -197 -1382 -4710 10573 211 10784
1.1.2014
Profit/loss for the -1011 -1011 0 -1011
period
Translation 15 15 15
difference
Share issue 90 90 90
Management 8 8 8
incentive plan
Total equity 9898 520 6534 -182 -1382 -5715 9674 211 9886
31.3.2014
a) Share capital
b) Share premium account
c) Fund for invested unrestricted equity
d) Translation difference
e) Own shares
f) Retained earnings
g) Non-controlling interests
CONSOLIDATED STATEMENT OF CASH FLOWS 1.1.- 1.1.- 1.1.-
abridged 31.3.2014 31.3.2013 31.12.2013
unaudite
MEUR
Cash flow from operating activities -1,8 -3,5 -1,2
Cash flow from investing activities, net -0,8 -0,1 -3,0
Total cash flows from financing activities: 0,8 0,4 2,6
Share issue 0,1
Repayment of capital -0,4
Proceeds from borrowings 3,0 1,6 5,6
Repayment of borrowings -2,2 -1,1 -2,4
Other financial items -0,1 -0,1 -0,2
Change in cash and cash equivalents -1,8 -3,2 -1,6
Cash and cash equivalents at the beginning of 3,2 4,8 4,8
period
Cash and cash equivalents at the close of 1,4 1,6 3,2
period
NOTES TO THE REPORT
Accounting policies
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 2013 financial statements. The new revised standards or interpretations
effective as of 1 January 2014 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 three geographical operating segments that have been combined
into one segment for reporting purposes. Geographically, sales 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 1.1.2014 65,7
Translation differences (+/-) 0,0
Increase 0,8
Disposals -0,0
Reclassifications -0,6
Cost 31.3.2014 65,8
Accumulated depreciation 1.1.2014 -49,8
Translation differences (+/-) -0,0
Accumulated depreciation of disposals and 0,0
reclassifications
Depreciation for the period -0,4
Accumulated depreciation 31.3.2014 -50,2
Carrying amount 1.1.2013 15,9
Carrying amount 31.3.2013 15,6
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
6.99 % of company's all shares and 3.34 % of all votes.
Contingent liabilities
unaudited 31.3.2014 31.3.2013
MEUR
For own loans
- Mortgages 25,7 25,7
- Other quarantees 2,5 2,7
For others
- Guarantees 0,0 0,1
Leasing liabilities 0,2 0,2
Nominal values of forward exchange contracts 1,3 2,0
Derivative contracts 0,4 0,4
Events with related parties
The Group's related parties consist of subsidiaries and associated companies;
the company's management and any companies in which they exert influence; and
those involved in the Saarelainen shareholder agreement and any companies
controlled by them. The management personnel considered to be related parties
comprise the Board of Directors, President & CEO, and the company's Executive
Group. The pricing of goods and services in transactions with related parties
conforms to market-based pricing.
During the report period, ordinary business transactions with related parties
were made as follows: the sales to the related parties were EUR 106 thousand
and the purchases from the related parties were EUR 159 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 2014 2013 2013
Earnings/share (EPS) eur -0,21 -0,21 -0,32
Return on equity % -10 -8 -13
Equity ratio % 37 45 38
Shareholders equity/share eur 2,00 2,46 2,20
Net debt MEUR 8,7 5,1 6,1
Gearing % 88 42 57
Gross investments MEUR 0,2 0,1 3,7
% of net sales 3 1 8
Order book MEUR 18,7 18,9 18,1
Average number of personnel Staff 101 119 111
Workers 73 126 102
Total 173 245 102
Personnel in person-years, average Staff 88 103 104
Workers 73 72 82
Total 160 175 185
Adjusted number of shares ('000) At period-end 4847 4805 4805
Average during period 4819 4813 4813
Calculation of key indicators
Profit / loss for the period attributable to equity
holders of parent
Earnings/share -----------------------------------------------
(EPS)
Average number of outstanding shares
Profit / loss 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
© 2024 Nasdaq, Inc. All Rights Reserved |