Neo Industrial Oyj - Half Year financial report

NEO INDUSTRIAL PLC HALF YEAR FINANCIAL REPORT 9 AUGUST 2016 3:05 PM

NEO INDUSTRIAL PLC'S HALF YEAR FINANCIAL REPORT JANUARY-JUNE 2016

The Cable Segment’s turnover grew and operating result improved clearly from
previous year. 

January–June
-The Group’s turnover was EUR 50.2 million (43.6 million).
-The operating result was EUR 3.9 (-0.6) million.
-The operating result of the Cable Segment was EUR 4.3 (0.1) million.
-The Group’s result for the period was EUR 2.3 (-1.3) million.

MANAGING DIRECTOR RALF SOHLSTRÖM:

For the first half of year 2016, the Cable segment’s turnover increased 15% and
the operating result increased by EUR 4.2 million compared to previous year.
The operating result of the comparison period was burdened by non-recurring
costs, total EUR 0.9 million. 

The turnover and operating results increased due to the delivery contracts of
underground cables concluded last year as well as active actions taken to
increase the utilisation rates and delivery capacities of the factories. The
investments agreed upon earlier have been implemented successfully, and the
efficiency improvement program started last October has resulted in improved
cost-effectiveness of the cable industry and improved productivity of the
factories. 

The Group's financing debts have reduced significantly and, consequently,
management is able to focus on business development. This is already visible in
the profit development. 

The market shows signs of recovery and grid builders are expected to continue
underground cabling investments to improve the reliability of electricity
distribution. 

KEY FIGURES


                                    1-6/2016  1-6/2015  1-12/2015
Turnover, EUR million                   50,2      43,6       84,6
Operating result, EUR million            3,9      -0,6       -2,0
Result for the period, EUR million       2,3      -1,3       -3,7
Earnings per share, EUR                 0,38     -0,21      -0,62
ROI, %                                  13,9      -1,5       -6,0
Equity ratio, %                         18,2      14,2       11,8



RISKS AND UNCERTAINTY FACTORS

Neo Industrial’s financial risks include currency, interest rate, commodity,
liquidity, credit and investment market risks. Financial risks and the related
protection measures are described in more detail in the notes to the latest
financial statements. The company’s future risk factors are related to the
business development of its portfolio companies. The uncertainty of the global
economy and financial market possess a risk to the financial arrangements of
the Group. 

In addition to ensuring liquidity and sufficient funding by conducting
negotiations on financing and payment terms, measures for boosting inventory
turnover and freeing up capital assets are taken into action Due to improved
financial situation the management has been able to concentrate on business
development. 

In the Cable segment, the most significant risks are related to market
development, fluctuations of raw material prices and currencies as well as
working capital management in various situations. During considerable seasonal
changes, suppliers’ terms of payment effect significantly on the ability to
ensure competitive delivery times through sufficient inventories. Also,
operation models are being developed in order to balance out the effects of
seasonal changes on the load rates of factories. 

In the Cable Segment the key raw materials are metals (copper and aluminium)
and plastics. In the metals purchases partial price hedging is used with the
aid of commodity derivatives. Important with metals are the development of both
the dollar-denominated price and the USD / EUR exchange rate. 

MAJOR EVENTS AFTER THE REVIEW PERIOD

There has been no major events after the review period.

NEAR-TERM OUTLOOK

Construction has been picking up somewhat in Nordic countries and Western
Europe. The management believes that grid constructors will continue ground
cabling investments to ensure distribution reliability. The turnover of the
Cable Segment in 2016 is believed to clearly exceed the turnover of 2015. The
Group’s operating result is believed to be positive also during the second half
of the year and the operating result of the entire year is believed to be
clearly positive. 

DISCLOSURE POLICY OF HALF YEAR FINANCIAL REPORT

Neo Industrial discloses relevant information related to its Half Year
Financial Report with this Stock Exchange Release. The entire Half Year Report
for January–June 2016 is attached to this release and is also available on
company's website at www.neoindustrial.fi. 


Hyvinkää 9 August 2016

Neo Industrial Plc
Board of Directors

Further information:
Managing Director Ralf Sohlström, tel. +358 40 770 2720



All comments in this report that do not refer to actual facts are future
estimates. Such estimates include expectations concerning market trends, growth
and profitability as well as statements including the words "believe", "assume"
or "will be" or a similar expression. Since thses estimates are based on
current plans and estimates, they involve risks and uncertainty factors that
may cause the actual results to differ substantially from current statements. 

Among other things, such factors include 1) operating conditions, such as
continued success in production and the ensuing efficiency benefits,
availability and cost of production inputs, demand for new products and changes
in circumstances affecting the acquisition of capital under acceptable
conditions; 2) sector-specific circumstances, such as the intensity of demand
for products, the competition, current and future market prices for the Group’s
products and related pricing pressures, the financial situation of the Group’s
customers and competitors and competitors’ possible new products; and 3) the
general economic situation, such as economic growth in the Group’s main market
areas and change in exchange rates and interest rates.

Attachments:

Half Year Financial Report January-June 2016.pdf