2011-04-26 08:00:00 CEST
2011-04-26 08:00:05 CEST
REGULATED INFORMATION
Ponsse Oyj - Interim report (Q1 and Q3)
PONSSE PLC, STOCK EXCHANGE RELEASE, 26 APRIL 2011, 9:00 a.m.
Vieremä, Finland, 2011-04-26 08:00 CEST (GLOBE NEWSWIRE) -- PONSSE PLC, STOCK
EXCHANGE RELEASE, 26 APRIL 2011, 9:00 a.m.
PONSSE'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2011
- Net sales were EUR 71.9 (51.3) million.
- Operating result was EUR 5.4 (2.8) million, equalling 7.5 (5.4) per cent of
net sales.
- Result before taxes totalled EUR 3.0 (4.8) million.
- Cash flow from business operations was positive at EUR 5.4 (8.2) million.
- Earnings per share were EUR -0.01 (0.21).
- Equity ratio was 47.3 (40.4) per cent.
- Order books stood at EUR 85.8 (37.0) million.
PRESIDENT AND CEO JUHO NUMMELA:
During the first quarter of the year, the demand for forest machines continued
at a good level. In our main market areas, our customers' work situation was
good, which was seen, in particular, in the growth of demand for services and
sales of new machines.
During the first quarter of 2011, there were delays in the deliveries of forest
machines due to availability problems with materials and components. The
Vieremä factory was on schedule during the period under review, but all
machines could not be invoiced according to plan. The company's order books
grew by 132 per cent during the period under review and amounted to EUR 85.8
(37.0) million at the end of the period under review.
During the past quarter, the company's net sales grew by 40 per cent compared
with the corresponding period and amounted to EUR 71.9 (51.3) million. The
service business continued to show strong growth.
Operating result amounted to EUR 5.4 (2.8) million during the first quarter.
The result of the period under review was burdened by an impairment of about
EUR 0.6 million related to external trade receivables of South America.
Operating costs (staff costs, depreciation and amortisation and other operating
costs) were kept under control during the period under review, showing a
planned increase of 37.9 per cent. The scope of operational business was
significantly larger compared with the corresponding period. Investments in
staff were seen in the increase in operating costs.
Cash flow from business operations during the period under review was positive
at EUR 5.4 (8.2) million.
Epec Oy's forest machine information system and software product development
unit located in Kajaani will transfer back to Ponsse Plc starting from 1 May
2011. The transfer enables even stronger development of information system
products for Ponsse's forest machines and Epec Oy's increased focus on the
needs of other work machine clients. Epec Oy will continue the manufacturing of
Ponsse's information system products.
NET SALES
Consolidated net sales for the period under review amounted to EUR 71.9 (51.3)
million, which is 40 per cent more than in the comparison period. International
business operations accounted for 59.9 (68.1) per cent of total net sales.
Net sales were regionally distributed as follows: Northern Europe 57.7 (55.7)
per cent, Central and Southern Europe 15.8 (17.9) per cent, Russia and Asia
10.9 (7.3) per cent, North and South America 15.6 (19.0) per cent and other
countries 0.0 (0.1) per cent.
PROFIT PERFORMANCE
Operating result was EUR 5.4 (2.8) million, accounting for 7.5 (5.4) per cent
of net sales in the period under review. An impairment loss worth about EUR 0.6
million related to external trade receivables in South America was recognised
as an expense during the period under review. Consolidated return on capital
employed (ROCE) stood at 12.4 (19.5) per cent.
Staff costs for the period under review totalled EUR 12.4 (8.5) million and
other operating expenses EUR 7.8 (5.8) million. The net total of financial
income and expenses was EUR -2.3 (2.1) million. Exchange rate gains and losses
due to currency rate fluctuations were recognised under financial items, and
their net impact during the period under review totalled EUR -2.0 (2.4)
million. As a result of the decision of the Adjustment Board concerning the
taxation of the parent company, the taxes for the period under review amounted
to EUR -2.9 (1.5) million. Profit for the period totalled EUR 0.1 (6.3)
million. Diluted and undiluted earnings per share (EPS) were EUR -0.01 (0.21).
The interest on a hybrid loan for the period, less tax, have been taken into
account in EPS.
STATEMENT OF FINANCIAL POSITION AND FINANCING ACTIVITIES
At the end of the period under review, the total of consolidated statements of
financial position amounted to EUR 162.1 (150.5) million. Inventories stood at
EUR 79.6 (69.2) million. Trade receivables totalled EUR 26.3 (23.7) million,
and liquid assets stood at EUR 9.5 (11.4) million. Group shareholders' equity
stood at EUR 75.9 (60.3) million and parent company shareholders' equity at EUR
65.5 (46.2) million. Group shareholders' equity includes a hybrid loan of EUR
19 million issued on 31 March 2009. The interest paid for the hybrid loan,
totalling EUR 4.5 million, was recognised as a reduction of Group shareholders'
equity. The amount of interest-bearing liabilities was EUR 32.6 (45.7) million.
The company has used 15 per cent of its credit facility limit. The parent
company's net receivables from other Group companies stood at EUR 62.5 (58.1)
million. The parent company's receivables from subsidiaries mainly consisted of
trade receivables. Consolidated net liabilities totalled EUR 21.3 (33.3)
million, and the debt-equity ratio (gearing) was 43.0 (75.8) per cent. Equity
ratio stood at 47.3 (40.4) per cent at the end of the period under review.
Cash flow from business operations amounted to EUR 5.4 (8.2) million, while
cash flow from investment activities stood at EUR -1.7 (-0.1) million.
ORDER INTAKE AND ORDER BOOKS
Order intake for the period totalled EUR 90.7 (68.5) million, while period-end
order books were valued at EUR 85.8 (37.0) million. The minimum order
commitments of 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 1.7 (1.2)
million, of which EUR 309 (231) thousand was capitalised.
Capital expenditure totalled EUR 1.7 (0.1) million. It mainly consisted of
ordinary maintenance and replacement investments of machinery and equipment.
MANAGEMENT
The Group Sales Management Team operates as a regional director organisation,
which is lead by Jarmo Vidgrén, the Group's Sales and Marketing Director, and
Tapio Mertanen, Service Director.
The geographical distribution and the responsible persons are presented below:
Northern Europe: Jarmo Vidgrén (Finland), Jerry Wannberg (Sweden, Denmark) and
Lyder Ellevold (Norway),
Central and Southern Europe: Janne Vidgrén (Austria, Poland, Romania, Germany,
the Czech Republic and Hungary), Tapio Ingervo (Spain, Italy, Portugal and
France) and Gary Glendinning (the United Kingdom),
Russia and Asia: Jaakko Laurila (Russia, Belarus), Norbert Schalkx (Japan,
South Africa and the Baltic countries) and Risto Kääriäinen (China),
North and South America: Marko Mattila (USA, Canada), Cláudio Costa (Brazil)
and Martin Toledo (Uruguay).
PERSONNEL
The Group had an average staff of 892 (781) during the period and employed 908
(790) 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 - 31 March 2011 totalled
781,033, accounting for 2.8 per cent of the total number of shares. Share
turnover amounted to EUR 8.7 million, with the period's lowest and highest
share prices amounting to EUR 10.20 and EUR 11.85, respectively.
At the end of the period, shares closed at EUR 11.46, and market capitalisation
totalled EUR 320.9 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 authorizations
given to the Board of Directors and other resolutions at the AGM.
DISCLOSURE NOTIFICATIONS
Of the Ponsse Plc shares in the ownership and under the control of Einari
Vidgrén's estate, totalling 13,348,074 shares and 47.67 per cent of the votes,
13,348,072 shares and 47.67 per cent of the votes were transferred to the
ownership and control of Einari Vidgrén's direct heirs in the distribution of
the estate on 23 March 2011. A separate release was issued on the matter on 24
March 2011.
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 RISKS AND THEIR MANAGEMENT
As the utilisation rate of capacity increases, the risk related to the
availability of parts and components also increases. The availability of
certain types of components has deteriorated, and there are upward pressures in
raw material prices. The company seeks to manage these risks through
cooperation with business partners. The financial standing of suppliers is
constantly monitored. The company surveys the availability of alternative
suppliers to mitigate the potential availability and price risks.
The parent company monitors the changes in the value of internal and external
Group receivables and the associated risk of impairment.
The key objective of the company's financial risk management is to manage
liquidity, interest and currency risks. The company ensures its liquidity with
credit limit facilities agreed with different financial institutions. The
effect of adverse changes in interest rates is minimised by utilising credits
linked to different reference rates and by concluding interest rate swaps. The
negative effects of currency rate fluctuations are mitigated by derivative
contracts.
The changes taking place in the fiscal and customs legislation of countries to
which Ponsse exports may hamper the company's export trade or its
profitability.
OUTLOOK FOR THE FUTURE
The good outlook in the forestry sector in the company's main market areas
enables positive development of the company's business during 2011.
After the strong growth in 2010, however, the Group's net sales are expected to
increase at a more moderate rate in accordance with the Group's strategy. The
Group's profitability and cash flow are expected to develop positively and
improve compared with 2010.
The capacity of the factory will be increased during the year and moderate
recruitment will continue throughout the whole Group. The company will invest
in its service network strongly in Iisalmi and Jyväskylä among other things and
the machining and welding capacity and automation of the Vieremä factory.
PONSSE GROUP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1,000)
IFRS IFRS IFRS
1-3/11 1-3/10 1-12/10
NET SALES 71,933 51,260 262,416
Increase (+)/decrease (-) in inventories of finished 6,115 2,317 476
goods and work in progress
Other operating income 189 147 898
Raw materials and services -51,454 -35,424 -170,810
Expenditure on employment-related benefits -12,355 -8,453 -38,243
Depreciation and amortisation -1,262 -1,261 -5,079
Other operating expenses -7,756 -5,817 -27,984
OPERATING RESULT 5,410 2,769 21,674
Share of results of associated companies -50 -80 5
Financial income and expenses -2,334 2,140 2,769
RESULT BEFORE TAXES 3,026 4,830 24,448
Income taxes -2,917 1,471 -1,111
NET RESULT FOR THE PERIOD 109 6,301 23,338
OTHER ITEMS INCLUDED IN TOTAL COMPREHENSIVE RESULT:
Translation differences related to foreign units 602 -557 -904
TOTAL COMPREHENSIVE RESULT FOR THE PERIOD 711 5,744 22,434
Diluted and undiluted earnings per share (* -0.01 0.21 0.78
(* 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 IFRS
ASSETS 31.3.11 31.3.10 31.12.10
NON-CURRENT ASSETS
Intangible assets 6,869 5,739 6,571
Goodwill 3,440 3,440 3,440
Property, plant and equipment 24,613 24,373 24,443
Financial assets 111 111 111
Investments in associated companies 1,425 1,540 1,625
Non-current receivables 2,636 3,944 3,144
Deferred tax assets 1,746 2,018 1,712
TOTAL NON-CURRENT ASSETS 40,840 41,165 41,045
CURRENT ASSETS
Inventories 79,558 69,223 72,391
Trade receivables 26,305 23,716 32,125
Income tax receivables 182 510 623
Other current receivables 5,713 4,480 4,483
Cash and cash equivalents 9,487 11,410 11,036
TOTAL CURRENT ASSETS 121,245 109,340 120,659
TOTAL ASSETS 162,085 150,505 161,704
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 7,000 7,000 7,000
Other reserves 19,030 19,030 19,030
Translation differences -430 -685 -1,032
Treasury shares -2,228 -665 -2,228
Retained earnings 52,505 35,656 52,396
EQUITY OWNED
BY PARENT COMPANY SHAREHOLDERS 75,877 60,336 75,166
NON-CURRENT LIABILITIES
Interest-bearing liabilities 16,011 24,009 16,155
Deferred tax liabilities 601 495 469
Other non-current liabilities 107 626 128
TOTAL NON-CURRENT LIABILITIES 16,720 25,131 16,752
CURRENT LIABILITIES
Interest-bearing liabilities 16,603 21,719 20,603
Provisions 4,755 4,409 4,706
Tax liabilities for the period 755 112 215
Trade creditors and other current liabilities 47,374 38,797 44,263
TOTAL CURRENT LIABILITIES 69,488 65,038 69,787
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 162,085 150,505 161,704
CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1,000)
IFRS IFRS IFRS
1-3/11 1-3/10 1-12/10
CASH FLOW FROM BUSINESS OPERATIONS:
Net result for the period 109 6,301 23,338
Adjustments:
Financial income and expenses 2,334 -2,140 -2,769
Share of the result of associated companies 50 80 -5
Depreciation and amortisation 1,262 1,261 5,079
Income taxes 2,968 -1,306 1,108
Other adjustments 500 -1,104 -1,449
Cash flow before changes in working capital 7,223 3,092 25,302
Change in working capital:
Change in trade receivables and other receivables 4,997 -3,847 -11,962
Change in inventories -7,167 -1,303 -4,471
Change in trade creditors and other liabilities 2,857 7,427 18,378
Change in provisions for liabilities and charges 49 -526 -229
Interest received 57 78 486
Interest paid -136 -184 -1,365
Other financial items -2,094 2,397 3,632
Income taxes paid -405 1,114 -1,310
NET CASH FLOW FROM BUSINESS OPERATIONS (A) 5,380 8,249 28,462
CASH FLOW FROM INVESTMENTS
Investments in tangible and
intangible assets -1,730 -106 -4,825
Investments in other assets 0 0 0
Repayment of loan receivables 0 0 0
Dividends received 0 0 0
CASH OUTFLOW FROM INVESTMENT ACTIVITIES (B) -1,730 -106 -4,825
FINANCING
Acquisition of treasury shares 0 0 -1,564
Hybrid loan 0 0 0
Interest paid, hybrid loan -1,137 -1,137 -2,280
Withdrawal/Repayment of
current loans -3,838 -6,059 -8,621
Change in current
interest-bearing liabilities 34 21 -8
Withdrawal/Repayment of
non-current loans -168 73 -6,573
Payment of finance lease liabilities -157 -161 -421
Change in non-current receivables 67 -97 435
Dividends paid 0 0 -4,193
NET CASH OUTFLOW FROM FINANCING (C) -5,199 -7,359 -23,227
Change in cash and cash equivalents(A+B+C) -1,549 783 410
Cash and cash equivalents on 1 January 11,036 10,626 10,626
Cash and cash equivalents on 31 March/31 December 9,487 11,410 11,036
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
Translation differences 602 602
Result for the period 109 109
Total comprehensive income for 602 109 711
the period
Direct entries to retained
earnings *)
Dividend distribution
Purchase of treasury shares
Other changes
SHAREHOLDERS' EQUITY 31 MAR 2011 7,000 19,030 -430 -2,228 52,505 75,877
SHAREHOLDERS' EQUITY 1 JAN 2010 7,000 19,030 -128 -665 34,329 59,566
Translation differences -557 -557
Result for the period 6,301 6,301
Total comprehensive income for -557 6,301 5,744
the period
Direct entries to retained -781 -781
earnings *)
Dividend distribution -4,193 -4,193
Purchase of treasury shares
Other changes
SHAREHOLDERS' EQUITY 31 MAR 2010 7,000 19,030 -685 -665 35,656 60,336
*) Consists of the interest paid for the hybrid loan classified as equity.
31.3.11 31.3.10 31.12.10
1. LEASING COMMITMENTS (EUR 1,000) 5,042 5,874 4,991
2. CONTINGENT LIABILITIES (EUR 1,000) 31.3.11 31.3.10 31.12.10
Guarantees given on behalf of others 359 824 425
Repurchase commitments 2,591 3,599 2,501
Other commitments 3,422 2,122 2,659
TOTAL 6,372 6,545 5,585
3. PROVISIONS (EUR 1,000) Guarantee provision
1.1.2011 4,706
Provisions added 222
Provisions cancelled -173
31.3.2011 4,755
KEY FIGURES AND RATIOS 31.3.11 31.3.10 31.12.10
R&D expenditure, MEUR 1.7 1.2 5.9
Capital expenditure, MEUR 1.7 0.1 4.8
as % of net sales 2.4 0.2 1.8
Average number of employees 892 781 825
Order books, MEUR 85.8 37.0 68.3
Equity ratio, % 47.3 40.4 46.9
Diluted and undiluted earnings per share (EUR) -0.01 0.21 0.78
Equity per share (EUR) 2.71 2.15 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 1-3/11 1-3/10 1-12/10
Ponsse Group 90.7 68.5 311.2
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; 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 off 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 known 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, 26 April 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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