2008-08-05 07:19:27 CEST
2008-08-05 07:20:15 CEST
REGULATED INFORMATION
Neomarkka - Interim report (Q1 and Q3)
NEOMARKKA´S INDUSTRIAL INVESTMENTS´ RESULT IMPROVED INVESTMENTS IN SECURITIES MADE LOSSES
Neomarkka Plc INTERIM REPORT 5.8.2008 at 8.15AM 1(13) INTERIM REPORT 1.1. - 30.6.2008 NEOMARKKA´S INDUSTRIAL INVESTMENTS´ RESULT IMPROVED INVESTMENTS IN SECURITIES MADE LOSSES Investments in Russia continue; Neomarkka buying majority of the shares of Russian cable manufacturer -------------------------------------------------------------------------------- | KEY FIGURES | 4-6/ | 4-6/ | 1-6/ | 1-6/ | | | 2008 | 2007 | 2008 | 2007 | -------------------------------------------------------------------------------- | Turnover, EUR million, of which | 32.7 | 12.4 | 59.0 | 14.2 | -------------------------------------------------------------------------------- | - Cable business turnover | 32.7 | 8.5 | 59.9 | 8.5 | -------------------------------------------------------------------------------- | - Gains and losses from trade of | 0.0 | 3.8 | -0.9 | 5.6 | | financial assets | | | | | -------------------------------------------------------------------------------- | Operating profit, EUR million, of | 1.7 | 3.5 | 3.5 | 4.8 | | which | | | | | -------------------------------------------------------------------------------- | - Cable business | 2.0 | 0.0 | 5.0 | 0.0 | -------------------------------------------------------------------------------- | - Trade of financial assets | -0.3 | 3.5 | -1.5 | 4.8 | -------------------------------------------------------------------------------- | Profit for the financial year EUR | 0.6 | 2.3 | 1.2 | 2.9 | | million | | | | | -------------------------------------------------------------------------------- | Earnings per share EUR | 0.11 | 0.38 | 0.20 | 0.48 | -------------------------------------------------------------------------------- Return on investment (ROI) during period under review was 4.4 % (11.0 %). Equity ratio is 47.1 % (51.2 %). Neomarkka has executed the new strategy since June 2007. All financial figures are not fully comparable to the corresponding period of the previous year, because the business operations have changed substantially. Reka Cables (Reka Cables Ltd and its subsidiaries) belong to the cable business segment and has part part of Neomarkka Group since 1.6.2007. These financial figures of Reka Cables are comparable: -------------------------------------------------------------------------------- | REKA CABLES | 1-6/ | 1-6/ | | | 2008 | 2007 | -------------------------------------------------------------------------------- | Turnover, EUR million | 59.8 | 48.9 | -------------------------------------------------------------------------------- | Operating profit, EUR million | 5.5 | 3.5 | -------------------------------------------------------------------------------- MAJOR EVENTS DURING THE PERIOD UNDER REVIEW Industrial private equity investments; Cables The turnover and operating profit of Reka Cables increased also during second quarter. However, the growth was limited by the delayed and prolonged installations of the Riihimäki medium- and high voltage factory machines. The changes needed for the installation of the machines decreased the available production capacity of medium- and high voltage products. The prices of the metals (copper and aluminium) have been volatile. The associated company Nestor Cables Ltd´s target at second quarter was to finish the machine installations and to get the customer deliveries fully in force. The machine installations of Nestor Cables were delayed and the planned delivery performance was reached only at the end of the period. The delay was shown in the financial result. The loss has been included in the Group result according to share of ownership (30%). Investments in securities During the second quarter of the year, the gains and losses from the financial assets reached zero result. The dividends received and interest income covered the loss of the bonds issued by Nordea Bank Plc. In the whole period under review investments in securities made operating losses. Neomarkka has detached from the bonds issued by Nordea Bank Plc on 30 June 2008. The costs incurred from the detach made earlier than what was agreed in the agreements has been included to the financial figures Regarding ownership relating private equity, no changes were made during the period. NEOMARKKA SHARES; PRICES AND VOLUMES TRADED Neomarkka Plc's B shares are listed on the OMX Nordic Exchange Helsinki. The closing price at the end of the review period was EUR 9.73 (EUR 9.05) per share. On 31 December 2007 the price was EUR 9.79 per share. The share turnover in the review period was 252,298 (1,976,058) shares. The lowest B share quotation was EUR 7.90 (EUR 7.78) and the highest quotation was EUR 10.50 (EUR 9.35). FINANCIAL RESULT, BANLANCE SHEET AND FINANCING The interim report has been drawn up in accordance with the IAS 34 requirements for interim reports. Same principles for drawing up consolidated financial statements have been followed as in the financial statement 2007. The interim report is unaudited. Financial result The consolidated turnover totalled EUR 59.0 million in the review period, consisting of the turnover of the cable business and the gains and losses from the trade of financial assets. The turnover of the cable business totalled EUR 59.9 million (EUR 8.5 million). The gains and losses from the trade of financial assets totalled EUR -0.9 million (EUR 5.6 million) in the review period. Operating profit for the review period was EUR 3.5 million (EUR 4.8 million), of which the operating profit of the cable business was EUR 5.0 million (EUR 0.0 million). The operating loss of the trade of financial assets was EUR -1.5 million (operating profit EUR 4.8 million). The net result for the review period was EUR 1.2 million (EUR 2.9 million). Earnings per share were EUR 0.20 (EUR 0.48). Balance sheet and financing At the end of the review period the balance sheet totalled EUR 122.8 million (EUR 120.3 million). At the end of the review period, the equity per share was EUR 9.61 (10.22) and the equity ratio was 47.1% (51.2%). The growth of cable business requires financing of the working capital. Therefore the factoring credit limit of Reka Cables was increased by EUR 2 million. The financing of the associated company Nestor Cables Ltd is proceeding as planned. The business operations start-up is financed with both own and external capital. The liquidity situation of the Group is good. INVESTMENTS The investments made in the review period relate to the cable business, totalling EUR 7.0 million (EUR 32.9 million of which purchase of Reka Cables was EUR 27.0 million). Long-term leases have been recognised as fixed assets under IFRS. Shareholders' meeting and governance The Annual General Meeting (AGM) was held on 11 June 2008. The AGM resolved to accept the Annual Report, the Financial Statement and the Consolidated Financial Statements from fiscal period 2007 and accepted the proposal of the Board of Directors to pay dividend of EUR 0.50 per share. From the financial year 2006 a dividend of EUR 0.30 per share was paid. The AGM discharged the Board of Directors and the Managing Director for fiscal period 2007. The AGM resolved to elect five members to the Board of Directors of Neomarkka Plc and re-elected the following members: Jorma Wiitakorpi as chairman of the Board, Matti Lainema as vice chairman and as members Ilpo Helander, Taisto Riski and Pekka Soini. The AGM authorized the Board of Directors to acquire the company´s own shares and to decide on the issue of shares and special rights entitling to shares as proposed. As external auditor for the fiscal period 2008 the AGM elected Deloitte & Touche Ltd, Authorized Public Accountants, having Hannu Mattila, APA, as main auditor. Taisto Riski and Matti Laimema, members of the Board of Directors, are the members of the Audit Committee. The Managing Director of Neomarkka Plc is Markku E. Rentto. PERSONNEL The Group employed an average of 311 people (52). Group personnel numbered 337 on 30 June 2008, of which 334 were in the cable business. Group structure and shareholders Neomarkka Plc is the parent company in a Group that includes the fully owned subsidiaries Novalis Plc and Alnus Ltd with their subsidiaries. The domicile of the parent company is Hyvinkää. At the end of the review period, Neomarkka Plc had 12,753 (13,516) shareholders. The biggest shareholder Reka Ltd had a 50.76% (50.76%) interest at the end of the review period, with 65.77% (65.77%) of all votes. Neomarkka Plc is thus part of the Reka Group. Reka Ltd's domicile is Hyvinkää. At the end of the review period, the aggregate ownership of the ten largest shareholders was 59.79% (59.42%) of all shares and 72.05% (71.79%) of all votes. Major events after the review period The installations and tests of machinery at the Riihimäki factory has been continued. Major part of the installations will be finished by the end of August. Some machines enablening the widening of the high voltage product sortiment will be installed during the fall. Neomarkka is buying majority of the shares of Russian cable manufacturer, OAO Expocable. Separate stock exchange release of the acquisition will be published. Regarding investments in securities, assets have been invested in interest and short-term investments. ASSESSMENT OF UNCERTAINTY FACTORS AND BUSINESS RISKS The main financial risks of Neomarkka are currency, interest rate, commodity, liquidity, credit and investment market-risks. These financial risks and their hedging measures are explained further in notes to the financial statement for year 2007. In accordance with the updated strategy in 2007, future risk factors are more closely tied to trends in the business operations of a small number of portfolio companies and to normal business risks. The previous strategy based Neomarkka's risk on a widely distributed market risk. The most significant risks at Reka Cables are the fluctuation in raw material costs and more rapid changes in the volume of orders than in the past. In order to be aware of the risks and prepare for them, Reka Cables Ltd has carried out an extensive risk-charting process. The company believes that the cable markets in Russia will grow and develop and has invested heavily in exploiting the business opportunities there. These investments include a risk that the growth in Russia will not take place according to expectations. Nestor Cables Ltd's business carries cable business risks and the risks involved in starting up a new company. Comments made in this report that do not refer to actual facts that have already taken place are future estimates. Such estimates include expectations concerning market trends, growth and profitability, and statements that include the terms ‘believe', ‘assume', ‘will be', or a similar expression. Since these estimates are based on current plans and estimates, they involve risks and uncertainty factors which may lead to results differing substantially from current statements. Such factors include 1) operating conditions, e.g. continued success in production and consequent efficiency benefits, availability and cost of production inputs, demand for new products, changing circumstances in respect of the acquisition of capital under acceptable conditions; 2) circumstances in the sector 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, competitors' possible new competing products and 3) the general economic situation such as economic growth in the Group's main geographical market areas or changes in exchange rates and interest rates. PROSPECTS FOR THE NEAR FUTURE The outlook for the cable industry is onwards positive. The overall market situation is assumed to remain good, providing that no significant negative changes take place in the overall economic situation on the main markets of the Nordic countries and in Russia. The production facilities in Russia (start-up in 2007) and the expansion of the Riihimäki production facilities give cause to expect that the turnover of industrial activities will exceed EUR 120 million and that there will be increase in profitability. OAO Expocable extends the product range, completes clientele and brings opportunities to further growth. The prices of the key raw materials are expected to be quite volatile. The unstable situation at the investment in securities market is expected to continue. For the time being Neomarkka´s investments in securities will be in existing private equity investments and in short term investments. Majority of the short term investments are capital secured. -------------------------------------------------------------------------------- | CONSOLIDATED INCOME STATEMENT (IFRS) | | | | -------------------------------------------------------------------------------- | | 4-6/ | 4-6/ | 1-6/ | 1-6/ | -------------------------------------------------------------------------------- | EUR 1,000 | 2008 | 2007 | 2008 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Industrial business | 32,664 | 8,543 | 59,937 | 8,543 | | turnover | | | | | -------------------------------------------------------------------------------- | Gains and losses from the | -1 | 3,836 | -940 | 5,634 | | trade of financial assets | | | | | -------------------------------------------------------------------------------- | Turnover | 32,663 | 12,379 | 58,997 | 14,177 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in inventories of | 2,568 | -854 | 5,945 | -854 | | finished products and | | | | | | production in progress | | | | | -------------------------------------------------------------------------------- | Production for own use | 16 | 10 | 58 | 10 | -------------------------------------------------------------------------------- | Materials and services | -26,382 | -5,714 | -48,095 | -5,714 | -------------------------------------------------------------------------------- | Personnel expenses | -3,849 | -1,084 | -7,353 | -1,217 | -------------------------------------------------------------------------------- | Depreciation and | -930 | -278 | -1,804 | -281 | | impairment | | | | | -------------------------------------------------------------------------------- | Other operating income | -2,352 | -982 | -4,231 | -1,311 | | and expenses | | | | | -------------------------------------------------------------------------------- | | -30,929 | -8,902 | -55,480 | -9,367 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | 1,734 | 3,477 | 3,517 | 4,810 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial income | 641 | 0 | 646 | 0 | -------------------------------------------------------------------------------- | Financial expenses | -1,138 | -499 | -1,846 | -983 | -------------------------------------------------------------------------------- | Share of the result of | -201 | 0 | -287 | 0 | | associates | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit before taxes | 1,036 | 2,978 | 2,030 | 3,827 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Taxes | -394 | -719 | -803 | -940 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the financial | 642 | 2,259 | 1,227 | 2,887 | | year | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share after | 0.11 | 0.38 | 0.20 | 0.48 | | and before dilution, EUR | | | | | -------------------------------------------------------------------------------- | Number of shares | 6,020,360 | 6,020,360 | 6,020,360 | 6,020,360 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET (IFRS) | | | -------------------------------------------------------------------------------- | EUR 1,000 | 30.06.2008 | 31.12.2007 | -------------------------------------------------------------------------------- | A s s e t s | | | -------------------------------------------------------------------------------- | NON-CURRENT ASSETS | | | -------------------------------------------------------------------------------- | Goodwill | 4,527 | 4,527 | -------------------------------------------------------------------------------- | Other intangible non-current assets | 3,249 | 3,479 | -------------------------------------------------------------------------------- | Tangible non-current assets | 29,071 | 23,916 | -------------------------------------------------------------------------------- | Holdings in associates | 766 | 1,004 | -------------------------------------------------------------------------------- | Deferred tax assets | 444 | 204 | -------------------------------------------------------------------------------- | TOTAL NON-CURRENT ASSETS | 38,057 | 33,130 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CURRENT ASSETS | | | -------------------------------------------------------------------------------- | Inventories | 24,763 | 16,815 | -------------------------------------------------------------------------------- | Financial assets recognised at fair | 18,022 | 37,034 | | value through profit and loss | | | -------------------------------------------------------------------------------- | Available-for-sale financial assets | 4,001 | 4,001 | -------------------------------------------------------------------------------- | Sales receivables and other receivables | 35,448 | 12,154 | -------------------------------------------------------------------------------- | Cash in hand and at bank | 2,479 | 3,268 | -------------------------------------------------------------------------------- | TOTAL CURRENT ASSETS | 84,713 | 73,271 | -------------------------------------------------------------------------------- | T o t a l a s s e t s | 122,770 | 106,401 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | S h a r e h o l d e r s´e q u i t y a n | | | | d l i a b i l i t i e s | | | -------------------------------------------------------------------------------- | Share capital | 24,082 | 24,082 | -------------------------------------------------------------------------------- | Premium fund | 66 | 66 | -------------------------------------------------------------------------------- | Reserve fund | 1,221 | 1,221 | -------------------------------------------------------------------------------- | Translation differences | -158 | -145 | -------------------------------------------------------------------------------- | Retained profit | 10,114 | 11,971 | -------------------------------------------------------------------------------- | Other unrestricted equity | 21,327 | 21,327 | -------------------------------------------------------------------------------- | Profit for the financial year | 1,227 | 1,153 | -------------------------------------------------------------------------------- | Total shareholders´ equity | 57,879 | 59,675 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LONG-TERM LIABILITIES | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 2,614 | 2,091 | -------------------------------------------------------------------------------- | Provisions | 747 | 540 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 24,680 | 22,512 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHORT-TERM LIABILITIES | | | -------------------------------------------------------------------------------- | Tax liabilities from the profit | 439 | 198 | -------------------------------------------------------------------------------- | Short-term interest-bearing liabilities | 5,597 | 4,999 | -------------------------------------------------------------------------------- | Accounts payable and other liabilities | 30,814 | 16,386 | -------------------------------------------------------------------------------- | TOTAL LIABILITIES | 64,891 | 46,726 | -------------------------------------------------------------------------------- | S h a r e h o l d e r s´e q u i t y a | 122,770 | 106,401 | | n d l i a b i l i t i e s | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | BALANCING ACCOUNT OF SHAREHOLDERS´ EQUITY (IFRS) | | -------------------------------------------------------------------------------- | EUR | Share | Premi | Reserv | Trans | Other | Retained | Share-holde | | 1,000 | capita | um | e fund | -lati | unres- | profit | rs´ equity | | | l | fund | | on | tric-t | | total | | | | | | diffe | ed | | | | | | | | rence | equity | | | | | | | | s | | | | -------------------------------------------------------------------------------- | Share-ho | 24,082 | 66 | 1,221 | | 21,327 | 13,777 | 60,473 | | lders´ | | | | | | | | | equity | | | | | | | | | 31.12.20 | | | | | | | | | 06 | | | | | | | | -------------------------------------------------------------------------------- | Changes | | | | | | | 0 | -------------------------------------------------------------------------------- | Profit | | | | | | 2,887 | 2,887 | | for the | | | | | | | | | financia | | | | | | | | | l year | | | | | | | | -------------------------------------------------------------------------------- | Total | | | | | | 2,887 | 2,887 | | returns | | | | | | | | | and | | | | | | | | | costs | | | | | | | | | during | | | | | | | | | the | | | | | | | | | period | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | | -1,806 | -1,806 | | s paid | | | | | | | | -------------------------------------------------------------------------------- | Share-ho | 24,082 | 66 | 1,221 | 0 | 21,327 | 14,858 | 61,554 | | lders´ | | | | | | | | | equity | | | | | | | | | 30.6.200 | | | | | | | | | 7 | | | | | | | | -------------------------------------------------------------------------------- | EUR | Share | Premi | Reserv | Trans | Other | Retained | Share-holde | | 1,000 | capita | um | e fund | -lati | unres- | profit | rs´ equity | | | l | fund | | on | tric-t | | total | | | | | | diffe | ed | | | | | | | | rence | equity | | | | | | | | s | | | | -------------------------------------------------------------------------------- | Share-ho | 24,082 | 66 | 1,221 | -145 | 21,327 | 13,124 | 59,675 | | lders´ | | | | | | | | | equity | | | | | | | | | 31.12.20 | | | | | | | | | 07 | | | | | | | | -------------------------------------------------------------------------------- | Changes | | | | -13 | | | -13 | -------------------------------------------------------------------------------- | Profit | | | | | | 1,227 | 1,227 | | for the | | | | | | | | | financia | | | | | | | | | l year | | | | | | | | -------------------------------------------------------------------------------- | Total | | | | -13 | | 1,227 | 1,214 | | returns | | | | | | | | | and | | | | | | | | | costs | | | | | | | | | during | | | | | | | | | the | | | | | | | | | period | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | | -3,010 | -3,010 | | s paid | | | | | | | | -------------------------------------------------------------------------------- | Share-ho | 24,082 | 66 | 1,221 | -158 | 21,327 | 11,341 | 57,879 | | lders´ | | | | | | | | | equity | | | | | | | | | 30.6.200 | | | | | | | | | 8 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED CASH FLOW STATEMENT (IFRS) | 1.1.-30.6. | 1.1.-30.6. | | EUR 1,000 | 2008 | 2007 | -------------------------------------------------------------------------------- | OPERATING ACTIVITIES | | | -------------------------------------------------------------------------------- | Payments received from operating activities | 74,926 | 110,284 | -------------------------------------------------------------------------------- | Payments paid on operating activities | -68,308 | -57,942 | -------------------------------------------------------------------------------- | Paid interests and other financial expenses | -2,028 | -954 | -------------------------------------------------------------------------------- | Interests received and other financial | 574 | 265 | | incomes | | | -------------------------------------------------------------------------------- | Direct taxes paid | -1,198 | 0 | -------------------------------------------------------------------------------- | Total operating activities | 3,966 | 51,653 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INVESTING ACTIVITIES | | | -------------------------------------------------------------------------------- | Acquisition of subsidiaries and new | -2 | -26,909 | | business | | | -------------------------------------------------------------------------------- | Investments in tangible assets | -7,374 | -5,931 | -------------------------------------------------------------------------------- | Total investing activities | -7,376 | -32,840 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | FINANCING ACTIVITIES | | | -------------------------------------------------------------------------------- | Increase in loans | 7,141 | 26,418 | -------------------------------------------------------------------------------- | Decrease in loans | -1,288 | -43,000 | -------------------------------------------------------------------------------- | Payments of financial leasing | -276 | -43 | -------------------------------------------------------------------------------- | Dividends paid | -2,956 | -1,783 | -------------------------------------------------------------------------------- | Total financing activities | 2,621 | -18,408 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | CASH FLOW FOR THE PERIOD | -789 | 404 | -------------------------------------------------------------------------------- | Liquid funds at beginning of the period | 3,268 | 3,324 | -------------------------------------------------------------------------------- | LiQUID FUNDS AT END OF PERIOD | 2,479 | 3,728 | -------------------------------------------------------------------------------- NOTES TO THE ACCOUNTS The interim report has been drawn up in accordance with the IAS 34 requirements for interim reports. The interim report is unaudited. PRINCIPLES FOR DRAWING UP THE interim reports Neomarkka has applied the same principles for drawing up the interim reports as in the financial statement 2007. SEGMENT INFORMATION -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 30.6.2008 | -------------------------------------------------------------------------------- | EUR 1,000 | -------------------------------------------------------------------------------- | | Investment | Industrial | Others and | Total | | | in | Investment; | elim. | | | | securities | cables | | | -------------------------------------------------------------------------------- | Industrial business | | 59,937 | | 59,937 | | turnover | | | | | -------------------------------------------------------------------------------- | Gains and losses from | -940 | | | -940 | | the trade of financial | | | | | | assets | | | | | -------------------------------------------------------------------------------- | Turnover | -940 | 59,937 | | 58,997 | -------------------------------------------------------------------------------- | Segment operating | -1,522 | 4,998 | | 3,477 | | profit | | | | | -------------------------------------------------------------------------------- | Unallocated items | | | 40 | 40 | -------------------------------------------------------------------------------- | Operating profit | | | | 3,517 | -------------------------------------------------------------------------------- | Share of the result of | | -287 | | | | associates | | | | -287 | -------------------------------------------------------------------------------- | Unallocated items | | | | -2,003 | -------------------------------------------------------------------------------- | Profit for the | | | | 1,227 | | financial year | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Segment assets | 33,646 | 82,487 | 6,094 | 122,227 | -------------------------------------------------------------------------------- | Unallocated assets | | | 543 | 543 | -------------------------------------------------------------------------------- | Total assets | 33,646 | 82,487 | 6,637 | 122,770 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Segment liabilities | 1,124 | 29,842 | 863 | 31,829 | -------------------------------------------------------------------------------- | Unallocated | | | 33,062 | 33,062 | | liabilities | | | | | -------------------------------------------------------------------------------- | Total liabilities | 1,124 | 29,842 | 33,925 | 64,891 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Assets - Liabilities | 32,522 | 52,645 | -27,288 | 57,879 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments | 0 | 3,797 | 3,160 | 6,957 | -------------------------------------------------------------------------------- | Depreciations | -11 | -1,683 | -110 | -1,804 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 30.6.2007 | -------------------------------------------------------------------------------- | EUR 1,000 | -------------------------------------------------------------------------------- | | Investment | Industrial | Others and | Total | | | in | Investment; | elim. | | | | securities | cables | | | -------------------------------------------------------------------------------- | Industrial business | | 8,543 | | 8,543 | | turnover | | | | | -------------------------------------------------------------------------------- | Gains and losses from | 5,634 | | | 5,634 | | the trade of financial | | | | | | assets | | | | | -------------------------------------------------------------------------------- | Turnover | 5,634 | 8,543 | | 14,177 | -------------------------------------------------------------------------------- | Segment operating | 4,790 | 20 | | 4,810 | | profit | | | | | -------------------------------------------------------------------------------- | Unallocated items | | | | 0 | -------------------------------------------------------------------------------- | Operating profit | | | | 4,810 | -------------------------------------------------------------------------------- | Share of the result of | | | | 0 | | associates | | | | | -------------------------------------------------------------------------------- | Unallocated items | | | | -1,923 | -------------------------------------------------------------------------------- | Profit for the | | | | 2,887 | | financial year | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Segment assets | 50,649 | 68,474 | | 119,123 | -------------------------------------------------------------------------------- | Unallocated assets | | | | 1,172 | -------------------------------------------------------------------------------- | Total assets | 50,649 | 68,474 | | 120,295 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Segment liabilities | 2,940 | 19,979 | | 22,919 | -------------------------------------------------------------------------------- | Unallocated | | | | 35,822 | | liabilities | | | | | -------------------------------------------------------------------------------- | Total liabilities | 2,940 | 19,979 | | 58,741 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Assets - Liabilities | 47,709 | 48,495 | | 61,554 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments | 0 | 5,914 | | 5,914 | -------------------------------------------------------------------------------- | Depreciations | -6 | -275 | | -281 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | changes in tangible NON-CURRENT assets | | | -------------------------------------------------------------------------------- | EUR 1,000 | 1-6/2008 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Book value at beginning of period | 23,916 | 51 | -------------------------------------------------------------------------------- | Investment | 6,932 | 11,061 | -------------------------------------------------------------------------------- | Increase through company acquisition | 0 | 17,114 | -------------------------------------------------------------------------------- | Decrease | 0 | -2,489 | -------------------------------------------------------------------------------- | Depreciations | -1,777 | -1,821 | -------------------------------------------------------------------------------- | BOOK VALUE AT END OF PERIOD | 29,071 | 23,916 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONTINGENT LIABILITIES | | | -------------------------------------------------------------------------------- | EUR 1,000 | 30.6.2008 | 31.12.2007 | -------------------------------------------------------------------------------- | Debts, on behalf of corporate mortgages | | | | are given | | | -------------------------------------------------------------------------------- | Loans from financial institutions | 6,432 | 7,891 | -------------------------------------------------------------------------------- | Granted corporate mortgages | 15,000 | 15,000 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Debts, on behalf of securities or | | | | guarantees are given | | | -------------------------------------------------------------------------------- | Loans from financial institutions | 12,456 | 13,033 | -------------------------------------------------------------------------------- | Book value of pledged securities | 26,987 | 26,987 | -------------------------------------------------------------------------------- | Granted guarantees | 12,456 | 13,033 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OTHER COLLATERALS | | | -------------------------------------------------------------------------------- | Guarantees | 120 | 120 | -------------------------------------------------------------------------------- Payment commitments: Reka Cables Ltd has made a commitment to the raw material acquisitions of its subsidiary ZAO Reka Cables. The sales receivables concerned are security for the factoring credit. Concerning the acquisition of Reka Cables the parties to the deal have agreed on an adjustment to the purchase price on the basis of the trend in the average operating margin of Reka Cables in 2007 and 2008. At the most, the price can be raised or lowered by EUR 3.5 million. INVESTMENT COMMITMENTS Investment commitments on tangible current assets on 30 June 2008 totalled EUR 0.9 million (30 June 2007 EUR 0.0 million). The investment commitments are related to the extension of the cable production plant in Riihimäki. DERIVATIVE CONTRACTS -------------------------------------------------------------------------------- | EUR 1,000 | 30.6.2008 | 31.12.2007 | -------------------------------------------------------------------------------- | Nominal values | | | -------------------------------------------------------------------------------- | Interest derivatives | | | -------------------------------------------------------------------------------- | Interest rate ceiling derivatives | 9,800 | 9,800 | -------------------------------------------------------------------------------- | Interest rate swaps | 15,667 | 0 | -------------------------------------------------------------------------------- | Foreign exchange derivatives | | | -------------------------------------------------------------------------------- | Currency forward agreements | 9,351 | 0 | -------------------------------------------------------------------------------- | Commodity derivatives | | | -------------------------------------------------------------------------------- | Price hedging for metals | 1,511 | 1,119 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Fair values | | | -------------------------------------------------------------------------------- | Interest derivatives | | | -------------------------------------------------------------------------------- | Interest rate ceiling derivatives | 99 | 27 | -------------------------------------------------------------------------------- | Interest rate swaps | 26 | 0 | -------------------------------------------------------------------------------- | Foreign exchange derivatives | | | -------------------------------------------------------------------------------- | Currency forward agreements | 13 | 0 | -------------------------------------------------------------------------------- | Commodity derivatives | | | -------------------------------------------------------------------------------- | Price hedging for metals | 91 | -36 | -------------------------------------------------------------------------------- The loans of the Group have been partly hedged with interest rate derivatives. A interest rate ceiling of 4.5% has been acquired for the EUR 3 million loan for three years and of 4.7% for the EUR 6.8 million loan for three years. The original interest rate base for the hedged EUR 3 million loan is the 6-month Euribor and that for the EUR 6.8 million loan the 12-month Euribor. In addition there are interest rate protections by using 1 year interest rate swaps. -------------------------------------------------------------------------------- | RELATED PARTY EVENTS (REKA GROUP) | -------------------------------------------------------------------------------- | EUR 1,000 | 1-6/2008 | 1-6/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Sales to Reka Group | 70 | 5 | -------------------------------------------------------------------------------- | Dividends to Reka Group | -1,528 | -587 | -------------------------------------------------------------------------------- | Acquisition of Reka Cables Ltd | 0 | -25,803 | -------------------------------------------------------------------------------- | Other purchases from Reka Group | -495 | -143 | -------------------------------------------------------------------------------- | Sales receivables and other receivables at end of | 267 | 852 | | period | | | -------------------------------------------------------------------------------- | Non-current debts (financial leases) at end of | -8,304 | -7,902 | | period | | | -------------------------------------------------------------------------------- | Other debts at end of period | -399 | -324 | -------------------------------------------------------------------------------- | Guarantees given | 0 | 4,000 | -------------------------------------------------------------------------------- | Guarantees received | 1,327 | 1,902 | -------------------------------------------------------------------------------- Guarantees received include the quarantee given by Reka Ltd for a Reka Cables Ltd´s loan from the Nordic Investment Bank. This guarantee will continue. No costs will be incurred by Reka Cables Ltd through the guarantee. FINANCIAL ASSETS RECOGNISED AT FAIR VALUE THROUGH PROFIT AND LOSS -------------------------------------------------------------------------------- | EUR 1,000 | Book value | Book value | | | 30.6.2008 | 31.12.2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Hedge funds or securities based on | | | | hedge funds | | | -------------------------------------------------------------------------------- | Ind eQ Active 4024 bonds / Nordea | 0 | 5,254 | -------------------------------------------------------------------------------- | Ind eQ Active 4025 bonds / Nordea | 0 | 15,756 | -------------------------------------------------------------------------------- | Total | 0 | 21,010 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Money market funds and deposits | | | -------------------------------------------------------------------------------- | Nordea Pro Euro Korko Kasvu | 2,888 | 4,143 | -------------------------------------------------------------------------------- | Interest rate warrants | 0 | 1,853 | -------------------------------------------------------------------------------- | Certificate of deposits | 15,009 | 10,076 | -------------------------------------------------------------------------------- | Total | 17,897 | 16,073 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Derivatives | | | -------------------------------------------------------------------------------- | Interest derivatives; interest rate | 99 | 27 | | ceilings | | | -------------------------------------------------------------------------------- | Interest derivatives; interest rate | 26 | 0 | | swaps | | | -------------------------------------------------------------------------------- | Total | 125 | 27 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total financial assets recognised at | 18,022 | 37,109 | | fair value through profit and loss | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | AVAILABLE-FOR-SALE FINANCIAL ASSETS | Book value | Book value | | EUR 1,000 | 30.6.2008 | 31.12.2007 | -------------------------------------------------------------------------------- | Private Equity | | | | -------------------------------------------------------------------------------- | Oulun Puhelin Holding Plc | | 3,081 | 3,081 | -------------------------------------------------------------------------------- | Satakunnan Teletieto Ltd | | 920 | 920 | -------------------------------------------------------------------------------- | Total available-for-sale financial | 4,001 | 4,001 | | assets | | | -------------------------------------------------------------------------------- CALCULATION OF KEY FIGURES -------------------------------------------------------------------------------- | Return on | = | Profit before taxes + interest and other | x 100 | | investment | | financial expenses / | | -------------------------------------------------------------------------------- | (ROI) % | | [Balance sheet total - provisions and | | | | | non-interest bearing liabilities] | | | | | (average) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity ratio, | = | Shareholders' equity + minority interest | x 100 | | % | | minus deferred tax liabilities / | | -------------------------------------------------------------------------------- | | | Balance sheet total - advances received | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per | = | Profit for the period belonging to parent company | | share (EPS), | | owners / | -------------------------------------------------------------------------------- | EUR | | Number of shares adjusted for share | | | | | issues (average) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity/share, | = | Shareholders´ equity - minority interest minus | | EUR | | deferred tax liabilities / | -------------------------------------------------------------------------------- | | | Number of shares adjusted for share | | | | | | issues at the end of the financial | | | | | | period | | | -------------------------------------------------------------------------------- Helsinki 5.8.2008 Neomarkka Plc Board of Directors pp. Sari Tulander CFO FURTHER INFORMATION: Markku E. Rentto, Managing Director, tel. +358 207 209 190 Sari Tulander, CFO, tel. +358 207 209 192 DISTRIBUTION OMX Nordic Exchange Helsinki Main media www.neomarkka.fi
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