Ferronordic Machines AB (publ) Interim Report January to March 2015
Stockholm, 19 May 2015
SIGNIFICANTLY REDUCED NEW MACHINE SALES
Revenue decreased by 50% (30% in rubles) to SEK 252.4m (SEK 501.1m)
Operating profit amounted to SEK -12.4m (SEK 10.2m)
Operating margin was -4.9% (2.0%)
EBITDA amounted to SEK 7.3m (SEK 31.0m)
The after-tax result amounted to SEK -11.0m (SEK -1.5m)
Earnings per ordinary share amounted to SEK -2.35 (SEK -1.40)
Cash flow from operating activities amounted to SEK 29.6m (SEK -6.2m)
|SEK M||First quarter2015||First quarter 2014|
|Net Debt / EBITDA||0.5x||0.4x|
COMMENTS BY LARS CORNELIUSSON, CEO AND PRESIDENT:
While the macroeconomic and geopolitical situation has somewhat stabilized during the quarter, the market for sales of new machines has fallen significantly. The effects of the financial turmoil at the end of 2014 are still clearly visible. Liquidity is tight, infrastructure projects are being postponed and financing for our customers remains challenging. Together with significant price increases following the depreciation of the ruble, this has resulted in a decrease of the market for new machines in Russia by approximately 75% compared to the same period last year.
The market situation has obviously affected our revenue negatively, in particular the sales of new machines. The number of new machines sold during the quarter decreased to 86 units compared to 298 units during the first quarter of 2014.
The significant reduction in new machine sales was partly compensated by an increased demand for used machines. Given the market conditions, our aftermarket sales were also relatively strong and increased by 15% in ruble compared to the same period last year. In total, however, our revenue during the first quarter decreased by 50% to SEK 252m from SEK 501m in the first quarter of 2014.
The implementation of various cost saving measures that commenced the fourth quarter of 2014 was intensified during the first quarter. Even though these measures have contributed to an overall reduction of our cost level, we do not expect to see the proper effect of these measures until later during the year. Depending on the market development we have also made preparations to take further actions if needed.
In April it was announced that the proposal of the Board to the AGM is that, for the time being, no dividends should be paid on the preference shares. This does not mean that the payment of dividends has been cancelled. The intention is that dividend payments should be made according to plan. But in a year like this we cannot make a decision already in May to pay dividends in October 2015 and April 2016. Before dividends can be paid we must first ensure that we have funds available to fulfill obligations to our suppliers. If the financial position allows it the Board will call for an extraordinary general meeting in October 2015 and/or April 2016 where the dividend payments can be decided.
About Ferronordic Machines
Ferronordic Machines is the authorized dealer of Volvo Construction Equipment and Terex Trucks in Russia. The company began its operations in June 2010 and has expanded rapidly across Russia and is today well established in all federal districts with over 70 outlets and approximately 700 employees. In addition to distributing and providing aftermarket support to Volvo Construction Equipment machines, the company has also been appointed aftermarket dealer for Volvo and Renault Trucks as well as dealer for Volvo Penta in certain parts of Russia. The company has also signed up some other high quality brands such as Logset and several attachment manufacturers. The vision of Ferronordic Machines is to be regarded as the leading service- and sales company in the CIS markets. The preference shares of Ferronordic Machines are listed on NASDAQ OMX First North Premier. The company has appointed Avanza Bank AB as its Certified Advisor.
For more information, please contact:
Anders Blomqvist, CFO and Head of IR, Tel: +46 8 5090 7280 firstname.lastname@example.org
Ferronordic Machines discloses the information herein pursuant to the Securities Markets Act and/or the Financial Instruments Act. The information was submitted for publication on 19 May 2015, 11:30 CET.