HK RUOKATALO?S INTERIM REPORT FOR 1 JANU
HK Ruokatalo Oyj STOCK EXCHANGE BULLETIN 3 MAY 2004, at 10:30am 1(6)
HK RUOKATALOS INTERIM REPORT FOR 1 JANUARY TO 31 MARCH 2004
HK Ruokatalo Groups turnover for Q1 of 2004 was EUR 151.8 million, up
by EUR 7.8 million or 5.4 per cent on the corresponding figure a year
earlier. The operating profit rose to EUR 5.1 million or 3.3 per cent
of turnover. The three-month result before exceptional items was EUR
3.9 million, up by 11.4 per cent on the corresponding figure of EUR
3.5 million a year earlier. Earnings per share were up from EUR 0.09
to EUR 0.12 compared to Q1 2003.
Progress was made with the Groups business in Finland as expected and
budget targets were met. Good management of our core process delivered
positive earnings improvement and business growth. At home, sales rose
during the early part of the year and consumer prices remained stable.
Q1 saw an increase in HK Ruokatalos exports from Finland and
profitability was as anticipated. We retained our position as market
leader in Finland and in the Baltics.
The efficiency measures embarked on in the Baltic units during 2003
were evident in the result. Q1 turnover from the Groups Baltic
operations was EUR 24.6 million. The result before exceptional items
rose by 50 per cent to EUR 0.9 million compared to EUR 0.6 million a
year earlier.
Sokolów, our Polish associate, also reported a marked improvement in
profitability on the back of higher turnover and thriving exports.
INVESTMENTS AND FINANCE
Group gross investments totalled EUR 5.9 million (EUR 21.1 million)
during the first three months of the year. Investments at home
accounted for EUR 2.8 million of this figure and the Baltics for EUR
3.1 million. On the production side, the new slicing and packing line
came on stream at Vantaa and a start was made on the earthworks for a
freezing plant to be built in Forssa. Rigas Miesnieks new logistics
centre was completed in Latvia and in Estonia, pork producer Ekseko
continued investments aimed at reducing adverse environmental impacts.
Group interest-bearing debts remained almost the same as at year-end
2003 and at 31 March 2004 stood at EUR 154.1 million (EUR 136.4m). The
equity ratio was on track at 43.1 per cent (44.3%).
EMPLOYEES
The Group employed an average of 4,647 persons (4,803) during the
first three months of the year. An analysis of employees by country at
the end of March is as follows: Finland 57.8%, Estonia 34.6%, Latvia
6.1%, Lithuania 1.4% and other countries 0.1%.
BOARD OF DIRECTORS AUTHORISATIONS
At 31 March 2004, the Board of Directors had authorisations to
increase the share capital through one or more rights issues, one or
more convertible bond loans and/or warrants so that the companys
share capital may be raised by no more than a maximum of EUR 3,060,000
through the issuance of a maximum of 1,800,000 of the companys new A
Shares.
The authorisation allowed the Board of Directors to disapply the pre-
emption rights of existing shareholders and to decide the issue price
and other terms and conditions of subscription and the terms and
conditions of a convertible bond loan or warrants. The authorisation
was not exercised and lapsed accordingly on 9 April 2004.
SHARE PERFORMANCE
During the first three months of 2004, 2,129,004 HK Ruokatalo A Shares
were traded on the Helsinki Exchanges for an estimated total of EUR
13,954,300. The middle price was EUR 6.55 and the March closing price
was EUR 6.50. HK Ruokatalos market capitalisation at 31 March 2004
was EUR 168.0 million (EUR 148.2m).
INCREASE IN SHARE CAPITAL
Between 2 and 30 January 2004, the exercise of warrants attached to
shares issued in the 1998 Employee Offering increased the number of
the companys A Shares by 595,705 new A Shares and the share capital
by EUR 1,012,698.50. The issue price was EUR 5.94 per share. The
increase was entered in the Trade Register on 13 February 2004. The
new shares are entitled to receive a dividend for the financial year
ending 31 December 2003 and thereafter. The warrant scheme expired on
31 January 2004 and this subscription period was the last. A total of
150,000 warrants were originally attached to Employee Shares. Of
these, 119,656 were exercised to subscribe new A Shares. Around 220
members of staff employed by the Group at the time subscribed to
shares in the 1998 Employee Offering.
NOTICES OF CHANGE IN OWNERSHIP
On 13 February 2004, Markku Helander, pursuant to Chapter 2, Section 9
of the Securities Market Act, reported that he had reduced his stake
in HK Ruokatalo to 4.91 per cent of the shares and 0.99 per cent of
the votes.
Likewise, on 16 February 2004, Sampo Life Insurance Company reported
that its stake in HK Ruokatalo had fallen to 4.94 per cent of the
shares and 0.99 per cent of the votes.
EVENTS TAKING PLACE SINCE 31 MARCH 2004
The Annual General Meeting held on 22 April 2004 adopted the parent
companys and consolidated financial statements and discharged the
members of the Board of Directors and the CEO from liability for 2003.
It was decided to declare a dividend of EUR 0.28 per share as
recommended by the Board of Directors. The Annual General Meeting
confirmed as five the number of members of the Board of Directors.
Marcus H. Borgström Agricultural Counsellor (Hon), Markku Aalto
farmer, Lars Danell director, Tiina Varho-Lankinen MSc and Heikki
Kauppinen BSc were all re-appointed to the Board.
The Annual General Meeting authorised the Board of Directors to decide
whether to increase the share capital through one or more rights
issues, one or more convertible bond loans and/or warrants so that in
a rights issue or when issuing convertible bonds or warrants, a
maximum of 2,000,000 of the companys new A Shares having a nominal
value of EUR 1.70 may be issued and the companys share capital may be
raised by no more than EUR 3,400,000.
The authorisation allows the Board of Directors to disapply the pre-
emption rights of existing shareholders to subscribe to new shares, a
convertible bond loan or warrants and to decide the issue price and
other terms and conditions of subscription and the terms and
conditions of a convertible bond loan or warrants. The authorisation
is valid until 22 April 2005. To date, the Board of Directors has not
exercised this authorisation.
CORPORATE GOVERNANCE REGULATION
HK Ruokatalo is to introduce on 1 July 2004 the Recommendation for
Corporate Governance of Listed Companies formulated by HEX, the
Central Chamber of Commerce and the Confederation of Finnish Industry
and Employers.
THE FUTURE
The summer, an important season for the meat industry, is almost upon
us. HK Ruokatalo will welcome the season with top quality products and
dependable deliveries.
At home, we are further stepping up cooperation with key customers in
a bid to enhance the logistics chain to our mutual benefit. Likewise
we are strengthening the competitiveness of the entire delivery chain.
In the Baltics, EU membership will create a common market and improve
our business conditions throughout the Baltic region. All our
production facilities in the Baltics, as well as in Poland are now in
line with EU standards.
Since it produces most of the raw pork meat it requires, Rakvere
Lihakombinaat is poised to benefit from the increase in the global
price of pork.
In Lithuania, where the market is fragmented and there is no market
leader, we will benefit from collaboration with Sokolów of Poland.
Sokolów is expected to continue to make positive progress in Poland
and the company has already seen a dynamic strengthening of turnover
and profitability. Exports in particular have risen. In Poland, there
is growing confidence in the ability of Sokolów and certain other
major meat companies to flourish in the EU market, something that has
been translated into sharply rising share prices. With a 21.12 per
cent stake, HK Ruokatalo is the largest single shareholder in Sokolów.
We are planning to increase our ownership in near future to a maximum
of 49.99 per cent.
CONSOLIDATED PROFIT AND LOSS ACCOUNT (EUR 1000)
1-3/2004 1-3/2003 1-12/2003
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Turnover 151,789 143,998 647,435
Operating profit 5,060 4,409 27,465
Profit before exceptional items 3,915 3,476 22,189
Group result before taxes 3,915 3,442 22,189
Result for the period under review 2,965 2,084 15,380
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The taxes in the profit and loss account take into account the
equivalent tax on income for the period under review.
CONSOLIDATED BALANCE SHEET (EUR 1000)
31 Mar 2004 31 Mar 2003 31 Dec 2003
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ASSETS
Fixed assets
Intangible assets 6,474 8,063 7,247
Goodwill on consolidation 24,091 25,071 24,597
Tangible assets 193,729 189,582 193,279
Financial assets 22,248 14,096 21,366
Fixed assets, total 246,542 236,812 246,489
Current assets
Stocks 48,083 42,251 39,704
Debtors 75,666 67,438 79,724
Cash at bank and in hand 6,396 7,618 12,055
Current assets, total 130,145 117,307 131,483
Assets, total 376,687 354,119 377,972
EQUITY AND LIABILITIES
Shareholders equity 160,316 146,713 153,778
Capital loan 50 50 50
Minority interests 1,970 10,059 1,871
Group reserve - 1,242 -
Provisions for liabilities and charges 173 177 178
Deferred tax liability 8,727 7,372 8,727
Long-term creditors 97,966 88,795 97,765
Short-term creditors 107,485 99,711 115,603
Shareholders equity and
liabilities, total 376,687 354,119 377,972
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CASH FLOW STATEMENT (EUR 1000)
1-3/2004 1-3/2003 1-12/2003
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Operating activities
Net cash inflow/outflow from
operating activities 10,641 9,249 48,465
Change in net working capital -16,547 -12,089 -8,451
Financial items and taxes -2,048 -1,824 -9,463
Net cash inflow/outflow from
operating activities -7,954 -4,664 30,551
Investments
Net cash inflow/outflow
from investing activities -5,553 -19,354 -55,391
Financing
Change in loans 4,309 5,988 17,478
Dividends paid 0 0 -6,244
Share issue 3,539 9,304 9,317
Net cash inflow/outflow
from financing activities 7,848 15,292 20,551
Change in liquid assets -5,659 -8,726 -4,289
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FINANCIAL INDICATORS
Earnings per share (EPS), EUR 0.12 0.09 0.62
Equity per share at 31 March, EUR 6.20 5.81 6.09
Equity ratio, % 43.1 44.3 41.2
Number of shares 25,847,395 25,249,115 25,251,690
Gross fixed asset
investments, EUR million 5.9 21.1 64.8
Gross investments as % of turnover 3.9 14.7 10.0
Employees, end of
- month average 4,647 4,803 5,034
CONSOLIDATED CONTINGENT LIABILITIES (EUR 1000)
31 Mar 2004 31 Mar 2003 31 Dec 2003
Debts for which pledges or
mortgages given as surety
- pension loans 16,426 17,787 16,519
- loans from financial institutions 115,895 96,704 114,949
For own debt
- pledges 10,007 13,827 9,561
- real estate mortgages 89,088 88,772 89,088
- business mortgages 22,056 23,025 23,804
For associated undertakings
- guarantees 50 875 50
For others
- pledges 40 42 40
- guarantees 5,340 5,122 6,292
Other own commitments
Leasing commitments 470 212 510
Other liabilities 3,015 1,115 1,315
Figures in this report are unaudited.
Turku, 3 May 2004
HK Ruokatalo Oyj
Board of Directors
Simo Palokangas
Chief executive officer
DISTRIBUTION:
Helsinki Exchanges
Internet: www.hk-ruokatalo.fi
