INTERIM REPORT FOR 1 JANUARY - 30 JUNE 2
PONSSE OYJ STOCK EXCHANGE BULLETIN 16 JULY 2004 at 09AM
INTERIM REPORT FOR 1 JANUARY - 30 JUNE 2004
Ponsse Groups turnover for the first six months of 2004 was EUR
89.5 million (Jan-Jun/2003 EUR 81.3m). Exports and foreign business
operations accounted for 60.5 per cent (54.3%) of turnover. The
operating profit was EUR 8.5 million (EUR 7.7m) and the Groups back
orders totalled EUR 38.7 million (EUR 30.6m at 30 June 2003).
TURNOVER AND RESULT
Group turnover rose by 10.1 per cent to EUR 89.5 million. The trend
in exports was particularly encouraging, with exports rising to 60.5
per cent of turnover (54.3%)during the period under review. Export
volumes were especially up in neighbouring markets and Central
Europe.
The operating profit for the period under review was EUR 8.5
million, up by EUR 0.8 million or 11.1 per cent on the figure a year
earlier. The operating profit was 9.5 per cent (9.4%) of turnover.
This improvement in performance was made on the back of a 17 per
cent increase in the production output of new machines. Positive
progress was made with export activities and sales of used machines
during the early part of the year.
The profit after financial items rose by 30.2 per cent on the year
to EUR 8.7 million (EUR 6.7m). Net financing income was EUR 0.1
million (EUR -1.0m). Gains and expenses from hedging currency
positions and also foreign exchange profits and losses on sales and
purchases have been booked under financial items. There were no
extraordinary items during the period under review.
The profit for the period under review was EUR 5.6 million (EUR
4.4m).
MARKET SITUATION
As in 2003, demand in Finland remained satisfactory during the
period under review. The demand for forest machines improved
encouragingly, especially on the European export market.
June saw Ponsse sign a cooperation agreement with OOO Zeppelin
Russland, one of Caterpillars largest dealers. Under the agreement,
OOO Zeppelin Russland will act as dealer for Ponsses products and
provide maintenance and spare parts services in Russia. Zeppelin
will provide financing services for buyers of forest machinery
through Caterpillars customer financing facilities. We believe this
solution will considerably increase sales of new and used forest
machines to Russia.
The outlook for the global economy during the period under review
was brighter than a year ago. Investments by the forest industry in
new and existing production units were also higher. Growing
production capacity has increased the demand for raw timber.
NEW ORDERS AND BACK ORDERS
We secured new orders worth EUR 94.7 million (EUR 78.1m). Back
orders at 30 June 2004 were EUR 38.7 million (EUR 30.6m). In keeping
with previous practice, distributors minimum purchase commitments
are included in back orders.
SUBSIDIARIES
In Sweden, Ponsse AB celebrated its 10th anniversary in spring. The
occasion was marked by a Road Show in various parts of Sweden.
The early summer saw Ponsse USA Inc. take the decision to enlarge
its maintenance facilities in Michigan to better respond to an
increased demand for maintenance services resulting from the growth
in local forest machine sales. The company has taken out a long
lease on the premises and will be able to move in during the first
half of 2005.
No significant changes otherwise took place in the operations of
Ponsses marketing and after sales subsidiaries abroad.
BALANCE SHEET
The consolidated balance sheet total at 30 June 2004 was EUR 84.7
million (EUR 81.2m). Interest-bearing debts totalled EUR 26.3
million (EUR 25.2m). Net debt was EUR 12.8 million (EUR 18.3m). The
equity ratio was 41.2 per cent (47.4%). Cash assets at the end of
the period under review totalled EUR 12.9 million (EUR 6.7m).
CAPITAL EXPENDITURE AND R&D
Investments during the first six months of 2004 totalled EUR 1.5
million (EUR 1.3m). Investments were mostly in two building
projects: the extension of the maintenance and spare parts centre at
Iisalmi and the construction of office premises at the Vieremä
plant. Other investments were in information systems and production
equipment.
Group R&D expenses amounted to EUR 1.6 million (EUR 1.7m) for the
first six months of 2004, accounting for 1.8 per cent (2.1%) of
turnover. During the period under review a total of 58 people (59)
were employed in R&D.
PERSONNEL
The Group employed an average number of 586 (550) persons during the
period under review. At 30 June 2004, the Group employed 625 (588)
persons.
MANAGEMENT
Ponsses CFO Mikko Paananen has been appointed acting deputy to
Ponsse Oyjs President and CEO Arto Tiitinen. The appointment is
effective from 1 August 2004, when vice president and CEO Juha
Vidgrén starts a 12-month study leave period. Juha Vidgrén will
continue to be deputy chairman of the Board of Directors and will
retain his position as a member of the boards of directors of
Ponsses subsidiaries.
SHARES
A total 1,334,291 Ponsse shares, corresponding to 19.1 per cent of
the total, were traded during the first six months of the year for a
total of EUR 25.7 million. The lowest and highest trading prices
paid during the period under review were EUR 16.46 and EUR 21.75 per
share respectively. The closing price at 30 June 2004 was EUR 21.25
and the market capitalisation was EUR 148.8 million.
INTRODUCTION OF IAS/IFRS
Progress was made as planned with the IFRS project embarked on in
late winter 2003. On the basis of information to date, we expect
IFRS to have little impact on the companys profit and loss account.
Differences in the valuation and booking of balance sheet items will
increase the balance sheet total by around EUR 2 million.
The first financial statements in compliance with the new rules will
be prepared for the financial year commencing 1 January 2005. We
also aim to publish the interim reports in 2005 in compliance with
IFRS accounting principles.
OUTLOOK FOR THE REST OF THE YEAR
Ponsse posted a good result for the first six months of the year.
Lower production and delivery volumes owing to summer holidays mean
that Q3 turnover and earnings will be below those for Q2. Taking
into account the companys strong order book, the general market
situation and the new distribution channel in Russia, we expect
turnover and performance for the year as a whole to be much higher
than in 2003.
Ponsse Group key indicators
Profit and loss account 1-6/04 1-6/03 1-12/03
TEUR TEUR TEUR
Turnover 89 503 81 290 166 034
Increase (+) or decrease (-) in stocks of
finished goods and work in progress 2 087 -462 -482
Other operating income 683 738 1 457
Raw materials and services -60 596 -53 039 -110 776
Staff expenses -13 776 -12 226 -24 093
Depreciation -1 324 -1 295 -2 788
Other operating expenses -8 063 -7 341 -15 099
Operating profit 8 514 7 665 14 253
Share of results of associated undertakings 58 38 208
Financial income and expenses 110 -1 035 -1 411
Result before appropriations and taxes 8 682 6 668 13 050
Income taxes -3 533 -2 544 -3 913
Change in deferred tax liability 432 232 2
Earnings for the period under review 5 581 4 356 9 139
Balance sheet 30.6.04 30.6.03 31.12.03
TEUR TEUR TEUR
Assets
Fixed assets and other non-current assets
Intangible assets 1 713 1 317 1 541
Tangible assets 15 474 13 812 15 479
Financial assets 658 491 660
Stocks and current assets
Stocks 35 404 37 438 31 688
Receivables 18 547 21 384 18 267
Cash in hand and at banks 12 935 6 722 10 565
Total 84 731 81 164 78 200
Shareholders equity and liabilities
Shareholders equity
Share capital 3 500 3 500 3 500
Other equity 31 183 34 896 39 594
Provisions for liabilities and charges 2 490 0 2 284
Creditors
Non-current 25 168 16 000 14 123
Current 22 390 26 768 18 699
Total 84 731 81 164 78 200
Receivables at 30 June 2004 include deferred tax assets of EUR 603
thousand (30 June 2003, EUR 533 thousand, 31 December 2003, EUR 240
thousand). Non-current creditors at 30 June 2004 includes a deferred
tax liability of
EUR 731 thousand (30 June 2003, EUR 845 thousand, 31 December 2003
EUR 838 thousand).
Comparison figures of year 2003 has been changed to be parallel with
new book-keeping practices.
Cash flow statement
1-6/04 1-6/03 1-12/03
Cash flow from operations: TEUR TEUR TEUR
Turnover 8 514 7 665 14 253
Depreciation and value adjustments 1 324 1 295 2 788
Change in reserves 206 0 2 284
Other reconciliations 32 81 0
Cash flow before change
in working capital 10 076 9 041 19 325
Change in working capital:
Increase (-)/ decrease in interest-free
operating receivables -57 -8 943 -6 108
Increase /-)/decrease (+) in stocks -3 715 -3 518 2 232
Increase (+)/decrease (-) in
current interest-free creditors 5 240 4 615 503
Cash flow from operations before
financial items and taxes 11 544 1 195 15 952
Financial income and expenses 158 -1 035 -1 443
Taxes paid -2 509 -2 544 -2 290
Cash flow from operations: 9 193 -2 384 12 219
Pledges given, contingent and other liabilities
30.6.04 30.6.03 31.12.03
TEUR TEUR TEUR
1. 1. For own debt
Debts for which mortgages have been pledged as collateral
Loans from credit institutions 1 680 15 972 12 021
Mortgages given on land
and buildings 2 482 3 866 3 866
Chattel mortgages given 1 547 2 893 3 293
Mortgages pledged as collateral,
total 4 029 6 759 7 159
2. Leasing commitments 498 2 037 536
3. Contingent liabilities on behalf of Group companies
Guarantees given on behalf of
Group companies 1 056 1 111 1 025
4. Liabilities arising from derivative contracts
4.1 Nominal values
Currency derivatives
Options 5 480 1 492 3 568
Forward contracts 8 958 11 500 13 060
4.2 Market values
Currency derivatives
Options 24 2 34
Forward contracts 36 88 728
5. Other contingent liabilities
Guarantees given on behalf of others 648 526 756
Repurchase commitments 5 687 7 019 7 943
Total 6 335 7 545 8 699
Key indicators 30.6.04 30.6.03 31.12.03
R&D expenditure, EUR million 1.6 1.7 3.0
Fixed asset investments, EUR million 1.5 1.3 4.5
as % of turnover 1.7 1.6 2.7
Average number of staff 586 550 553
Back orders, EUR million 38.7 30.6 33.7
Equity ratio, % 41.2 47.4 55.7
Earnings per share, EUR 0.80 0.62 1.31
Shareholders equity per share, EUR 4.95 5.49 6.16
Taxes corresponding to profit for the period under review have been
included as income taxes in the Profit and Loss Account and in
earnings per share.
New orders 1-6/04 1-6/03 1-12/03
MEUR MEUR MEUR
Ponsse Group 94.7 78.1 165.4
Quarterly information
4-6/03 7-9/03 10-12/03 1-3/04 4-6/04
TEUR TEUR TEUR TEUR TEUR
Turnover 44 167 36 303 48 441 43 874 45 629
Operating profit 5 056 2 030 4 558 4 807 3 707
Result before appropriations
and taxes 4 618 1 903 4 479 5 010 3 672
The figures in the Interim Report are unaudited.
Vieremä, 16 July 2004
PONSSE OYJ
Arto Tiitinen
President, CEO
Further information from:
President, CEO Arto Tiitinen, tel: +358 20 768 8621 and
CFO Mikko Paananen, tel: +358 20 768 8648
www.ponsse.com
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