INTERIM REPORT FOR 1 JANUARY TO - 30 SEPTEMBER 2004
PONSSE OYJ STOCK EXCHANGE BULLETIN 22 OCTOBER 2004 at 9AM
INTERIM REPORT FOR 1 JANUARY TO - 30 SEPTEMBER 2004
Ponsse Groups turnover for the first nine months of 2004 was EUR 130.4 million
(Jan-Sept/2003 EUR 117.6m). The operating profit was EUR 13.2 million (EUR 9.7
million) and the Groups back orders totalled EUR 40.7 million (EUR 28.2m at 30
Sept 2003). The Board of Directors is to recommend to an extraordinary general
meeting of shareholders a scrip issue and the payment of an additional dividend
for 2003.
TURNOVER AND RESULT
Group turnover rose by 10.9 per cent to EUR 130.4 million. Development of the
Groups international operations was particularly encouraging. During the period
under review, international operations accounted for 60.9 per cent of turnover
(55.4%).
The operating profit for the period under review was EUR 13.2 million, up by EUR
3.5 million or 35.9 per cent on the figure a year earlier, and amounted to 10.1
per cent (8.2%) of turnover. The return on investment (ROI) was 28.5 per cent
(19.9%).
Sales of Ponsse machines progressed encouraging during the period under review.
The number of new machines produced was up by 20.5 per cent on the figure a year
earlier. Improved earnings performance was due not only to higher overall volume,
but also to the encouraging trend in the number of machines exported and better
results from the sale of used machines.
The profit after financial items rose by 53.6 per cent on the year to EUR 13.2
million (EUR 8.6m). Net financing income was EUR -0.2 million (EUR -1.2m).
Exchange rate differences and gains and losses from currency hedging have been
booked as financial items. There were no extraordinary items during the period
under review.
The profit for the first nine months of 2004 was EUR 8.6 million (EUR 5.5m).
MARKET SITUATION
During the period under review, the outlook for the global economy was much
brighter than a year ago. The sharp rise in oil prices has not eroded the
confidence of either private consumers or companies in the economy. Towards the
end of the period under review, business prospects in the forest industry were
also looking much brighter.
The encouraging trend in Ponsses international business continued, with brisk
growth particularly in neighbouring markets and Central Europe. Ponsses business
in Russia developed as planned.
NEW ORDERS AND BACK ORDERS
New orders were secured in the amount of EUR 138.1 million (EUR 111.9m) and back
orders at 30 September 2004 were EUR 40.7 million (EUR 28.2m). In keeping with
previous practice, back orders include distributors minimum purchase commitments.
SUBSIDIARIES
Export Director Jari Kartano was appointed managing director of Ponsse UK Ltd with
effect from 1 September 2004.
BALANCE SHEET
The consolidated balance sheet total at 30 September 2004 was EUR 87.2 million
(EUR 81.1m). Interest-bearing debts totalled EUR 23.7 million (EUR 25.7m). Net
debt was EUR 9.1 million (EUR 13.1m). The equity ratio was 43.4 per cent (48.8%).
Cash assets at the end of the period under review totalled EUR 14.5 million (EUR
12.5m).
CAPITAL EXPENDITURE AND R&D
Investments during the first nine months of 2004 totalled EUR 2.8 million (EUR
2.4m). Investments were mainly on the enlargement of the maintenance service and
training centre at Iisalmi. Other investments were in information systems and
production equipment.
Group R&D expenses amounted to EUR 2.6 million (EUR 2.6m) during the period under
review, accounting for 2.0 per cent of turnover (2.2%). A total of 58 people (55)
were employed in R&D during the period under review.
PERSONNEL
The Group employed an average of 592 (553) persons during the period under review.
At 30 September 2004, the Group employed 595 (551) persons.
MANAGEMENT
Mechanical engineer Jari Kartano was appointed Export Director at Ponsse Oyj
effective 1 August 2004. He also joined the Management Team.
SHARES
A total of 1,449,249 Ponsse shares, corresponding to 20.7 per cent of the total,
were traded during the first nine months of the year
for a total of EUR 28.3 million. The lowest and highest trading prices paid during
the period under review were EUR 16.46 and EUR 24.00 per share respectively. The
closing price at 30 September 2004 was EUR 22.83 and the market capitalisation was
EUR 159.8 million.
NOTICE OF AN EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
The Board of Directors has decided to convene an extraordinary general meeting. At
the meeting, which is to be held on 24 November 2004, the Board of Directors is to
recommend that a dividend of EUR 1.0 per share be paid in addition to the dividend
decided, on the basis of the balance sheet adopted for the financial year ending
31 December 2003, at the Annual General Meeting held on 16 March 2004. Should the
General Meeting approve the Board of Directors recommendation for the payment of
an additional dividend, the dividend will be paid to shareholders who are
registered at the record date, 29 November 2004, in the companys share register
kept by the Finnish Central Securities Depository Ltd. The Board of Directors is
to recommend that the dividend be paid on 7 December 2004.
Furthermore, the Board of Directors is to recommend that the General Meeting
decide to increase the companys share capital from EUR 3,500,000 to EUR 7,000,000
through a EUR 3,500,000 scrip issue subject to the following terms and conditions:
1. In the scrip issue, shareholders receive, without consideration, one
(1) new share for one (1) old share held.
2. The EUR 3,500,000 increase in share capital is effected by converting
retained earnings of EUR 955,000.00 and EUR 2,545,000.00 from the share
premium account into share capital.
3. A total of 7,000,000 new shares are issued. The nominal value of each
of the companys shares is EUR 0.50.
4. The record date for the scrip issue is 29 November 2004. The right to
new shares issued in the scrip issue is vested in shareholders who are
registered in the companys share register at the record date.
5. The scrip issue will be effected in the book-entry securities system
and requires no action from shareholders. The scrip issue does not affect
ownership or voting rights ratios in the company.
6. Provided that the increase in share capital has been entered in the
Trade Register, the new shares issued in the scrip issue will be registered
in shareholders book-entry securities accounts on 2 December 2004.
7. The new shares will be entitled to a full dividend for the financial
year commencing 1 January 2004 and to other rights in the company from the
date the share capital has been registered in the Trade Register.
8. Shareholders who have not converted their share certificates to book-
entries will be entitled to the new shares issued in the scrip issue once
they have converted their certificates.
The Board of Directors is recommending the scrip issue to double the number of the
companys shares. This will improve trading in the companys shares on the market
and promote the function of the share market.
INTRODUCTION OF IAS/IFRS
Progress was made as planned with the IFRS project embarked on in winter 2003.
IFRS will have a relatively minor impact on the companys balance sheet. Compared
to present practice, differences in the valuation and booking of balance sheet
items will increase the balance sheet total by around EUR 2 million. The company
will publish a balance sheet drawn up in compliance with IFRS by March 2005.
The first financial statements in compliance with the new rules will be prepared
for the financial year commencing 1 January 2005. Then first interim report for
the 2005 financial year will comply with IFRS rules.
OUTLOOK FOR THE REST OF THE YEAR
Ponsse delivered an excellent result for the first nine months of the year. As in
earlier years, sales of forest machines are expected to focus on Q4 of the current
year.
Taking into account the companys strong order book, the general market situation
and especially the growth in exports, 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 1-9/04 1-9/03 1-12/03
TEUR TEUR TEUR
Turnover 130 424 117 593 166 034
Increase (+) or decrease (-) in stocks of
finished goods and work in progress(-) 2 437 -270 -482
Other operating income 1 010 982 1 457
Raw materials and services -87 085 -78 116 -110 776
Staff expenses -19 364 -17 455 -24 093
Depreciation -1 995 -1 935 -2 788
Other operating expenses -12 249 -11 104 -15 099
Operating profit 13 178 9 695 14 253
Share of results of
associated undertakings 137 49 208
Financial income and expenses -152 -1 173 -1 411
Result before appropriations and 13 163 8 571 13 050
taxes
-4 802 -3 446 -3 913
Change in deferred tax liability 286 349 2
Earnings for the period under review 8 647 5 474 9 139
Balance sheet 30.9.2004 30.9.2003 31.12.2003
TEUR TEUR TEUR
Assets
Fixed assets and other non-current
assets
Intangible assets 1 731 1 699 1 541
Tangible assets 16 039 13 859 15 479
Financial assets 737 501 660
Stocks and current assets
Stocks 36 664 35 098 31 688
Receivables 17 495 17 458 18 267
Cash in hand and at banks 14 499 12 486 10 565
Total 87 165 81 101 78 200
Shareholders equity and liabilities
Shareholders equity
Share capital 3 500 3 500 3 500
Other equity 34 259 36 021 39 594
Provisions for liabilities and 3 205 0 2 284
charges
Creditors
Non-current 24 169 17 952 14 123
Current 22 032 23 628 18 699
Total 87 165 81 101 78 200
Receivables at 30 September 2004 include deferred tax assets of EUR 430
thousand (30 September 2003, EUR 650 thousand, 31 December 2003, EUR 240
thousand). Non-current creditors at 30 September 2004 include a deferred tax
liability of EUR 703 thousand (30 September 2003, EUR 843 thousand, 31
December 2003 EUR 838 thousand).
The comparative figures given for 2003 have been adjusted to correspond to
new booking practice.
Cash flow statement
1-9/04 1-9/03 1-12/03
Cash flow from operations: TEUR TEUR TEUR
Turnover 13 178 9 695 14 253
Depreciation and value 1 995 1 935 2 788
adjustments
Change in provision 921 0 2 284
0 100 0
Cash flow before change in working 16 094 11 730 19 325
capital
Change in working capital:
Increase (-)/ decrease in current
interest-free
operating receivables 802 -4 902 -6 108
Increase /-)/decrease (+) in -4 976 -1 178 2 232
stocks
Increase (+)/decrease (-) in
current interest-free creditors 6 015 2 882 503
Cash flow from operations before
financial items and taxes 17 935 8 532 15 952
Financial income and expenses -33 -1 173 -1 443
Taxes paid -3 277 -3 446 -2 290
Cash flow from operations: 14 625 3 913 12 219
Pledges given, contingent and other liabilities
30.9.2004 30.9.2003 31.12.2003
TEUR TEUR TEUR
1. 1. For own debt
Debts for which mortgages have been pledged as collateral
Loans from credit institutions 1 261 17 210 12 021
Mortgages given on land and buildings 1 655 3 866 3 866
Chattel mortgages given 1 009 3 293 3 293
Mortgages pledged as collateral, total 2 664 7 159 7 159
2. Leasing commitments 451 2 210 536
3. Contingent liabilities on behalf of Group
companies
Guarantees given on behalf of
Group companies 1 041 1 097 1 025
4. Liabilities arising from derivative contracts
4.1 Nominal values
Currency derivatives
Options 5 257 3 888 3 568
Forward contracts 7 392 11 909 13 060
4.2 Market values
Currency derivatives
Options 37 9 34
Forward contracts 82 84 728
5. Other contingent liabilities
Guarantees given on behalf of others 566 766 756
Repurchase commitments 5 685 6 905 7 943
Total 6 251 7 671 8 699
Key indicators 30.9.2004 30.9.2003 31.12.2003
R&D expenditure, EUR million 2.6 2.6 3,0
Fixed asset investments, EUR million 2.8 2.4 4.5
as % of turnover 2.2 2,0 2.7
Average number of staff 592 553 553
Back orders, EUR million 40.7 28.2 33.7
Equity ratio, % 43.4 48.8 55.7
Earnings per share, EUR 1.24 0.78 1.31
Shareholders equity per share, EUR 5.39 5.65 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 1-9/04 1-9/03 1-12/03
MEUR MEUR MEUR
Ponsse Group 138.1 111.9 165.4
Quarterly information 7-9/03 10-12/03 1-3/04 4-6/04 7-9/04
TEUR TEUR TEUR TEUR TEUR
Turnover 36 303 48 441 43 874 45 629 40 921
Operating profit 2 030 4 558 4 807 3 707 4 664
Result before
appropriations and taxes 1 903 4 479 5 010 3 672 4 481
The figures in the Interim Report are unaudited.
Vieremä, 22 October 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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