PONSSE?S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2006
PONSSE OYJ STOCK EXCHANGE RELEASE 25 APRIL 2006, 9:00 A.M.
PONSSES INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2006
- Turnover EUR 52.3 million (EUR 56.5 million Q1/2005 million)
- International business operations accounted for 64.4% of turnover (61.5%)
- Operating profit EUR 6.7 million (EUR 7.2 million)
- Operating profit accounted for 12.8% of turnover (12.8%)
- Earnings per share: EUR 0.16 (EUR 0.19).
The comparison figures are Ponsses figures presented in the adjusted financial
statements for the corresponding period in 2005. Reporting complies with the
International Financial Reporting Standards (IFRS).
Arto Tiitinen, President and CEO, states the following:
- During the period under review, our business operations developed in
line with the set objectives outside the Nordic countries. In Sweden, the
machinery markets stabilised from the previous year as the damage caused by
storms had been repaired. In Finland, the change in forestry taxation
enforced at the turn of the year affected timber and machinery sales. Our
order books and our relative profitability during the period remained at the
previous years level.
- The extension of the Vieremä assembly plant was brought into
production use in January. The production volumes of the new machinery
compared to capacity were relatively low owing to the installation and
testing of the new lines.
- During the period, we made significant investments in improving the
production capacity of Epec Oy. The new production line acquired for the
companys Seinäjoki facility will allow us to increase the production of
control systems eightfold.
TURNOVER
Ponsses turnover for the period amounted to EUR 52.3 million (EUR 56.5
million). International business operations increased their share of turnover
from the previous year and accounted for 64.4 per cent (61.5 per cent) of
turnover. Domestic sales represented 35.6 per cent (38.5 per cent) of total
turnover.
PROFIT PERFORMANCE
Ponsse recorded an operating profit of EUR 6.7 million (EUR 7.2 million) for
the period. Operating profit continued to account for 12.8 per cent of
turnover, showing no change from the previous year. Return on investment (ROI)
stood at 31.5 per cent (42.8 per cent).
Staff costs in the period amounted to EUR 9.2 million (EUR 8.4 million) and
other operating expenses to EUR 5.1 million (EUR 4.6 million). Net financial
expenses were EUR -0.4 million (EUR +30,000). Income and expenses resulting
from currency risk hedging were included under financial items. One thousand
euro was recorded as income under extraordinary items. No extraordinary items
were recorded for the comparison period.
Profit for the period totalled EUR 4.6 million (EUR 5.4 million).
Earnings per share were EUR 0.16 (EUR 0.19).
BALANCE SHEET AND FINANCIAL POSITION
At the end of the period under review, the consolidated balance sheet total
amounted to EUR 114.1 million (EUR 98.7 million). Interest-bearing liabilities
totalled EUR 34.5 million (EUR 26.5 million) and net liabilities EUR 26.8
million (EUR 14.9 million). The equity ratio stood at 39.4 per cent (38.6 per
cent). Trade receivables totalled EUR 17.4 million (EUR 22.6 million).
Cash in hand and at banks came to EUR 7.2 million (EUR 10.7 million).
Reported cash flow from business operations totalled EUR -1.7 million (EUR 4.6
million), while that from investing activities was EUR -2.2 million (EUR -1.1
million).
ORDER INTAKE AND ORDER BOOKS
The order intake for the period totalled EUR 52.9 million (EUR 68.5 million),
while period-end order books were valued at EUR 55.4 million (EUR 56.1
million). The order books included dealers minimum purchase commitments, based
on previous practice.
SUBSIDIARIES
During the period, Ponsse Oyjs wholly-owned subsidiary Ponsse North America
Inc. established a subsidiary in Canada, Ponsse North America Incorporated
Canada.
CAPITAL EXPENDITURE AND R&D
Capital expenditure totalled EUR 2.2 million (EUR 1.1 million).
R&D expenses totalled EUR 0.8 million (EUR 1.1 million).
PERSONNEL
The Group had an average staff of 781 (675) during the period and employed 779
(683) people at the period-end. The increase in the number of personnel could
be attributed to new subsidiaries being set up in Russia and Brazil, the
acquisition of Lako Oy, preparation for an increase in production volumes, and
the increased demand for maintenance services.
ANNUAL GENERAL MEETING AND ADMINISTRATION
The Annual General Meeting was held at the company premises in Vieremä on 15
March 2006. A decision was made to pay a dividend of EUR 0.80 per share,
totalling EUR 11.2 million. The dividends were paid on 27 March 2006.
A decision was made at the Annual General Meeting to improve the liquidity of
shares by doubling the number of company shares from 14,000,000 to 28,000,000
without increasing the share capital (split 1:2). Trading in the new shares
began on 29 March 2006.
Nils Hagman, Ilkka Kylävainio, Seppo Remes, Mirja Ryynänen, Einari Vidgrén and
Juha Vidgrén were re-elected as Board members.
Ernst & Young Oy were re-appointed as the company auditors with Eero Huusko,
Authorised Public Accountant, as the principal auditor.
In the constituent meeting, Einari Vidgrén was elected Chairman of the Board of
Directors and Juha Vidgrén was elected Vice Chairman.
SHARE PERFORMANCE
The trading volume of Ponsse Oyj shares between 1 January and 31 March 2006 was
1,334,084 accounting for 4.8 per cent of the total number of shares. Share
turnover came to EUR 16.3 million, with the periods lowest and highest share
price amounting to EUR 13.60 and EUR 15.00, respectively.
At the end of the period, the share price closed at EUR 13.60 and the market
capitalisation totalled EUR 380.8 million.
PROSPECTS
The company estimates that the proportional share of cut-to-length harvesting
in the total volume of timber harvesting will increase in comparison with other
harvesting methods, and that the market prospects for forest machines will
continue to be good throughout the year in most market areas.
During the year, the company will continue to expand its international
distribution network and plans to launch the industrial manufacture of
harvester heads suited for the debarking of eucalyptus in Brazil in the second
quarter.
At the end of the period, the company was looking at good order books.
Favourable development in sales is expected to continue in most main markets,
thanks to a positive market outlook and the companys own actions.
The demand for forest machines in Nordic countries is expected to pick up in the second half of the
year. The full years financial performance is expected to be better than in
2005. Earnings are likely to be generated mostly in the second half.
EVENTS AFTER THE PERIOD
On 13 April 2006, Ponsse announced that it was entering into co-operation with
Volvo in Latin America.
PONSSE GROUP
CONSOLIDATED PROFIT AND LOSS ACCOUNT (EUR 1,000)
IFRS IFRS IFRS
1-3/06 1-3/05 1-12/05
TURNOVER 52 294 56 481 226 095
Increase (+)/decrease (-) in stocks of 4 690 3 058 730
finished goods and work in progress
Other operating income 542 422 1 326
Raw materials and services -35 489 -38 881 -139 304
Staff costs -9 177 -8 434 -34 317
Depreciation -1 051 -831 -4 041
Other operating expenses -5 123 -4 588 -21 437
OPERATING PROFIT 6 686 7 227 29 051
Share of results of associated 101 17 285
companies
Financial income and -432 30 -1 225
expenses
RESULT BEFORE EXTRAORDINARY ITEMS 6 355 7 274 28 111
Extraordinary items 1 0 -1
RESULT AFTER EXTRAORDINARY
ITEMS 6 356 7 274 28 110
Income tax -1 750 -1 797 -8 480
Minority interest 0 -33 0
NET PROFIT FOR THE PERIOD 4 606 5 444 19 629
In the financial statements for 2005, Ponsse Group has changed the accounting
policy concerning the purchase of used machines in connection with the sale of
new machines. In accordance with the general IFRS principles (Chapter 35), the
value adjustment made at the time of purchase of used machinery has been
interpreted as actually being a discount on the sales price of new machinery
and, therefore, the change in value has been accounted for as an adjustment
item in the consolidated turnover. Previously, until the end of Q3/2005, this
type of change in value has been presented under the item 'Materials and
services'. Comparison data for 2005 has been adjusted accordingly.
Actual changes in the value of used machinery that are made after the time of
sale will we handled as a write-down of inventory value in the same manner as
previously.
CONSOLIDATED BALANCE SHEET (EUR 1,000)
IFRS IFRS IFRS
ASSETS 31 31 31
March06 March05 Dec.05
FIXED AND OTHER NON-CURRENT ASSETS
Intangible assets 2 906 1 932 2 652
Goodwill 3 831 3 327 3 773
Property, plant and equipment 25 080 18 987 24 270
Financial assets 36 25 35
Holdings in associated companies 1 114 845 1 013
Non-current receivables 135 105 103
Deferred tax assets 828 891 537
TOTAL FIXED AND OTHER NON-CURRENT 33 930 26 112 32 383
ASSETS
CURRENT ASSETS
Stocks 52 624 37 600 45 161
Trade receivables 17 409 22 583 14 782
Other current receivables 2 946 1 766 3 594
Current investments 2 0 2
Cash in hand and at banks 7 195 10 652 12 339
TOTAL CURRENT ASSETS 80 176 72 601 75 879
TOTAL ASSETS 114 106 98 713 108 262
CAPITAL AND RESERVES, AND LIABILITIES
SHAREHOLDERS EQUITY
Share capital 7 000 7 000 7 000
Other reserves 19 20 19
Translation differences -504 -711 -442
Retained earnings 38 256 31 034 44 811
CAPITAL AND RESERVES OWNED
BY PARENT COMPANY SHAREHOLDERS 44 771 37 343 51 389
Minority interest 0 451 0
TOTAL CAPITAL AND RESERVES 44 771 37 794 51 389
NON-CURRENT CREDITORS
Interest-bearing liabilities 18 821 23 348 18 953
Deferred tax liabilities 886 1 030 1 142
Other non-current creditors 256 335 359
TOTAL NON-CURRENT CREDITORS 19 962 24 713 20 453
CURRENT CREDITORS
Interest-bearing liabilities 15 707 3 170 5 444
Provisions 5 344 4 410 6 324
Tax liabilities for the period 1 157 1 108 1 216
Trade creditors and other current 27 166 27 517 23 436
creditors
TOTAL CURRENT CREDITORS 49 373 36 206 36 420
TOTAL CAPITAL AND RESERVES, AND 114 106 98 713 108 262
LIABILITIES
CONSOLIDATED CASH FLOW STATEMENT (EUR 1,000)
IFRS IFRS IFRS
1-3/06 1-3/05 1-12/05
BUSINESS OPERATIONS:
Profit for the period 4 606 5 444 19 629
Adjustments:
Financial income and expenses 433 -30 1 225
Share of the result of associated -101 -17 -285
companies
Depreciation 1 051 831 4 041
Deferred taxes -294 -301 22
Income tax 2 044 2 098 8 458
Other adjustments -24 59 256
Cash flow before change in working 7 715 8 084 33 346
capital
Change in working capital:
Increase (-)/decrease (+) in current
non-interest-bearing -1 975 -4 472 1 501
receivables
Increase (-) / decrease (+) in -7 463 -1 219 -9 052
stocks
Increase (-)/decrease (+) in current
non-interest-bearing creditors 3 208 5 414 1 279
Change in provisions for -980 257 2 171
liabilities and charges
Interest received 37 62 277
Interest paid -293 -402 -932
Other financial items -265 182 -656
Income taxes paid -1 733 -3 299 -9 517
NET CASH FLOW FROM BUSINESS -1 749 4 607 18 417
OPERATIONS (A)
INVESTMENTS
Investment in tangible and intangible -2 186 -1 090 -11 209
assets
Investment in other assets 0 0 -11
Dividends received 0 0 101
CASH OUTFLOW FROM INVESTING -2 186 -1 090 -11 119
ACTIVITIES (B)
FINANCING
Withdrawal/Repayment of
non-current loans 10 338 -5 004 -2 677
Increase (-) / decrease (+) in
current
interest-bearing liabilities -4 0 0
Withdrawal/Repayment of
non-current loans -235 -590 -4 961
Payment of finance lease liabilities -76 -179 -231
Increase (-) / decrease (+) in non- -32 2 4
current receivables
Paid dividends -11 200 - 2 800 -2 800
NET CASH OUTFLOW FROM -1 209 -8 571 -10 665
FINANCING (C)
Increase (-) / decrease (+) in -5 144 -5 054 -3 367
liquid assets (A+B+C)
Liquid assets, 1 Jan.. 12 339 15 706 15 706
Liquid assets, 31 March/31 7 195 10 652 12 339
Dec.
RECONCILIATION OF CAPITAL AND RESERVES (EUR 1,000)
A = Share Capital
B = Share premium and other
reserves
C = Translation
differences
D = Retained earnings
E = Minority interest
F = Total capital and
reserves
CAPITAL AND RESERVES OWNED BY PARENT COMPANY SHAREHOLDERS
A B C D E F
CAPITAL AND RESERVES, 1 7 000 20 -838 28 425 419 35 025
JAN 2005
Translation differences 0 0 128 -35 0 93
NET INCOME RECOGNISED
DIRECTLY IN CAPITAL AND 0 0 128 -35 0 93
RESERVES
Net profit for the 0 0 0 5 444 0 5 444
period
TOTAL RECOGNISED INCOME
AND EXPENSES 0 0 128 5 409 0 5 537
Dividend distribution 0 0 0 -2 800 0 -2 800
Change in minority 0 0 0 0 32 32
interest
CAPITAL AND RESERVES, 31 7 000 20 -710 31 034 451 37 794
MARCH 2005
CAPITAL AND RESERVES, 1 7 000 20 -442 44 811 0 51 389
JAN. 2006
Translation differences 0 0 -63 39 0 -24
NET INCOME RECOGNISED
DIRECTLY IN CAPITAL AND 0 0 -63 39 0 -24
RESERVES
Net profit for the 0 0 0 4 606 0 4 606
period
TOTAL RECOGNISED INCOME 0
AND EXPENSES 0 -63 4 645 0 4 582
Dividend distribution 0 0 0 -11 200 0 -11 200
Change in minority 0 0 0 0 0 0
interest
CAPITAL AND RESERVES, 31 7 000 20 -505 38 256 0 44 771
MARCH 2006
SEGMENT INFORMATION (EUR 1,000)
GEOGRAPHIC SEGMENTS
1-3/06 1-3/05 1-12/05
TURNOVER
Nordic countries 35 437 43 944 154 017
Rest of Europe 18 563 14 828 71 758
North and South America 6 490 5 478 33 775
Elimination -8 685 -7 876 -34 697
Unallocated 489 107 1 242
TOTAL 52 294 56 481 226 095
OPERATING PROFIT
Nordic countries 3 901 5 819 18 825
Rest of Europe 2 640 1 912 10 761
North and South America 45 402 2 027
Unallocated 100 -906 -2 562
TOTAL 6 686 7 227 29 051
PLEDGES GIVEN, CONTINGENT AND OTHER LIABILITIES (EUR 1,000)
31 March06 31 March05 31 Dec05
1. FOR OWN DEBT
Debts for which mortgages have been pledged as
collateral
Loans from financial 0 0 0
institutions
Mortgages given on land and buildings 0 1 126 101
Chattel mortgages given 0 820 336
MORTGAGES GIVEN AS PLEDGES, TOTAL 0 1 946 437
2. LEASING COMMITMENTS (EUR 3 028 397 1 996
1,000)
3. CONTINGENT LIABILITIES ON BEHALF
OF GROUP COMPANIES (EUR 1,000)
Guarantees given on behalf of Group
companies 862 800 884
4. LIABILITIES BASED ON DERIVATIVE CONTRACTS (EUR 1,000)
4.1 Nominal values
Currency derivatives
Forward contracts 18 993 14 181 14 690
4.2 Market values
Currency derivatives
Forward contracts 87 -82 -70
5. OTHER CONTINGENT LIABILITIES (EUR 1,000)
Guarantees given on others 1 400 817 1 289
behalf
Repurchase commitments 6 836 8 325 7 163
Other liabilities 0 0 0
Total 8 237 9 142 8 452
KEY FIGURES AND RATIOS 31.3.06 31.3.05 31.12.05
R&D expenditure, MEUR 0,8 1,1 3,7
Capital expenditure, MEUR 2,2 1,1 11,2
% of turnover 4,2 1,9 5,0
Average number of staff 781 675 729
Order books, MEUR 55,4 56,1 54,9
Equity ratio, % 39,4 38,6 47,6
Earnings per share, EUR 0,16 0,19 0,70
Equity per share, EUR 1,60 1,33 1,84
Per-share figures have been adjusted with the share split.
Income taxes based on profit for the period are included in the Profit and Loss
Account and earnings per share.
ORDER INTAKE, MEUR 1-3/06 1-3/05 1-12/05
Ponsse Group 52,9 68,5 236,9
Ponsse Group has applied the International Financial Reporting Standards (IFRS)
to its financial reporting as of 1 January 2005. The first IFRS-compliant
annual financial statement was drawn up for the accounting period 2005. Prior
to the adoption of IFRS, Ponsse Oyj's consolidated financial statements were
prepared according to Finnish Accounting Standards (FAS).
The above figures have not been audited.
The above figures have been rounded and so may differ from those given in the
official financial statements.
Vieremä, 25 April 2006
Arto Tiitinen
President and CEO
FOR FURTHER INFORMATION, PLEASE CONTACT:
Arto Tiitinen, President and CEO, tel. +358 (0)20 768 4621 or +358 (0)400 566
875
Mikko Paananen, CFO, tel. +358 (0)20 768 8648 or +358 (0)400 817 036
DISTRIBUTION:
Helsinki Stock Exchange
Principal media
www.ponsse.com
