PONSSE'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2010
PONSSE PLC STOCK EXCHANGE RELEASE 27 APRIL 2010 AT 9:00 A.M.
PONSSE'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2010
- Net sales amounted to EUR 51.3 (37.5) million.
- Operating result was EUR 2.8 (-8.7) million, equalling 5.4 (-23.1) per cent of
net sales.
- Result before taxes was EUR 4.8 (-9.0) million.
- Cash flow from business operations was positive, EUR 8.2 (-1.8) million.
- Earnings per share were EUR 0.23 (-0.34).
- Equity ratio was 41.7 (47.5) per cent.
- Order books stood at EUR 37.0 (16.0) million.
PRESIDENT AND CEO JUHO NUMMELA:
The demand for forest machines continued to pick up during the first quarter of
2010. Our customers have had plenty of work in all market areas. The new
eight-wheeled harvesters have been well received by the market, and the new
products have sold well ever since their serial production began.
Order intake developed favourably throughout the period under review, and at the
end of the period, the order books stood at EUR 37.0 (16.0) million. The
capacity utilisation rate was increased by about 40 per cent during the first
quarter of the year. In addition to the sales of new machines picking up, the
net sales of services, trade-in machines and information systems businesses also
increased in all market areas.
During the past quarter, the company's net sales increased by 37 per cent from
the comparable period and was EUR 51.3 (37.5) million. The net sales of services
during the first quarter were up by 38 per cent from the comparable period.
Operating result was positive and amounted to EUR 2.8 (-8.7) million during the
first quarter. Cash flow from business operations was positive during the period
under review, EUR 8.2 (-1.8) million.
As the utilization rate of capacity improved, there were fewer temporary layoffs
than expected during the period under review. The operating costs were still
decreasing from the comparable period.
NET SALES
Consolidated net sales for the period under review amounted to EUR 51.3 (37.5)
million, an increase of 37 per cent from the comparison period. International
business operations accounted for 68.1 (62.2) per cent of total net sales. Net
sales was regionally distributed as follows: Nordic countries 54.4 (55.8) per
cent, the rest of Europe 24.8 (20.6) per cent, North and South America 19.0
(20.7) per cent, and other countries 1.9 (3.0) per cent.
PROFIT PERFORMANCE
Operating result was EUR 2.8 (-8.7) million. Operating result equalled 5.4
(-23.1) per cent of net sales in the period under review. Return on capital
employed (ROCE) stood at 19.1 (-22.9) per cent.
Staff costs for the period under review totalled EUR 8.5 (8.9) million, and
other operating expenses EUR 5.8 (5.7) million. The net total of financial
income and expenses was EUR 2.1 (-0.3) million. Exchange rate gains and losses
due to currency rate fluctuations were recognised under financial items, and
their net impact during the period under review totalled EUR 2.4 (0.8) million.
As a result of the company's claim for rectification regarding income taxes
being accepted, the taxes for the period under review amounted to EUR 1.5
million (EUR -410 thousand). Result for the period totalled EUR 6.3 (-9.4)
million. Diluted and undiluted earnings per share (EPS) were EUR 0.23 (-0.34).
The company does not have any items that could have a dilutive effect on the
earnings per share.
BALANCE SHEET AND FINANCIAL POSITION
At the end of the period under review, the consolidated balance sheet total
amounted to EUR 149.9 (162.4) million. The value of inventories was EUR 69.2
(84.2) million. Trade receivables totalled EUR 23.7 (17.2) million and liquid
assets stood at EUR 11.4 (7.3) million. Group equity stood at EUR 62.0 (76.8)
million and parent company equity at EUR 46.2 (75.7) million. The equity
includes a hybrid loan of EUR 19 million issued on 31 March 2009. The interest
paid for the hybrid loan, EUR 2.3 million, was entered as a reduction of Group
equity. The amount of interest-bearing liabilities was EUR 45.7 (55.2) million.
Of the company's credit limits, 16% are being used. The parent company's net
receivables from other Group companies stood at EUR 58.1 (52.1) million. The
parent company's receivables from subsidiaries mainly consist of trade
receivables. Consolidated net liabilities totalled EUR 33.3 (47.3) million, and
the debt-equity ratio (gearing) was 73.7 (71.9) per cent. The equity ratio stood
at 41.7 (47.5) per cent at the end of the period under review. The dividend
liability in as per the AGM resolution of 31 March 2010 is included in other
current liabilities.<0} {0>Osingonmaksupäivä on 14.4.2010.<}52{>The dividend was
paid on 14 April 2010.<0}
Cash flow from business operations was EUR 8.2 (-1.8) million. Cash flow from
investing activities amounted to EUR -0.1 (-0.3) million.
ORDER INTAKE AND ORDER BOOKS
The order intake for the period totalled EUR 68.5 (29.7) million, while
period-end order books were valued at EUR 37.0 (16.0) million. The order books
do not include dealers' minimum purchase commitments. The figures for the
comparison period have been adjusted in this respect.
DISTRIBUTION NETWORK
No changes took place in the Group structure during the period under review.
The subsidiaries included in the Ponsse Group are Epec Oy, Finland; OOO Ponsse,
Russia; Ponsse AB, Sweden; Ponsse AS, Norway; Ponsse Asia-Pacific Ltd, Hong
Kong; Ponsse China Ltd, China; Ponsse Latin America Ltda, Brazil; Ponsse North
America, Inc., United States of America; Ponssé S.A.S., France; Ponsse UK Ltd,
Great Britain; and Ponsse Uruguay S.A., Uruguay. Sunit Oy in Kajaani, Finland,
is an affiliated company in which Ponsse Plc has a holding of 34 per cent.
R&D AND CAPITAL EXPENDITURE
The Group's R&D expenses totalled EUR 1.2 (1.4) million during the period under
review. The amount of R&D expenses capitalised during the period was EUR 231
(168) thousand.
Capital expenditure totalled EUR 0.1 (0.3) million. It mainly consisted of
normal maintenance and replacement investments in plant and machinery.
MANAGEMENT
Tapio Mertanen (44) was appointed Service Director during the period under
review. Tapio Mertanen has graduated from a Technical College as a technician
and also holds a degree (MTD) in materials management. Mertanen starts in his
new position on 3 May 2010 when the current Service Director Juhani Mäkynen
joins another employer. Mertanen reports to Sales and Marketing Director Jarmo
Vidgrén.
PERSONNEL
The Group had an average staff of 781 (943) during the period and employed 786
(916) people at period-end.
SHARE PERFORMANCE
The company's registered share capital consists of 28,000,000 shares. The
trading volume of Ponsse Plc shares for 1 January - 31 March 2010 totalled
702,177, accounting for 2.5 per cent of the total number of shares. Share net
sales came to EUR 5.3 million, and the period's lowest and highest share prices
were EUR 6.63 and EUR 8.84, respectively.
At the end of the period, the share price stood at EUR 7.85 and market
capitalisation was EUR 219.8 million.
At the end of the period under review, the company owned 47,900 treasury shares.
ANNUAL GENERAL MEETING
A separate release was issued on 31 March 2010 regarding the authorizations
given by the AGM to the Board of Directors and other resolutions by the AGM.
GOVERNANCE
The company's decision-making and administrative processes comply with the
Finnish Companies Act, other regulations governing listed companies and the
Ponsse Plc Articles of Association. The Board of the Company has ratified the
code of governance complying with the Corporate Governance procedure for Finnish
listed companies approved by the Board of the Securities Market Association in
2008. The code aims to ensure that the company is competently managed and that
business procedures and practices of a high ethical and professional standard
are used.
The code of governance can be viewed on Ponsse's website in the Investors
section.
SHORT-TERM RISKS AND THEIR MANAGEMENT
As more capacity is utilised, risks to part and component availability may
increase. The availability of certain types of components has deteriorated, and
there are upward pressures in raw material prices. Ponsse aims to manage these
risks through partnership cooperation. The financial standing of suppliers is
regularly monitored. The company surveys alternative suppliers in order to
mitigate the risks related to availability and price.
The parent company will monitor the changes in asset values of Group receivables
and the associated risk of impairment.
The key objectives of the company's financing risk management include
controlling liquidity, interest and currency risks. Ponsse has ensured its
liquidity by means of credit limit agreements with a number of financial
institutions. The company has issued covenants as security for its financial
liabilities. The Group's most important bank loan covenant is its equity ratio.
The covenant terms and conditions are met at the end of the period under review.
In order to minimise the impact of any adverse changes in interest rates, the
company uses interest rate swaps and credits tied to different reference rates.
Derivative contracts are used to reduce the negative effect of changes in
exchange rates.
Any changes in tax and customs legislation in countries to which Ponsse exports
may pose further challenges to its export trade or its profitability.
OUTLOOK FOR THE FUTURE
The forest machine markets will improve in 2010 better than expected compared to
the previous year. The positive signals concerning an increase in wood demand
and thus improved job opportunities for our customers promote the positive
development of the business. The net sales of service and information system
businesses are expected to remain strong.
Order flow permitting, the factory capacity will be further increased. The
temporary layoffs have ended, and the entire personnel has been invited back to
work.
Net sales for 2010 will increase considerably when compared to the previous
year. The operating result and cash flow from business operations will be
clearly positive.
PONSSE GROUP
CONSOLIDATED PROFIT AND LOSS ACCOUNT (EUR 1,000)
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| | | IFRS | IFRS | IFRS | |
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| | | 1-3/10 | 1-3/09 | 1-12/09 | |
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| NET SALES | | 51,260 | 37,539 | 146,705 | |
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| Increase (+)/decrease (-) in | 2,317 | -1,852 | -8,321 | |
| inventories of finished goods | | | | |
| and work in progress | | | | |
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| Other operating income | | 147 | 303 | 1,154 | |
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| Raw materials and services | -35,424 | -28,718 | -95,982 | |
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| Expenditure on | -8,453 | -8,944 | -31,968 | |
| employment-related benefits | | | | |
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| Depreciation and amortisation | -1,261 | -1,323 | -5,244 | |
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| Other operating | | -5,817 | -5,678 | -22,087 | |
| expenses | | | | | |
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| OPERATING RESULT | | 2,769 | -8,673 | -15,744 | |
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| Share of results of associated | -80 | -48 | 71 | |
| companies | | | | |
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| Financial income and expenses | 2,140 | -258 | 123 | |
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| RESULT BEFORE TAXES | 4,830 | -8,979 | -15,550 | |
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| Income taxes | | 1,471 | -410 | -4,700 | |
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| NET RESULT FOR THE | | 6,301 | -9,389 | -20,251 | |
| PERIOD | | | | | |
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| OTHER ITEMS INCLUDED IN TOTAL | | | | |
| COMPREHENSIVE INCOME: | | | | |
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| Translation differences | -560 | 102 | -56 | |
| associated with a foreign unit | | | | |
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| TOTAL COMPREHENSIVE INCOME FOR | 5,741 | -9,287 | -20,307 | |
| THE PERIOD | | | | |
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| Diluted and undiluted earnings | 0.23 | -0.34 | -0.72 | |
| per share | | | | |
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CONSOLIDATED BALANCE SHEET (EUR 1,000)
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| | IFRS | IFRS | IFRS |
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| ASSETS | 31.3.10 | 31.3.09 | 31.12.09 |
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| NON-CURRENT ASSETS | | | |
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| Intangible assets | 5,739 | 4,739 | 5,287 |
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| Goodwill | 3,440 | 3,454 | 3,440 |
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| Property, plant and equipment | 24,373 | 28,095 | 25,374 |
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| Financial assets | 111 | 109 | 110 |
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| Holdings in associated companies | 1,540 | 1,671 | 1,790 |
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| Non-current receivables | 3,944 | 1,910 | 3,299 |
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| Deferred tax assets | 1,425 | 2,903 | 1,255 |
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| TOTAL NON-CURRENT ASSETS | 40,572 | 42,882 | 40,555 |
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| CURRENT ASSETS | | | |
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| Inventories | 69,223 | 84,180 | 67,920 |
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| Trade receivables | 23,716 | 17,202 | 21,409 |
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| Income tax receivables | 510 | 4,358 | 243 |
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| Other current receivables | 4,480 | 6,450 | 3,508 |
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| Liquid assets | 11,410 | 7,321 | 10,626 |
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| TOTAL CURRENT ASSETS | 109,340 | 119,512 | 103,707 |
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| TOTAL ASSETS | 149,912 | 162,394 | 144,262 |
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| SHAREHOLDERS' EQUITY AND LIABILITIES | | |
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| EQUITY | | | |
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| Share capital | 7,000 | 7,000 | 7,000 |
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| Other reserves | 18,732 | 18,354 | 18,615 |
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| Translation differences | -1,404 | -1,042 | -870 |
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| Retained earnings | 37,695 | 52,517 | 36,868 |
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| EQUITY OWNED | | | |
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| BY PARENT COMPANY SHAREHOLDERS | 62,023 | 76,830 | 61,612 |
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| Minority interest | 0 | 0 | 0 |
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| TOTAL EQUITY | 62,023 | 76,830 | 61,612 |
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| NON-CURRENT LIABILITIES | | | |
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| Interest-bearing liabilities | 24,009 | 26,321 | 23,973 |
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| Deferred tax liabilities | 495 | 530 | 464 |
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| Other non-current liabilities | 626 | 857 | 590 |
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| TOTAL NON-CURRENT LIABILITIES | 25,131 | 27,708 | 25,026 |
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| CURRENT LIABILITIES | | | |
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| Interest-bearing liabilities | 21,719 | 28,904 | 27,939 |
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| Provisions | 4,409 | 6,396 | 4,935 |
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| Tax liabilities for the period | 112 | 29 | 37 |
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| Trade creditors and other current | 36,517 | 22,527 | 24,713 |
| liabilities | | | |
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| TOTAL CURRENT LIABILITIES | 62,758 | 57,856 | 57,624 |
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| TOTAL SHAREHOLDERS' EQUITY AND | 149,912 | 162,394 | 144,262 |
| LIABILITIES | | | |
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CONSOLIDATED CASH FLOW STATEMENT (EUR 1,000)
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| | | IFRS | IFRS | IFRS |
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| | | 1-3/10 | 1-3/09 | 1-12/09 |
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| BUSINESS OPERATIONS: | | | | |
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| Net result for the period | | 6,301 | -9,389 | -20,251 |
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| Adjustments: | | | | |
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| Financial income and expenses | -2,140 | 258 | -123 |
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| Share of the result of associated | 80 | 48 | -71 |
| companies | | | |
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| Depreciation and amortisation | 1,261 | 1,323 | 5,244 |
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| Income taxes | | -1,306 | 205 | 4,534 |
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| Other adjustments | | -1,104 | 512 | 927 |
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| Cash flow before change in working | 3,092 | -7,043 | -9,738 |
| capital | | | |
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| Change in working capital: | | | | |
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| Change in non-interest-bearing | -3,847 | 5,394 | 2,866 |
| receivables | | | |
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| Change in inventories | | -1,303 | 4,127 | 20,388 |
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| Change in non-interest-bearing | 7,427 | -4,567 | -2,256 |
| liabilities | | | |
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| Change in provisions for liabilities | -526 | 338 | -1,123 |
| and charges | | | |
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| Interest received | | 78 | 39 | 165 |
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| Interest paid | | -184 | -874 | -2,226 |
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| Other financial items | | 2,397 | 417 | 1,898 |
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| Income taxes paid | | 1,114 | 413 | 1,230 |
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| NET CASH FLOW FROM BUSINESS OPERATIONS | 8,249 | -1,756 | 11,203 |
| (A) | | | |
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| INVESTMENTS | | | | |
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| Investments in tangible and intangible | -106 | -264 | -2,008 |
| assets | | | |
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| Investments in other assets | 0 | 0 | 0 |
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| Repayment of loan receivables | 0 | 0 | 0 |
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| Dividends received | | 0 | 0 | 0 |
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| CASH OUTFLOW FROM INVESTMENT | -106 | -264 | -2,008 |
| ACTIVITIES (B) | | | |
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| FINANCING | | | | |
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| Hybrid loan | | 0 | 19,000 | 19,000 |
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| Interest paid, hybrid loan | | -1,137 | 0 | -1,409 |
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| Withdrawal/Repayment of | | | | |
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| current loans | | -6,059 | -17,731 | -18,770 |
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| Change in current | | | | |
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| interest-bearing receivables | | 21 | 25 | 11 |
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| Withdrawal/Repayment of | | | | |
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| non-current loans | | 73 | 178 | -2,438 |
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| Payment of finance lease liabilities | -161 | -134 | -61 |
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| Change in non-current receivables | -97 | -90 | -201 |
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| Dividends paid | | 0 | 0 | -2,795 |
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| NET CASH OUTFLOW FROM FINANCING (C) | -7,359 | 1,247 | -6,663 |
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| Change in liquid assets (A+B+C) | 784 | -774 | 2,531 |
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| Liquid assets on 1 Jan | | 10,626 | 8,095 | 8,095 |
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| Liquid assets on 31 Mar / 31 Dec | 11,410 | 7,321 | 10,626 |
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RECONCILIATION OF CHANGES IN EQUITY (EUR 1,000)
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| A = Share | | | | | | |
| capital | | | | | | |
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| B = Share premium and other | | | | |
| reserves | | | | |
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| C = Translation differences | | | | |
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| D = Own shares | | | | | |
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| E = Retained earnings |
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| F = Total capital and reserves | | | | |
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| | EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS |
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| | A | B | C | D | E | F |
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| EQUITY 1 JAN | 7,000 | 19,03 | -128 | -665 | 36,375 | 61,612 |
| 2010 | | 0 | | | | |
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| Direct posting | | | | | -1,137 | -1,137 |
| to retained | | | | | | |
| earnings *) | | | | | | |
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| Dividend | | | | | -4,193 | -4,193 |
| distribution | | | | | | |
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| Purchase of the | | | | | | |
| company's own | | | | | | |
| shares | | | | | | |
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| Other changes | | | | | | |
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| Total | | | -560 | | 6,301 | 5,741 |
| comprehensive | | | | | | |
| income for the | | | | | | |
| period | | | | | | |
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| EQUITY 31 MAR | 7,000 | 19,030| -688 | -665 | 37,346 | 62,023 |
| 2010 | | | | | | |
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| EQUITY 1 JAN | 7,000 | 20 | -72 | -665 | 60,830 | 67,113 |
| 2009 | | | | | | |
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| Direct posting | | | | | | |
| to retained | | | | | | |
| earnings *) | | | | | | |
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| Dividend | | | | | | |
| distribution | | | | | | |
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| Purchase of the | | | | | | |
| company's own | | | | | | |
| shares | | | | | | |
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| Other changes | |19,000 | | | | 19,000 |
| | | | | | | |
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| Total | | | 102 | | -9,389 | -9,287 |
| comprehensive | | | | | | |
| income for the | | | | | | |
| period | | | | | | |
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| EQUITY 31 MAR | 7,000 | 19,020| 30 | -665 | 51,441 | 76,826 |
| 2009 | | | | | | |
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| *) Consists of interest paid for the hybrid loan classified as equity. |
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| | | | 31.3.10 | 31.3.09 | 31.12.09 |
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| 1. LEASING COMMITMENTS (EUR | | 5,874 | 4,993 | 6,176 |
| 1,000) | | | | |
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| 2. CONTINGENT LIABILITIES (EUR 1,000) | 31.3.10 | 31.3.09 | 31.12.09 |
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| Guarantees given on behalf of others | 824 | 1,038 | 951 |
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| Repurchase commitments | | | 3,599 | 4,749 | 4,111 |
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| Other commitments | | | 2,122 | 2,025 | 2,080 |
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| TOTAL | | | 6,545 | 7,812 | 7,142 |
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| 3. PROVISIONS (EUR | | | Guarantee provision |
| 1,000) | | | |
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| 1 Jan 2010 | | | 4,935 | | |
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| Increase | | | 220 | | |
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| Used provisions | | | -746 | | |
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| 31 March 2010 | | | 4,409 | | |
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| KEY FIGURES AND RATIOS | | | 31.3.10 | 31.3.09 | 31.12.09 |
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| R&D expenditure, MEUR | | 1.2 | 1.4 | 4.9 |
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| Capital expenditure, MEUR | 0.1 | 0.3 | 2.0 |
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| as % of net sales | | | 0.2 | 0.7 | 1.4 |
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| Average number of employees | 781 | 943 | 858 |
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| Order books, MEUR | | | 37.0 | 16.0 | 20.3 |
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| Equity ratio, % | | | 41.7 | 47.5 | 42.8 |
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| Diluted and undiluted earnings per share, | 0.23 | -0.34 | -0.72 |
| EUR | | | |
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| Equity per share, EUR | | | 2.22 | 2.74 | 2.20 |
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FORMULAE FOR FINANCIAL INDICATORS
Average number of employees:
Average of the number of personnel at the end of each month. The calculation has
been adjusted for part-time employees.
Equity ratio, %:
Equity + minority interest
----------------------------------------
Balance sheet total - advance payments received * 100
Earnings per share:
Earnings before taxes - taxes (incl. change in deferred taxes) -/+ minority
interest
----------------------------------------------------------------------------
Average number of shares during the accounting period, adjusted for share issues
Equity per share:
Shareholders' equity
----------------------------------------------
Number of shares on the balance sheet date, adjusted for share issues
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| ORDER INTAKE, MEUR | | | 1-3/10 | 1-3/09 | 1-12/09 |
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| Ponsse Group | | | 68.5 | 29.7 | 143.5 |
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The interim report has been prepared in accordance with the IFRS recognition and
measurement principles; however, it does not comply with all of the requirements
of IAS 34. The same accounting principles were observed for the interim report
as for the annual financial statements produced on 31 December 2009, however so
that the following new standards, interpretations and modifications adopted by
the EU were only introduced from 1 January 2010: IFRS 3 (revised) - Business
Combinations; IAS 27 (revised) - Consolidated and Separate Financial Statements;
IFRIC 12 - Service Concession Arrangements; IFRIC 15 - Agreements for the
Construction of Real Estate; IFRIC 16 - Hedges of a Net Investment in a Foreign
Operation; IFRIC 17 - Distributions of Non-cash Assets to Owners; IFRIC 18 -
Transfers of Assets from Customers; IFRIC 9 and IAS 39 (amendment) -
Reassessment of Embedded Derivatives in Conjunction with Reclassification; IAS
39 (amendment) - Items Acceptable as Objects of Hedging IFRS 2 (amendment) -
Share-based Payment - transactions settled in cash within the Group. These new
standards, interpretations and amendments have no impact on the Group's interim
report.
In April 2009, the IASB published improvements to 12 different standards as part
of their annual improvement programme. The Group has adopted the following most
relevant amendments from 1 January 2010: IFRS 8 (amendment) - Operating
Segments; IAS 17 (amendment) - Leases and IAS 36 (amendment) - Impairment of
Assets, but these improvements have no impact on the Group's interim report.
The above figures have not been audited.
The above figures have been rounded off and may therefore differ from those
given in the official financial statements.
This communication includes future-oriented statements that are based on the
assumptions currently known by the company's management and its current
decisions and plans. Although the management believes that the future
expectations are well founded, there is no certainty that these expectations
will prove to be correct. This is why the results may significantly deviate from
the assumptions included in the future-oriented statements as a result of, among
other things, changes in the economy, markets, competitive conditions,
legislation or currency exchange rates.
Vieremä 27 April 2010
PONSSE PLC
Juho Nummela
President and CEO
FURTHER INFORMATION
Juho Nummela, President and CEO, tel. +358 20 768 8914 or +358 400 495 690
Petri Härkönen, CFO, tel. +358 20 768 8608 or +358 50 409 8362
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Principal media
www.ponsse.com
