PONSSE?S INTERIM REPORT FOR 1 JANUARY TO
PONSSE OYJ STOCK EXCHANGE BULLETIN 23 APRIL 2004 at 9AM
PONSSES INTERIM REPORT FOR 1 JANUARY TO 31 MARCH 2004
Ponsse Group made strong progress during Q1 of 2004. Turnover was
EUR 43.9 million (Q1/2003 EUR 36.1m) and the operating profit EUR
4.9 million (EUR 1.6m). Exports and foreign business operations
accounted for 59.6 per cent (45.4%) of turnover. We entered Q2 of
2004 with a very healthy order book of EUR 38.9 million (EUR 41.4m
at 31 March 2003).
TURNOVER AND RESULT
Turnover rose by 21.8 per cent to EUR 43.9 million. Although growth
was mainly export driven, domestic demand also remained buoyant.
The operating profit for the period under review was EUR 4.9 million
(EUR 1.6m), equivalent to 11.1 per cent (4.3%) of turnover. The
companys return on investment (ROI) was 33.8 per cent (14.7%).
This marked improvement in turnover and operating profit was owing
to higher production volume and lower stocks of finished products
than during the corresponding period a year earlier.
The profit after financial items was EUR 5.0 million (EUR 2.1m).
Financial income amounted to EUR 0.1 million net (EUR 0.5m). Gains
from foreign currency hedging were booked under financial items.
There were no extraordinary items during the period under review.
The profit for Q1 2004 was EUR 3.2 million (EUR 1.0m). Earnings per
share were EUR 0.46 (EUR 0.14)
MARKET SITUATION
As was the case in 2003, the Finnish forest machine market was brisk
during Q1 of 2004.
The global economy now looks much brighter than a year ago. Ponsses
core export markets were in much better shape than during the
corresponding period in 2003. The economic trend in Sweden, Russia
and Germany has been particularly encouraging. A weak US dollar
eroded the profitability of exports to North America.
On 18 March 2003, Ponsse received the President of Finlands
Internationalization Award for 2003. In her presentation speech,
President Tarja Halonen stated that the award is given to companies
in recognition of their excellent progress and achievement on the
international market.
NEW ORDERS AND BACK ORDERS
We secured new orders worth EUR 41.4 million (EUR 55.4m). Back
orders at 31 March 2004 were EUR 38.9 million (EUR 41.4m). In
keeping with previous practice, distributors minimum purchase
commitments are included in back orders.
SUBSIDIARIES
No significant changes took place in the operations of Ponsses
marketing and after sales subsidiaries abroad.
BALANCE SHEET
The consolidated balance sheet total at 31 March 2004 was EUR 80.2
million (EUR 73.2m). Interest-bearing debts totalled EUR 24.8
million (EUR 23.0m). Net debts decreased slightly compared to the
previous year and stood at EUR 14.6 million (EUR 15.3m). Dividend
payment resulted in the equity ratio dropping to 40.4 per cent
(47.9%). Cash assets totalled EUR 10.3 million (EUR 7.7m).
INVESTMENTS AND R&D
Investments during the first three months of 2004 totalled EUR 0.5
million (EUR 0.6m). The period under review saw the opening of new
customer service centre premises in Mikkeli and Joensuu. A start was
also made on the building of design and financial administration
premises at the Vieremä production plant and modernization of the
maintenance and spare parts centre at Iisalmi. These projects will
be implemented during 2004.
R&D expenditure during the period under review was EUR 0.7 million
(EUR 1.0m).
PERSONNEL
The Group employed an average number of 567 (536) persons during the
period under review. At 31 March 2004, the Group employed 573 (535)
persons.
MANAGEMENT
Mr Arto Tiitinen MBA (44) took up his position as Ponsses President
and CEO on 1 April 2004. He joins Ponsse from tractor and engine
manufacturer Valtra Oy, where he was responsible for Valtras global
sales, marketing and communications. Tommi Ruha, who served as
Ponsses President and CEO since 2001, left Ponsse on 12 February
2004. Deputy President and CEO Juha Vidgrén MSc (Educ) acted as the
companys CEO during the interim period.
ANNUAL GENERAL MEETING
The Annual General Meeting was held in Iisalmi on 16 March 2004. The
Annual General Meeting decided to pay a dividend of EUR 2.00 per
share, a total of EUR 14 million, for 2003. The dividend was paid on
26 March 2004.
The Annual General Meeting decided to pay bonuses totalling 0.3
million to Ponsse Oyjs employees.
Nils Hagman, Ilkka Kylävainio, Seppo Remes, Mirja Ryynänen, Einari
Vidgrén Industrial Counsellor (Hon) and Juha Vidgrén were
reappointed to the Board of Directors. Einari Vidgrén continues to
serve as Chairman of the Board of Directors and Juha Vidgrén as
Deputy Chairman. Ernst & Young Oy were reappointed the companys
auditors, with Heikki Laitinen APA as the principal auditor.
3
SHARES
A total of 753,309 Ponsse Oyj shares, 10.8 per cent of the total
number, were traded between 1 January and 31 March 2004 for a total
of EUR 13.9 million. The highest and lowest trading prices during
the period under review were EUR 16.46 and EUR 20.50 per share
respectively. The closing price at 31 March 2004 was EUR 17.50 and
the market capitalisation was EUR 122.5 million.
INTRODUCTION OF IFRS/IAS
During the year under review, work continued on preparations for the
introduction of the new accounting standard. The first financial
statements in compliance with IFRS will be prepared for the
financial year commencing 1 January 2005. The company plans to
present the first interim report for 2005 in compliance with IFRS.
Initial studies show that the change in accounting principles and
practices will have no material impact on the balance sheet and
results.
OUTLOOK FOR THE REST OF THE YEAR
The company had a healthy order book at 31 March 2004. The companys
turnover and earnings are expected to develop encouragingly during
Q2. The positive market outlook would indicate higher turnover and
earnings for the entire year than in 2003.
Ponsse Group key indicators
Profit and loss account 1-3/04 1-3/03 1-12/03
TEUR TEUR TEUR
Turnover 43 933 36 060 163 488
Increase (+) or decrease (-) in stocks
of finished goods and work in progress 1 826 2 151 -482
Other operating income 371 395 1 457
Raw materials and services -30 408 -26 674 -110 769
Staff costs -6 649 -6 010 -24 093
Depreciation -656 -653 -2 788
Other operating
expenses -3 549 -3 718 -15 099
Operating profit 4 868 1 551 11 714
Share of results of associated
undertakings 2 22 208
Financial income and expenses 140 477 1 128
Result before appropriations
and taxes 5 010 2 050 13 050
Income taxes -2 119 -1 431 -3 913
Change in deferred tax liability 332 374 2
Minority interest 0 0 0
Earnings for the period under review 3 223 993 9 139
Balance sheet 31.3.04 31.3.03 31.12.03
TEUR TEUR TEUR
Assets
Fixed assets and other non-current assets
Intangible assets 1 617 1 272 1 541
Tangible assets 15 347 13 874 15 479
Financial assets 601 473 660
Stocks and current assets
Stocks 33 793 36 690 31 688
Receivables 18 548 13 124 18 267
Cash in hand and at banks 10 273 7 732 10 565
Total 80 179 73 165 78 200
Shareholders equity and liabilities
Shareholders equity
Share capital 3 500 3 500 3 500
Other equity 28 846 31 520 39 594
Minority interest 0 3 0
Provisions for liabilities
and charges 2 318 0 2 284
Creditors
Non-current 23 154 16 262 14 123
Current 22 361 21 880 18 699
Total 80 179 73 165 78 200
Receivables at 31 March 2004 include deferred tax assets of EUR 407
thousand (31 March 2003, EUR 608 thousand, 31 December 2003, EUR 240
thousand).
Non-current creditors at 31 March 2004 include deferred tax
liabilities of EUR 776 thousand (31 March 2003, EUR 896 thousand,
31 December 2003, EUR 838 thousand).
Cash flow statement
1-3/04 1-3/03 1-12/03
Cash flow from operations TEUR TEUR TEUR
Operating profit 4 868 1 551 11 714
Depreciation and
value adjustments 656 653 2 788
Change in provision 34 0 2 284
Other reconciliations 17 128 0
Cash flow before change
in working capital 5 575 2 332 16 786
Change in working capital:
Increase (-)/decrease (+) in current
interest-free operating receivables 26 -600 -6 108
Increase (-)/decrease (+)
in stocks -2 105 -2 770 2 232
Increase (+)/decrease (-) in
current interest-free creditors 4 416 2 058 503
Cash flow from operations before
financial items and income taxes 7 912 1 020 13 413
Financial income and expenses 48 477 1 096
Taxes paid -770 -1 431 -2 290
Cash flow from operations: 7 190 66 12 219
Pledges given, contingent and other liabilities
31.3.04 31.3.03 31.12.03
TEUR TEUR TEUR
1. For own debt
Debts for which mortgages have been pledged as collateral
Loans from credit institutions 10 763 13 070 12 021
Mortgages given
on land and buildings 2 522 3 866 3 866
Chattel mortgages given 1 947 2 893 3 293
Mortgages given as pledges, total 4 469 6 759 7 159
2. Leasing commitments 484 1 979 536
3. Contingent liabilities on behalf of Group companies
Guarantees given on behalf of
Group companies 1 052 1 165 1 025
4. Liabilities arising from derivative contracts
4.1 Nominal values
Currency derivatives
Options 3 882 1 760 3 568
Forward contracts 9 037 11 536 13 060
4.2 Market values
Currency derivatives
Options -14 3 34
Forward contracts 184 180 728
5. Other contingent liabilities
Guarantees given on behalf of others 731 695 756
Repurchase commitments 6 144 6 438 7 943
Other liabilities 0 0 0
Total 6 875 7 133 8 699
Key indicators 31.3.04 31.3.03 31.12.03
R&D expenditure, EUR million 0.7 1.0 3.0
Fixed asset investments, EUR million 0.5 0.6 4.5
as % of turnover 1.2 1.8 2.8
Average number of staff 567 536 553
Back orders, EUR million 38.9 41.4 33.7
Equity ratio, % 40.4 47.9 55.7
Earnings per share, EUR 0.46 0.14 1.31
Shareholders equity per share, EUR 4.62 5.00 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
1-3/04 1-3/03 1-12/03
EUR mill. EUR mill. EUR mill.
Ponsse Group 41.4 55.4 165.4
Quarterly information
1-3/03 4-6/03 7-9/03 10-12/03 1-3/04
TEUR TEUR TEUR TEUR TEUR
Turnover 36 060 43 250 36 200 47 978 43 933
Operating profit 1 551 4 142 1 922 4 099 4 868
Result before appropriations
and taxes 2 050 4 618 1 903 4 479 5 010
The figures in the Interim Report are unaudited.
Vieremä, 23 April 2004
PONSSE OYJ
Arto Tiitinen
President, CEO
Further information from:
Arto Tiitinen, President, CEO, tel: +358 (0)17 7684 621
CFO Mikko Paananen, tel: +358 (0)17 768 4648 and
www.ponsse.com
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