ASPO Plc STOCK EXCHANGE RELEASE May 11, 2011, at 10:00
Net sales and operating profit grew considerably
(comparative figures are for January-March 2010)
January-March 2011
- Aspo Group's net sales grew by 28% and amounted to EUR 106.7 million (EUR
83.4 million)
- Operating profit grew by 38% to EUR 2.9 million (EUR 2.1 million)
- Profit before taxes amounted to EUR 1.5 million (EUR 1.0 million)
- Earnings per share stood at EUR 0.04 (EUR 0.02)
- Aspo collected approximately EUR 20 million in new equity with a rights issue
that ended after the review period.
Aspo changes its guidance.
New guidance for 2011: Aspo will increase its net sales by 10-20% and improve
its operating profit.
Guidance given in the financial statement release on February 14, 2011: Aspo has
the preconditions to increase its net sales and improve its earnings per share.
KEY FIGURES
1-3/2011 1-3/2010 1-12/2010
Net sales, MEUR 106.7 83.4 395.9
Operating profit, MEUR 2.9 2.1 17.9
Share of net sales, % 2.7 2.5 4.5
Profit before taxes, MEUR 1.5 1.0 14.1
Share of net sales, % 1.4 1.2 3.6
Personnel at the end of period 739 702 712
Earnings per share, EUR 0.04 0.02 0.40
EPS adjusted for dilution, EUR 0.04 0.03 0.41
Equity per share, EUR 2.66 2.66 2.63
Equity ratio, % 31.7 36.2 33.2
Gearing, % 115.8 92.1 101.5
AKI OJANEN, ASPO'S CEO:
"Aspo's net sales and operating profit grew considerably. All operating segments
increased their net sales and three operating segments were also successful in
improving their operating profit. The Group's operating profit grew from the
comparison period as Leipurin, Telko and Kaukomarkkinat improved their operating
profit significantly.
ESL Shipping's operating profit was weakened by the costs incurred by the ice
conditions of the Baltic Sea. The costs increased sharply during the worst ice
conditions. Ice conditions are estimated to have been the worst for twenty-five
years due to large pack ice areas and strong winds. The ships of our shipping
company are efficient ice-strengthened vessels able to operate in difficult
conditions. Ship traffic has increased on the Baltic Sea. Some of the ships with
operating permission for the area are small and low-powered. All vessels are
equally provided with ice-breaking help, which decelerates the whole ship
traffic. Because of ship traffic restrictions set by authorities due to ice
conditions, the ships can operate only when they get help or have operating
permission. Our vessels waited for ice breaking help or operating permission for
a total of 70 days. In addition, navigating in icy sea conditions reduces travel
speed and substantially increases fuel consumption.
The Group's strategic goal is to grow in Russia, the Ukraine, and other CIS
countries. We were successful with this during the review period. Aspo increased
its net sales by 81% in these countries as compared with the previous year's
first quarter.
Aspo has implemented a rights issue based on the shareholders' pre-emptive
subscription right after the review period. The offered shares were subscribed
up to 120.8%. A total of 98.6% of the shares were subscribed using the
subscription right and the remaining part without subscription right. The new
capital, nearly EUR 20 million, enables Aspo to continue with its growth
strategy and strengthens the company's balance sheet."
ASPO AS A COMPANY
Aspo is a conglomerate that owns and develops business operations in northern
Europe and growth markets, focusing on demanding B-to-B customers. Aspo's strong
company brands - ESL Shipping, Leipurin, Telko and Kaukomarkkinat - aim to be
the market leaders in their sectors. They are responsible for their own
operations, customer relationships, and the development of these. Together they
generate Aspo's goodwill. Aspo's Group structure and business operations are
continually developed without any predefined schedules.
Aspo's operating segments are ESL Shipping, Leipurin, Telko and Kaukomarkkinat.
Other operations include Aspo Group's administration and other operations not
belonging to the business units.
The Group monitors its net sales on the basis of the following geographical
division: Finland, the Nordic countries, the Baltic countries, Russia + Ukraine
+ other CIS countries, and other countries.
OPERATIONAL PERFORMANCE
General uncertainty has continued in economic life. Uncertainty in the global
economy was particularly visible as a change in the value of currencies, and the
risk of inflation as an increase in the interest rate. Energy and raw material
prices have risen due to increased international demand. The production volume
for the basic industry has continued to improve in Aspo's market area, which has
increased the demand for petrochemical products, food raw materials and
industrial raw material cargos.
ESL Shipping
ESL Shipping is the leading dry bulk sea transport company operating in the
Baltic Sea area. At the end of the review period, the company's fleet consisted
of 15 vessels, of which the company owns 12 in full. Two are leased and one is
partially owned.
1-3/2011 1-3/2010 Change 1-12/2010
Net sales, MEUR 20.5 17.3 3.2 79.5
Operating profit, MEUR 0.4 1.4 -1.0 11.5
Personnel 179 186 -7 183
The dry bulk cargo price level has decreased worldwide. ESL Shipping's vessels
operate mainly with long-term transport agreements. In the first half of the
year, the shipping company leased external capacity due to difficult wintertime
ice conditions. The capacity increase enabled the company to ensure that the
agreements of long-term customers could be fulfilled.
The exceptionally difficult ice conditions weakened operating profit in
February-March in particular. Profitability was weakened by decreased vessel
speeds, rapidly growing fuel consumption and the long waiting times due to ice
conditions in the navigation routes.
The ice conditions were extremely difficult in February. Harsh frosts were
followed by strong winds, which set pack ice areas in exceptionally swift motion
compared to preceding years. Authorities restricted the navigation of vessels
because of strong winds and the vessels had to wait for operating permissions
and the help provided by ice-breakers. The ice-breaking capacity could not fully
respond to the challenges set by last winter. The shipping company's vessels had
to wait for either operating permission or the helping ice-breaker for a total
of 70 days. The company was able to ensure the transport of raw material
deliveries for the customers with efficient operation. Winter traffic witnessed
four averages. However, the company managed to repair the damage caused by them
without dockings.
The cargo volume carried by ESL Shipping in January-March amounted to 2.8
million tons (2.9). The steel industry accounted for 1.8 million tons (2.1) and
the energy industry 0.9 million tons (0.7) of the volume.
Net sales amounted to EUR 20.5 million (17.3). Profitability weakened and
operating profit was EUR 0.4 million (1.4).
During the period, ESL Shipping signed a significant, long-term contract with
Rautaruukki Corporation for the marine transport of raw materials on the Baltic
Sea. The contract makes it possible for the contracting parties to make long-
term operational plans, and for ESL Shipping to renovate the barge stock used
for the steel industry's transport purposes in the summer of 2011.
An 18,800 dwt vessel, m/s Alppila, is being built in India. The vessel will be
delivered to the shipping company after a trial run and it will be ready for
operation in the Baltic Sea area next fall. The vessel is in ESL Shipping's Eira
class and will be built to the highest ice class, 1A Super. ESL Shipping will
lease the vessel with a long-term leasing agreement.
Two ice-strengthened supramax vessels ordered from the Korean Hyundai Mipo
shipyard are under construction in Vietnam. One of the vessels may be completed
already in 2011 and the other in the spring of 2012. Both vessels are financed
with a term loan facility.
Leipurin
Leipurin serves the baking and food industry by supplying ingredients,
production machinery, and production lines, as well as related expertise.
Leipurin operates in Finland, Russia, Poland, the Baltic countries, the Ukraine,
Belarus, and Kazakhstan. In Russia, Leipurin has operations in several large
cities in addition to St. Petersburg and Moscow. Procurement operations are
international.
1-3/2011 1-3/2010 Change 1-12/2010
Net sales, MEUR 29.9 25.2 4.7 108.7
Operating profit, MEUR 1.5 0.7 0.8 3.6
Personnel 232 224 8 226
Raw material prices in the food industry strengthened slightly during the period
under review.
Bakery raw material sales continued to show positive development and grew by
17% as compared with the comparison period. Net sales grew particularly in
Russia and the Baltic countries. Leipurin continued to focus and expand its
operations in the growing markets. The net sales of the business in Russia, the
Ukraine and other CIS countries was EUR 6.2 million (5.3); that is, 20.7% of
Leipurin's total net sales and operating profit was 6.9% of net sales.
The operating profit in the Leipurin business was 5.0% of net sales; operating
profit grew by 114% and was EUR 1.5 million (0.7).
The sale of bakery machinery and lines was better than in the comparison period
last year and grew by 52%.
Telko
Telko is the leading expert and supplier of industrial chemicals and plastic raw
materials in the Baltic Sea region. It operates in Finland, the Baltic
countries, Scandinavia, Poland, the Ukraine, Russia, Belarus, Kazakhstan, and
China. Procurement operations are international. Business is based on
representation by the best international principals and on the expertise of the
personnel. Telko develops the production and competitiveness of its customers'
products in cooperation with them.
1-3/2011 1-3/2010 Change 1-12/2010
Net sales, MEUR 48.1 34.5 13.6 175.2
Operating profit, MEUR 1.7 1.6 0.1 6.8
Personnel 225 191 34 199
The prices of raw materials sold strengthened further. Basic industrial demand
was better than in the comparison period last year.
Telko was able to improve its operating profit in industrial chemicals and
plastic raw materials. Its operating profit grew and amounted to EUR 1.7 million
(1.6). The operating profit for the comparison period in 2010 is improved by the
dissolution of the provision for bad debt, worth EUR 0.4 million.
Telko's restructuring measures have decreased fixed costs and Telko's net sales
and profitability have improved thanks to new principals, customers and market
areas.
Of all market areas, the developing markets' share increased both in net sales
and profitability. The net sales of the business in Russia, the Ukraine, and
other CIS countries was EUR 17.8 million (11.5); that is, 37% of total net sales
and operating profit was 4.6% of net sales. The operating profit of Telko's
business was 3.5% of net sales.
Kaukomarkkinat
Kaukomarkkinat specializes in energy efficiency technology, solutions to improve
efficiency in the process industry, and security and digital products.
Operations are based on the products of the best companies in the industry and
the willingness of the company's own experts to improve the operations and
efficiency of its customers. Kaukomarkkinat operates in Finland, Poland, Russia,
China, and Vietnam.
1-3/2011 1-3/2010 Change 1-12/2010
Net sales, MEUR 8.2 6.4 1.8 32.5
Operating profit, MEUR 0.4 -0.4 0.8 0.6
Personnel 90 87 3 91
Kaukomarkkinat's net sales and operating profit grew. In particular Finnish AV
sales and Far Eastern project sales increased their net sales. The company's AV
sales delivered large screen applications used in in-store advertising to a
major Finnish store chain. The operating profit for Chinese project deliveries
was positive and the order book is normal.
The order book and net sales for local energy equipment were good with regard to
the season. Orders in major energy project deliveries have, at the municipality
level, waited for the government's decisions on energy subsidies to be made
project-by-project during the second quarter.
Other operations
Other operations include Aspo Group's administration and other operations not
belonging to the business units.
1-3/2011 1-3/2010 Change 1-12/2010
Net sales, MEUR 0.0 0.0 0.0 0.0
Operating profit, MEUR -1.1 -1.2 0.1 -4.6
Personnel 13 14 -1 13
NET SALES
Aspo Group's net sales grew by EUR 23.3 million or 27.9% to EUR 106.7 million
(83.4).
Net sales by segment, MEUR
1-3/2011 1-3/2010 Change 1-12/2010
ESL Shipping 20.5 17.3 3.2 79.5
Leipurin 29.9 25.2 4.7 108.7
Telko 48.1 34.5 13.6 175.2
Kaukomarkkinat 8.2 6.4 1.8 32.5
Other operations 0.0 0.0 0.0 0.0
Total 106.7 83.4 23.3 395.9
There is no considerable inter-segment net sales.
Net sales by market area, MEUR
1-3/2011 1-3/2010 Change 1-12/2010
Finland 45.2 35.8 9.4 167.1
Nordic countries 10.9 11.2 -0.3 51.9
Baltic countries 11.2 9.0 2.2 43.8
Russia, Ukraine + other CIS countries 30.7 17.0 13.7 88.5
Other countries 8.7 10.4 -1.7 44.6
Total 106.7 83.4 23.3 395.9
Net sales in Russia, the Ukraine and other CIS countries developed well in
Leipurin and Telko. When ESL Shipping's raw material export transport from
Russia is included in the net sales figures, the share of Russia is emphasized
in the Group.
1-3/2011 1-3/2010 Change 1-12/2010
Russia, Ukraine + other CIS countries 38.3 22.0 16.3 112.0
EARNINGS
Aspo Group's operating profit in January-March amounted to EUR 2.9 million
(2.1). ESL Shipping's operating profit decreased to EUR 0.4 million (1.4).
Leipurin's operating profit was EUR 1.5 million (0.7). Telko's operating profit
increased by EUR 0.1 million to EUR 1.7 million (1.6). Kaukomarkkinat's
operating profit was EUR 0.4 million (-0.4).
Other operations include Aspo Group's administration and a small share of other
items not belonging to the business units. The operating profit of other
operations was negative, amounting to EUR -1.1 million (-1.2).
Operating profit by segment, MEUR
1-3/2011 1-3/2010 Change 1-12/2010
ESL Shipping 0.4 1.4 -1.0 11.5
Leipurin 1.5 0.7 0.8 3.6
Telko 1.7 1.6 0.1 6.8
Kaukomarkkinat 0.4 -0.4 0.8 0.6
Other operations -1.1 -1.2 0.1 -4.6
Total 2.9 2.1 0.8 17.9
Earnings per share
Earnings per share was EUR 0.04 (0.02) and diluted earnings per share was EUR
0.04 (0.03). Equity per share was EUR 2.66 (2.66).
INVESTMENTS
The Group's investments amounted to EUR 9.9 million (0.4). Most of the
investments consisted of the advance payments for supramax vessel orders of ESL
Shipping.
Investments by segment, acquisitions excluded, MEUR
1-3/2011 1-3/2010 Change 1-12/2010
ESL Shipping 9.6 0.1 9.5 11.1
Leipurin 0.1 0.1 0.0 0.3
Telko 0.2 0.1 0.1 0.9
Kaukomarkkinat 0.0 0.0 0.0 0.8
Other operations 0.0 0.1 -0.1 0.1
Total 9.9 0.4 9.5 13.2
FINANCING
The Group's financing position weakened compared to the first quarter in 2010.
The Group's cash and cash equivalents amounted to EUR 6.4 million (5.9). There
was a total of EUR 88.4 million (69.1) in interest-bearing liabilities on the
consolidated balance sheet. The growth in interest-bearing liabilities was
affected by payments related to ESL Shipping's vessel investments. Interest-free
liabilities totaled EUR 68.0 million (52.7).
Aspo Group's net gearing was 115.8% (92.1), return on equity was 6.5% (3.2), and
equity ratio was 31.7% (36.2).
The Group's cash flow from operations was negative in the review period,
totaling EUR -2.9 million (-4.3). At the end of the period, the change in
working capital stood at EUR -6.0 million (-6.7).
Cash flow from investments was EUR -9.8 million, which means that the Group's
free cash flow was EUR -12.7 million in the review period.
The amount of binding revolving credit facilities signed between Aspo and its
key banks stood at EUR 40 million at the end of the period. The total amount of
revolving credit facilities was decreased by EUR 10 million in the review
period. The amount of revolving credit facilities was decreased voluntarily
while the number of long-term financing agreements was increased. At the end of
the review period, EUR 30 million of the revolving credit facilities was unused.
ESL Shipping signed a ship financing agreement during the period under review.
The value of the agreement is EUR 25 million, and the loan period is 10 years.
Convertible capital loan
On March 31, 2011, Aspo Plc had EUR 10,800,000 in a convertible capital loan
issued in 2009. The loan period is from June 30, 2009 to June 30, 2014. The loan
will be repaid in one installment on June 30, 2014, assuming that the repayment
conditions outlined in Chapter 12 of the Finnish Companies Act and the loan
terms are met. The loan has a fixed interest rate of 7%.
The loan units can be converted into Aspo shares. Each EUR 50,000 loan unit
entitled the loan unit holder to convert the loan unit into 7,690 shares in Aspo
Plc at the end of the review period. The conversion rate was EUR 6.50. The loan
can be converted annually between January 2 and November 30. The conversion
period ends on June 15, 2014. During January-March 2011, 215,320 new shares were
subscribed with 28 loan units.
Related party loans
Aspo Plc has granted a EUR 2.8 million loan to Aspo Management Oy, one of the
company's related parties and controlled by the company, as part of a new
shareholding plan for the Group. The interest of the loan receivable is 3%. The
loan receivable falls due on March 31, 2014. It can be extended to March
31, 2016 at the latest. Aspo Plc's shares are used as collateral. The company
has been consolidated in the financial statements. The loan is market-based.
RISKS AND RISK MANAGEMENT
In 2011, the sluggish upturn in the economic situation continued, which has
lowered risk levels in all sectors. The improved economic situation is visible
as increased inflation expectations and increased interest rates.
At the Group level, strategic risks are decreased by the fact that business
operations are divided into four sectors and operations are carried out in a
wide geographical area. Operative risks have decreased and the likelihood of
materialization is lower, but the changes in the market as an aftermath of the
recession are constantly monitored. Increased prices may result in a change in
the value of inventories and cause reasonable price risks. Quick positive
changes in financial structures may also cause risks due to changes in the
customer or principal structure or technologies, and due to the fact that
possibilities that require fast reaction remain unutilized.
Aspo is growing in developing market areas where growth risks are also affected
by industrial and commercial investments, interest rate levels, exchange rates,
and customers' liquidity, as well as changes in legislation and import
regulations. Consumer behavior is also reflected in the risks generated through
B-to-B customers and the risk levels. The industrial demand in Western countries
has improved as the economy has recovered and risk levels have generally
decreased. The changes in demand in emerging markets show a similar trend, but
these changes are more difficult to predict.
Aspo has avoided considerable exchange rate losses due to active hedging of
currency positions and currency flow. Credit loss risks have stabilized, but in
the aftermath of the recession, we are still keeping a close eye on our
customers.
The risks caused by the aftermath of the economic recession were monitored
closely at Aspo. The company continued to carry out final risk analyses
controlled by external assessors and to make continuity plans. The company
reviews insurance coverage, complete with its risk levels, on a continuous basis
to minimize loss risks.
One of the tasks of the audit committee established by Aspo's Board of Directors
is to monitor the efficiency of the Group's internal supervision, internal
audits, and risk management systems. The audit committee monitors the risk
management process and carries out necessary measures to prevent strategic risks
in particular. In accordance with the internal supervision principles approved
by the Board of Directors, risk management is part of Aspo's internal
supervision, and its task is to ensure the implementation of the Group's
strategy, development of financial results, shareholder value, dividend payment
ability, and continuity in business operations. The operational management of
the business areas is responsible for risk management. The management is
responsible for specifying sufficient measures, their implementation, and for
monitoring and ensuring that the measures are implemented as part of day-to-day
operational control. Risk management is coordinated by Aspo's CFO, who reports
to the Group CEO.
Goodwill reflects the performance ability of each sector with capital employed,
and the related risks are monitored with sector-specific impairment testing at
least annually.
Aspo Group's financing and financing risk management are centralized in the
parent company in accordance with the financing policy approved by the Board of
Directors.
PERSONNEL
Personnel by segment, end of period
1-3/2011 1-3/2010 Change 1-12/2010
ESL Shipping 179 186 -7 183
Leipurin 232 224 8 226
Telko 225 191 34 199
Kaukomarkkinat 90 87 3 91
Other operations 13 14 -1 13
Total 739 702 37 712
At the end of the period, Aspo Group employed 739 employees (702).
Changes in the total number of employees are due to an increase caused by
organic growth and seasonal fluctuation in the number of ship personnel
employed. The growth in the number of employees was relatively highest in
Russia, Ukraine and other CIS countries, as well as in China.
Rewarding
Aspo Group has a profit bonus system. Part of the Group's profit is paid as a
profit bonus to the personnel fund. The personnel fund aims to use most of the
profit bonuses for the purchase of shares in Aspo Plc. The long-term goal is
that the personnel will become a significant shareholder group in the company.
All persons working at Aspo Group's Finnish subsidiaries are members of the
personnel fund. Aspo's business areas pay part of their earnings as bonuses to
the personnel. The calculation principles for the bonuses are decided upon by
business area.
In 2009, Aspo's Board of Directors decided on a shareholding program for the
Group's key personnel. The potential gain is based on continuation of the key
employees' employment relationships and Aspo Group's cumulative Earnings per
Share indicator (EPS) over the period of 2009-2011. The potential gain will be
paid partly in Aspo shares and partly in cash between January and March 2012.
The management shareholding program encompasses about 30 persons in Aspo's
management and key personnel.
On October 26, 2010, Aspo's Board decided on a new shareholding plan for Aspo
Group's management. The purpose of the plan is to enable considerable long-term
ownership in Aspo for those involved in the plan. For the shareholding, the
participants acquired a company called Aspo Management Oy, whose entire stock
they own. Aspo Management Oy acquired 114,523 Aspo shares from the participants
at market price. In addition, Aspo assigned 322,637 shares at EUR 7.93 per share
to the company in a directed share issue. As part of the arrangement, the Board
decided to grant Aspo Management Oy a EUR 2,800,000 interest-bearing loan to
finance the share purchase. The plan is valid until the spring of 2014 and
dissolved after that in a manner to be decided upon later. The plan will be
extended for one year at a time if Aspo's share price at the beginning of
2014, 2015, or 2016 is below the average price at which Aspo Management Oy
acquired the Aspo shares it owns. There are restrictions on the right of
disposal of the shares for the duration of the plan. The participants' holding
in Aspo Management Oy remains primarily valid until the system is dissolved.
SHARE CAPITAL AND SHARES
Aspo Plc's registered share capital on March 31, 2011, was EUR 17,691,729.57,
and the total number of shares was 27,052,023, of which the company held
254,233 shares, i.e. 0.94% of the share capital. Aspo Plc has one share series.
Each share entitles the shareholder to one vote at the shareholder's meeting.
Aspo's share is quoted on NASDAQ OMX Helsinki Ltd's medium-sized companies group
under industrial products and services.
From January to March 2011 a total of 1 096 149 Aspo Plc shares with a market
value of EUR 8.77 million were traded on NASDAQ OMX Helsinki, in other words,
4.1% of the stock changed hands. In January-March, the stock reached a high of
EUR 9.30 and a low of EUR 8.19. The average price was EUR 8.78 and the closing
price at the end of the period was EUR 8.85. At the end of the period, the
market capitalization excluding treasury shares was EUR 237.2 million.
At the end of the period, the number of Aspo Plc shareholders was 5,938. A total
of 696,432 shares, or 2.6 % of the total share capital, were nominee registered
or held by non-domestic shareholders.
DECISIONS OF THE ANNUAL SHAREHOLDERS' MEETING
Dividend
The Annual Shareholders' Meeting of Aspo Plc on April 5, 2011, approved the
payment of a dividend totaling EUR 0.42 per share. The dividend will be paid on
April 15, 2011.
Board of Directors and Auditor
The Annual Shareholders' Meeting of Aspo Plc re-elected Matti Arteva, Esa
Karppinen, Roberto Lencioni, Gustav Nyberg, Kristina Pentti-von Walzel and Risto
Salo to the Board of Directors for one year. At the Boards' organizing meeting
held after the Annual Shareholders' Meeting, Gustav Nyberg was elected to carry
on as Chairman of the Board and Matti Arteva as Vice-Chairman. At the meeting
the Board also decided to re-appoint Roberto Lencioni Chairman of the Audit
Committee and Kristina Pentti-von Walzel and Risto Salo as committee members.
The authorized public accounting firm PricewaterhouseCoopers Oy will continue as
company auditor. Jan Holmberg, APA, will act as the auditor in charge.
Authorizations
Authorization of the Board to decide on the acquisition of company-held shares
The shareholders authorized the Board to decide on the acquisition of no more
than 500,000 company-held shares using the unrestricted shareholders' equity of
the company. The shares shall be acquired through public trading, for which
reason the shares are acquired otherwise than in proportion to the holdings of
the shareholders and the consideration paid for the shares shall be the market
price of the Aspo's share at the time of repurchase. The authorization does not
exclude the Board's right to resolve on a directed repurchase. The shares shall
be acquired to be used for financing or execution of corporate acquisitions or
other transactions, for execution of the company's share-ownership program or
for other purposes determined by the Board. The Board may not exercise the
authorization to acquire company-held shares if after the acquisition the
company or its subsidiary would posses or have as a pledge more than ten (10)
per cent of the company's stock. The authorization is valid until the Annual
Shareholders' Meeting in 2012, but no more than 18 months from the approval at
the Shareholders' Meeting.
Authorization of the Board to decide on a share issue of the company-held shares
The shareholders authorized the Board to decide on a share issue, through one or
several installments, to be executed by conveying the company-held shares. An
aggregate maximum amount of 754,233 shares may be conveyed based on the
authorization. The authorization will be used for the financing or execution of
corporate acquisitions or other transactions, the execution of the company's
share-ownership program or for other purposes determined by the Board. The
authorization includes the right of the Board of Directors to decide on all the
terms and conditions of the conveyance and thus also includes the right to
convey shares otherwise than in proportion to the holdings of the shareholders,
in deviation from the shareholders' pre-emptive right on the conditions provided
by law. The authorization is valid until the Annual Shareholders' Meeting in
2012, but no more than 18 months from the approval at the Shareholders' Meeting.
Authorization of the Board to decide on a rights issue
The shareholders authorized the Board to decide on a rights issue for
consideration, whereby shareholders have the right to subscribe for new Aspo
shares in proportion to their previous shareholdings. The total number of new
shares to be offered for subscription may not exceed 5,500,000. The Annual
Shareholders' Meeting authorized the Board to specify other terms and conditions
governing such a rights issue. The authorization is valid until the Annual
Shareholders' Meeting in 2012 but not more than 18 months from the approval at
the Shareholders' Meeting. This authorization does not invalidate the Board
authorization to decide on a share issue related to the transfer of the company-
held shares.
EVENTS AFTER THE REPORTING PERIOD
Aspo implemented a rights issue based on the shareholders' pre-emptive
subscription right after the review period. The new capital, nearly EUR 20
million, enables Aspo to continue with its growth strategy and strengthens its
balance sheet.
Aspo's Board of Directors used the share issue authorizations granted by the
Annual Shareholders' Meeting, and the conditions for the issue were published on
April 5, 2011. The prospectus accepted by the national Financial Supervisory
Authority for the issue of 3,838,143 new shares was published on April 8, 2011.
According to the final result of the issue, a total of 3,785,900 shares (98.6%
of the offered shares) were subscribed using the subscription rights. The
remaining 52,243 shares (1.4% of the offered shares) were subscribed without
subscription rights, and they have been delivered to investors according to the
terms and conditions published on April 5, 2011. The share issue was subscribed
up to 120.8%. Trading in the new shares together with present shares began on
May 9, 2011.
To ensure uniform treatment of Aspo's shareholders, convertible capital loan
holders and pursuant to convertible capital loan terms and conditions, Aspo's
Board decided on April 5, 2011 to amend the terms and conditions of the
convertible capital loan issued in 2009, with regard to the number of shares
obtained in the conversion, so that each EUR 50,000 loan unit entitles its loan
unit holder to convert the loan unit into 8,074 new shares in Aspo. The
conversion rate changed to EUR 6.19. As a result of the issue, the maximum of
new Aspo shares into which the whole capital loan is convertible increased by
79,488 shares from the previously notified number. Amendments made to the
convertible capital loan terms and conditions came into effect on May 6, 2011.
A total of 69,210 new Aspo Plc shares, corresponding with nine loan units, were
subscribed from the convertible capital loan issued in 2009. The new shares were
entered into the trade register on April 1, 2011.
In accordance with the decision made by the Annual Shareholders' Meeting, a
dividend of EUR 0.42 per share, a total of EUR 11,284,140.00, was paid to the
shareholders. The dividend payment date was April 15, 2011.
On March 14, 2011, Aspo's Board of Directors decided to grant Aspo Management Oy
a EUR 400,000 loan for the subscription related to the issue. After fulfilment
of the preconditions for the decision, Aspo Management Oy withdrew a total of
EUR 324,750.40 of the loan on April 14, 2011, and used all of its subscription
rights for the subscription of Aspo shares. The loan is treated at Aspo Plc as a
related parties' transaction.
Jukka Nieminen, M.Sc. (Tech.), has been appointed as the new Managing Director
for Kaukomarkkinat Ltd as of August 8, 2011.
OUTLOOK FOR 2011
Aspo Group's current structure creates a good basis for operational growth. Aspo
will increase its net sales by 10-20% and improve its operating profit. A
possible change to the tonnage tax legislation would considerably improve the
Group's profit after taxes. Aspo's guidance does not include the possible change
to the tonnage tax legislation.
ESL Shipping
The shipping company's own vessel capacity has decreased in the past few years.
The company has ordered a vessel, m/s Alppila, from India. The shipyard that
builds the vessel estimates that its building is completed in the summer of
2011 and it is able to operate on the Baltic Sea next fall. Due to more
demanding winter traffic conditions than before and to ensure docking in early
summer, the time charters of m/s Beatrix and m/s Nassauborg have been extended
until the summer of 2011. The aim is to ensure that there is enough capacity in
the growing Baltic Sea cargo markets. A considerable share of the transport
capacity for 2011 is covered with long-term price and transport volume
agreements. The steel industry volumes are estimated to remain at the 2010
level, while the energy sector cargo volumes are estimated to increase from the
last year's level. One Finnish steel mill has announced a blast furnace
renovation scheduled for the second quarter.
The amendment to the tonnage tax legislation, which is waiting for approval by
the EU commission, would have a considerable effect on ESL Shipping's post-tax
result if applied.
Leipurin
Organic growth is expected to continue. The new offices that were established
create a good foundation for several years of growth in bakery raw material
sales. Bakery machinery sales are predicted to grow in Finland, the Baltics and
Russia. Leipurin investigates the possibilities of further expanding its product
range to fulfill the needs of Eastern growth markets in particular. Establishing
other food industry operations in Russia and the Baltic region is expected to
have a positive effect on Leipurin's result. The order book for bakery machinery
and lines is normalizing and thus better than last year. Leipurin has expanded
its product range, paying special attention to bakery technology and price
competitiveness in the Eastern growth markets.
Telko
Organic growth is expected to continue. Telko continues to expand in Russia, the
CIS countries, and China, in accordance with its strategy. The company will
still open new offices in major Russian cities. The new customs treaty between
Russia, Belarus, and Kazakhstan from July 1, 2010 creates good opportunities of
expanding operations to cover Belarus and Kazakhstan through subsidiaries. Telko
will focus on further development of logistics and finding strong new principal
representatives.
The subsidiary in China is expanding its operations by establishing a unit in
the Guanzo area in Southern China. The operation is based on raw material
service for the Chinese business owned by northern European industrial plastic
pressing enterprises. Telko makes preparations for establishing a refinery
terminal in Russia. It would enable the company to provide a large new customer
base with liquid chemical products.
Kaukomarkkinat
Kaukomarkkinat aims to increase the product range of its local energy solutions,
especially in Finland. The demand is expected to grow due to increased energy
prices and the new EU directives aimed at generating energy savings.
The sales of solar cells, pellet boilers and power plants, and air heat source
pump solutions are expected to remain at least at the present level. Turbine and
heat exchanger projects in industrial use are expected to increase compared to
the first quarter in previous year.
The order book for the Finnish AV and data department is good. The order book
for Far Eastern project deliveries is significantly better than in 2010, and it
covers 2011 deliveries.
Helsinki, May 11, 2011
ASPO Plc
Board of Directors
ASPO GROUP INCOME STATEMENT
1-3/2011 1-3/2010 1-12/2010
MEUR % MEUR % MEUR %
Net sales 106.7 100.0 83.4 100.0 395.9 100.0
Other operating income 0.1 0.1 0.6 0.7 1.5 0.4
Depreciation and write-downs -2.0 -1.9 -2.1 -2.5 -8.1 -2.0
Operating profit 2.9 2.7 2.1 2.5 17.9 4.5
Financial income and expenses -1.3 -1.2 -1.1 -1.3 -3.8 -1.0
Profit before taxes 1.5 1.4 1.0 1.2 14.1 3.6
Profit for the period 1.1 0.5 10.4
Other comprehensive income
Translation differences 0.1 0.9 1.2
Cash flow hedges -0.8 -0.9
Income tax on other comprehensive income 0.2 0.2
Other comprehensive income for the year,
net of taxes -0.5 0.9 0.5
Total comprehensive income 0.6 1.4 10.9
Profit attributable to shareholders 1.1 0.5 10.3
Non-controlling interest 0.0 0.0 0.1
Total comprehensive income attributable
to shareholders 0.6 1.4 10.8
Non-controlling interest 0.0 0.0 0.1
ASPO GROUP BALANCE SHEET
3/2011 3/2010 Change 12/2010
MEUR MEUR % MEUR
Assets
Non-current assets
Intangible assets 15.5 16.1 -3.7 15.9
Goodwill 40.6 40.3 0.7 40.6
Tangible assets 62.5 48.5 28.9 54.4
Available-for-sale assets 0.2 0.2 0.0 0.2
Long-term receivables 1.3 0.6 116.7 1.3
Shares in associated companies 1.7 1.6 6.2 1.7
Total non-current assets 121.8 107.3 13.5 114.1
Current assets
Inventories 45.4 30.4 49.3 44.9
Sales and other receivables 53.7 46.9 14.5 46.7
Cash and bank deposits 6.4 5.9 8.5 7.1
Total current assets 105.5 83.2 26.8 98.7
Total assets 227.3 190.5 19.3 212.8
Shareholders' equity and liabilities
Shareholders' equity
Share capital 17.7 17.7 0.0 17.7
Other shareholders' equity 52.5 51.0 2.9 51.1
Shareholders' equity attributable to equity holders
of the parent 70.2 68.7 2.2 68.8
Non-controlling interest 0.7 0.0 0.0 0.7
Long-term liabilities 80.9 56.4 43.4 78.5
Short-term liabilities 75.5 65.4 15.4 64.8
Total shareholders' equity and liabilities 227.3 190.5 19.3 212.8
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
A = Share capital F = Translation difference
B = Premium fund G = Retained earnings
C = Fair value fund H = Total
D = Other funds I = Non-controlling interest
E = Repurchased shares J = Total shareholders' equity
MEUR A B C D E F G H I J
Balance at
31.12.2010 17.7 4.3 -0.7 5.4 -4.5 -0.4 46.9 68.7 0.8 69.5
Comprehensive income:
Profit for the period 1.1 0.0
Translation difference 0.1
Cash flow hedge, net of taxes -0.6
Total comprehensive income -0.6 0.1 1.1 0.6
Transactions with owners:
Share-based payment 0.1
Conversion of convertible bond 1.2
Rights issue -0.4
Total transactions with owners 0.8 0.1 0.9
Balance at 31.3.2011 17.7 4.3 -1.3 6.2 -4.5 -0.3 48.1 70.2 0.7 70.9
Balance at
31.12.2009 17.7 4.3 0.0 2.8 -3.7 -1.6 47.4 66.9 0.1 67.0
Comprehensive income:
Profit for the period 0.5 0.0
Translation difference 0.9
Total comprehensive income 0.9 0.5 1.4
Transactions with owners:
Share-based payment 0.2 0.1 0.0
Total transactions with owners 0.2 0.1 0.0 0.4
Balance at 31.3.2010 17.7 4.3 0.0 3.0 -3.6 -0.7 48.0 68.7 0.0 68.7
ASPO GROUP CASH FLOW STATEMENT
1-3/2011 1-3/2010 1-12/2010
MEUR MEUR MEUR
OPERATIONAL CASH FLOW
Operating profit 2.9 2.1 17.9
Adjustments to operating profit 2.3 2.5 8.3
Change in working capital -6.0 -6.7 -8.5
Interest paid -1.5 -1.2 -4.8
Interest received 0.2 0.4 1.2
Taxes paid -0.8 -1.4 -4.5
Total operational cash flow -2.9 -4.3 9.6
INVESTMENTS
Investments in tangible and
intangible assets -9.8 -0.2 -11.9
Gains on the sale of tangible and intangible assets 0.1 0.6
Purchases of business operations -0.3
Associated companies acquired 0.2
Total cash flow from investments -9.8 -0.1 -11.4
FINANCING
Change in short-term borrowings 8.5 -0.5 -14.9
Change in long-term borrowings 3.5 -0.7 24.0
Share repurchase -0.9
Dividends paid -10.8
Total financing 12.0 -1.2 -2.6
Increase / Decrease in liquid funds -0.7 -5.6 -4.4
Liquid funds in beginning of year 7.1 11.5 11.5
Liquid funds at period end 6.4 5.9 7.1
KEY FIGURES AND RATIOS 1-3/2011 1-3/2010 1-12/2010
Earnings per share, EUR 0.04 0.02 0.40
EPS adjusted for dilution, EUR 0.04 0.03 0.41
Equity per share, EUR 2.66 2.66 2.63
Equity ratio, % 31.7 36.2 33.2
Gearing, % 115.8 92.1 101.5
ACCOUNTING PRINCIPLES AND FINANCIAL REPORTING
Aspo Plc's interim report has been compiled in accordance with the principles of
IAS 34 Interim Financial Reporting. The same accounting principles have been
adopted in the interim report as in the Financial Statements on December
31, 2010. The calculation formulas for key indicators are explained on page 82
of the 2010 financial statements. The information in this report is unaudited.
Helsinki May 11, 2011
ASPO Plc
Aki Ojanen Arto Meitsalo
CEO CFO
For more information:
Aki Ojanen, +358 9 521 4010, +358 400 106 592
aki.ojanen@aspo.com
PRESS AND ANALYST CONFERENCE
The press and analyst conference will be arranged today, Wednesday May
11, 2011, at 14.00 at Restaurant Savoy, 7th floor, Eteläesplanadi 14, FI-00130
Helsinki.
FINANCIAL INFORMATION IN 2011
Aspo Plc will publish the following Interim Reports in 2011:
for the second quarter on August 18, 2011
for the third quarter on October 26, 2011
DISTRIBUTION:
NASDAQ OMX Helsinki
Key media
www.aspo.com
[HUG#1514363]
