ASPO Plc STOCK EXCHANGE RELEASE October 26, 2011 at 10:00
ASPO: Strong growth in net sales and operating profit
(Figures for the comparable period in 2010 are presented in parentheses)
January-September 2011
- Aspo Group's net sales were up 24%, totaling EUR 355.0 million (EUR 286.8
million)
- Operating profit grew by 33% to EUR 16.5 million (EUR 12.4 million)
- Profit before taxes amounted to EUR 12.6 million (EUR 9.4 million)
- Earnings per share stood at EUR 0.32 (EUR 0.25)
July-September 2011
- Aspo Group's net sales grew by 19%, totaling EUR 123.7 million (EUR 104.2
million)
- Operating profit increased by 40% to EUR 8.4 million (EUR 6.0 million)
- Earnings per share stood at EUR 0.17 (EUR 0.13)
- ESL Shipping took delivery of a new vessel, m/s Alppila, in the reporting
period.
Aspo maintains its guidance for 2011 unchanged. Aspo's net sales will increase
by 10-20% and operating profit will improve.
The comparable key figures presented in this review have been adjusted for the
rights issue that has been carried out.
KEY FIGURES
1-9/2011 1-9/2010 1-12/2010
Net sales, MEUR 355,0 286,8 395,9
Operating profit, MEUR 16,5 12,4 17,9
Share of net sales, % 4,6 4,3 4,5
Profit before taxes, MEUR 12,6 9,4 14,1
Share of net sales, % 3,5 3,3 3,6
Personnel at the end of period 749 720 712
Earnings per share, EUR 0,32 0,25 0,38
EPS adjusted for dilution, EUR 0,32 0,26 0,39
Equity per share, EUR 2,89 2,32 2,49
Equity ratio, % 34,2 30,0 33,2
Gearing, % 93,1 123,7 101,5
AKI OJANEN, ASPO'S CEO:
"Aspo's third-quarter net sales and operating profit reflect the strong
performance ability of Aspo's current structure. All business operations
generated good results. Growth has continued strong especially in countries
outside Finland and Scandinavia, where net sales increased by 48%. The Group's
operating profit percentage totaled 6.8% in the third quarter, meaning that we
exceeded our minimum target of 5%. The cumulative operating profit percentage
since the beginning of the year was 4.6%.
Uncertainty has increased in the international market, and economic forecasts of
the future have weakened. General forecasts of slower economic growth have led
us to increase our proactive measures and prepare for a possible downswing in
the economy. Of Aspo's business operations, a cyclical turn would first be felt
at Telko. However, Telko reported record operating profit, EUR 3.4 million
(1.8), in the third quarter. September was the quarter's best month in terms of
performance. The demand for raw materials sold by Telko and the sales prices
tied to oil price trends have declined on the markets, but Telko's volumes have
continued to grow. Preventive prudence in purchases and the speeding up of
inventory turnover have improved cash flow.
The conglomerate's diversified business creates stability. Big inputs in the
eastern markets create a foundation for strong organic growth over several
years."
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
market leaders in their sectors. They are responsible for their own operations
and 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 schedule.
Aspo's operating segments are ESL Shipping, Leipurin, Telko and Kaukomarkkinat.
Other operations consist of Aspo Group's administration and other operations
that do not belong 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
and other CIS countries; and other countries.
OPERATIONAL PERFORMANCE
General uncertainty about the global economy has increased. It has especially
led to currency fluctuations and a drop in interest rates. Energy and raw
material prices have decreased moderately. The production of basic industry has
remained normal in Aspo's market area. The prices of raw materials sold have
decreased slightly.
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 16 vessels, of which the company owned 12 in full. Three were leased and one
was partially owned.
7-9/2011 7-9/2010 Change 1-9/2011 1-9/2010 1-12/2010
Net sales, MEUR 24,1 20,6 3,5 71,0 59,6 79,5
Operating profit, MEUR 4,2 3,7 0,5 7,8 8,5 11,5
Personnel 186 197 -11 186 197 183
Dry bulk cargo price levels decreased worldwide in the spring, and prices were
up this fall. The Baltic Sea cargo markets remained stable. ESL Shipping's long-
term cargo contracts account for a considerable share of capacity. The transport
demand from the steel and energy industries, both important to the shipping
company, remained normal.
The fleet was in full use, and operations ran normally in good weather
conditions. ESL Shipping's net sales grew by 17%, totaling EUR 24.1 million in
July-September (20.6). The pusher-barge fleet used by the steel industry was
docked and overhauled, which reduced the shipping company's transport capacity
in the summer. The overhaul investment amounted to approximately EUR 6 million
and will extend the vessels' service life by approximately ten years.
The cargo volume carried by ESL Shipping in July-September amounted to 3.5
million tons (3.4). The steel industry accounted for 1.9 million tons (2.3) and
the energy industry for 1.2 million tons (0.9) of the volume.
In the reporting period, m/s Alppila, a vessel of approximately 20,000 dwt, was
handed over from India. The vessel will be in traffic in the Baltic Sea this
fall. The vessel's outfitting and transfer generated costs in the third quarter.
The shipping company agreed on compensation from the shipyard for income losses
caused by the delay in vessel delivery. The overall impact of income losses,
outfitting, and transfer to the Baltic Sea did not have a considerable impact on
the result for the reporting period. The vessel belongs to ESL Shipping's Eira
class and the highest ice class, 1A Super. She is owned by SEB Leasing Oy, which
has leased her to ESL Shipping under a long-term charter agreement.
Two 1A ice-strengthened Supramax vessels ordered from the Korean Hyundai Mipo
shipyard are under construction in Vietnam. The first of the two will be
completed in the fourth quarter this year, and the other one in the second
quarter of 2012. The vessels, financed with a loan facility, will be used in the
company's normal charter services. The outfitting of the vessels and their
transfer to the Baltic Sea will result in expenses.
Leipurin
Leipurin serves the baking and other food industry by supplying ingredients,
production machinery, and production lines, as well as related expertise.
Leipurin operates in Finland, Russia, Poland, the Baltic countries, Ukraine,
Belarus, and Kazakhstan. In Russia, Leipurin has operations in several large
cities in addition to St Petersburg and Moscow. Procurement operations are
international.
7-9/2011 7-9/2010 Change 1-9/2011 1-9/2010 1-12/2010
Net sales, MEUR 29,2 26,5 2,7 93,1 78,1 108,7
Operating profit, MEUR 0,9 0,9 0,0 3,9 2,2 3,6
Personnel 237 217 20 237 217 226
Raw material prices in the food industry stabilized in the reporting period and
returned to their previous high level. The prices of oil-based raw materials and
mill products remained unchanged in the third quarter. The price of sugar has
risen steeply in the EU.
The net sales of Leipurin increased by 10% in the third quarter, amounting to
EUR 29.2 million (26.5). Operating profit amounted to EUR 0.9 million (0.9).
Net sales for bakery raw materials grew and operating profit improved. The net
sales of bakery machinery decreased from the comparable period, since no
significant bakery machinery deliveries were recognized as income in the
reporting period.
As for market areas, the share of emerging markets increased in both net sales
and operating profit. The net sales of Russia, Ukraine and other CIS countries
totaled EUR 6.5 million (6.2) of Leipurin's overall net sales in the third
quarter. Inputs in bakery raw materials and test bakeries in Russia, the
establishment of business in Kazakhstan, Ukraine and Belarus, as well as market
leadership in Finland and the Baltic countries have enabled stable and
profitable growth.
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, 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
cooperates with its regional customers to develop their production and
competitiveness.
7-9/2011 7-9/2010 Change 1-9/2011 1-9/2010 1-12/2010
Net sales, MEUR 55,7 47,6 8,1 159,3 127,3 175,2
Operating profit, MEUR 3,4 1,8 1,6 7,3 5,1 6,8
Personnel 229 202 27 229 202 199
The prices of raw materials sold have decreased from the early part of the year.
Basic demand in industries important to Telko has continued to be good in the
Western markets and continued to grow in the Eastern markets.
Net sales grew by 17% in the third quarter, amounting to EUR 55.7 million
(47.6). Operating profit rose to EUR 3.4 million (1.8), and the operating profit
percentage was 6.1 (3.8).
Telko's business consists of separate sales activities in plastic raw materials
and industrial chemicals, and sales developed well in both areas.
Emerging markets continued to increase their share of net sales. The net sales
of Russia, Ukraine and other CIS countries totaled EUR 23.3 million (17.8), or
42% of Telko's overall net sales, in the third quarter.
Telko has continued its inputs into growing market areas, such as Ukraine and
China, as well as into growth in Russian metropolises. The Rauma terminal
investment, which will be completed in early 2012, continued. The investment
will enable the Finnish chemicals unit to increase the number and added value of
products supplied to customers. In St Petersburg, the preliminary survey of a
potential chemicals handling terminal continued.
Kaukomarkkinat
Kaukomarkkinat specializes in energy efficiency technology, solutions to improve
efficiency in the process industry, and professional electronics. Operations are
based on the products of the best companies in the industry and the ability of
the company's own experts to improve the operations and efficiency of customers.
Kaukomarkkinat operates in Finland, Poland, Russia, China, and Vietnam.
7-9/2011 7-9/2010 Change 1-9/2011 1-9/2010 1-12/2010
Net sales, MEUR 14,7 9,5 5,2 31,6 21,8 32,5
Operating profit, MEUR 1,0 0,6 0,4 1,3 -0,2 0,6
Personnel 84 90 -6 84 90 91
Net sales grew by 55% in the third quarter, amounting to EUR 14.7 million (9.5).
Operating profit improved year-over-year, amounting to EUR 1.0 million (0.6).
Net sales and profitability improved especially thanks to the project sales in
China and air-source heat pump sales in Finland. The January-September sales of
energy-efficiency equipment increased by 23%. The sales of professional
electronics in Finland improved from the previous quarter, but decreased year-
over-year. In Poland, the sales of energy-efficiency equipment has developed
well.
Jukka Nieminen, MSc (Eng.), took over as Managing Director of Kaukomarkkinat on
August 8, 2011.
Other operations
Other operations include Aspo Group's administration and other operations not
belonging to the business units.
7-9/2011 7-9/2010 Change 1-9/2011 1-9/2010 1-12/2010
Net sales, MEUR 0,0 0,0 0,0 0,0 0,0 0,0
Operating profit, MEUR -1,1 -1,0 -0,1 -3,8 -3,2 -4,6
Personnel 13 14 -1 13 14 13
The expenses of other operations amounted to EUR -1.1 million (-1.0).
MANAGEMENT
Aspo renewed its Executive Committee in the reporting period. The new Group
Executive Committee, established on September 1, 2011, replaces the Extended
Executive Committee and Aspo Plc's Executive Committee. The reform will enable
the Group to react faster to the surrounding economic and market environment and
to carry out efficient synergistic development between its business areas. The
managing directors of the different business areas can also be involved in the
development of Group structures at an earlier stage. The new Group Executive
Committee will be chaired by Aki Ojanen, CEO of Aspo Plc, and its members will
include: Markus Karjalainen, Managing Director of ESL Shipping Ltd; Kalle
Kettunen, Managing Director of Telko Ltd; Arto Meitsalo, CFO of Aspo Plc; Jukka
Nieminen, Managing Director of Kaukomarkkinat Ltd; Harri Seppälä, Group
Treasurer of Aspo Plc; and Matti Väänänen, Managing Director of Leipurin Ltd.
NET SALES
January-September
Aspo Group's net sales in January-September grew by 24%, totaling EUR 355.0
million (286.8). All operating segments increased their net sales notably: ESL
Shipping and Leipurin both by 19%. In terms of euro, Telko's net sales growth
was again biggest, totaling EUR 32.0 million, or 25%. The net sales of
Kaukomarkkinat, in turn, saw the greatest relative growth, amounting to 45%.
July-September
Aspo Group's net sales grew by EUR 19.5 million, or 19%, to EUR 123.7 million
(104.2).
Net sales by segment, MEUR
7-9/2011 7-9/2010 Change 1-9/2011 1-9/2010 1-12/2010
ESL Shipping 24,1 20,6 3,5 71,0 59,6 79,5
Leipurin 29,2 26,5 2,7 93,1 78,1 108,7
Telko 55,7 47,6 8,1 159,3 127,3 175,2
Kaukomarkkinat 14,7 9,5 5,2 31,6 21,8 32,5
Other operations 0,0 0,0 0,0 0,0 0,0 0,0
Total 123,7 104,2 19,5 355,0 286,8 395,9
There is no considerable inter-segment net sales.
Net sales by market area, MEUR
7-9/2011 7-9/2010 Change 1-9/2011 1-9/2010 1-12/2010
Finland 43,8 44,6 -0,8 136,7 120,7 167,1
Nordic countries 12,0 13,6 -1,6 38,2 39,5 51,9
Baltic countries 15,0 11,7 3,3 42,2 31,2 43,8
Russia, Ukraine + other CIS
countries 29,9 24,0 5,9 82,9 63,3 88,5
Other countries 23,0 10,3 12,7 55,0 32,1 44,6
Total 123,7 104,2 19,5 355,0 286,8 395,9
The strongest growth was recorded in the market area termed other countries,
which reported a year-over-year increase of 123%. The growth of other countries
came from ESL Shipping's transports originating in Russia, as well as from net
sales growth in China reported by Telko and Kaukomarkkinat. Growth in Russia,
Ukraine and other CIS countries was 25%, while overall net sales growth was 19%.
The importance of the market area consisting of Russia, Ukraine, and other CIS
countries to the Group is emphasized when ESL Shipping's raw material transports
from Russia are included in the figures. Calculated this way, the region's
third-quarter net sales accounted for 33% of the Group's overall net sales.
MEUR 7-9/2011 7-9/2010 Change 1-9/2011 1-9/2010 1-12/2010
Russia, Ukraine + other CIS
countries 40,3 30,0 10,3 110,0 80,7 112,0
EARNINGS
January-September
Aspo Group's operating profit in January-September amounted to EUR 16.5 million
(12.4). ESL Shipping's operating profit was EUR 7.8 million (8.5), Leipurin's
EUR 3.9 million (2.2), Telko's EUR 7.3 million (5.1), and Kaukomarkkinat's EUR
1.3 million (-0.2).
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 -3.8 million (-3.2).
July-September
Aspo Group's operating profit in July-September amounted to EUR 8.4 million
(6.0). ESL Shipping's operating profit was EUR 4.2 million (3.7), while
Leipurin's remained unchanged at EUR 0.9 million (0.9). Telko's operating
profit, EUR 3.4 million (1.8), improved notably, and that of Kaukomarkkinat rose
by EUR 0.4 million to EUR 1.0 million (0.6).
The operating profit of other operations was negative, EUR -1.1 million (-1.0),
and was thus at the planned level.
Operating profit by segment, MEUR
7-9/2011 7-9/2010 Change 1-9/2011 1-9/2010 1-12/2010
ESL Shipping 4,2 3,7 0,5 7,8 8,5 11,5
Leipurin 0,9 0,9 0,0 3,9 2,2 3,6
Telko 3,4 1,8 1,6 7,3 5,1 6,8
Kaukomarkkinat 1,0 0,6 0,4 1,3 -0,2 0,6
Other operations -1,1 -1,0 -0,1 -3,8 -3,2 -4,6
Total 8,4 6,0 2,4 16,5 12,4 17,9
Earnings per share January-September
EPS were EUR 0.32 (0.25) and diluted EPS amounted to EUR 0.32 (0.26). Equity per
share was EUR 2.89 (2.32).
INVESTMENTS
The Group's investments in January-September totaled EUR 32.6 million (11.9).
Most of the investments consisted of advance payments for ESL Shipping's
Supramax vessel orders and of the pusher-barge fleet's overhaul.
Investments by segment, acquisitions excluded, MEUR
7-9/2011 7-9/2010 Change 1-9/2011 1-9/2010 1-12/2010
ESL Shipping 11,9 0,1 11,8 31,0 10,5 11,1
Leipurin 0,3 0,1 0,2 0,6 0,2 0,3
Telko 0,3 0,4 -0,1 0,7 0,7 0,9
Kaukomarkkinat 0,1 0,1 0,0 0,3 0,4 0,8
Other operations 0,0 0,0 0,0 0,0 0,1 0,1
Total 12,6 0,7 11,9 32,6 11,9 13,2
FINANCING
The Group's financing position improved over the comparable period. Compared
with the second quarter, the financing position remained unchanged. Cash and
cash equivalents amounted to EUR 14.9 million (10.7) at period-end. The
consolidated balance sheet had a total of EUR 96.5 million (89.2) in interest-
bearing liabilities. Non-interest-bearing liabilities totaled EUR 76.6 million
(61.6).
Aspo Group's net gearing was 93.1% (123.7), and equity ratio was 34.2% (30.0).
Aspo's financing position was positively affected by the reporting period's
strong cash flow, as well as the rights issue carried out in the second quarter.
It was negatively affected by the advance payments for the vessel investments,
as well as the dividends paid in the second quarter.
The Group's cash flow from operating activities amounted to EUR 11.8 million
(2.2) in January-September. At the end of the period the change in working
capital stood at EUR -6.7 million (-10.4). Cash flow from operating activities
was very strong in the third quarter, totaling EUR 9.7 million.
Cash flow from investments totaled EUR -31.6 million (-10.7). The growth was
affected by advance payments for vessels under construction and the overhaul of
the pusher-barge fleet. The Group's free cash flow in January-September amounted
to EUR -19.8 million (-8.5).
The amount of binding revolving credit facilities signed between Aspo and its
main financing banks stood at EUR 40 million at the end of the period. The
binding revolving credit facilities remained fully unused at period-end. EUR 3
million of Aspo's EUR 50 million commercial paper program had been used at the
end of the period.
Convertible capital loan
On September 30, 2011, Aspo Plc had EUR 10,350,000 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
entitles its holder to convert the loan unit into 8,074 new shares in Aspo. The
conversion rate is EUR 6.19. The loan can be converted annually between January
2 and November 30. The conversion period ends on June 15, 2014.
In January-September 2011, 284,530 new shares were subscribed for with 37 loan
units. No conversions were made in July-September.
Related party loans
Aspo Plc has granted a EUR 3.1 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 on 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 Management Oy may not deposit in pledge or use as
security the Aspo Plc shares it holds without Aspo Plc's written consent. The
company has been consolidated in the financial statements. The loan is market-
based.
RISKS AND RISK MANAGEMENT
Economic growth continued in the first half of 2011, lowering risk levels in the
main market areas of all of Aspo's segments. After the summer, the general
economy and expectations weakened rapidly, which partly kept inflation
expectations in check and lowered interest rates. The uncertainty of the global
economy increases strategic and operational risks in Aspo's business areas.
Strategic risks are reduced by the Group's business being divided into four
segments and business being conducted over a wide geographical area, with
customers from corporations representing many different fields of industry. The
consolidation of principals and either increased or decreased interest in
different market areas raise strategic risks but also create opportunities for
Aspo's companies.
Aspo is growing in emerging market areas where growth risks are also affected by
industrial and commercial investments, interest rate levels, exchange rates, and
customers' liquidity, as well as by changes in legislation and import
regulations. The growth opportunities presented by emerging markets boost
interest among competitors to launch or expand business in these areas. Consumer
behavior is also reflected in the risks generated through B-to-B customers and
the risk levels.
Industrial demand in Western countries has improved in the past 12 months, as
the economy has picked up. However, economic uncertainty makes it more difficult
to predict the demand and business of B-to-B customers and to assess risks. The
changes in demand in emerging markets show a similar trend, but these changes
are even more difficult to predict. The downward changes seen in the global
economy may affect the demand for Aspo's products and services and push risk
levels higher. The uncertainty over the general economy may lead to rapid
changes in raw material prices and demand. Aspo has prepared for this by
diversifying its segments and ensuring the organization can react rapidly.
The increased likelihood of operational risks and their realization will be met
with proactive measures and ongoing monitoring of market changes resulting from
the uncertain economic outlook.
As prices decrease, rapid changes in inventory values may cause 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 has avoided considerable exchange rate losses due to active hedging of
currency positions and currency flow. Credit loss risks may increase as the
general economy weakens, which is why we are keeping a close eye on customers.
Aspo's risk management is based on a well-functioning organization and the
expertise of its staff, which ensure the operation of the risk management
functions included in business processes. Risk analyses of the Group's segments
form the foundation for the continuity plan of each segment. The company reviews
insurance coverage, complete with its risk levels, on a continuous basis in
order 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 charges management with measures needed 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 and 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, including capital
employed, and the related risks are monitored with sector-specific impairment
testing at least annually. Additional impairment tests were not considered to be
necessary in 2011.
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
9/2011 9/2010 Change 12/2010
ESL Shipping 186 197 -11 183
Leipurin 237 217 20 226
Telko 229 202 27 199
Kaukomarkkinat 84 90 -6 91
Other operations 13 14 -1 13
Total 749 720 29 712
At the end of the period, Aspo Group had 749 employees (720).
Changes in the total number of employees result from the increase caused by
organic growth and seasonal fluctuation in the number of ship personnel
employed. The increase in the number of employees was 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 approved 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 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 shareholding program encompasses about 30 persons in Aspo's
management and key personnel.
In 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 shareholding purposes, 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. Aspo Management Oy subscribed to 62,452 shares in
Aspo's rights issue and raised an additional loan of EUR 324,750.40 from Aspo to
finance the purchases. The plan is valid until spring 2014, after which it will
be dissolved 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. As a rule, the participants' holding in Aspo
Management Oy remains valid until the system is dissolved.
SHARE CAPITAL AND SHARES
Aspo Plc's share capital on September 30, 2011 was EUR 17,691,729.57 and the
total number of shares was 30,959,376 of which the company held 328,500 shares;
that is, 1.1% of the share capital. Aspo Plc has one share series. Each share
entitles the shareholder to one vote at the shareholders' meeting. Aspo's share
is quoted on NASDAQ OMX Helsinki Ltd's Mid Cap segment under industrial products
and services.
From January to September 2011 a total of 2,859,794 Aspo Plc shares with a
market value of EUR 21.5 million were traded on NASDAQ OMX Helsinki, in other
words, 9.2% of the stock changed hands. During the period, the stock reached a
high of EUR 9.30 (EUR 8.82 when adjusted for rights issue) and a low of EUR
6.32. The average price was EUR 7.62 and the closing price at the end of the
period was EUR 6.55. At the end of the period, the market value excluding
treasury shares was EUR 200.6 million.
The number of Aspo Plc shareholders was 6,132 at period-end. A total of 754,198
shares, or 2.4% of the share capital, were nominee registered or held by non-
domestic shareholders.
Based on the authorization given by the Annual Shareholders' Meeting, Aspo Plc
initiated a repurchase program and had acquired a total of 74,267 company-held
shares through public trading on NASDAQ OMX Helsinki by the end of the reporting
period.
DECISIONS OF THE ANNUAL SHAREHOLDERS' MEETING
Dividend
In accordance with the decision made by Aspo Plc's Annual Shareholders' Meeting
on April 5, 2011, a dividend of EUR 0.42 per share was paid to shareholders. The
dividend totaled EUR 11,284,140.00. The dividend was paid on April 15, 2011.
Board authorizations
Authorization of the Board to decide on the acquisition of company-held shares
The Annual Shareholders' Meeting authorized the Board of Directors to decide on
the acquisition of a maximum of 500,000 company-held shares using non-restricted
shareholders' equity. The shares will be purchased through public trading, which
means that the purchase will be made irrespective of the shareholders' holdings,
and the price paid for the shares will be the market price of Aspo's shares at
the time of acquisition. The authorization does not exclude the Board's right to
decide on a directed issue. The shares will be used to finance and complete any
acquisitions or other transactions, to carry out the company's incentive
programs, or for other purposes to be decided on by the Board of Directors. The
Board may not exercise the authorization to acquire company-held shares if,
after the acquisition, the company or its subsidiary would possess or have as a
pledge more than 10% of the company's stock. The authorization is valid until
the Annual Shareholders' Meeting of 2012, but no more than 18 months from the
approval at the Shareholders' Meeting.
Authorization of the Board to decide on a share issue involving the transfer of
treasury shares
The shareholders authorized the Board of Directors to decide on a share issue
involving one or more installments, carried out through the transfer of treasury
shares. A maximum of 754,233 shares may be transferred on the basis of the
authorization. The authorization will be used to finance or execute any
acquisitions or other transactions, to carry out the company's shareholding
program, or for other purposes determined by the Board of Directors. The
authorization gives the Board the right to decide on the terms and conditions
applicable to the rights issue, and thus also the right to decide on a directed
share issue deviating from the shareholders' pre-emptive right, as provided by
law. The authorization is valid until the Annual Shareholders' Meeting of 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, whereby
shareholders have the right to subscribe to 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 Board was authorized to decide on
other terms and conditions governing the rights issue. The authorization is
valid until the Annual Shareholders' Meeting of 2012, but no more than 18 months
from the approval at the Shareholders' Meeting. The authorization does not
invalidate the authorization given to the Board to decide on a share issue
involving the transfer of company-held shares.
RIGHTS ISSUE
Aspo's Board of Directors used the authorization given to it by the Annual
Shareholders' Meeting and decided to issue a maximum of 3,838,143 new shares in
a rights issue based on the pre-emptive rights of shareholders. According to the
final result of the issue, a total of 3,785,900 shares (98.6% of the offered
shares) were subscribed for using the subscription right. The remaining 52,243
shares, corresponding to 1.4% of all the shares offered, were subscribed to
without subscription rights. The share subscription percentage was 120.8%. As a
result of the issue, the number of Aspo shares rose by 3,838,143 to 30,959,376.
The Group collected over EUR 19 million in new equity through the rights issue.
EVENTS AFTER THE REPORTING PERIOD
After the reporting period, Aspo Plc signed a new revolving credit facility
agreement of EUR 20 million. The loan maturity is three years, and the purpose
of the loan is to meet the Group's general financing needs.
Aspo Plc will arrange a capital markets day for analysts, financiers, and the
media on December 8, 2011.
OUTLOOK FOR 2011
The decline in the global economy that has continued since spring increases
uncertainty in the market and makes it more difficult to forecast future
development. Nevertheless, Aspo's current structure creates a good basis for
long-term growth. The Group will continue its inputs into the emerging Eastern
markets.
Aspo maintains its guidance unchanged. The company's net sales will increase by
10-20% and operating profit will improve.
ESL Shipping
The net sales growth of ESL Shipping is expected to continue. Activities in the
Baltic Sea transport market are estimated to remain at the current satisfactory
level, and the prices of ESL Shipping's multi-year agreements will stay at the
current level. International cargo prices are expected to remain low.
The shipping company's vessel capacity declined in 2007-2010, but grew with the
reception of the Eira-class vessel in the reporting period. To secure the
increasing transport volumes in the Baltic Sea and the capacity of multi-year
contracts, the time charters of m/s Beatrix and m/s Nassauborg have been further
extended until summer 2012. A considerable share of the capacity for 2011 has
been handled through long-term price and transport agreements. The steel
industry's transport volume is expected to decrease and the energy sector's
cargo volume to increase from the previous year.
The shipping company's capacity will increase notably in the following three
quarters. Construction of the two vessels that ESL Shipping ordered from Vinash,
a Vietnamese shipyard belonging to the Korean company Hyundai Mipo, is on
schedule. According to the schedule, the first vessel will be handed over in
January 2012, but the handover may still take place this year. According to the
schedule, the second vessel is to be handed over in the second quarter of 2012.
The vessels are the first Supramax vessels capable of operating in the Baltic
ice conditions, and they will be registered in the 1A ice class. The outfitting
of the vessels and their transfer to the Baltic Sea will result in expenses.
Both vessels were financed with a bank loan.
The amendment to the tonnage tax legislation prepared by the Finnish government
and awaiting approval from the EU commission would have a considerable positive
effect on ESL Shipping's post-tax result if applied.
Leipurin
Organic growth is expected to continue. Food industry demand and prices are
expected to remain at their current good level. The international financial
crisis may affect the price levels of raw materials sold, as well as the
liquidity of customer companies. Exchange rate changes may cause exchange rate
losses.
The offices that were established in Russia, Ukraine, and Kazakhstan create a
good foundation for several years of growth in bakery raw material sales. Bakery
machinery sales are predicted to grow from 2010. Income from bakery machinery
projects is expected to be recognized in the fourth quarter. Leipurin continues
to look into opportunities to further expand its product range of bakery
machinery, especially to meet the needs of Eastern growth markets. The
establishment of other food industry operations in Russia, Kazakhstan and the
Baltic countries is not expected to notably affect the profitability of Leipurin
in 2011.
Telko
Organic growth is expected to continue. The offices set up in Russia,
Kazakhstan, and China form a good foundation for several years of growth. The
future trend in the sector's demand is difficult to forecast. The international
financial crisis may affect the price levels of raw materials sold, demand, and
the liquidity of customer companies. Exchange rate changes may cause exchange
rate losses. A possible steep decline in the prices of raw materials sold may
lead to write-downs in inventories.
Telko continues to expand in line with its strategy in Russia, Ukraine, other
CIS countries, and China. The company will open new offices in major Russian
cities. Telko is looking into a potential investment in a chemicals handling
terminal in St Petersburg. The terminal would ensure the logistical resources
needed for multi-year growth in the chemicals business, as well as customer-
specific upgrading of products in Russia. Owing to the financial crisis in
Belarus, the country's currency is not used for product sales in the region. The
Rauma terminal investment has progressed as planned and will be completed in
early 2012.
Kaukomarkkinat
The international economic crisis makes it difficult to forecast the future.
Kaukomarkkinat will specify its strategy in 2011. Kaukomarkkinat aims to
increase the product range of its local energy solutions, especially in Finland.
The demand for products and services is expected to grow due to a long-term
increase in energy prices and the new EU directives aimed at generating energy
savings.
The sales of solar energy systems, biofuel power plants, and air-source heat
pump solutions are expected to remain at least at the present level. The number
of industrial turbine and heat exchanger projects is expected to increase from
2010.
The order book for Chinese project deliveries has improved significantly from
2010 and covers all of 2011.
Helsinki, October 26, 2011
ASPO Plc
Board of Directors
ASPO GROUP INCOME STATEMENT
7-9/2011 7-9/2010
MEUR % MEUR %
Net sales 123.7 100.0 104.2 100.0
Other operating income 0.7 0.6 0.3 0.3
Depreciation and write-downs -2.1 -1.7 -2.0 -1.9
Operating profit 8.4 6.8 6.0 5.8
Financial income and expenses -1.6 -1.3 -1.2 -1.2
Profit before taxes 6.8 5.5 4.9 4.7
Profit for the period 5.0 4.0 3.6 3.5
Other comprehensive income
Translation differences -1.2 -0.6
Cash flow hedges 1.6 -3.4
Income tax on other comprehensive income -0.3 0.9
Other comprehensive income for the year, net of taxes 0.1 -3.1
Total comprehensive income 5.1 0.5
Profit attributable to shareholders 5.0 3.5
Non-controlling interest 0.0 0.1
Total comprehensive income attributable to shareholders 5.1 0.4
Non-controlling interest 0.0 0.1
1-9/2011 1-9/2010 1-12/2010
MEUR % MEUR % MEUR %
Net sales 355.0 100.0 286.8 100.0 395.9 100.0
Other operating income 0.9 0.3 1.0 0.3 1.5 0.4
Depreciation and write-downs -6.1 -1.7 -6.1 -2.1 -8.1 -2.0
Operating profit 16.5 4.6 12.4 4.3 17.9 4.5
Financial income and expenses -3.9 -1.1 -3.0 -1.0 -3.8 -1.0
Profit before taxes 12.6 3.5 9.4 3.3 14.1 3.6
Profit for the period 9.3 2.6 7.0 2.4 10.4 2.6
Other comprehensive income
Translation differences -0.8 0.6 1.2
Cash flow hedges 0.3 -1.5 -0.9
Income tax on other comprehensive income 0.0 0.4 0.2
Other comprehensive income for the year, net
of taxes -0.5 -0.5 0.5
Total comprehensive income 8.8 6.5 10.9
Profit attributable to shareholders 9.3 6.9 10.3
Non-controlling interest 0.0 0.1 0.1
Total comprehensive income attributable to
shareholders 8.8 6.4 10.8
Non-controlling interest 0.0 0.1 0.1
ASPO GROUP BALANCE SHEET
9/2011 9/2010 Change 12/2010
MEUR MEUR % MEUR
Assets
Non-current assets
Intangible assets 15,6 15,8 -1,3 15,9
Goodwill 40,5 40,4 0,2 40,6
Tangible assets 80,8 55,4 45,8 54,4
Available-for-sale assets 0,2 0,2 0,0 0,2
Long-term receivables 1,4 1,5 -6,7 1,3
Shares in associated companies 1,7 1,3 30,8 1,7
Total non-current assets 140,2 114,6 22,3 114,1
Current assets
Inventories 45,1 40,1 12,5 44,9
Sales and other receivables 60,5 49,0 23,5 46,7
Cash and bank deposits 14,9 10,7 39,3 7,1
Total current assets 120,5 99,8 20,7 98,7
Total assets 260,7 214,4 21,6 212,8
Shareholders' equity and liabilities
Shareholders' equity
Share capital 17,7 17,7 0,0 17,7
Other shareholders' equity 69,2 45,8 51,1 51,1
Shareholders' equity attributable to equity holders
of the parent 86,9 63,5 36,9 68,8
Non-controlling interest 0,7 0,1 0,0 0,7
Long-term liabilities 102,9 59,8 72,1 78,5
Short-term liabilities 70,2 91,0 -22,9 64,8
Total shareholders' equity and liabilities 260,7 214,4 21,6 212,8
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 9,3 0,0
Translation difference -0,8
Cash flow hedge, net of taxes 0,3
Total comprehensive income 0,3 -0,8 9,3 8,8 0,0
Transactions with owners:
Dividend payment -11,1
Share repurchase -0,5
Share-based payment 0,3
Conversion of convertible bond 1,5
Rights issue 19,2
Total transactions with owners 20,7 -0,5 -10,8 9,4
Balance at 30.9.2011 17,7 4,3 -0,4 26,1 -5,0 -1,2 45,4 86,9 0,7 87,6
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 6,9 0,1
Translation difference 0,6
Cash flow hedge, net of taxes -1,1
Total comprehensive income -1,1 0,6 6,9 6,4 0,1
Transactions with owners:
Dividend payment -10,8
Share-based payment 0,2 0,1 0,1
Conversion of convertible bond 0,5
Total transactions with owners 0,7 0,1 -10,7 -9,9
Balance at 30.9.2010 17,7 4,3 -1,1 3,5 -3,6 -1,0 43,7 63,5 0,1 63,6
ASPO GROUP CASH FLOW STATEMENT
1-9/2011 1-9/2010 1-12/2010
MEUR MEUR MEUR
OPERATIONAL CASH FLOW
Operating profit 16,5 12,5 17,9
Adjustments to operating profit 6,8 6,3 8,3
Change in working capital -6,7 -10,4 -8,5
Interest paid -3,5 -4,6 -4,8
Interest received 0,5 1,2 1,2
Taxes paid -1,8 -2,8 -4,5
Total operational cash flow 11,8 2,2 9,6
INVESTMENTS
Investments in tangible and
intangible assets -31,6 -11,2 -11,9
Gains on the sale of tangible and intangible
assets 0,3 0,6
Purchases of business operations -0,3
Associated companies acquired 0,2 0,2
Total cash flow from investments -31,6 -10,7 -11,4
FINANCING
Rights issue 19,2
Change in short-term borrowings -5,4 17,1 -14,9
Change in long-term borrowings 25,4 1,4 24,0
Share repurchase -0,5 -0,9
Dividends paid -11,1 -10,8 -10,8
Total financing 27,6 7,7 -2,6
Increase / Decrease in liquid funds 7,8 -0,8 -4,4
Liquid funds in beginning of year 7,1 11,5 11,5
Liquid funds at period end 14,9 10,7 7,1
KEY FIGURES AND RATIOS 1-9/2011 1-9/2010 1-12/2010
Earnings per share, EUR 0,32 0,25 0,38
EPS adjusted for dilution,
EUR 0,32 0,26 0,39
Equity per share, EUR 2,89 2,32 2,49
Equity ratio, % 34,2 30,0 33,2
Gearing, % 93,1 123,7 101,5
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 comparable key figures presented in this
review have been adjusted for the rights issue that has been carried out. The
information in this report is unaudited.
Helsinki October 26, 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 October
26, 2011, at 14:00, at the Paavo Nurmi cabinet at Hotel Kämp, Pohjoisesplanadi
28, 00100 Helsinki.
DISTRIBUTION:
NASDAQ OMX Helsinki
Key media
www.aspo.com
[HUG#1557790]
