ASPO Plc STOCK EXCHANGE BULLETIN October 25, 2007 at 9:00
a.m.
ASPO INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2007
Net sales grew to EUR 195.2 million, the operating profit was EUR
21.1 million
- Aspo Group's net sales in January-September were EUR 195.2 million
(EUR 159.5 million)
- The operating profit totaled EUR 21.1 million (EUR 7.5 million)
including a non-recurring sales profit of EUR 10.2 million from sale
of vessel
- The profit before tax was EUR 19.6 million (EUR 6.1 million)
- The earnings per share totaled EUR 0.57 (EUR 0.18)
- The outlook for 2007 remains unchanged, and we expect the full-year
operating profit to improve on the previous year.
KEY FIGURES
1-9/07 1-9/06 1-12/06
Net sales, MEUR 195.2 159.5 225.9
Operating profit, MEUR 21.1 7.5 12.8
Share of net sales, % 10.8 4.7 5.7
Profit before tax, MEUR 19.6 6.1 11.1
Share of net sales, % 10.0 3.8 4.9
Earnings per share, EUR 0.57 0.18 0.32
Diluted earnings per share, EUR 0.52 0.18 0.31
Comparable earnings per share, EUR 0.27 0.18 0.32
Equity per share, EUR 2.42 2.06 2.26
Equity ratio, % 42.8 39.3 45.2
Gearing, % 41.5 55.0 35.7
Gustav Nyberg, CEO of Aspo:"Aspo's operations in Russia and the Ukraine have been successful
this year. The share of the eastern markets already comprises over
one third of Aspo Group's net sales.
Positive development continued in the third quarter. From January to
September, all Divisions saw an increase in net sales, and earnings
improved.
Despite the Shipping Division's diminished transport capacity,
earnings improved in the third quarter in comparison with the
previous year. The third quarter result of the Chemicals Division
fell short of last year. The Systems Division slightly improved on
last year.
The overall growth of Aspo's net sales during January-September
continued strong and operating profit excluding non-recurring items
grew as profitability improved. This development was mainly driven by
the Shipping Division's enhanced operations and the Chemicals
Division's business acquisition at the beginning of the year.
The outlook for 2007 remains unchanged."
OPERATIONAL PERFORMANCE
The market situation remained stable during the third quarter. The
euro-denominated price of crude oil remained at an all-time high.
Price trends in chemicals were unstable, and the prices of certain
raw materials took a downward turn. Business conditions in the
Shipping Division's markets further strengthened. The investment
demand in the service station business remained at a good level.
Russia and other CIS markets continued at the forefront of growth and
as a motor for good profitability development in all Aspo's
divisions.
Aspo Chemicals
The Aspo Chemicals Division consists of Aspokem Ltd and its
subsidiaries. They distribute, store and market chemicals and plastic
raw materials in Finland, Denmark, Sweden, Estonia, Latvia,
Lithuania, Russia and Ukraine. The Division engages in processing
activities in Finland and Latvia. Aspokem is also engaged in
East-West chemical trading.
1-9/07 1-9/06 1-12/06
Net Sales, MEUR 91.8 62.9 89.1
Operating Profit, MEUR 2.5 2.0 2.7
Personnel 128 100 104
Price trends in petrochemicals were unstable. The prices of certain
products went down, whereas others remained unchanged or went up. The
price of crude oil rose again to an all-time high level. However, the
euro strength against the dollar kept the development in the Baltic
region at a neutral level.
Strong growth continued in the Chemicals Division's net sales, and
the Division's position in the Nordic countries strengthened thanks
to the business acquisition made at the beginning of the year. The
organic growth of Russia and the Ukraine continued strong in the
eastern markets. As for product groups, the net sales of plastic raw
materials grew in all markets.
Chemicals' operating profit clearly rose from last year but earnings
in relation to net sales did not reach last year's level. As for
operating profit, the development varied considerably in different
markets and different qualities. Domestic performance was the weakest
as a whole; due to modest growth in volumes and tough competition,
the result of the quarter and the review period fell short of last
year. In the Baltic countries, the result remained at last year's
level, and in Russia and the Ukraine the result was growing.
During the review period we completed the organization for starting
up business in Belarus. The organization has also been strengthened
in Finland and Sweden.
At the beginning of the year, Chemicals acquired the entire share
capital of the Danish Wilfert Chemical Nordic A/S. Founded in 1984,
the company employs ten people and is primarily engaged in the
distribution of plastic raw materials in Denmark, Sweden, Norway and
Finland. Last year the company recorded net sales of approximately
EUR 21 million and an operating profit of some EUR 0.6 million. In
accordance with the agreement, business operations were immediately
transferred to the buyer and the figures have been consolidated as of
the beginning of the year.
Aspo Shipping
The Aspo Shipping Division consists of ESL Shipping and its
subsidiaries and affiliate. ESL Shipping is the leading dry bulk sea
transport company operating in the Baltic Sea area. As of the end of
the period the fleet operated by the company comprised 18 units.
1-9/07 1-9/06 1-12/06
Net Sales, MEUR 62.9 60.0 82.7
Operating Profit, MEUR 21.0 8.1 12.6
Personnel 240 257 257
In the global bulk freight markets, demand was strong and freight
rates continued to rise. The market situation in the Baltic Sea area
also remained good and freights rose, partly due to higher fuel
prices.
The Shipping Division's transport capacity was smaller than last year
because the biggest vessel of the fleet was sold in May. However, the
enhancement of the fleet's operations succeeded as planned. There
were fewer of the cargo availability problems that hampered
operations last year but some of them still existed.
Due to diminished capacity, net sales were somewhat reduced during
the third quarter in comparison to last year. Net sales in the review
period as a whole continued to grow slightly. Profitability further
improved in the third quarter. Operational result excluding
non-recurring items improved from last year, mainly due to more
efficient operations, more balanced availability of goods and
successful cost management.
The demand for shipping in the steel industry remained good
throughout January-September. The shipping volume was approximately
11.4 (10.6) million tons, of which the proportion of the energy
industry was over 60%. The proportion of the US dollar in invoiced
sales has continuously decreased. During the third quarter it
comprised approximately 20% on average.
The investment program in the Shipping Division proceeded as planned.
The first of the two 20,000 gross register ton vessels that are being
constructed in India should be completed next summer, with the other
due in 2009.
Aspo Systems
The Aspo Systems Division comprises Autotank Ltd and its
subsidiaries. Autotank is the leading Nordic supplier of service
station maintenance services and automated dispensing systems.
Autotank has subsidiaries in Sweden, Norway, Estonia, Latvia,
Lithuania and Poland, as well as a joint venture in Russia.
1-9/07 1-9/06 1-12/06
Net Sales, MEUR 40.5 36.6 54.1
Operating Profit, MEUR -0.4 -1.4 -1.0
Personnel 307 326 323
Deliveries of the equipment and software required for the chip card
introduction continued but did not reach the targeted level. The
order book remained at a good level. The demand for fuel dispensing
equipment was good and the deliveries even surpassed the set targets,
especially in the Russian, Belarussian and Ukrainian markets. The
operations of the maintenance services, the biggest unit of the
Division, were mainly profitable during the review period, but
heavily unprofitable in Sweden.
Net sales continued to grow moderately. Due to the cyclic nature of
the operations, profitability in the third quarter was weaker than in
the second quarter. The Division made a loss but the result was
clearly better than for the January-September period last year.
Losses for the third quarter were reduced by half in comparison with
last year but remained clearly below the set targets. This was mainly
due to the Swedish markets where tough competition in service and
maintenance kept the operations heavily unprofitable.
NET SALES
Aspo Group's net sales for January-September 2007 amounted to EUR
195.2 million compared with EUR 159.5 million in the corresponding
period last year. All Divisions were able to increase their net sales
over the previous year.
Net Sales by Division, MEUR
7-9/07 7-9/06 Change 1-9/07 1-9/06 1-12/2006
Chemicals 31.5 22.5 9.0 91.8 62.9 89.1
Shipping 20.5 21.7 -1.2 62.9 60.0 82.7
Systems 14.4 12.8 1.6 40.5 36.6 54.1
TOTAL 66.4 57.0 9.4 195.2 159.5 225.9
Net Sales by Market Area, MEUR
7-9/07 7-9/06 Change 1-9/07 1-9/06 1-12/2006
Finland 34.0 34.5 -0.5 104.6 100.5 137.4
Nordic countries 18.2 11.7 6.5 53.4 33.1 47.8
Baltic countries 4.3 3.8 0.5 12.7 10.4 15.6
Russia etc. 9.9 7.0 2.9 24.5 15.5 25.1
TOTAL 66.4 57.0 9.4 195.2 159.5 225.9
The significance of Russia and other CIS markets in Aspo's business
will be further emphasized when the Shipping Division's raw material
transports from Russia are included in the Russian market area. When
the calculation is carried out this way, the distribution of net
sales between Finland and Russia is as follows:
MEUR 7-9/07 7-9/06 Change 1-9/07 1-9/06 1-12/2006
Finland 30.0 25.3 4.7 77.6 72.7 100.6
Russia etc. 13.9 16.2 -2.3 51.5 43.3 61.9
EARNINGS
Aspo Group recorded an operating profit of EUR 21.1 million or 10.8%
of net sales including a non-recurring sales profit of EUR 10.2
million (EUR 7.5 million, or 4.7% of net sales). Planned depreciation
totaled EUR 7.4 million
(EUR 6.9 million). The Group's net financial costs amounted to EUR
1.5 million (EUR 1.4 million).
The profit before taxes was EUR 19.6 million (EUR 6.1 million) and
the net profit for the period totaled EUR 14.7 million (EUR 4.6
million).
Operating Profit by Division, MEUR
7-9/07 7-9/06 Change 1-9/07 1-9/06 1-12/2006
Chemicals 0.6 0.7 -0.1 2.5 2.0 2.7
Shipping 3.8 3.4 0.4 21.0 8.1 12.6
Systems -0.1 -0.2 0.1 -0.4 -1.4 -1.0
Group Administration -0.6 -0.4 -0.2 -2.0 -1.2 -1.5
TOTAL 3.7 3.5 0.2 21.1 7.5 12.8
INVESTMENTS
The Group invested EUR 9.4 million (EUR 9.6 million) in
January-September, primarily in Chemicals Division's business
acquisition and advance payments on Shipping Division's vessel
purchases.
Investments by Division, MEUR
7-9/07 7-9/06 1-9/07 1-9/06 1-12/06
Chemicals 0.0 0.1 4.8 1.2 1.3
Shipping 0.0 0.0 3.8 7.3 7.3
Systems 0.3 0.6 0.7 1.0 1.4
Group Administration 0.0 0.0 0.1 0.1 0.2
TOTAL 0.3 0.7 9.4 9.6 10.2
FINANCING
The Group's financial situation was healthy. Liquid assets totaled
EUR 11.9 million (EUR 9.4 million) at the end of the period. There
was a total of EUR 37.9 million (EUR 38.2 million) in
interest-bearing liabilities on the consolidated balance sheet at the
end of the period. Interest-free liabilities totaled EUR 38.1 million
(EUR 32.6 million). The Group's gearing was 41.5% (55.0%) and the
equity ratio adjusted for deferred tax liabilities was 42.8% (39.3%).
The increase in the Group's working capital during the review period
was caused by the acquisition of the chemicals business, the growth
of business in Russia and Ukraine, and the increased current assets
and receivables in the Systems Division's Swedish subsidiary.
PERSONNEL
Aspo Group's personnel averaged 685 (692) from January 1 to September
30, 2007, compared with 693 for the entire financial year 2006.
Average Personnel by Division
1-9/07 1-9/06 1-12/06
Chemicals 128 100 104
Shipping 240 257 257
Systems 307 326 323
Group Administration 10 9 9
TOTAL 685 692 693
SHARES AND SHAREHOLDERS
From January to September 2007 a total of 3,454,289 Aspo Plc shares
worth EUR 24.5 million were traded on the OMX Nordic Exchange in
Helsinki, or 13.2% of the stock changed hands. During the period, the
stock reached a high of EUR 7.80 and a low of EUR 6.45. The average
price was EUR 7.09 and the closing price EUR 6.71. The market
capitalization excluding treasury shares was EUR 173.5 million.
At the end of the period, Aspo Plc's registered share capital was EUR
17,534,426.97 and the number of shares was 26,171,283. The company
held 319,789 of its own shares, representing 1.22 percent of Aspo
Plc's share capital.
During the period, the company has disposed of 100,840 Aspo Plc
shares in partial payment for the Chemicals' acquisition and 5,000
shares in accordance with the company's management incentive
program.
At the end of the period, the number of Aspo Plc shareholders was
4,890. A total of 703,704 shares, or 2.7% of the total share capital
were nominee registered or held by non-domestic shareholders.
PROSPECTS FOR 2007
All of Aspo's Divisions are maintaining a positive outlook for this
year. We expect to see continued growth in net sales from the Group's
ongoing operations, and the acquisition made by the Chemicals
Division early this year is expected to further boost growth.
Furthermore, the Group's units in the eastern markets appear to show
sustained growth. The Group's operating profit is expected to improve
on the previous year.
Chemicals
The global chemicals markets have seen considerable price
fluctuations in the past few years, and these are expected to
continue. Manufacturers are severely cutting the production capacity
for low-profit products. As demand exceeds supply, prices tend to
rise quickly. The fluctuations in crude oil prices and the dollar are
likely to continue.
The Chemicals Division appears to be continuing on a growth track in
the near-eastern markets. The business acquisition strengthened the
Division's position in the Scandinavian markets, and it is expected
to have a positive impact on the Division's performance this year and
in the longer term.
As a whole, net sales from the Division's ongoing operations are
expected to grow this year. In addition, the business acquisition
made early this year will further increase net sales. According to
our current estimates, the Division has every opportunity to improve
on last year's operating profit.
The biggest risks for the Chemicals Division have to do with the
potential negative effects of the European Union's chemical
regulation (REACH). In the worst-case scenario, the legislation will
restrict the manufacture and use of chemicals in the European Union.
Other risks include political and financial instability in Russia and
the Ukraine.
Shipping
The international freight market is expected to remain stronger than
on average, at least for the time being. Brisk demand for freight
transport is expected in the Baltic Sea as well.
The Shipping Division's transport capacity was diminished slightly in
the spring after the sale of the Ms Arkadia, decreasing the
Division's net sales in the second half of the year. However, the
whole year's net sales are not expected to decrease. Ms Credo, the
new vessel commissioned last year, has now been successfully
integrated into the fleet. The shipping line's operations were
enhanced in the first half of the year, and we expect the operations
to continue more efficiently than before, also towards the end of the
year. The Shipping Division has good chances of improving its
profitability this year, provided the problems we have faced
concerning the availability of goods will not get worse.
Foreign exchange risks associated with the shipping business have
mostly been hedged by forward contracts; our customer contracts
include special bunker clauses to protect ourselves against the
risks associated with the fluctuation in fuel prices.
Systems
We expect to see sustained and brisk market conditions in the fuel
distribution business in 2007. In addition to technology investments,
other developments supporting this view include the growing
distribution of new fuel mixtures as well as the consolidation of the
sector.
Deliveries of the equipment required for the chip card introduction
picked up pace in the first half of the year. The Systems Division's
order book has remained at a good level. At the beginning of their
life-cycle, however, the profitability of new technical solutions is
weaker. We expect to see moderate growth in net sales. We also expect
to see profitability improvements towards year-end, and to see the
operations generate profit.
Helsinki, October 25, 2007
ASPO Plc
Board of Directors
ASPO GROUP INCOME STATEMENT
7-9/07 7-9/06
MEUR % MEUR %
NET SALES 66.4 100.0 57.0 100.0
Other operating income 0.1 0.2 0.0 0.0
Depreciation and write-downs -2.4 -3.6 -2.5 -4.4
OPERATING PROFIT 3.7 5.6 3.5 6.1
Financial income and expenses -0.4 -0.6 -0.5 -0.9
PROFIT BEFORE TAXES 3.3 5.0 3.0 5.3
PROFIT FOR THE PERIOD 2.6 3.9 2.3 4.0
Profit attributable
to shareholders 2.5 2.3
Minority interest
1-9/07 1-9/06 1-12/06
MEUR % MEUR % MEUR %
NET SALES 195.2 100.0 159.5 100.0 225.9 100.0
Other operating income 10.3 5.3 0.7 0.4 0.9 0.4
Depreciation and write-downs -7.4 -3.8 -6.9 -4.3 -9.3 -4.1
OPERATING PROFIT 21.1 10.8 7.5 4.7 12.8 5.7
Financial income and expenses -1.5 -0.8 -1.4 -0.9 -1.8 -0.8
PROFIT BEFORE TAXES 19.6 10.0 6.1 3.8 11.1 4.9
PROFIT FOR THE PERIOD 14.7 7.5 4.6 2.9 8.2 3.6
Profit attributable
to shareholders 14.6 4.6 8.2
Minority interest 0.1
ASPO GROUP BALANCE SHEET 9/07 9/06 Change 12/06
MEUR MEUR % MEUR
ASSETS
Non-Current Assets
Intangible assets 1.6 0.5 220.0 1.2
Goodwill 10.8 8.1 33.3 8.2
Tangible assets 51.4 57.1 -10.0 54.4
Available-for-sale assets 0.2 0.2 0.0 0.2
Long-term receivables 2.3 1.9 21.1 2.3
Shares in associated companies 1.4 1.2 16.7 1.4
Total Non-Current Assets 67.7 69.0 -1.9 67.7
Current Assets
Inventories 23.4 17.1 36.8 17.7
Sales and other receivables 45.0 38.4 17.2 34.9
Cash and bank deposits 11.9 9.4 26.6 9.1
Total Current Assets 80.3 64.9 23.7 61.7
TOTAL ASSETS 148.0 133.9 10.5 129.4
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' Equity
Share capital 17.5 17.2 1.7 17.5
Other shareholders' equity 45.3 35.2 28.7 40.7
Shareholders' equity attributable
to equity holders of the parent 62.6 52.3 19.7 58.1
Minority interest 0.2 0.1 0.1
Long-term liabilities 27.1 32.2 -15.8 28.7
Short-term liabilities 58.1 49.3 17.8 42.5
TOTAL SHAREHOLDERS' EQUITY
AND LIABILITIES 148.0 133.9 10.5 129.4
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
A = Share Capital
B = Premium Fund
C = Fair Value Fund
D = Other Funds
E = Repurchased Shares
F = Translation Difference
G = Retained Earnings
H = Total
I = Minority Interest
J = Total Shareholders' Equity
MEUR A B C D E F G H I J
Balance at
12/31/2006 17.5 2.5 0.0 0.2 -1.8 0.1 39.7 58.1 0.1 58.2
Translation
differences 0.1
Increase in
hedging reserve -0.5 0.0
Share of
deferred taxes 0.0
Net profit for
the period 14.6 0.1
Dividend payment -10.5
Share repurchase -0.5
Share disposal 0.2 0.4
Conversion of
convertible bond
to shares 0.0 0.6
Balance at
9/30/2007 17.5 3.1 -0.5 0.4 -1.9 0.2 43.8 62.6 0.2 62.8
Balance at
12/31/2005 17.2 0.5 0.3 0.2 -1.9 0.0 40.9 57.4 0.1 57.4
IAS 8 adjustment*) 0.8
Balance at
1/1/2006 17.2 0.5 0.3 0.2 -1.9 0.0 41.7 58.2 0.1 58.3
Translation
differences -0.1 0.0
Amoount carried to
income statement -0.4
Share of
deferred taxes 0.1
Net profit for
the period 4.6 0.0
Dividend payment -10.1 0.0
Share disposal 0.0 0.0
Conversion of
convertible bond
to shares 0.0 0.1
Change in
minority interest -0.1 0.1
Balance at
9/30/2006 17.2 0.6 0.0 0.2 -1.8 0.0 36.1 52.3 0.2 52.5
*) Comparative data has been adjusted with an IAS 8 compliant change
in accounting principles
Accounting principles
All figures are unaudited. This interim report has been prepared in
accordance with the IAS 34 (Interim Reports) standard. The accounting
principles that were applied in the preparation of the financial
statements of December 31, 2006 have been applied in the preparation
of this interim report. As of January 1, 2007, the Group has adopted
the following new standards: IFRS 7, Financial Instruments:
Disclosures and IAS 1 (amendment), Presentation of Financial
Statements. The Group estimates that the adoption of these standards
will have no material influence on the interim report.
ASPO GROUP CASH FLOW STATEMENT
1-9/07 1-9/06 1-12/06
MEUR MEUR MEUR
Net Operational Cash Flow 4.5 8.7 12.3
INVESTMENTS
Investments in tangible and
intangible assets -4.8 -9.5 -10.2
Gains on the sale of tangible
and intangible assets 10.3 1.0 1.0
Purchases of subsidiary shares -4.7
Total Cash Flow From Investments 0.8 -8.5 -9.2
FINANCING
Repurchase of shares -0.5
Share disposal 0.0 0.1 0.1
Change in short-term borrowings 8.1 13.5 7.2
Change in short-term receivables -5.2
Change in long-term receivables 0.1 -0.1
Change in long-term borrowings -2.0 -1.6 -3.5
Dividends paid -10.6 -10.1 -10.2
Total Financing -4.9 -3.3 -6.5
Impact of changes in exchange rates 0.2 0.0 0.0
Increase / Decrease in Liquid Funds 0.6 -3.1 -3.4
Liquid funds in beginning of year 9.1 12.5 12.5
Liquid funds and used overdraft
limit at period end 9.7
Used overdraft limit at period end 2.2
Liquid funds at period end 11.9 9.4 9.1
KEY FIGURES AND RATIOS
1-9/07 1-9/06 1-12/06
Earnings/Share, EUR 0.57 0.18 0.32
Diluted Earnings/Share, EUR 0.52 0.18 0.31
Comparable Earnings/Share, EUR 0.27 0.18 0.32
Equity/Share, EUR 2.42 2.06 2.26
Equity Ratio, % 42.8 39.3 45.2
Gearing, % 41.5 55.0 35.7
Wilfert Business Combination, preliminary
ASSETS
Tangible assets 0.1
Inventories 2.4
Sales and other receivables 3.4
TOTAL ASSETS 5.9
Long-term liabilities 0.4
Short-term liabilities 3.5
Net Assets 2.0
Goodwill arising from the acquisition 2.4
TOTAL ACQUISITION COST 4.4
The total acquisition cost of EUR 4.4 million comprise costs of EUR
0.1 million directly attributable to the acquisition. A part of the
acquisition cost (EUR 0.7 million) was paid in Aspo Plc shares.
Paid in cash -3.7
Overdraft limit of the acquired subsidiary -0.8
PRESS CONFERENCE
We have arranged a press conference for the analysts and media to be
held today starting at 10:00 a.m. at Restaurant Palace Gourmet,
Eteläranta 10, Helsinki.
ASPO Plc
Gustav Nyberg Dick Blomqvist
CEO CFO
For further information, contact:
Gustav Nyberg, tel. +358 9 7595 256 or +358 40 503 6420
gustav.nyberg@aspo.fi
DISTRIBUTION:
OMX Nordic Exchange
The Main Media
www.aspo.fi
Aspo Group focuses on logistical services for industry. Aspo serves
businesses in the energy and industrial process sectors requiring
strong specialist and logistical know-how. Aspo's net sales in 2006
totaled EUR 225.9 million. About 39% of this came from Aspo
Chemicals, 37% from Aspo Shipping and 24% from Aspo Systems.
