Vapo Oy Interim Report 1.1.-31.12.2013
October–December
– Group turnover in the October–December period was EUR 164.0 million (EUR 155.6 million in the same period in 2012).
– Operating margin (EBITDA) was EUR 25.0 million, or 15.2% of turnover (EUR 8.0 million, 5.6%).
– The operating result was EUR 11.3 million, or 6.9% of turnover (EUR -3.1 million, -2.0%). The operating result includes one-off items of EUR 4.0 million (EUR 4.1 million).
– Free cash flow before taxes was EUR -2.1 million (EUR -10.9 million).
– Gross investments were EUR 18.3 million (EUR 12.9 million).
– Net investments were EUR 1.3 million (EUR 11.4 million).
– 3.0 TWh of energy peat was delivered (3.1 TWh).
January–December
– Group turnover in the January–December period was EUR 616.7 million (EUR 652.9 million in the same period in 2012).
– Operating margin (EBITDA) was EUR 78.7 million, or 12.8% of turnover (EUR 48.9 million, 7.5%).
– The operating result was EUR 31.7 million, or 5.1% of turnover (EUR 5.8 million, 0.9%). The operating result includes one-off items of EUR 6.9 million (EUR 15.3 million).
– The pre-tax return on invested capital (ROIC) was 4.7% (0.9%).
– Free cash flow before taxes was EUR 0.3 million (EUR 64.2 million).
– Gross investments were EUR 54.7 million, ratio to depreciation 1.3 (EUR 48.0 million, 1.1).
– Net investments were EUR 35.7 million, ratio to depreciation 0.8 (EUR 26.9 million, 0.6).
– The equity ratio on 31 December 2013 was 37.1% (37.1%).
– Interest-bearing net debt on 31 December 2013 was EUR 376.0 million (EUR 355.9 million).
– The ratio of interest-bearing net debt to operating margin (net debt / EBITDA) on 31 December 2013 was
4.8 (7.3).
– 11.0 TWh of energy peat was delivered (14.8 TWh).
Tomi Yli-Kyyny, CEO: In a challenging market situation, the business areas improved their profitability
Group turnover in the October–December period was approximately EUR 164.0 million, about 5 per cent higher than in the reference period. This was due to the over EUR 15 million increase in Vapo Timber’s sales. The unprecedentedly warm weather during the last months of the year decreased the turnover in the Peat Products, Wood Fuels and Heat and Power business areas significantly. The operating profit was EUR 11.3 million. The operating loss of the reference period was EUR 3.1 million. In a challenging market situation, the business areas improved their profitability.
We have resolutely strengthened our balance sheet by disposing of non-core holdings, enhancing the recycling of capital and improving operational profitability. Nevertheless, we will continue to invest in water treatment and sustainable peat production to ensure continuity of operations. In the long term, we seek a pre-tax ROIC of more than seven per cent.
The strengthening of the balance sheet and the improved operational efficiency are reflected especially in the net debt/EBITDA ratio. Despite there being much more capital tied up in peat stocks than last year and despite having paid a dividend of EUR 10 million, our equity ratio at the end of the period was 37.1 per cent (37.1%) and the net debt / EBITDA ratio is 4.8 (7.3).
This year’s peat production season was much better than the previous year both quantitatively and especially qualitatively. 87 per cent of the production target was met (2012: 47 per cent). At the moment, there is no shortage in any of the grades of peat in the market. In addition to the warm weather, the energy peat tax increase at the beginning of 2013, the low coal price and the electricity price that has remained low have decreased the demand for district heat, fuels and especially peat among our customers.
After the end of the review period, we have agreed on two corporate arrangements on the grounds of operational synergies made possible by them. In January, Vapo Timber sold the Hankasalmi sawmill to Versowood Oy. After the transaction, Vapo Timber continues to develop the operations of the Lieksa and Nurmes sawmills. Synergies between the Hankasalmi sawmill and the sawmills of North Karelia were not extensive enough, whereas Versowood estimates to gain synergy benefits as a result of the transaction. In Sweden, our subsidiary Neova AB and the Lantmännen group are merging their pellet business operations. The new company is the market leader in wood pellet production in Sweden. The company will include Neova’s pellet operations in Sweden and the corresponding Lantmännen Agroenergi business operations in Sweden and Latvia. We have a 50% share in the company. The merger is subject to the approval of the EU’s competition authorities. I believe in the future of the pellet business in Sweden, the Baltic countries and Finland, and we now have a solid foundation for growing our operations in all of these markets.
Vapo’s current financial year is 16 months long and will end on 30 April 2014. After that, we will adopt four-month reporting periods and the new financial year will begin on 1 May and end on 30 April. The next report will cover the result of the entire financial year from 1 January 2013 to 30 April 2014. The report on the result of the extended financial period will be published on 17 June 2014.
Consolidated key figures
|
MEUR |
10–12/2013 |
10–12/2012 |
1–12/2013 |
1–12/2012 |
1–12/2011 |
|
|
|
|
|
|
|
|
Turnover |
164.0 |
155.6 |
616.7 |
652.9 |
705.0 |
|
Operating profit (EBITA) |
11.3 |
-3.1 |
31.7 |
5.8 |
-41.9 |
|
% of turnover |
6.9 |
-2.0 |
5.1 |
0.9 |
-5.9 |
|
Operating profit (EBITA) before impairments |
11.9 |
-2.8 |
32.4 |
6.5 |
-4.5 |
|
% of turnover |
7.2 |
-1.8 |
5.3 |
1.0 |
-0.6 |
|
Result for the period |
7.9 |
-1.1 |
17.0 |
2.8 |
-39.1 |
|
|
|
|
|
|
|
|
Operating margin (EBITDA) |
25.0 |
8.0 |
78.7 |
48.9 |
41.9 |
|
+/- Change in working capital |
-25.8 |
-7.5 |
-42.7 |
42.2 |
59.7 |
|
– Net investments |
-1.3 |
-11.4 |
-35.7 |
-26.9 |
-81.2 |
|
Free cash flow before taxes |
-2.1 |
-10.9 |
0.3 |
64.2 |
20.5 |
|
Gross investments |
18.3 |
12.9 |
54.7 |
48.0 |
94.5 |
|
Return on invested capital % *) |
|
|
4.7 |
0.9 |
-5.8 |
|
Return on invested capital % before impairments * |
|
|
4.8 |
1.0 |
-0.6 |
|
Return on equity % * |
|
|
5.7 |
0.9 |
-11.9 |
|
|
|
|
|
|
|
|
Balance sheet total |
|
|
840.5 |
804.8 |
869.3 |
|
Shareholders’ equity |
|
|
296.0 |
291.6 |
285.8 |
|
Interest-bearing net debt |
|
|
376.0 |
355.9 |
416.7 |
|
Equity ratio %** |
|
|
37.1 |
37.1 |
33.8 |
|
Interest-bearing net debt/operating margin |
|
|
4.8 |
7.3 |
9.9 |
|
Gearing % |
|
|
127.0 |
122.0 |
145.8 |
|
|
|
|
|
|
|
|
Employees, average |
|
|
1,118 |
1,154 |
1,226 |
*) Previous 12 months
**) In calculating the equity ratio, the convertible bond on the balance sheet was calculated as shareholders’ equity in accordance with the recommendations of the Committee for Corporate Analysis.
The Group’s more comprehensive table of key figures over the period of five years and the principles for calculating these key figures can be found at the end of the Interim Report.
Developments by business segment
Turnover by segment
|
MEUR |
10–12/2013 |
10–12/2012 |
Change % |
1–12/2013 |
1–12/2012 |
Change % |
|
Peat Products |
47.0 |
52.3 |
-10.1 |
186.4 |
220.5 |
-15.4 |
|
Energy peat |
41.2 |
43.2 |
-4.8 |
160.3 |
183.2 |
-12.5 |
|
Environmental peat |
5.8 |
9.0 |
-35.4 |
26.2 |
37.2 |
-29.8 |
|
Wood Fuels |
38.2 |
44.4 |
-13.9 |
134.20 |
165.4 |
-18.9 |
|
Forest fuels |
15.1 |
16.8 |
-10.0 |
50.8 |
65.2 |
-22.1 |
|
Pellets |
23.5 |
27.6 |
-15.0 |
83.8 |
100.2 |
-16.4 |
|
Heat and Power |
29.2 |
31.5 |
-7.3 |
101.4 |
105.5 |
-3.9 |
|
Kekkilä Group |
14.6 |
15.4 |
-5.4 |
89.9 |
92.1 |
-2.3 |
|
Vapo Timber |
40.8 |
25.5 |
60.5 |
139.1 |
112.5 |
23.6 |
|
Others |
2.8 |
2.6 |
8.7 |
10.6 |
9.8 |
7.6 |
|
Forest BtL |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Mustankorkea |
2.8 |
2.6 |
8.7 |
10.6 |
9.8 |
7.6 |
|
Group administration & shared by businesses |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Inter-segment turnover |
-8.6 |
-16.0 |
46.1 |
-44.9 |
-52.9 |
15.1 |
|
Total |
164.0 |
155.6 |
5.4 |
616.7 |
652.9 |
-5.5 |
Operating profit/loss by segment
|
MEUR |
10–12/2013 |
10–12/2012 |
Change % |
1–12/2013 |
1–12/2012 |
Change % |
|
Peat Products |
13.3 |
2.8 |
375.6 |
40.1 |
29.0 |
38.1 |
|
Energy peat |
11.6 |
2.3 |
395.5 |
36.0 |
25.4 |
42.0 |
|
Environmental peat |
1.7 |
0.5 |
275.3 |
4.1 |
3.7 |
10.9 |
|
Wood Fuels |
1.3 |
0.5 |
138.8 |
0.0 |
-8.1 |
99.4 |
|
Forest fuels |
-0.4 |
0.5 |
-177.9 |
-0.3 |
-2.7 |
90.7 |
|
Pellets |
1.6 |
0.0 |
4,230.6 |
0.2 |
-5.4 |
103.8 |
|
Heat and Power |
2.8 |
1.4 |
99.0 |
4.6 |
-0.6 |
907.2 |
|
Kekkilä Group |
-2.2 |
-3.1 |
28.2 |
0.1 |
3.8 |
-97.9 |
|
Vapo Timber |
-0.7 |
-3.0 |
75.6 |
-5.7 |
-10.9 |
47.2 |
|
Others |
-3.0 |
-1.8 |
-67.2 |
-8.7 |
-6.7 |
-29.4 |
|
Forest BtL |
-0.5 |
-0.4 |
-45.8 |
-1.4 |
-0.6 |
-119.6 |
|
Mustankorkea |
0.6 |
0.6 |
6.6 |
2.2 |
2.1 |
7.0 |
|
Group administration & shared by businesses |
-3.1 |
-2.0 |
-53.4 |
-9.5 |
-8.2 |
-16.8 |
|
Eliminations |
-0.1 |
0.0 |
-424.6 |
1.4 |
-0.8 |
286.5 |
|
Total |
11.3 |
-3.1 |
460.8 |
31.7 |
5.8 |
442.5 |
For further information please contact:
– Tomi Yli-Kyyny, CEO, tel. +358 20 790 5605
– Jyrki Vainionpää, CFO, tel. +358 20 790 5609
– Ahti Martikainen, Director, Communications and Public Affairs, tel. +358 20 790 5608