Vapo Oy Interim Report 1 May–31 December 2015
September–December 2015:
- Group turnover in the September–December period was EUR 153.1 million (EUR 159.4 million in September–December 2014).
- Operating margin (EBITDA) was EUR 20.7 million, or 13.5% of turnover (EUR 26.0 million, 16.3%).
- Operating profit (EBIT) was EUR 3.3 million, or 2.2% of turnover (EUR 14.4 million, 9.0%). The operating profit includes one-off expenses in the amount of EUR 7.2 million (one-off income of EUR 3.0 million).
- Free cash flow before taxes was EUR 0.3 million (EUR -3.7 million).
- Gross investments were EUR 13.3 million (EUR 19.3 million).
- Net investments were EUR 12.2 million (EUR 10.8 million).
May–December 2015:
- Group turnover in the May–December period was EUR 277.2 million (EUR 291.8 million in May–December 2014).
- Operating margin (EBITDA) was EUR 22.4 million, or 8.1% of turnover (EUR 39.8 million, 13.6%).
- Operating profit (EBIT) was EUR -9.5 million, or -3.4% of turnover (EUR 11.5 million, 3.9%). The operating profit includes one-off expenses in the amount of EUR 7.2 million (one-off income of EUR 3.0 million).
- The pre-tax return on invested capital (ROIC) was 2.3% (4.3%).
- Free cash flow before taxes was EUR 18.7 million (EUR -36.3 million).
- Gross investments were EUR 26.7 million (EUR 54.7 million), the ratio to depreciation was 1.1 (2.0).
- Gross investments were EUR 11.8 million (EUR 36.0 million), the ratio to depreciation was 0.5 (1.3).
- The equity ratio on 31 December 2015 was 35.6% (36.8% on 31 December 2014).
- Interest-bearing net debt on 31 December 2015 was EUR 412.1 million (EUR 399.0 million on 31 December 2014).
- The ratio of interest-bearing net debt to operating margin (net debt/EBITDA) on 31 December 2015 was 7.1 (5.6 on 31 December 2014).
- 5.5 TWh of energy peat was delivered (5.7 TWh).
CEO Tomi Yli-Kyyny on the second third of the financial year: Vapo is placing an even stronger focus on the energy business.
The temperatures in November–December were the highest in recorded history in many places around Finland. The effect of a one-degree change in temperature on the demand for heating and fuel is approximately five per cent. Fuel sales and the sales of heating by Vapo’s own plants were substantially below the normal level in the latter part of the year. Due to the low market price of electricity, peat and energy chips were barely used at all to produce electricity at condensing power plants in Finland.
Vapo completed a significant transaction right after the end of the review period by selling its sawmill business to the Austria-based Binderholz Group. Write-downs related to the divestment of Vapo Timber Oy and the low demand for fuels were the most significant factors contributing to the unsatisfactory result in the second third of the year.
Vapo has surveyed its customer satisfaction for several years. According to the survey conducted in October–November 2015, some 80 per cent (2014: 77%) of Vapo’s customers were satisfied with the service they receive, and the Net Promoter Score increased to 26 (2014: 22). On a scale of 1–10, Vapo earned the highest scores from its customers for the reliability of supply (8.7), the convenience of buying (8.7), fulfilling contractual terms (8.6) and responsible operations (8.3).
Vapo Oy’s strategy is to expand its operations by acquiring new heating customers and switching its heating plants to domestic solid fuels. During the review period, Vapo Oy built a new solid fuel boiler in the Jokela district of Tuusula. The new boiler began to produce heating for the Jokela district heating network in December 2015. The change improved the unit’s profitability and reduced the price of district heating for customers.
The goal in fuel production and supply is to establish and maintain long-term customer relationships, while adapting production to correspond with customer demand. In spite of the rainy summer, Vapo Oy’s energy peat reserves are sufficient to cover nearly the entire heating season following the current heating season. Against this backdrop, it is highly desirable that the increase in fuel wood subsidies and reduction in peat taxation, which are currently in the EU notification process, will be implemented. These changes would bring stability to the operating environment of customers who use domestic fuels.
Consolidated key figures
|
MEUR |
9–12/2015 |
9–12/2014 |
5–12/2015 |
5–12/2014 |
5/2014–4/2015 |
|
|
|
|
|
|
|
|
Turnover |
153.1 |
159.4 |
277.2 |
291.8 |
486.9 |
|
Operating profit (EBIT) |
3.3 |
14.4 |
-9.5 |
11.5 |
36.9 |
|
% of turnover |
2.2 |
9.0 |
-3.4 |
3.9 |
7.6 |
|
Operating profit (EBIT) before impairments |
9.4 |
14.4 |
-3.4 |
11.4 |
37.6 |
|
% of turnover |
6.1 |
9.1 |
-1.2 |
3.9 |
7.7 |
|
Profit/loss for the period |
-2.7 |
7.5 |
-14.4 |
0.7 |
19.8 |
|
|
|
|
|
|
|
|
Operating margin (EBITDA) |
20.7 |
26.0 |
22.4 |
39.8 |
74.7 |
|
+/- Change in working capital |
-8.2 |
-18.9 |
8.1 |
-40.1 |
-32.7 |
|
– Net investments |
-12.2 |
-10.8 |
-11.8 |
-36.0 |
-67.1 |
|
Free cash flow before taxes |
0.3 |
-3.7 |
18.7 |
-36.3 |
-25.1 |
|
Gross investments |
13.3 |
19.3 |
26.7 |
54.7 |
88.4 |
|
Return on invested capital % * |
|
|
2.3 |
4.3 |
5.3 |
|
Return on invested capital % before impairments * |
|
|
3.3 |
4.8 |
5.5 |
|
Return on equity % * |
|
|
1.4 |
2.1 |
6.6 |
|
|
|
|
|
|
|
|
Balance sheet total |
|
|
821.1 |
819.1 |
838.2 |
|
Shareholders’ equity |
|
|
278.6 |
286.8 |
305.4 |
|
Interest-bearing net debt |
|
|
412.1 |
399.0 |
393.1 |
|
Equity ratio % |
|
|
35.6 |
36.8 |
37.9 |
|
Interest-bearing net debt/operating margin |
|
|
7.1 |
5.6 |
5.3 |
|
Gearing % |
|
|
148.2 |
139.2 |
128.7 |
|
|
|
|
|
|
|
|
Personnel on average |
|
|
960 |
977 |
961 |
*) Previous 12 months
**) In calculating the equity ratio, the capital loan on the balance sheet was calculated as shareholders’ equity
Developments by company
Turnover by segment
|
MEUR |
9–12/2015 |
9–12/2014 |
Change % |
5–12/2015 |
5–12/2014 |
Change % |
5/2014–4/2015 |
|
Vapo Oy |
86.6 |
89.9 |
-3.7 |
139.7 |
142.9 |
-2.2 |
251.9 |
|
Vapo Timber Oy |
30.5 |
28.5 |
7.0 |
58.0 |
59.5 |
-2.5 |
89.0 |
|
Kekkilä Group |
18.9 |
19.4 |
-2.4 |
53.1 |
52.1 |
1.8 |
87.1 |
|
Neova AB |
17.3 |
17.2 |
0.6 |
26.3 |
29.0 |
-9.3 |
48.9 |
|
AS Tootsi Turvas |
3.9 |
4.3 |
-8.6 |
7.1 |
7.5 |
-6.1 |
12.9 |
|
Others |
0.0 |
4.1 |
-99.8 |
0.0 |
7.9 |
-99.8 |
7.8 |
|
Inter-segment turnover |
-4.1 |
-3.9 |
-5.9 |
-6.8 |
-7.1 |
3.3 |
-10.8 |
|
Total |
153.1 |
159.4 |
-4.0 |
277.2 |
291.8 |
-5.0 |
486.9 |
Operating profit/loss by segment
|
MEUR |
9–12/2015 |
9–12/2014 |
Change % |
5–12/2015 |
5–12/2014 |
Change % |
5/2014–4/2015 |
|
Vapo Oy |
12.3 |
19.8 |
-37.6 |
0.8 |
17.1 |
-95.3 |
49.1 |
|
Vapo Timber |
-0.8 |
0.2 |
-438.7 |
-1.7 |
0.9 |
-280.8 |
0.8 |
|
Kekkilä Group |
-3.6 |
-2.9 |
-25.5 |
-1.9 |
-2.2 |
12.9 |
1.1 |
|
Neova Ab |
0.6 |
0.4 |
71.3 |
-0.9 |
-1.8 |
50.6 |
1.0 |
|
Tootsi Turvas |
0.5 |
0.5 |
4.4 |
0.8 |
1.0 |
-19.9 |
1.6 |
|
Others |
0.0 |
0.6 |
-100.5 |
0.0 |
1.5 |
-102.8 |
0.9 |
|
Associated companies |
0.1 |
0.4 |
-71.5 |
-0.9 |
-0.6 |
-50.2 |
2.2 |
|
Eliminations |
-5.9 |
-4.7 |
-25.8 |
-5.7 |
-4.5 |
-26.3 |
-19.8 |
|
Total |
3.3 |
14.4 |
-76.9 |
-9.5 |
11.5 |
-182.6 |
36.9 |
For further information, please contact:
– Tomi Yli-Kyyny, CEO, Vapo Oy, tel. +358 (0)20 790 5605
– Suvi Kupiainen, CFO, Vapo Oy, tel. +358 (0)20 790 5516