Helsinki, Finland, 2013-08-23 10:00 CEST (GLOBE NEWSWIRE) -- VAAHTO GROUP PLC OYJ INTERIM REPORT 23.8.2013 at 11:00
VAAHTO GROUP INTERIM REPORT for 1 January – 30 June 2013
Vaahto Group’s turnover from continuing operations during the period 1 January to 30 June 2013 was 20.6 M euros (comparative 16.1 M euros) and operating loss 0.2 M euros (2.3 M euros). Turnover was 28 % higher than in the reference period, and the operating result was significantly better. The order book of the continuing operations remained at a good level, totaled 18.6 M euros (9.2 M euros).
The Vaahto Group Plc Oyj Extraordinary Meeting of Shareholders of 19 June 2012 approved an amendment to the statutes, based on which the company’s normal financial year was changed to 1 January – 31 December from the beginning of the year 2013. The reference data presented in this report has been changed to correspond the actual period.
In accordance with the preliminary contract signed on 16 January 2013, the sale of Vaahto Paper Technology’s project-business unit and the spare-parts and small-project operations belonging to the company’s service unit to the German firm Gebr. Bellmer GmbH Maschinenfabrik was completed on 15 April 2013. The assets and liabilities related to the sale are included on the balance sheet as non-current assets held for sale and related liabilities. In the profit and loss statement, the project business is presented in one line as a discontinued operation. The profit and loss statement’s reference data have been adjusted correspondingly.
Vaahto Paper Technology
Vaahto Paper Technology division’s turnover from continuing operations was 5.0 M euros (6.1 M euros) and the operating loss of 1.5 M euros (operating loss 1.9 M euros). Turnover fell 18 % from the reference period while the operating result improved slightly but still remained negative. The main reason for the operating loss is the division’s weak order intake.
The sale of Vaahto Paper Technology’s project-business unit and the spare-parts and small-project operations belonging to the company’s service unit to Gebr. Bellmer GmbH Maschinenfabrik was completed on 15 April 2013. All projects that were in progress on 15 April 2013 were transferred to Bellmer in connection with the sale. Completed projects that are within their warranty period remain with Vaahto Paper Technology Ltd. The liabilities and debts related to the completion of these projects are presented in the profit and loss statement as discontinuing operations and in the balance sheet as assets and debts. The operating loss of the discontinuing operations was 1.4 M euros (1.1 M euros); this includes the sale of the project-business and the costs of the discontinuing operations. The sale price is not final, as it contains items to be realized in the future.
Vaahto Process Technology
Vaahto Process Technology division’s turnover for the period under review was 15.7 M euros (10.1 M euros) and operating profit 1.3 M euros (operating loss 0.5 M euros). Turnover increased by 55 % from the reference period’s level. The operating result improved and was 8.2 % of the turnover. The main reasons for the positive development were constant order income and the expected realization of the delivered projects.
The market situation of Vaahto Process Technology division has been remained stable and the demand has continued to be moderate.
Research and development
Vaahto Group’s research and development activities have focused on expanding the product range of the Vaahto Paper Technology division. The scope of research and development activities remains at the level seen in the previous financial year.
Investments
Vaahto Group’s capital expenditure during the period under review was 0.2 M euros (0.6 M euros). It consisted mainly of machine and equipment investments for the Vaahto Paper Technology division’s service business.
Financing and taxes
The cash flow of the business operations was -0.7 M euros during the period, and the cash flow of investments was 1.0 M euros. Interest-bearing liabilities amounted to 16.5 M euros at the end of the period under review. The consolidated balance-sheet total was 24.0 M euros, and the equity ratio -20.9 %. The 30 June 3013 interim report indicated violation of repayment covenants related to Vaahto Group’s equity ratio that were involved in its credit-institution loans. Vaahto Group has received a commitment from the relevant credit institution that the breach of the covenants will not result in any penalties. Measures have been taken in Vaahto Group to improve its financial position and equity ratio.
Human resources
The average number of personnel during the period under review was 275.
In connection with the sale of Vaahto Paper Technology’s Project –business on 15 April 2013, 72 employees belonging to the Project-business, were transferred to Bellmer.
Authorization for a share issue
The General Meeting of 10 April 2013 authorized the Board of Directors to decide on the issuing of new shares in one or several lots. The maximum number of new shares that may be issued is 2,000,000. The proposed authorization corresponded to 50 % of all shares in the company.
This authorization entitled the Board to decide on all terms of the share issue, including the right to deviate from the shareholders’ subscription privilege.
Disputes
Vaahto Paper Technology Ltd is currently engaged in a dispute over patent rights with another equipment-supplier. The District Court decided in favor of Vaahto Paper Technology Ltd, but the Court of Appeal overturned the District Court ruling in June 2013. Vaahto Paper Technology Ltd will apply for leave to appeal to the Supreme Court. Apart from the legal expenses, the dispute is not expected to cause any additional costs to Vaahto Paper Technology Ltd, thus no reservations related to this dispute have been made in the Vaahto Group’s interim report.
Vaahto Paper Technology Ltd is currently party to a dispute over an equipment delivery with a customer. Per the agreement between the two parties, the matter has been initiated by an arbitration court in Singapore. Apart from the legal expenses, the dispute is not expected to cause any additional costs to Vaahto Paper Technology Ltd, thus no reservations have been made for such costs in the Vaahto Group’s interim report.
Risks
Vaahto Group’s financing situation remains tight and involves significant risks. Positive development requires that the plans made by the management will actualize and that the plans for the rearrangement of short-term payments and for obtaining additional funding be successful. The Board of Directors is currently in negotiations with the credit institutions to improve liquidity and equity ratio.
International Financial Reporting Standards
The interim report has been prepared in accordance with the International Financial Reporting Standards (IFRS) and IAS 34, Interim Financial Reporting.
Forecast for the 1 January – 31 December 2013 financial year
The development of the international economy shows no signs of improvement, and the market situation of Vaahto Group’s main customer industries remains difficult. However, Vaahto Group’s result is expected to increase substantially from that of the previous financial period and to be positive for continuing operations.
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, IFRS 1000 EUR | Interim Report 1.1. - 30.6.2013 6 months | Interim Report 1.1. - 30.6.2012 6 months | Annual Report 1.9.2011- 31.12.2012 16 months | |
| Net sales | 20 630 | 16 075 | 40 908 | |
| Change in finished goods and work in progress | -1 196 | -288 | 1 385 | |
| Production for own use | 82 | 268 | 788 | |
| Other operating income | 66 | 3 | 96 | |
| Share of profits of affiliated companies | 0 | 14 | 25 | |
| Material and services | -9 278 | -6 888 | -19 459 | |
| Employee benefit expenses | -6 352 | -7 124 | -17 194 | |
| Depreciations | -635 | -797 | -2 188 | |
| Impairment losses of goodwill | 0 | 0 | -28 | |
| Other operating expenses | -3 499 | -3 597 | -9 229 | |
| Operating profit or loss | -183 | -2 335 | -4 895 | |
| Financing income | 80 | 7 | 62 | |
| Financing expenses | -523 | -476 | -1270 | |
| Profit or loss before taxes | -625 | -2 804 | -6 103 | |
| Tax on income from operations | -69 | -266 | -2 226 | |
| Profit or loss for the period | -694 | -3 070 | -8 329 | |
| Discontinuing operations | ||||
| Profit or loss for the fiscal year from the discontinuing operations | -1 413 | -1 104 | -1 597 | |
| Profit or loss | -2 107 | -4 174 | -9 926 | |
| Other comprehensive Income: | ||||
| Translation differences | -4 | 8 | 38 | |
| Other comprehensive income, net of tax | -4 | 8 | 38 | |
| Total comprehensive income | -2 112 | -4 166 | -9 888 | |
| Earnings per share calculated on profit attributable to equity holders of the parent: | ||||
| EPS undiluted, euros/share, continuing operations | -0,17 | -0,89 | -2,40 | |
| EPS diluted, euros/share, continuing operations | -0,17 | -0,89 | -2,40 | |
| EPS undiluted, euros/share, discontinuing operations | -0,36 | -0,322 | -0,46 | |
| EPS diluted, euros/share, discontinuing operations | -0,36 | -0,32 | -0,46 | |
| EPS undiluted, euros/share | -0,53 | -1,21 | -2,86 | |
| EPS diluted, euros/share, continuing operations | -0,53 | -1,21 | -2,86 | |
| Average number of shares | 3 977 360 | 3 444 667 | 3 463 206 | |
| CONSOLIDATED BALANCE SHEET, IFRS 1000 EUR | Interim Report 30.6.2013 | Annual Report 31.12.2012 | ||
| Assets | ||||
| Intangible assets | 82 | 233 | ||
| Goodwill | 1 692 | 1 692 | ||
| Tangible assets | 7 277 | 7 596 | ||
| Shares in affiliated companies | 79 | 83 | ||
| Available in sale investments | 43 | 43 | ||
| Non-current trade receivables and other receivables | 3 | 3 | ||
| Deferred tax asset | 270 | 271 | ||
| Non-current assets | 9 445 | 9 921 | ||
| Inventories | 4 758 | 5 783 | ||
| Trade receivables and other receivables | 6 047 | 6 776 | ||
| Cash and bank 1) | 890 | 1 449 | ||
| Current assets | 11 695 | 14 007 | ||
| Non current assets held for sale | 2 878 | 6 557 | ||
| Total assets | 24 018 | 30 484 | ||
| Equity and liabilities | ||||
| Share capital | 2 872 | 2 872 | ||
| Share premium account | 6 | 6 | ||
| Fair value reserve and other reserves | 5 063 | 5 063 | ||
| Translation differences | 56 | 56 | ||
| Retained earnings | -12 271 | -10 160 | ||
| Shareholders' equity | -4 275 | -2 163 | ||
| Deferred tax liability | 641 | 699 | ||
| Long-term liabilities, interest-bearing | 3 060 | 3 608 | ||
| Non-current provisions | 445 | 395 | ||
| Non-current liabilities | 4 146 | 4 701 | ||
| Short-term liabilities, interest-bearing | 13 471 | 14 045 | ||
| Trade payables and other liabilities | 9 327 | 10 662 | ||
| Tax liability | 0 | 264 | ||
| Current liabilities | 22 798 | 24 971 | ||
| Interest-bearing liabilities held for sale | 0 | 573 | ||
| Interest-free liabilities held for sale | 1 348 | 2 402 | ||
| Total equity and liabilities | 24 018 | 30 484 | ||
| 1) Cash and bank includes deposit for loan guarantee 0.8 thousand euros. | ||||
| KEY FIGURES, IFRS | Interim Report 1.1. - 30.6.2013 6 months | Interim Report 1.1. - 30.6.2012 6 months | Annual Report 1.9.2011- 31.12.2012 16 months | |
| Operating profit or loss, continuing operations 1000 EUR | -183 | -2335 | -4 895 | |
| % of turnover | -0,9 | -14,5 | -12,0 | |
| Profit or loss before taxes, continuing operations 100 EUR | -625 | -2 804 | -6103,0 | |
| % of turnover | -3,0 | -17,4 | -14,9 | |
| Profit or loss, discontinuing operations 1000 EUR | -1 413 | -1 104 | -1 597 | |
| Earnings per share calculated on profit attributable to equity holders of the parent | -2 107 | -4 174 | -9 926 | |
| % of turnover | -10,2 | -26,0 | -24,3 | |
| Return on equity (ROE), % 1) | -131,0 | -276,4 | -413,0 | |
| Return on investment (ROI), % 1) | -22,6 | -37,6 | -26,0 | |
| Earnings per share EUR 2) | -0,53 | -1,21 | -2,15 | |
| Shareholders' equity per share EUR | -1,07 | 0,47 | -0,50 | |
| Equity ratio, % 3) | -20,9 | 6,5 | -7,9 | |
| Gearing 3) | -365,9 | 827,4 | -749,1 | |
| Gross investments in fixed assets 1000 EUR | 166 | 558 | 1 289 | |
| Order backlog, continuing operations 1000 EUR | 18608 | 9156 | 20 547 | |
| Total average number of personnel | 275 | 335 | 333 | |
| 1) Return on equity % and return on investment % have been calculated by converting the profit or loss for the reporting period to corresond the profit or loss for 12 months. Figures include also profit or loss from discontinuing operations. The reference period has been converted accordingly. | ||||
| 2) Earnings per share includes also the profit or loss from discontinuing operatins. Earnings per share from the period 1.9.2011 - 31.12.2012 has been calculated by converting the profit or loss for the period to correspond the profit or loss for 12 months. | ||||
| 3) The Equity ratio and Gearing from the period 1.1.-30.6.2013 includes also items from discontinuing operations. The gearing is negative because of the negative equity. | ||||
| CONSOLIDATED FLOW OF FUNDS STATEMENT, IFRS 1000 EUR | Interim Report 1.1. - 30.6.2013 | Interim Report 1.1. - 30.6.2012 | Annual Report 1.9.2011- 31.12.2012 | |
| Profit or loss before taxes | -2 134 | -3 851 | -9 926 | |
| Adjustments | 340 | 1 500 | 6 344 | |
| Change in working capital | 1 372 | -632 | 1 636 | |
| Financial income and expenses and taxes | -294 | -585 | -1 388 | |
| Flow of funds from operations | -716 | -3 568 | -3 333 | |
| Investments in tangible and intangible assets | -166 | -558 | -1 289 | |
| Increase caused by the change in Group structure | 0 | -18 | -18 | |
| Income from sales of tangible and intangible assets | 1 188 | 0 | 319 | |
| Repayments of loans | 0 | 0 | 8 | |
| Flow of funds from investments | 1 022 | -576 | -980 | |
| Share issue | 0 | 1 728 | 1 861 | |
| Increase of the interest-bearing liabilities | 27 | -3 968 | 5 946 | |
| Decrease of the interest-bearing liabilities | -891 | -1 054 | -2 821 | |
| Flow of funds from financial items | -865 | 4 642 | 4 987 | |
| Change of liquid funds | -558 | 499 | 674 | |
| STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, IFRS 1000 EUR | |||||||||
| Changes in shareholders' equity 1.1. - 30.6.2013 | Share capital | Share premium account | Unrestricted equity reserve | Reserve fund | Translation differences | Re- tained earn- ings | Total | Non-controlling interests | Total |
| Shareholders' equity in the beginning of the period | 2 872 | 6 | 3 068 | 1 995 | 56 | -10 160 | -2163 | 0 | -2 163 |
| Total comprehensive income | 0 | 0 | 0 | 0 | -1 | -2 111 | -2112 | 0 | -2 112 |
| Shareholders' equity at the end of the period | 2 872 | 6 | 3 068 | 1 995 | 56 | -12 271 | -4275 | 0 | -4 275 |
| Changes in shareholders' equity 1.1. - 30.6.2012 | Share capital | Share premium account | Unrestricted equity reserve | Reserve fund | Translation differences | Re- tained earn- ings | Total | Non-controlling interests | Total |
| Shareholders' equity in the beginning of the period | 2 872 | 6 | 0 | 1 995 | 36 | -1 848 | 3 060 | 0 | 3 060 |
| Total comprehensive income | 0 | 0 | 0 | 0 | 0 | -4 148 | -4148 | 0 | -4 148 |
| Share issue | 0 | 0 | 2100 | 0 | 0 | 0 | 2 100 | 0 | |
| Transaction costs for equity | 0 | 0 | -372 | 0 | 0 | 0 | -372 | 0 | -372 |
| Aqusition of subsidiary | 0 | 0 | 1 112 | 0 | 0 | 0 | 1 112 | 0 | 1 112 |
| Deferred taxes due to period changes | 0 | 0 | 91 | 0 | 0 | 0 | 91 | 0 | 91 |
| Transaction with owners | 0 | 0 | 2 931 | 0 | 0 | 0 | 2 931 | 0 | 2 931 |
| Shareholder's equity at the end of the period | 2872 | 6 | 2931 | 1995 | 36 | -5996 | 1843 | 0 | 1843 |
| Changes in shareholders' equity 1.9.2011 - 30.6.2012 | Share capital | Share premium account | Unrestricted equity reserve | Reserve fund | Translation differences | Re- tained earn- ings | Total | Non-controlling interests | Total |
| Shareholders' equity in the beginning of the period | 2 872 | 6 | 0 | 1 995 | 29 | -351 | 4 552 | 1 217 | 5 768 |
| Total comprehensive income | 0 | 0 | 0 | 0 | 27 | -9 915 | -9888 | 0 | -9 888 |
| Share issue | 0 | 0 | 2 250 | 0 | 0 | 0 | 2 250 | 0 | 2 250 |
| Transaction costs for equity | 0 | 0 | -389 | 0 | 0 | 0 | -389 | 0 | -389 |
| Aqusition of subsidiary | 0 | 0 | 1 112 | 0 | 0 | 105 | 1 217 | 0 | 1 217 |
| Disposal of subsidiary | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -1 217 | -1 217 |
| Deferred taxes due to period changes | 0 | 0 | 95 | 0 | 0 | 0 | 95 | 0 | 95 |
| Transaction with owners | 0 | 0 | 3 068 | 0 | 0 | 105 | 3 174 | -1 217 | 1 956 |
| Shareholder's equity at the end of the period | 2 872 | 6 | 3 068 | 1 995 | 56 | -10 160 | -2163 | 0 | -2 163 |
| SEGMENT INFORMATION, IFRS | |||
| BY OPERATING SEGMENTS | Interim Report 1.1. - 30.6.2013 6 months | Interim Report 1.1. - 30.6.2012 6 months | Annual Report 1.9.2011- 31.12.2012 16 months |
| Net sales | |||
| Vaahto Paper Technology | 5 015 | 6 081 | 16 939 |
| Vaahto Process Technology | 15 681 | 10 051 | 24 079 |
| Net sales between the segments | -67 | -57 | -110 |
| Group total | 20 630 | 16 075 | 40 908 |
| Shares of profits of affiliated companies | |||
| Vaahto Paper Technology | 0 | 14 | 25 |
| Vaahto Process Technology | 0 | 0 | 0 |
| Group total | 0 | 14 | 25 |
| Operating profit or loss | |||
| Vaahto Paper Technology | -1 469 | -1 865 | -4 320 |
| Vaahto Process Technology | 1 286 | -483 | -690 |
| Operating profit or loss between the segments | 0 | 14 | 0 |
| Group total | -183 | -2 335 | -4 920 |
| Profit or loss of the segment | |||
| Vaahto Paper Technology | -1 469 | -1 851 | -4 205 |
| Vaahto Process Technology | 1 286 | -483 | -690 |
| Group total | -183 | -2 335 | -4 895 |
| Financing income and expenses | -443 | -470 | -1 208 |
| Taxes | -69 | -266 | -2 226 |
| Profit or loss from continuing operations | -694 | -3 070 | -8 329 |
| Profit or loss from discontinuing operations | -1 413 | -1 140 | -1 597 |
| Profit or loss for the fiscal period | -2 107 | -4 174 | -9 926 |
| NET SALES BY MARKET AREAS OPERATING SEGMENTS, IFRS 1000 EUR | Interim Report 1.1. - 30.6.2013 6 months | Annual Report 1.9.2011- 31.12.2012 16 months | |
| Finland | 6 141 | 17 879 | |
| Other Europe | 6 181 | 18 618 | |
| Asia | 50 | 3 146 | |
| Africa | 1 265 | 147 | |
| Notrh America | 6 944 | 225 | |
| Other Europe | 48 | 893 | |
| Group total | 20 630 | 40 908 | |
| AVERAGE NUMBER OF PERSONNEL BY OPERATING SEGMENTS | Interim Report 1.1. - 30.6.2013 6 months | Interim Report 1.1. - 30.6.2012 6 months | Annual Report 1.9.2011- 31.12.2012 16 months |
| Vaahto Paper Technology, continuing operations | 148 | 123 | 142 |
| Vaahto Process Technology, continuing operations | 128 | 121 | 122 |
| Discontinuing operations | 91 | 69 | |
| Group total | 276 | 335 | 333 |
| DISCONTINUING OPERATIONS | ||||
| 1000 EUR | Interim Report 1.1. - 30.6.2013 6 months | Interim Report 1.1. - 30.6.2012 6 months | Annual Report 1.9.2011- 31.12.2012 16 months | |
| Profit or loss of the Project business unit | ||||
| Income | 2 931 | 8 991 | 19 786 | |
| Expenses | -4 440 | -10 037 | -21 342 | |
| Profit of loss before taxes | -1 509 | -1 046 | -1 556 | |
| Taxes | 95 | -58 | -41 | |
| Profit or loss after taxes | -1 414 | -1 104 | -1 597 | |
| Profit of loss from the discontinuing operations | -1 414 | -1 104 | -1 597 | |
| Flow of funds from the Project business unit | ||||
| Flow of funds from operations | -615 | -1 203 | ||
| Flow of funds from investments | 1 188 | -169 | ||
| Flow of funds from financial items | -52 | -265 | ||
| Flow of funds total | 521 | -1 637 | ||
| Non-current assets fo discontinuing operations | ||||
| Intangible assets | 0 | 93 | ||
| Tangible assets | 0 | 2 549 | ||
| Inventories | 708 | 1 548 | ||
| Receivables | 2 170 | 2 367 | ||
| Assets total | 2 878 | 6 557 | ||
| Non-current assets of discontinuing operations include total 590 thousand euros receivables of Vaahto Paper Technology Ltd related to the additional project work that the customer has challenged. The case is ongoing arbitration. The receivables contain uncertainty. | ||||
| Liabilities of Project business held for sale/discontinuing operations | ||||
| Finance lease liabilities | 574 | |||
| Current liabilities of discontinuing operations | 1 348 | 2 401 | ||
| Liabilities total | 1 348 | 2 975 | ||
| Figures are in thousand euros unless stated otherwise. Figures are unaudited. | ||||
| NOTES REQUIRED BY IAS 34 | ||||
| Accounting principles | ||||
| The Interim Report was drawn up according to the same accounting principles and calculation methods as the previous financial statement, for the fiscal period that ended on December 31, 2012. | ||||
| Dividens paid | ||||
| During the period under review, Vaahto Group Plc Oyj paid no dividends. | ||||
Lahti, 23 August 2013
VAAHTO GROUP PLC OYJ
Board of Directors
Vaahto Group is a globally operating high technology company serving process industry in the fields of pulp and paper machinery and process machinery.
Information: Ari Viinikkala Vaahto Group Plc Oyj CEO tel. +358 400 127664
