The cold winter increased Vapo’s turnover
The turnover of the Vapo Group in the first quarter increased substantially over the previous year. Turnover in the period amounted to EUR 242.4 million (EUR 219.1 million in the same period in 2010). Operating profit in the first quarter was EUR 23.6 million, compared to EUR 24.7 million in the same period last year. Cold weather and heavy snowfall in the winter also increased procurement and transport costs for peat and forest energy.
The cold winter months increased biofuel consumption both in heating and electricity generation. Delays in the EU processing of subsidies for energy wood usage increased sales of peat. Energy peat deliveries in Finland were a record 7.4 TWh (6.7 TWh), and in Sweden 0.7 TWh (0.7 TWh).
The cold winter months increased the turnover of Vapo Biofuels. The sales of energy products by Vapo Bioheat were boosted by industrial customers’ increased energy needs and the high prices of electricity products. Bioheat’s sales were marked by a positive earnings trend. In the sawmill industry (Vapo Timber), weaker profitability was attributable to higher raw materials prices. The activities of Vapo Environment remained stable, although the late spring delayed the start to the landscaping season, comments Managing Director Tomi Yli-Kyyny in summing up the state of business activity.
Vapo focused on wood energy
Vapo acquired a 30 per cent stake in the industrial timber procurement company Harvestia Oy, which will in future procure spruce and pine logs for Vapo Timber and energy wood for Vapo Biofuels. Vapo disposed of its electricity sales business on 1 April 2011. Vapo sold its composting and landscaping business in Finland to its subsidiary Kekkilä Oy at the start of the year.
Vapo’s businesses were organized into four business areas at the start of 2011: Vapo Biofuels, Vapo Bioheat, Vapo Timber and Vapo Environment. Pellets and environmental peat were transferred to the Vapo Biofuels business area. Group logistics operations are centralized as before.
Vapo’s Managing Director in the first quarter was Matti Hilli, M.Sc. (Eng.). Following Hilli’s retirement, Tomi Yli-Kyyny, M.Sc. (Eng.) took over as Managing Director on 1 April 2011.
All in all, the turnover of the Vapo Group is forecast to increase over the previous year and relative profitability to improve. However, profitable growth will require success in the upcoming peat production summer. As of spring 2011, nationwide peat stocks are estimated to stand at 2 TWh (4 TWh), which is around one fifth of the target level.
For further information please contact: Tomi Yli-Kyyny, Managing Director, CEO, Vapo Oy, Tel. +358 20 790 5605