Vapo increased sales of domestic bio energy
The turnover of the Vapo Group increased in the January-March 2010 period to EUR 219.1 million (EUR 181.3 million in January-March 2009). Operating profit grew to EUR 24.7 million, or 11.3 per cent of turnover (EUR 20.7 million, 11.4 per cent). Profit before taxes amounted to EUR 22.8 million (EUR 14.9 million).
Owing to the weather and increased industrial fuel requirements, demand for local fuels (peat, wood, reed canary grass) was good. A successful peat production summer in 2009 ensured adequate supplies of peat of good quality and normal transport distances. Sales grew and profitability improved. The price of energy peat in Finland dropped by over 10 per cent.
Rebuilding buffer stocks of peat will require favourable production conditions for a period of several years in succession and also sufficient production areas. Elaborate preparations have been made to secure the success of the peat production in this summer.
Earnings in the Pellets business area turned positive, but despite increased demand owing to the cold winter the oversupply situation in European markets persisted. In Finland, increased demand for pellets is being constrained by the low taxation of light fuel oil and electricity.
The cold weather and higher energy requirements by industrial customers increased demand for heat and power.
The gardening season is expected to be shorter and more intensive and expectations for the full year are encouraging. At the start of the year the Kekkilä brand expanded into a new product line with the successful launch of the Home & Garden concept.
In relative terms, the greatest relative increase in turnover in Vapo’s business areas was posted by Vapo Timber Oy. Production cutbacks and higher timber prices resulting from restricted roundwood availability are holding back progress.
The turnover of the Vapo Group in 2010 is forecast to increase over the previous year and relative profitability to improve. This will require a successful peat production season.
For further information please contact:
– Matti Hilli, Managing Director, Vapo Oy, Tel. +358 40 500 9549