Vapo Oy Interim Report 1 January – 30 September 2013
July-September
- Group turnover in the July-September period was EUR 107.9 million (EUR 106.1 million in the same period in 2012).
- Operating margin (EBITDA) was EUR 4.6 million, or 4.3% of turnover (EUR -11.8 million, -11.1%).
- The operating result was EUR -8.4 million, or -7.8% of turnover (EUR -23.3 million, -22.0%). The operating result includes one-off items of EUR 0.8 million (EUR 1.0 million).
- Free cash flow before taxes was EUR -27.4 million (EUR 1.8 million).
- Gross investments were EUR 11.9 million (EUR 10.5 million).
- Net investments were EUR 11.4 million (EUR 1.6 million).
- 1.6 TWh of energy peat was delivered (1.4 TWh).
January- September
- Group turnover in the January-September period was EUR 452.7 million (EUR 497.4 million in the same period in 2012).
- Operating margin (EBITDA) was EUR 53.8 million, or 11.9% of turnover (EUR 40.9 million, 8.2%).
- The operating result was EUR 20.4 million, or 4.5% of turnover (EUR 9.0 million, 1.8%). The operating result includes one-off items of EUR 2.8 million (EUR 11.2 million).
- The pre-tax return on invested capital (ROIC, previous 12 months) was 2.6% (-3.2%).
- Free cash flow before taxes was EUR 2.3 million (EUR 75.1 million).
- Gross investments were EUR 36.5 million, ratio to depreciation 1.1 (EUR 35.1 million, 1.1).
- Net investments were EUR 34.5 million, ratio to depreciation 1.0 (EUR 15.5 million, 0.5).
- The equity ratio on 30 September 2013 was 36.4% (36.9%). The equity ratio at the end of 2012 was 37.1%.
- Interest-bearing net debt on 30 September 2013 was EUR 368.4 million (EUR 345.1 million). Interest-bearing net debt at the end of 2012 was EUR 355.9 million.
- The ratio of interest-bearing net debt to operating margin on 30 September 2013 was 6.0 (11.3).
- 8.0 TWh of energy peat was delivered (10.1 TWh).
- Peat production volumes were approximately 80% (47%) of target.
CEO Tomi Yli-Kyyny on the result for the January-September period: In a tough market situation operating profit developed in a positive direction
In the January-September period, turnover decreased 9.0 per cent compared to the reference period. The turnover of the Peat Products business area was almost EUR 30 million below the reference period owing to a shortage of peat. Turnover was also reduced by the disposal of the forest fuels business in Sweden and adjustment of pellet deliveries to demand in the domestic markets of Finland and Sweden. The turnover of Vapo Timber grew by over EUR 11 million.
The operating profit of the Vapo Group was EUR 20.4 million, double that of the reference period in 2012. Peat production succeeded well and the profitability of the Heat and Power business area improved. Losses decreased at the Pellets and Forest Fuels businesses and at Vapo Timber. The operational profitability of the Kekkilä Group was lower than the reference period.
This year’s peat production season was much better than the previous year both quantitively and qualitatively. 80 per cent of the production target was met (2012: 47 per cent). We are able to offer our customers a sufficient range of grades of peat in almost all market areas. However, this production success does not automatically mean increased sales and improved profitability for Vapo everywhere. Coal has become cheaper and has taken market share from domestic-origin fuels, i.e. peat and wood. This has been evident in our customer base.
At its meeting on 19 September 2013, the company’s Board of Directors decided to pay a dividend of EUR 10 million (EUR 333.33 per share). The dividend payment date was 24 September 2013. The background to this was the decision taken by the Annual General Meeting of Vapo Oy (19 March 2013) to pay a conditional dividend such that a dividend not exceeding EUR 10 million may be paid for the 2012 financial period on a date to be decided by the Board of Directors. In making its decision, the Board took into account the company’s financial position, future financing requirements and capital structure corresponding to the financial targets. Vapo Oy did not pay a dividend on the result for 2011.
We changed our reporting schedule to correspond to the natural annual cycle of our core businesses. Around two thirds of our turnover consists of sales of energy i.e. fuels and heat and power, which we have defined as our core businesses. We have decided to concentrate on the Finnish, Swedish and Estonian markets, which all have clear seasonal variations. In a financial year based on the calendar year, production costs and the revenues from production and processing partly fall in different financial years. In October 2013, the extraordinary Annual General Meeting of Vapo Oy decided to alter the financial year and reporting schedule. The new financial year will start on 1 May and end on 30 April. At the same time we will move from quarterly reporting to tertial reporting. The first tertial will start on 1 May and end on 31 August. This period includes peat production and preparations for the heating season. The second tertial (1 September – 31 December) and the third tertial (1 January – 30 April) cover the heating season. The second tertial ends at the year-end (31 December), thus maintaining the continuity and comparability of key figures with previous annual accounts. The change will take effect by extending the current financial year that began on 1 January 2013 by four months to 30 April 2014.
We have resolutely strengthened our balance sheet. This has been done by disposing of non-core holdings, enhancing the recycling of capital and improving operational profitability. We have cut all investments apart from environmental investments, which we have continued according to plan. The strengthening of the balance sheet is reflected in the equity ratio and the net debt / EBITDA ratio. Despite there being much more capital tied up in peat stocks than last year and despite having just paid a dividend of EUR 10 million, our equity ratio is 36.4 per cent (36.9%) and the net debt / EBITDA ratio is 6.0 (11.3). There is still room for improvement in both, but it is a significant improvement compared to the end of 2011, for example, when the equity ratio was 33.8 per cent and net debt/EBITDA was 9.9.
Our target continues to be an operating profit of EUR 30 million for this year (1 January – 31 December 2013).
Consolidated key figures
|
MEUR |
1-9/2013 |
1-9/2012 |
1.12.2012 |
|
|
|
|
|
|
Turnover |
452,7 |
497,4 |
652,9 |
|
Operating profit (EBITA) |
20,4 |
9 |
5,8 |
|
% of turnover |
4,5 |
1,8 |
0,9 |
|
Result for the period |
9,1 |
3,9 |
2,8 |
|
|
|
|
|
|
Operating margin (EBITDA) |
53,8 |
40,9 |
48,9 |
|
+/- Change in working capital |
-17 |
49,7 |
42,2 |
|
– Net investments |
-34,5 |
-15,5 |
-26,9 |
|
Free cash flow before taxes |
2,3 |
75,1 |
64,2 |
|
Gross investments |
36,5 |
35,1 |
48 |
|
Return on invested capital % *) |
2,6 |
-3,2 |
0,9 |
|
Return on invested capital % before impairments * |
2,7 |
-1,8 |
1 |
|
Return on equity % * |
2,7 |
-5,4 |
0,9 |
|
|
|
|
|
|
Balance sheet total |
828,5 |
810,6 |
804,8 |
|
Shareholders’ equity |
288,6 |
294,2 |
291,6 |
|
Interest-bearing net debt |
368,4 |
345,1 |
355,9 |
|
Equity ratio % **) |
36,4 |
36,9 |
37,1 |
|
Interest-bearing net debt / operating margin (EBITDA) *) |
6 |
11,3 |
7,3 |
|
Gearing % |
127,6 |
117,5 |
122 |
|
|
|
|
|
|
Employees, average |
1123 |
1172 |
1154 |
*) 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
Developments by business segment
Turnover by segment
|
MEUR |
1-9/2013 |
1-9/2012 |
Change % |
1.12.2012 |
|
Peat Products |
139,4 |
168,2 |
-17,1 |
220,5 |
|
Energy peat |
119,1 |
140 |
-14,9 |
183,2 |
|
Environmental peat |
20,3 |
28,2 |
-28 |
37,2 |
|
Wood Fuels |
96 |
121,1 |
-20,7 |
165,4 |
|
Forest fuels |
35,7 |
48,5 |
-26,3 |
65,2 |
|
Pellets |
60,3 |
72,6 |
-16,9 |
100,2 |
|
Heat and Power |
72,1 |
74 |
-2,5 |
105,5 |
|
Kekkilä Group |
75,3 |
76,6 |
-1,7 |
92,1 |
|
Vapo Timber |
98,3 |
87,1 |
12,8 |
112,5 |
|
Others |
7,8 |
7,3 |
7,3 |
9,8 |
|
Forest BtL |
0 |
0 |
0 |
|
|
Mustankorkea |
7,8 |
7,3 |
7,3 |
9,8 |
|
Group administration & shared by businesses |
0 |
0 |
0 |
|
|
Inter-segment turnover |
-36,3 |
-36,9 |
1,7 |
-52,9 |
|
Total |
452,7 |
497,4 |
-9,0 |
652,9 |
Operating profit/loss by segment
|
MEUR |
1-9/2013 |
1-9/2012 |
Change % |
1.12.2012 |
|
Peat Products |
26,8 |
26,3 |
2,1 |
29 |
|
Energy peat |
24,4 |
23 |
6,1 |
25,4 |
|
Environmental peat |
2,4 |
3,2 |
-26,4 |
3,7 |
|
Wood Fuels |
-1,3 |
-8,6 |
84,9 |
-8,1 |
|
Forest fuels |
0,1 |
-3,2 |
104,1 |
-2,7 |
|
Pellets |
-1,4 |
-5,4 |
73,7 |
-5,4 |
|
Heat and Power |
1,4 |
-2,4 |
156,9 |
-1,2 |
|
Kekkilä Group |
2,3 |
6,9 |
-66,8 |
3,8 |
|
Vapo Timber |
-5 |
-7,9 |
36,6 |
-10,9 |
|
Others |
-5,7 |
-4,9 |
-15,7 |
-6,7 |
|
Forest BtL |
-0,9 |
-0,3 |
-211,9 |
-0,6 |
|
Mustankorkea |
1,6 |
1,5 |
7,2 |
2,1 |
|
Group admin. & shared by businesses |
-6,4 |
-6,1 |
-4,6 |
-8,2 |
|
Disposals |
1,9 |
-0,3 |
739,4 |
-0,2 |
|
Total |
20,4 |
9,0 |
126,7 |
5,8 |
Interim Report 1 January – 30 September 2013 (pdf)
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