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STOCK EXCHANGE RELEASE 6 May 1999

INTERIM REPORT JANUARY 1 - MARCH 31, 1999

JAAKKO PÖYRY GROUP'S NET SALES,

ORDER STOCK AND PROFIT INCREASED

Net Sales and Earnings

The Jaakko Pöyry Group's net sales for the period January - March 1999 amounted to EUR 94.3 million (EUR 61.7 million in the same period 1998). The Group's operating profit was EUR 5.7 (4.1) million and profit after financial items EUR 5.3 (3.5) million. The Group's profit for the period under review was EUR 2.9 (2.3) million and earnings per share EUR 0.22 (0.17). The Group's net sales increased by 5.6 per cent compared to the consolidated net sales for the Jaakko Pöyry Group and the Electrowatt Engineering Group for the same period 1998.

The business groups Forest Industry Consulting, Energy, Infrastructure and Environment, and Process Industries, recorded increased net sales. The operating profit increased in all business groups.

The Group's order stock amounted to EUR 346.1 million at the end of March. The consolidated order stock for the Jaakko Pöyry Group and the Electrowatt Engineering Group amounted to EUR 285.5 million at the end of December 1998. The Forest Industry, Energy, and Infrastructure and Environment business groups recorded the biggest increases.

The figures in the interim report are unaudited.

Financing and Capital Expenditure

The Group's liquidity remained good during the period under review. At the end of March, the Group's cash in hand and at banks totalled EUR 36.1 million and interest-bearing liabilities EUR 48.5 million, so interest-bearing net debts amounted to EUR 12.4 million. At the end of 1998 interest-bearing net debts amounted to EUR 20.4 million. The main reason for the reduction was that the Electrowatt Engineering Group has no interest-bearing loans. The net debt/equity ratio, gearing, decreased from 28.8 per cent at the end of the year 1998 to 16.8 per cent.

The Group's capital expenditure for the report period totalled EUR 2.6 (1.5) million. The capital expenditure consisted mostly of costs related to computer software, systems and hardware. In addition, Jaakko Pöyry Group Oyj increased its shareholding in Electrowatt Engineering Ltd during the period under review.

Group Structure

Jaakko Pöyry Group exercised on January 11, 1999 its option to increase its 49.0 per cent shareholding in Electrowatt Engineering Ltd, the parent company of Electrowatt Engineering Group, to 70.0 per cent. The acquisition price for the 21.0 per cent interest was EUR 3.9 million. Electrowatt Engineering Group is consolidated into the Jaakko Pöyry Group from the beginning of 1999.

After the period under review, on April 23, 1999, Jaakko Pöyry Group Oyj acquired the remaining 30.0 per cent of the share capital in Electrowatt Engineering Ltd. The acquisition price was EUR 5.5 million.

The Electrowatt Engineering Group's net sales for the period under review amounted to EUR 29.4 million and the operating profit to EUR 2.5 million.

Jaakko Pöyry Engenharia Ltda

The general economic situation in Brazil is still bad. The depreciation of the Brazilian currency and the high interest level will depress investment activity in the country and this has a negative effect on the operations of Jaakko Pöyry Engenharia Ltda. The associated company Jaakko Pöyry Engenharia Ltda has not been consolidated into the Jaakko Pöyry Group. The balance sheet value is about EUR 2.5 million. Jaakko Pöyry Group Oyj has in 1998 negotiated with the other shareholders in Jaakko Pöyry Engenharia Ltda regarding the possibility of transforming the forest industry business into a separate company, in which Jaakko Pöyry Group Oyj would hold a majority of the shares. The negotiations are on hold for the time being because agreement has not been reached.

Organisation

Mr. Lars Rautamo, M.Sc. (Econ.) is appointed Chief Financial Officer (CFO) of the Jaakko Pöyry Group from July 1, 1999. The post was earlier held by Executive Vice President Teuvo Salminen who's main responsibility from January 1, 1999 is the Infrastructure and Environment business group.

Share capital and shares

Jaakko Pöyry Group Oyj's share capital did not change during the period. The share capital was FIM 68.5 (EUR 11.5) million, divided between a total of 13.7 million shares.

Jaakko Pöyry Group Oyj's Annual General Meeting on March 18, 1999 authorised the Board of Directors to raise the share capital by issuing new shares and to issue convertible bonds and/or bonds with warrants. The purpose of this arrangement is to allow the share capital to be raised by a maximum of FIM 5 000 000 (EUR 0.8 million) based on the new shares and the bonds and bonds with warrants by issuing for subscription a maximum of 1 000 000 new shares. The authorisation is in force until March 18, 2000.

After the period under review, on April 23, 1999, Jaakko Pöyry Group Oyj's Board of Directors decided to raise the company's share capital by FIM 2 837 430 (EUR 0.5 million)from FIM 68 500 000 to FIM 71 337 430 by a targeted share issue to the sellers of the shares in Electrowatt Engineering Ltd, Ernst Göhner Stiftung 378 324 shares and Nordostschweizerische Kraftwerke AG 189 162 shares. The price to be paid was FIM 58 per share. The capital gain, a total of FIM 30 076 758 (EUR 5.0 million) is booked into the share premium reserve.

Jaakko Pöyry Group Oyj issued in 1998 a bond loan with warrants to all employees in the Group, with a total value of FIM 13.0 million. The bonds with warrants were wholly subscribed. The warrants carry subscription rights for a maximum of 1.3 million of the company's shares, with the subscription period beginning partly on April 1, 2000 and ending for all warrants on April 30, 2005.

The Annual General Meeting in 1998 authorised the Board of Directors to decide on the acquisition and transfer of the company's own shares. The authorisation covers a maximum of 685 000 shares, equalling 5.0 per cent of the total number of shares, of which the company has acquired 597 200 shares in 1998. The Annual General Meeting in 1999 authorised a continuation to the previously granted authorisation to acquire the company's own shares to a maximum of 685 000 shares. The authorisation still allows acquisition of 87 800 shares. The authorisation is in force until March 18, 2000.

The company's shares are quoted on the Helsinki and Stockholm Stock Exchanges. The average trading price during the report period was EUR 9.00, with a high of EUR 10.50 and a low of EUR 7.70. A total of 0.5 million of the company's shares (equalling 3.9 per cent of the total number of shares) were traded, corresponding to a turnover of EUR 4.8 million. On the Stockholm Stock Exchange, a total of 21 700 shares were traded with an average trading price of SEK 79.40.

After the period under review Finvest Oyj, the former biggest owner of Jaakko Pöyry Group Oyj sold all its shares in Jaakko Pöyry Group Oyj, a total of 5 803 700 shares equalling 42.4 per cent of the shares. The sale of the shares was offered to Finvest Oyj's shareholders.

After the above mentioned share issue and sale of shares Jaakko Pöyry Group Oyj's twenty biggest shareholders are: Corbis S.A. (16.4 per cent), Geveles Oy (8.0), Procurator Oy (4.1), Veikko Laine Oy (3.7), Ernst Göhner Stiftung (2.8), Varma-Sampo Mutual Pension Insurance Company (2.1), Tapiola Mutual Pension Insurance Company (1.9), Tapiola General Mutual Insurance Company (1.5), Nordostschweizerische Kraftwerke AG (1.4), Sampo Life Insurance Company Ltd (1.4), Pohjola Life Insurance Company (1.1), Tapiola Mutual Life Insurance Company (1.1), Gyllenberg Small Firm Fund (0.9), Merita Life Assurance Ltd (0.8), ABB Pension Foundation (0.6), Unit Trust Merita (0.6), Tapiola Corporate Life Insurance

Company (0.6), FIM Forte Investment Fund (0.6), Kaleva Mutual Insurance Company (0.6) and DHA-Invest Oy (0.6). Of the shares 38.4 per cent are nominee-registered.

Prospects

The order stock of the Forest Industry business group has grown. The growth is primarily due to the increased number of paper machine rebuilds. However, the forest industry's greenfield investments have declined, and no major improvement is foreseen during the second half of the year. This will affect the business group's result, which will fall short of last year's, as expected. The weakening business prospects of the forest industry in the first months of the year have affected the profitability of the Forest Industry Consulting business group. The order stock of the Energy business group has grown, and the group's profitability is expected to improve compared with last year. Business prospects in the Infrastructure and Environment business group are stable. The Process Industry business group's current order stock creates a good basis for the rest of the year.

The Group's order stock (proforma Jaakko Pöyry Group and Electrowatt Engineering Group) has grown during the period under review by EUR 60.6 million. The Group intends to improve its earnings compared with the previous year.

Vantaa, May 5, 1999

Jaakko Pöyry Group Oyj

Board of Directors

Jaakko Pöyry Group Oyj

Erkki Pehu-Lehtonen

Teuvo Salminen

For additional information, please contact:

Mr. Erkki Pehu-Lehtonen, President and CEO,

tel. +358 9 8947 2999, +358 400 468 084

Mr. Teuvo Salminen, Executive Vice President,

tel. +358 9 8947 2872, +358 400 420 285

Mr. Edvard Krogius, Investor Relations,

tel. +358 9 8947 3002, +358 40 551 3388

Distribution:

Helsinki Stock Exchange

Major Media

JAAKKO PÖYRY GROUP








































































































Consolidated Statement of Income1-3/19991-3/19981-12/1998
(EUR Million)   
NET SALES94.361.7259.7
Other operating income0.50.22.0
Share of associated companies' results0.00.61.5
Operating expenses-86.3-56.6-231.5
Depreciation and value decrease-2.8-1.8-9.6
OPERATING PROFIT 5.74.122.1
Proportion of net sales, %6.06.68.5
Financial income and expenses-0.4-0.6-1.5
PROFIT AFTER FINANCIAL ITEMS5.33.520.6
Proportion of net sales, %5.65.77.9
Extraordinary items0.00.00.0
PROFIT BEFORE APPROPRIATIONS,TAXES AND MINORITY INTEREST5.33.520.6
Income taxes -1.7-1.1-8.0
Minority interest-0.7-0.1-0.5
NET PROFIT FOR THE PERIOD2.92.312.1



JAAKKO PÖYRY GROUP






















































































































































































































































































    
 March 31,March 31,December 31,
Consolidated Balance Sheet199919981998
(EUR Million)   
ASSETS   
FIXED ASSETS   
Consolidation goodwill37.234.232.6
Intangible and tangible assets33.329.927.5
Non-current investments22.730.929.1
CURRENT ASSETS   
Receivables147.381.083.0
Own shares5.50.05.5
Investments, cash in hand and at banks36.151.029.4
 282.1227.0207.1
SHAREHOLDERS' EQUITY AND LIABILITIES   
SHAREHOLDERS' EQUITY69.962.571.4
MINORITY INTEREST9.75.95.3
    
LIABILITIES *)   
    
Non-current liabilities41.558.147.9
Current liabilities161.0100.582.5
    
 282.1227.0207.1
    
*) Intererst bearing liabilities48.579.049.8
Non-interest bearing liabilities154.079.580.6
    
 March 31,March 31,   December 31,
Contingent Liabilities199919981998
(EUR Million)   
Pledged assets and mortgages for own debt   
Pledged assets2.32.32.3
Mortgages, real estate1.11.21.1
Mortgages on company assets6.16.16.1
Other obligations   
Pledged assets3.83.83.8
Mortgages, real estate2.12.72.0
Rent and leasing obligations57.535.939.4
Pension obligations0.40.40.4
Other obligations 29.916.514.3
For others   
Pledged assets 3.42.53.4
Mortgages, real estate3.73.73.7
Derivative Instruments   
Foreign exchange forward contracts, notional values51.2129.0223.6



The notional amounts outstanding include positions, EUR 34.4 million, which have been closed off.

The notional amounts are not a measure of the foreign rate risk of the exposure outstanding.




























































































    
Key Figures 1-3/19991-3/19981-12/1998
Earnings / share, EUR0.220.170.89
Shareholders' equity / share, EUR4.914.565.03
Return on investment, % p.a.19.112.017.6
Return on equity, % p.a.20.114.218.0
Equity ratio, %32.933.439.5
Equity / Asset ratio, %26.830.235.3
Net debt / Equity ratio (gearing), %16.841.028.8
Order stock, EUR Million346.1159.1167.1
Capital expenditure, EUR Million2.61.57.0
Personnel in group companies in average4 1552 8012 919
Personnel in group companies at the end of the period4 1932 8302 977
Personnel in associated companies at the end of the period1 3052 5252 577
For purposes of calculating key figures, own shares have been eliminated from shareholders' equity and the number of shares.   










































































































































































































Key Figures for the Business Groups1-3/19991-3/19981-12/1998
(EUR Million)   
NET SALES    
Forest Industry30.631.1118.9
Forest Industry Consulting9.69.436.6
Energy20.43.920.2
Infrastructure and Environment22.810.043.9
Process Industries10.57.341.4
Other 0.40.0-1.3
Total94.361.7259.7
OPERATING PROFIT   
Forest Industry3.63.416.4
Forest Industry Consulting0.20.10.9
Energy1.00.01.6
Infrastructure and Environment1.60.73.8
Process Industries0.30.11.1
Associated companies0.00.61.1
Other-1.0-0.8-2.8
Total5.74.122.1
ORDER STOCK   
Forest Industry55.362.641.3
Forest Industry Consulting23.121.625.8
Energy114.010.47.9
Infrastructure and Environment94.220.526.3
Process Industries59.544.065.8
Total346.1159.1167.1
NET SALES GEOGRAPHICALLY   
The Nordic countries20.623.191.2
Other Europe 46.819.895.5
Asia10.07.229.7
North America5.37.627.4
Other11.64.015.9
Total94.361.7259.7






















































































































































































































Key Figures for the Business Groups1-3/974-6/977-9/9710-12/97
(EUR Million)    
NET SALES     
Forest Industry25.223.825.430.2
Forest Industry Consulting8.49.18.710.2
Energy3.64.14.15.3
Infrastructure and Environment9.09.18.611.0
Process Industries4.85.56.37.5
Other 0.30.20.5-1.6
Total51.351.853.662.6
OPERATING PROFIT    
Forest Industry3.81.85.84.4
Forest Industry Consulting0.40.80.60.9
Energy0.10.10.30.8
Infrastructure and Environment0.70.41.61.7
Process Industries-1.0-0.50.00.7
Associated companies-0.10.10.10.2
Other-0.5-1.2-0.7-1.6
Total3.41.57.77.1
ORDER STOCK    
Forest Industry44.557.547.545.5
Forest Industry Consulting21.320.520.421.2
Energy5.55.04.711.0
Infrastructure and Environment12.313.022.818.5
Process Industries26.728.526.144.5
Total110.3124.5121.5140.7
ELECTROWATT ENGINEERING*)    
Net sales28.832.138.432.2
Operating profit0.1-2.01.00.7
Orderstock126.5106.9122.3129.4


  • ) Electrowatt Engineering was an associated company (49.0 %) in 1998. Electrowatt Engineering will be consolidated into the Jaakko

Pöyry Group from 1999.




















































































































































































































Key Figures for the Business Groups1-3/984-6/987-9/9810-12/98
(EUR Million)    
NET SALES     
Forest Industry31.129.425.333.1
Forest Industry Consulting9.49.37.910.0
Energy3.95.85.05.5
Infrastructure and Environment10.011.410.012.5
Process Industries7.38.58.517.1
Other 0.0-0.70.0-0.6
Total61.763.756.777.6
OPERATING PROFIT    
Forest Industry3.43.94.54.6
Forest Industry Consulting0.10.30.20.3
Energy0.00.50.30.8
Infrastructure and Environment0.71.30.81.0
Process Industries0.1-0.10.20.9
Associated companies0.60.4-0.20.3
Other-0.8-1.5-0.3-0.2
Total4.14.85.57.7
ORDER STOCK    
Forest Industry62.662.552.041.3
Forest Industry Consulting21.622.027.225.8
Energy10.49.66.77.9
Infrastructure and Environment20.524.825.826.3
Process Industries44.038.671.265.8
Total159.1157.5182.9167.1
ELECTROWATT ENGINEERING*)    
Net sales27.626.934.130.4
Operating profit1.50.60.01.6
Order stock128.6136.3138.6118.4


  • ) Electrowatt Engineering was an associated company (49.0 %) in 1998. Electrowatt Engineering will be consolidated into the Jaakko Pöyry Group from 1999.