STOCK EXCHANGE RELEASE 13 Jan 2009
Pöyry takes adaptation measures in its Forest Industry and Construction Services business groups and assesses preliminarily its future prospects
PÖYRY PLC Company Announcement 13 January 2009 at 9:00 a.m.
The economic downturn sparked off by the global financial crisis has been clearly reflected in the operations of Pöyry's Forest Industry and Construction Services business groups. Pöyry takes significant adaptation measures in its Forest Industry and Construction Services business groups by starting statutory employee negotiations in business units based in Finland. The clearly decreased demand and lower capacity utilisation is expected to significantly weaken the Group's profit before taxes for 2009. The earnings guidance for 2008 remains unchanged.
The economic downturn has impaired forest industry companies' profitability and restrained globally the availability of investment financing. For this reason, projects have been postponed, preparations for new projects have slowed down and the amount of consulting assignments has decreased. Demand for Forest Industry business group's services has declined and a recovery in the demand is difficult to predict.
Demand for the Construction Services business group's services has reduced in its business sectors in Finland, Russia and the Baltic countries. Demand has weakened particularly in the commercial and office building as well as industrial construction sectors. A recovery in the demand is difficult to predict also in this area.
Pöyry launched during autumn 2008 an action programme designed to maintain the Group's profitability at as high a level as possible. The programme focuses on sales, resources, cost structure and investments. Pöyry has taken extensive measures to intensify sales, promote internal networking and increase cross-sharing of resources. In addition, temporary employment contracts and subcontracting will be cut back as projects in progress are completed.
As part of the adaptation measures, Pöyry initiates statutory employee negotiations in the Finland-based business units of the Forest Industry and Construction Services business groups. The statutory negotiations are concerned with temporary and permanent lay-offs, and other actions to adapt operations to the current market situation. The specific need for and duration of temporary lay-offs, possible permanent lay-offs and other actions to adapt operations will be determined in detail as negotiations proceed. The adaptation will equal a capacity of about 350 persons in the Forest Industry and a capacity of about 250 persons in the Construction Services. The company specific statutory employee negotiations will begin during January 2009 and are expected to be concluded during March 2009. In the Forest Industry business group's Brazilian unit a capacity of about 200 persons will be down-sized, in addition to other local cutback measures.
Demand for the Energy, Transportation, and Water and Environment business groups' services has remained stable and public-sector stimulus programmes are expected to improve demand further, especially in the transportation sector.
The clearly reduced demand and lower capacity utilisation is expected to have a significant weakening effect on the Forest Industry business group's and a clearly weakening effect on the Construction Services business group's operating profit for 2009. Preliminarily this is expected to significantly weaken the Pöyry Group's profit before taxes for 2009.
The Group's earnings guidance for 2008 will remain unchanged: consolidated net sales will increase in 2008 and profit before taxes will improve clearly in 2008. Pöyry PLC will publish its notice concerning annual accounts for 2008 and prospects for 2009 in more detail in its company announcement on 4 February 2009 at 8:30 a.m. Finnish time.
Pöyry is a global expert in consulting and engineering. We offer our clients in-depth industry expertise, innovative solutions and lifecycle engagement. Our knowledge extends across hydropower, oil and gas, power and heat, renewable energy, pulp and paper, chemical process industry, construction, transportation, and water and environment. We employ 8000 experts in 47 countries.
President and CEO
Deputy to President and CEO
Additional information by:
Heikki Malinen, President and CEO, Pöyry PLC
Tel. +358 10 33 22399
Teuvo Salminen, Deputy to President and CEO, Pöyry PLC
Tel. +358 10 33 22399
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