STOCK EXCHANGE RELEASE 4 Aug 1999
INTERIM REPORT JANUARY 1 - JUNE 30, 1999
JAAKKO PÖYRY GROUP'S NET SALES AND ORDER STOCK INCREASED,
EARNINGS PER SHARE IMPROVED BY 38 PER CENT
Net Sales and Earnings
The Jaakko Pöyry Group's net sales for the period January - June 1999 amounted to EUR 191.5 million (EUR 125.4 million in the same period 1998). The Group's operating profit was EUR 12.2 (8.9) million and profit after financial items EUR 11.4 (7.9) million. The Group's profit for the period under review was EUR 6.9 (5.1) million and earnings per share EUR 0.51 (0.37). The Group's net sales increased by 6.4 per cent compared to the consolidated net sales for the Jaakko Pöyry Group and the Electrowatt Engineering Group for the same period 1998.
All business groups recorded increased net sales. Operating profit increased in the Energy, Infrastructure and Environment and Process Industries business groups. The decreased profitability in the Forest Industry Consulting business group is due to costs in connection with the establishment of JP Capital International Ltd. JP Capital International Ltd serves the forest industry with implementation of acquisition, divestitures and restructuring activities. The company is based in London.
The Group's order stock amounted to EUR 350.3 million at the end of June. 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 increase in the order stock.
Jaakko Pöyry Group owns 40.0 per cent of the associated company Jaakko Pöyry Engenharia Ltda in Brazil. Jaakko Pöyry Engenharia Ltda has not been consolidated into the Jaakko Pöyry Group after 1995. The general economic situation in Brazil has improved. This has had a positive influence on the activity in Jaakko Pöyry Engenharia Ltda, and the result changed from loss to a slight profit during the second quarter of the reporting period.
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 June, the Group's cash in hand and at banks totalled EUR 44.6 million and interest-bearing liabilities EUR 51.3 million, so interest-bearing net debts amounted to EUR 6.7 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 8.6 per cent.
The Group's capital expenditure for the report period totalled EUR 4.0 (3.3) 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 and the Group has acquired the majority shareholding in Interpap Sp and the entire share capital in Oy Suoraplan Ltd.
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 remaining 30.0 per cent of the share capital was acquired on April 23, 1999. The acquisition price for the 51.0 per cent interest totalled to EUR 9.4 million.
The Electrowatt Engineering Group's net sales for the period under review amounted to EUR 60.1 million and the operating profit to EUR 5.3 million.
Jaakko Pöyry Oy, belonging to the Forest Industry business group, has in June acquired a majority shareholding in the Polish engineering company Interpap Sp. The company is Poland's leading forest industry engineering firm and will also expand its operations into Poland's growing energy market. Interpap Sp has about 50 employees.
Soil and Water Ltd, belonging to the Infrastructure and Environment business group, has in June acquired the entire share capital of Oy Suoraplan Ltd, a company specialising in the engineering of underground spaces, traffic tunnels, bridges and harbour structures. Oy Suoraplan Ltd has 8 employees.
Mr. Rainer Häggblom M. Sc.(For.), M.Sc. (Econ., Bus. Adm.) and present President and CEO of Jaakko Pöyry Consulting Oy has been appointed full-time Chairman of the Board of Directors of Jaakko Pöyry Consulting Oy from August 2, 1999. Mr. Rainer Häggblom will continue as director for the business group, Forest Industry Consulting. Mr. Tapio Korpeinen, M.Sc. (Eng.), MBA, is appointed new President and CEO of Jaakko Pöyry Consulting Oy from August 16, 1999.
Share capital and 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 still allows an issue of 432 514 new shares. The authorisation is in force until March 18, 2000.
Jaakko Pöyry Group Oyj's Board of Directors decided on April 23, 1999 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. The total number of shares increased from 13 700 000 to 14 267 486.
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.
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 company's shares are quoted on the Helsinki and Stockholm Stock Exchanges. The average trading price during the report period was EUR 9.52, with a high of EUR 12.40 and a low of EUR 7.70. A total of 8.8 million of the company's shares (equalling 64.3 per cent of the total number of shares) were traded, corresponding to a turnover of EUR 83.8 million. On the Stockholm Stock Exchange, a total of 44 950 shares were traded with an average trading price of SEK 88.20.
In April 1999 Finvest Oyj, the former biggest owner of Jaakko Pöyry Group Oyj sold all its shares in Jaakko Pöyry Group Oyj, a total of 5.8 million shares equalling 42.4 per cent of the shares. The sale of the shares was offered to Finvest Oyj's shareholders.
The investment activity in the Forest Industry has been lower than during the last years. An increasing share of total investments is related to rebuilds. The Forest Industry business group's order stock has grown due to increased number of rebuild orders. However, the forest industry's greenfield investment activity has 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 result of the business group, Forest Industry Consulting, depends on general activity within the forest industry and the development of JP Capital International Ltd during the rest of the year. The order stock of the Energy business group has grown, and the group's profitability will improve compared with last year. Business prospects in the Infrastructure and Environment business group are stable and the profitability will improve. The Process Industry business group's current order stock is satisfactory and the earnings are dependent on the implementation activity of major projects.
Consolidated earnings during the period under review have been good and the order stock has grown by EUR 64.8 million or 22.7 per cent. The Group's earnings will improve compared with the previous year and according to set targets.
Vantaa, August 3, 1999
Jaakko Pöyry Group Oyj
Board of Directors
Jaakko Pöyry Group Oyj
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
Helsinki Stock Exchange
Stockholm Stock Exchange
|Consolidated Statement of Income||1-6/1999||1-6/1998||1-12/1998|
|Other operating income||1.4||0.6||2.0|
|Share of associated companies' results||0.1||1.0||1.5|
|Depreciation and value decrease||-5.4||-3.6||-9.6|
|Proportion of net sales, %||6.4||7.1||8.5|
|Financial income and expenses||-0.8||-1.0||-1.5|
|PROFIT AFTER FINANCIAL ITEMS||11.4||7.9||20.6|
|Proportion of net sales, %||6.0||6.3||7.9|
|PROFIT BEFORE APPROPRIATIONS,TAXES AND MINORITY INTEREST||11.4||7.9||20.6|
|NET PROFIT FOR THE PERIOD||6.9||5.1||12.1|
|June 30,||June 30,||December 31,|
|Consolidated Balance Sheet||1999||1998||1998|
|Intangible and tangible assets||33.5||28.9||27.5|
|Investments, cash in hand and at banks||44.6||28.8||29.4|
|SHAREHOLDERS' EQUITY AND LIABILITIES|
|*) Interest bearing liabilities||51.3||61.8||49.8|
|Non-interest bearing liabilities||153.3||71.5||80.6|
|June 30,||June 30,||December 31,|
|Pledged assets and mortgages for own debt|
|Mortgages, real estate||1.1||1.2||1.1|
|Mortgages on company assets||6.1||6.1||6.1|
|Mortgages, real estate||2.2||2.4||2.0|
|Rent and leasing obligations||58.0||35.6||39.4|
|Mortgages, real estate||3.7||3.7||3.7|
|Foreign exchange forward contracts, notional values||49.8||179.9||223.6|
The notional amounts outstanding include positions, EUR 29.0 million, which have been closed off.
The notional amounts are not a measure of the foreign rate risk of the exposure outstanding.
|Earnings / share, EUR||0.51||0.37||0.89|
|Shareholders' equity / share, EUR||5.40||4.77||5.03|
|Return on investment, % p.a.||20.1||14.0||17.6|
|Return on equity, % p.a.||20.6||15.2||18.0|
|Equity ratio, %||34.0||38.0||39.5|
|Equity / Asset ratio, %||27.8||34.7||35.3|
|Net debt / Equity ratio (gearing), %||8.6||46.7||28.8|
|Order stock, EUR million||350.3||157.5||167.1|
|Capital expenditure, EUR million||4.0||3.3||7.0|
|Personnel in group companies in average||4 125||2 859||2 919|
|Personnel in group companies|
|at the end of the period||4 169||2 967||2 977|
|Personnel in associated companies|
|at the end of the period||1 330||2 623||2 577|
For purposes of calculating key figures, own shares have been eliminated from shareholders' equity and the number of shares
|Key Figures for the Business Groups||1-6/1999||1-6/1998||1-12/1998|
|Forest Industry Consulting||19.6||18.7||36.6|
|Infrastructure and Environment||46.4||21.4||43.9|
|Forest Industry Consulting||0.2||0.4||0.9|
|Infrastructure and Environment||3.7||2.0||3.8|
|Forest Industry Consulting||22.4||22.0||25.8|
|Infrastructure and Environment||95.1||24.8||26.3|
|NET SALES GEOGRAPHICALLY|
|The Nordic countries||46.3||47.2||91.2|
|Key Figures for the Business Groups||7-9/97||10-12/97||1-3/98||4-6/98|
|Forest Industry Consulting||8.7||10.2||9.4||9.3|
|Infrastructure and Environment||8.6||11.0||10.0||11.4|
|Forest Industry Consulting||0.6||0.9||0.1||0.3|
|Infrastructure and Environment||1.6||1.7||0.7||1.3|
|Forest Industry Consulting||20.4||21.2||21.6||22.0|
|Infrastructure and Environment||22.8||18.5||20.5||24.8|
|Key Figures for the Business Groups||7-9/98||10-12/98||1-3/99||4-6/99|
|Forest Industry Consulting||7.9||10.0||9.6||10.0|
|Infrastructure and Environment||10.0||12.5||22.8||23.6|
|Forest Industry Consulting||0.2||0.3||0.2||0.0|
|Infrastructure and Environment||0.8||1.0||1.6||2.1|
|Forest Industry Consulting||27.2||25.8||23.1||22.4|
|Infrastructure and Environment||25.8||26.3||94.2||95.1|