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.
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.
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.
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
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
JAAKKO PÖYRY GROUP
|Consolidated Statement of Income||1-3/1999||1-3/1998||1-12/1998|
|Other operating income||0.5||0.2||2.0|
|Share of associated companies' results||0.0||0.6||1.5|
|Depreciation and value decrease||-2.8||-1.8||-9.6|
|Proportion of net sales, %||6.0||6.6||8.5|
|Financial income and expenses||-0.4||-0.6||-1.5|
|PROFIT AFTER FINANCIAL ITEMS||5.3||3.5||20.6|
|Proportion of net sales, %||5.6||5.7||7.9|
|PROFIT BEFORE APPROPRIATIONS,TAXES AND MINORITY INTEREST||5.3||3.5||20.6|
|NET PROFIT FOR THE PERIOD||2.9||2.3||12.1|
JAAKKO PÖYRY GROUP
|March 31,||March 31,||December 31,|
|Consolidated Balance Sheet||1999||1998||1998|
|Intangible and tangible assets||33.3||29.9||27.5|
|Investments, cash in hand and at banks||36.1||51.0||29.4|
|SHAREHOLDERS' EQUITY AND LIABILITIES|
|*) Intererst bearing liabilities||48.5||79.0||49.8|
|Non-interest bearing liabilities||154.0||79.5||80.6|
|March 31,||March 31,||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||2.1||2.7||2.0|
|Rent and leasing obligations||57.5||35.9||39.4|
|Mortgages, real estate||3.7||3.7||3.7|
|Foreign exchange forward contracts, notional values||51.2||129.0||223.6|
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.
|Earnings / share, EUR||0.22||0.17||0.89|
|Shareholders' equity / share, EUR||4.91||4.56||5.03|
|Return on investment, % p.a.||19.1||12.0||17.6|
|Return on equity, % p.a.||20.1||14.2||18.0|
|Equity ratio, %||32.9||33.4||39.5|
|Equity / Asset ratio, %||26.8||30.2||35.3|
|Net debt / Equity ratio (gearing), %||16.8||41.0||28.8|
|Order stock, EUR Million||346.1||159.1||167.1|
|Capital expenditure, EUR Million||2.6||1.5||7.0|
|Personnel in group companies in average||4 155||2 801||2 919|
|Personnel in group companies at the end of the period||4 193||2 830||2 977|
|Personnel in associated companies at the end of the period||1 305||2 525||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||1-3/1999||1-3/1998||1-12/1998|
|Forest Industry Consulting||9.6||9.4||36.6|
|Infrastructure and Environment||22.8||10.0||43.9|
|Forest Industry Consulting||0.2||0.1||0.9|
|Infrastructure and Environment||1.6||0.7||3.8|
|Forest Industry Consulting||23.1||21.6||25.8|
|Infrastructure and Environment||94.2||20.5||26.3|
|NET SALES GEOGRAPHICALLY|
|The Nordic countries||20.6||23.1||91.2|
|Key Figures for the Business Groups||1-3/97||4-6/97||7-9/97||10-12/97|
|Forest Industry Consulting||8.4||9.1||8.7||10.2|
|Infrastructure and Environment||9.0||9.1||8.6||11.0|
|Forest Industry Consulting||0.4||0.8||0.6||0.9|
|Infrastructure and Environment||0.7||0.4||1.6||1.7|
|Forest Industry Consulting||21.3||20.5||20.4||21.2|
|Infrastructure and Environment||12.3||13.0||22.8||18.5|
- ) 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 Groups||1-3/98||4-6/98||7-9/98||10-12/98|
|Forest Industry Consulting||9.4||9.3||7.9||10.0|
|Infrastructure and Environment||10.0||11.4||10.0||12.5|
|Forest Industry Consulting||0.1||0.3||0.2||0.3|
|Infrastructure and Environment||0.7||1.3||0.8||1.0|
|Forest Industry Consulting||21.6||22.0||27.2||25.8|
|Infrastructure and Environment||20.5||24.8||25.8||26.3|
- ) Electrowatt Engineering was an associated company (49.0 %) in 1998. Electrowatt Engineering will be consolidated into the Jaakko Pöyry Group from 1999.