Ponsse Oyj: Ponsse's Half-year Report for 1 January - 30 June 2023
Ponsse Plc
Stock Exchange Release - Half-year Report
15 August 2023, 9:00 a.m. (EEST)
April-June (continuing operations):
- Net sales amounted to EUR 208.1 (195.9) million
- Operating profit totalled EUR 10.2 (12.9) million, equalling 4.9 (6.6) per cent of net sales
January-June (continuing operations):
- Net sales amounted to EUR 409.8 (352.0) million
- Operating profit totalled EUR 26.8 (21.9) million, equalling 6.5 (6.2) per cent of net sales
- Net result was EUR 21.8 (14.6) million
- Earnings per share were EUR 0.78 (0.52)
- Order books stood at EUR 294.2 (357.1) million at the end of period under review
- Cash flow from business operations was EUR 0.1 (-37.5) million (continuing and discontinued operations)
- Equity ratio was 54.3 (59.0) per cent at the end of period under review (continuing and discontinued operations)
- The company's euro-denominated operating profit in 2023 is expected to be slightly higher than the operating profit of its continuing operations in 2022 (EUR 46.6 million).
PRESIDENT AND CEO JUHO NUMMELA:
Demand for PONSSE forest machines was at a reasonable level during the last quarter. The order intake for the second quarter was approximately EUR 165.4 million. The company's order books at the end of the period under review stood at EUR 294.2 (357.1) million.
The situation in the forest industry decreased relatively quickly during the beginning of the year. The decrease in construction, combined with the decelerating growth of private consumption, has an impact on demand for forest industry end products. The weakening of the forest industry's economic outlook makes it challenging to assess the development of global logging volumes. The company's order intake has decreased from its peak level.
The company's net sales for the last quarter stood at EUR 208.1 (195.9) million. Of our operations, the sale and maintenance of new machines grew moderately, while the net sales of used machines decreased slightly during the first half of the year. Our technology company Epec continued its strong growth as planned. Our forest machine factory in Vieremä operated at its normal capacity, and delivery volumes were at a good level during the last quarter.
Our relative profitability during the last quarter was 4.9 (6.6) per cent. The profitability was affected by the growth of company's operating expenses faster than the net sales and the operative challenges related to subsidiary Ponsse Latin America Ltda. During the first half, our relative profitability increased slightly year-on-year, with profitability being 6.5 (6.2) per cent. We will continue our efforts to improve the profitability of our operations, and we aim to control our productivity, operating costs and product expenses more effectively.
The company's cash flow amounted to EUR 0.1 (-37.5) million. Capital was still tied up in raw material stocks and especially in the stocks of used machines. The turnover of used machine stocks decreased and the stock level increased during the last quarter. The availability of parts and components improved, and the factory had almost no unfinished products waiting for components.
Ponsse strengthened its presence on the west coast of the United States by signing a retail agreement with PacWest Machinery. At the same time, Ponsse sold the Oregon service business operations to PacWest. In the future, PacWest will be responsible for the sale and maintenance of PONSSE forest machines in the states of Oregon, Washington and Idaho enabling wider service network to Ponsse's customers and, with that, opportunity for the growth of Ponsse services on the west coast of the United States. Ponsse will normally continue to serve customers and develop its operations in the United States in its current market areas in the Great Lakes region and the southeastern parts of the country.
Despite the unstable markets, Ponsse will invest significantly in the development of the company. The development investments will focus on the development of new products and technologies, the Group's information systems, and digital services. Epec's factory investment in Seinäjoki is proceeding as planned, and the new factory will open during the second half of this year.
NET SALES
Consolidated net sales for the period under review amounted to EUR 409.8 (352.0) million, which is 16.4 per cent more than in the comparison period. International business operations accounted for 74.1 (78.8) per cent of net sales.
Net sales were regionally distributed as follows: Northern Europe 45.0 (39.2) per cent, Central and Southern Europe 20.8 (22.9) per cent, North and South America 31.2 (33.8) per cent and other countries 3.0 (4.1) per cent.
1-6/23 1-6/22
Net sales from continuing operations 409,828 352,043
Net sales from discontinued operations 2,533 23,407
Net sales total 412,362 375,450
PROFIT PERFORMANCE
The operating result amounted to EUR 26.8 (21.9) million. The operating result equalled 6.5 (6.2) per cent of net sales for the period under review.
1-6/23 1-6/22
Operating profit from continuing operations 26,834 21,874
Operating profit from discontinued operations 947 2,157
Operating profit total 27,781 24,030
Consolidated return on capital employed (ROCE) stood at 15.1 (12.0) per cent.
Staff costs for the period totalled EUR 60.6 (55.7) million. Other operating expenses stood at EUR 41.9 (36.0) million. The net total of financial income and expenses amounted to EUR 2.1 (-1.6) million. Exchange rate gains and losses due to currency rate fluctuations were recognised under financial items, having a net impact of EUR 3.1 (-2.5) million. During the period under review, no interest swap appreciation was recognised through profit or loss. The parent company's receivables from subsidiaries stood at EUR 112.2 (92.7) million net. Receivables from subsidiaries mainly consist of trade receivables.
Result for the period under review totalled EUR 21.8 (14.6) million. Diluted and undiluted earnings per share (EPS) came to EUR 0.78 (0.52).
STATEMENT OF FINANCIAL POSITION AND FINANCING ACTIVITIES
At the end of the period under review, the total consolidated statements of financial position amounted to EUR 596.9 (541.0) million. Inventories stood at EUR 251.4 (222.9) million. Trade receivables totalled EUR 67.3 (54.1) million, while cash and cash equivalents stood at EUR 49.6 (35.1) million. Group shareholders' equity stood at EUR 322.8 (308.8) million and parent company shareholders' equity (FAS) at EUR 249.0 (235.7) million. The amount of interest-bearing liabilities was EUR 108.3 (55.6) million. The company has ensured its liquidity by credit facility limits and commercial paper programs. Group's loans from financial institutions are non-collaretal bank loans without financial covenants. Consolidated net liabilities totalled EUR 55.3 (15.6) million, and the debt-equity ratio (net gearing) was 17.1 (5.1) per cent. The equity ratio stood at 54.3 (59.0) per cent at the end of the period under review.
Cash flow from operating activities amounted to EUR 0.1 (-37.5) million. Cash flow from investment activities came to EUR -18.3 (-22.2) million.
ORDER INTAKE AND ORDER BOOKS
Order intake for the period totalled EUR 350.3 (396.6) million, while period-end order books were valued at EUR 294.2 (357.1) million.
DISTRIBUTION NETWORK AND GROUP STRUCTURE
The subsidiaries included in the Ponsse Group are Ponsse AB, Sweden; Ponsse AS, Norway; Ponssé S.A.S., France; Ponsse UK Ltd, the United Kingdom; Ponsse Machines Ireland Ltd, Ireland, Ponsse North America, Inc., the United States; Ponsse Latin America Ltda, Brazil; Ponsse Uruguay S.A., Uruguay; OOO Ponsse, Russia; Ponsse Asia-Pacific Ltd, Hong Kong; Ponsse China Ltd, China; Ponsse Chile SpA, Chile; Ponsse Czech s.r.o., Czech Republic and Epec Oy, Finland.
The Group includes also the OOO Ponsse wholly owned property company Ponsse Centre in Russia, EAI PON1V Holding Oy in Finland and Sunit Oy in Finland, which is Ponsse Plc's associate with a holding of 34 per cent.
In its release issued on 28 June 2022, Ponsse announced that it has signed a deed of sale regarding the sale of all shares in OOO Ponsse to the Russian company OOO Bison. While the process to complete the transaction is still continuing, it has not yet been approved by the Russian authorities.
R&D AND CAPITAL EXPENDITURE
Group's R&D expenses during the period under review totalled EUR 14.0 (14.0) million, of which EUR 5.7 (5.8) million was capitalised.
Investments during the period under review totalled EUR 18.7 (17.5) million. It consisted in addition to capitalised R&D expenses of investments in buildings and ordinary maintenance and replacement investments for machinery and equipment.
MANAGEMENT
The following persons were members of the Management Team: Juho Nummela, President and CEO, acting as the chairman; Petri Härkönen, Deputy CEO, Chief Financial Officer; Juha Inberg, Chief R&D and Technology officer; Tiina Kautonen, Chief Human Resources Official; Marko Mattila, Chief, Sales, Service and Marketing Officer; Tapio Mertanen, Chief Service Business Officer; Katja Paananen, Chief Responsibility Officer; Miika Soininen, Chief Digital officer and Tommi Väänänen, Chief Operations officer. The company management has regular management liability insurance.
The international PONSSE service network is led by Marko Mattila, Chief, Sales, Service and Marketing Officer, and Tapio Mertanen, Chief Service Business Officer. Managing directors of Ponsse's subsidiaries and Jussi Hentunen report to Marko Mattila, Chief, Sales, Service and Marketing Officer. Group area directors report to Jussi Hentunen, Director, Dealer Development.
The geographical distribution and the responsible persons are presented below.
Northern Europe:
Jani Liukkonen (Finland),
Carl-Henrik Hammar (Sweden, Denmark and Norway) and
Tarmo Saks (the Baltic countries).
Central and Southern Europe:
Tuomo Moilanen (Germany and Austria),
Jean Sionneau (France),
Janne Tarvainen (Spain and Portugal),
Gary Glendinning (United Kingdom and Ireland),
Antti Räsänen (Hungary, Italy, Romania, Slovenia, Croatia, Serbia and Bulgaria),
Tarmo Saks (Poland and Slovakia) and
Jakub Hacura (Czech Republic).
Russia and Asia:
Mikhail Menshikov (Russia and Belarus),
Janne Tarvainen (Australia and South Africa) and
Risto Kääriäinen (China and Japan).
North and South America:
Pekka Ruuskanen (the United States),
Eero Lukkarinen (Canada),
Fernando Campos (Brazil) and
Martin Toledo (Uruguay, Chile and Argentina).
PERSONNEL
The Group had an average staff of 2,090 (2,016) during the period and employed 2,168 (2,076) people at period-end.
SHARE-BASED INCENTIVE PLANS
The Board of Directors of Ponsse Plc has approved two new Ponsse Group's share-based incentive plans. A stock exchange release regarding the incentive plans has been published on 3 March 2023. The aim of the new plans is to align the objectives of the shareholders and plan participants for increasing the value of the company in the long-term, to retain the participants at the company and to offer them competitive reward schemes that are based on earning and accumulating the company's shares.
The CEO plan consists of five performance periods, calendar years 2023, 2023-2024, 2023-2025, 2024-2026 and 2025-2027. A restriction period is included in performance periods 2023 and 2023-2024, which begins from the reward payment and ends on 31 December 2025. The matching reward will be paid by the end of May 2024, 2025 and 2026. The matching shares delivered as a matching reward cannot be transferred during a restriction period that will end on 31December 2025, 31 December 2026 and 31 December 2027. The performance-based reward will be paid by the end of May after the end of each performance period. The shares received as reward based on performance periods 2023 and 2023-2024 cannot be transferred during the restriction period, i.e. 31 December 2025. The amount of rewards to be paid based on the performance periods that began in 2023 will correspond to an approximate maximum total of 75,000Ponsse Plc shares, including also the portion to be paid in cash (gross reward).
The key employee plan consists of three performance periods, each lasting for three calendar years, performance periods 2023-2025, 2024-2026 and 2025-2027. The matching reward will be paid in 2023, 2024 and 2025 after the acquisition of the investment shares and confirmation of reward, as soon as practically possible. The matching shares delivered as a matching reward cannot be transferred during a restriction period that will end on 31December 2025, 31 December 2026 and 31 December 2027. The performance-based reward will be paid by the end of May after the end of each performance period. The share acquisitions for the first performance periods began on April 28, 2023, and ended on July 12, 2023. The number of shares acquired totaled 16,500. In the period, the cost effect of the share-based incentive plan was approximately EUR 0.2 million,
The total cost effect of the share-based incentive plans is estimated to be around EUR 2.1 million in the years 2023-2025.
During the financial period 2021, the Group implemented the restricted share plan, where the reward is based on the participant's valid employment or director contract and the continuity of the employment or service during a restriction period. The 24-month restriction period of the system ended in 2023 and accordingly, 3,000 company shares were paid as a reward. The expenses were distributed over the entire period, of which the 2023 portion is EUR 56 thousand.
SHARE PERFORMANCE
The company's registered share capital consists of 28,000,000 shares. The trading volume of Ponsse Plc shares for 1 January - 30 June 2023 totalled 249,157, accounting for 0.9 per cent of the total number of shares. Share turnover amounted to EUR 7.0 million, with the period's lowest and highest share prices amounting to EUR 25.55 and EUR 32.50, respectively.
At the end of the period, shares closed at EUR 32.00, and market capitalisation totalled EUR 896.0 million.
At the end of the period under review, the company held 10,457 treasury shares.
ANNUAL GENERAL MEETING
A separate release was issued on 12 April 2023 regarding the authorizations given to the Board of Directors and other resolutions at the AGM.
GOVERNANCE
In its decision-making and administration, the company observes the Finnish Limited Liability Companies Act, other regulations governing publicly listed companies and the company's Articles of Association. The company's Board of Directors has adopted the Code of Governance that complies with the Finnish Corporate Governance Code approved by the Board of the Securities Market Association. The purpose of the code is to ensure that the company is professionally managed and that its business principles and practices are of a high ethical and professional standard.
The Code of Governance is available on Ponsse's website in the Investors section.
NON-FINANCIAL INFORMATION REPORTING
Each year, Ponsse publishes its responsibility report in conjunction with its annual report. The report is also available on the company's website under responsibility and investors.
RISK MANAGEMENT
Our risk management is based on the company's values and strategic and financial goals. The purpose of risk management is to support the company's strategic objectives and to secure its financial development and the continuity of its business. Ponsse's management conducts an annual risk assessment that includes the sustainability risks and opportunities impacting the company's business. Within them, aspects related to climate change, biodiversity and resource efficiency together with digitalisation and technological development are emphasised.
The purpose of risk management is to identify, assess, and monitor business-related risks that may impact the realisation of the company's strategic and financial objectives or the continuity of business. This information is used to decide what measures will be required to prevent risks and respond to current risks.
Risk management is part of the company's daily business and has been incorporated into its management system. Risk management is directed by the risk management policy approved by the Board of Directors.
A risk is any event that may prevent the company from achieving its objectives or threatens the continuity of business. A risk may also be a positive event, in which case the risk is treated as an opportunity. Each risk is assessed on the basis of its impact and probability. The company's risk management methods include the avoidance, mitigation, and transfer of risk. Risks may also be managed by controlling and minimising their impacts.
SHORT-TERM RISK MANAGEMENT
Our major short-term risks are related to geopolitical situation, sudden economic fluctuation and still high inflation and rising interest rates. The instability of the world economy and increasing financing costs may also reduce demand for forest machines.
General delivery problems in our supply chain have made it more difficult to manage PONSSE forest machine production schedules, tied up more capital in the supply chain, and increased the risks related to working capital management.
Our operating environment has changed drastically and it is affecting Ponsse's operations. Russia's invasion of Ukraine has forced the European Union and United States to respond and impose rigid sanctions against Russia. Ponsse suspended all sales and export operations to Russia and Belarus effective 2 March 2022. At the same time, the operations of the local Russian subsidiary OOO Ponsse were discontinued. In its release issued on 28 June 2022, Ponsse announced that it has signed a deed of sale regarding the sale of all shares in OOO Ponsse to the Russian company OOO Bison. The reorganisation in Russia may be associated with uncertainty regarding the approval process for the sale of foreign-owned companies and completing the transaction. While the process to complete the transaction is continuing, it has not yet been approved by the Russian authorities. The delay is caused by a regulation entered into force in Russia on 8 September 2022, relating to the approval of sales of companies owned by foreign parties. Ponsse aims to complete the sale as soon as possible, depending on the approval process of the Russian authorities.
The uncertainty may also be increased by the volatility of developing countries' foreign exchange markets. The geopolitical situation will increase the uncertainty through financial market operations and sanctions. Changes taking place in the fiscal and customs legislation in countries to which Ponsse exports may hamper the company's export trade or its profitability.
The parent company monitors the changes in the Group's internal and external trade receivables and the associated risk of impairment. The company has long-term and extensive service contracts, which may involve operational risks.
The key objective of the company's financial risk management policy is to manage liquidity, interest and currency risks. The company ensures its liquidity through credit limit facilities agreed with a number of financial institutions. The effect of adverse changes in interest rates is minimised by utilising credit linked to different reference rates and by concluding interest rate swaps. The effects of currency rate fluctuations are partly mitigated through derivative contracts.
In the challenging situation, Ponsse's strong financial position is important. The company's financial position has remained strong due to good liquidity and binding credit limit facilities agreed with financial institutions. In terms of financing, Ponsse has carried out all measures necessary to ensure business continuity and financial situation is regularly evaluated.
In order to strengthen cybersecurity, Ponsse has clarified software update policy and user manual.
OUTLOOK FOR THE FUTURE
The company's euro-denominated operating profit in 2023 is expected to be slightly higher than the operating profit of its continuing operations in 2022 (EUR 46.6 million).
Due to the uncertainty in the market, the company keeps prioritising its investments and the cost control will be continued. The development work to improve profitability continues. The company monitors changes in the operating environment and customers operating conditions closely.
We monitor Ponsse Latin America Ltda -subsidiary's situation in an enhanced manner and company takes measures to improve the situation.
EVENTS AFTER THE PERIOD
On 7 August 2023, Ponsse announced that it has signed a retail agreement with PacWest Machinery (hereinafter "PacWest") in the United States. At the same time, the companies have signed a deed of sale according to which Ponsse sells its service business operations in Coburg, Oregon, to PacWest. In the future, PacWest will be responsible for the sale and maintenance of PONSSE forest machines in the states of Oregon, Washington and Idaho on the West Coast of the United States. The companies will not make the transaction price public. The price has no impact on the measurement of Ponsse's value or on the company's financial result.
There have been no other subsequent events after the review period that required recognition or disclosure.
PONSSE GROUP
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (EUR 1,000)
1-6/23 1-6/22 1-12/22
NET SALES 409,828 352,043 755,123
Increase 7,103 38,147 33,633
(+)/decrease (-) in
inventories of
finished goods and
work in progress
Other operating 2,097 1,396 3,677
income
Raw materials and -274,177 -264,621 -525,040
services
Expenditure on -60,594 -55,687 -107,873
employment-related
benefits
Depreciation and -15,564 -13,402 -27,671
amortisation
Other operating -41,859 -36,004 -85,270
expenses
OPERATING PROFIT 26,834 21,873 46,577
Share of results of 144 117 147
associated companies
Financial income and 2,143 -1,624 -3,504
expenses
RESULT BEFORE TAXES 29,120 20,367 43,219
Income taxes -7,352 -5,801 -9,037
NET RESULT FROM THE 21,768 14,567 34,182
CONTINUING
OPERATIONS
Net result from the 1,043 -200 2,930
discontinued
operations
NET RESULT FOR THE 22,812 14,367 37,113
PERIOD
OTHER ITEMS INCLUDED
IN TOTAL
COMPREHENSIVE
RESULT:
Translation -5,257 13,632 4,354
differences related
to foreign units
TOTAL COMPREHENSIVE 17,554 27,999 41,467
RESULT FOR THE
PERIOD
Diluted and 0.78 0.52 1.22
undiluted earnings
per share from
continuing
operations
Diluted and 0.04 -0.01 0.10
undiluted earnings
per share from
discontinued
operations
Diluted and 0.81 0.51 1.33
undiluted earnings
per share
4-6/23 4-6/22
NET SALES 208,099 195,919
Increase 4,812 15,595
(+)/decrease (-) in
inventories of
finished goods and
work in progress
Other operating 1,151 707
income
Raw materials and -141,228 -142,296
services
Expenditure on -32,446 -30,277
employment-related
benefits
Depreciation and -7,784 -7,001
amortisation
Other operating -22,389 -19,732
expenses
OPERATING PROFIT 10,215 12,914
Share of results of 145 116
associated companies
Financial income and 1,579 -2,743
expenses
RESULT BEFORE TAXES 11,939 10,287
Income taxes -4,206 -3,714
NET RESULT FROM THE 7,733 6,573
CONTINUING
OPERATIONS
Net result from the 551 -3,512
discontinued
operations
NET RESULT FOR THE 8,284 3,060
PERIOD
OTHER ITEMS INCLUDED
IN TOTAL
COMPREHENSIVE
RESULT:
Translation -3,317 11,794
differences related
to foreign units
TOTAL COMPREHENSIVE 4,967 14,855
RESULT FOR THE
PERIOD
Diluted and 0.28 0.23
undiluted earnings
per share from
continuing
operations
Diluted and 0.02 -0.13
undiluted earnings
per share from
discontinued
operations
Diluted and 0.30 0.11
undiluted earnings
per share
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (EUR 1,000)
ASSETS 30 Jun 23 30 Jun 22 31 Dec 22
NON-CURRENT ASSETS
Intangible assets 52,708 45,763 49,583
Goodwill 5,718 6,024 5,707
Property, plant and equipment 116,391 108,061 114,732
Financial assets 429 428 375
Investments in associated companies 956 886 881
Non-current receivables 58 232 63
Deferred tax assets 6,024 4,464 4,422
TOTAL NON-CURRENT ASSETS 182,284 165,858 175,763
CURRENT ASSETS
Inventories 251,415 222,894 229,648
Trade receivables 67,316 54,140 62,305
Income tax receivables 1,289 766 1,013
Other current receivables 27,000 22,481 24,817
Cash and cash equivalents 49,608 35,138 73,451
TOTAL CURRENT ASSETS 396,629 335,419 391,234
Assets related to assets held for sale 18,018 39,716 21,650
TOTAL ASSETS 596,931 541,023 588,648
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 7,000 7,000 7,000
Other reserves 3,460 3,460 3,460
Translation differences 7,443 21,979 12,701
Treasury shares -290 -2 -274
Retained earnings 305,143 276,393 298,926
EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS 322,757 308,830 321,813
NON-CURRENT LIABILITIES
Interest-bearing liabilities 49,894 51,170 42,484
Deferred tax liabilities 242 766 942
Other non-current liabilities 79 84 81
TOTAL NON-CURRENT LIABILITIES 50,214 52,019 43,507
CURRENT LIABILITIES
Interest-bearing liabilities 58,382 4,453 53,804
Provisions 10,930 4,274 10,647
Tax liabilities for the period 3,101 5,449 4,664
Trade creditors and other current liabilities 151,092 152,197 153,476
TOTAL CURRENT LIABILITIES 223,505 166,374 222,591
Liabilities related to assets held for sale 454 13,800 738
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 596,931 541,023 588,648
CONSOLIDATED STATEMENT OF CASH FLOWS (EUR 1,000)
Continuing and discontinued operations
1-6/23 1-6/22 1-12/22
CASH FLOWS FROM OPERATING ACTIVITIES:
Net result for the period 22,812 14,367 37,113
Adjustments:
Financial income and expenses -2,219 3,981 5,893
Change in provisions -158 -275 6,291
Share of the result of associated companies -144 -117 -147
Depreciation and amortisation 15,564 14,514 28,853
Income taxes 7,332 5,800 9,562
Other adjustments 1,801 885 -3,753
Cash flow before changes in working capital 44,988 39,154 83,812
Change in working capital:
Change in trade receivables and other receivables -7,283 -15,900 -21,858
Change in inventories -20,302 -59,465 -67,087
Change in trade creditors and other liabilities -6,123 3,631 -4,173
Interest received 246 139 309
Interest paid -1,455 -565 -1,627
Other financial items 1,160 -377 600
Income taxes paid -11,126 -4,122 -7,921
NET CASH FLOWS FROM OPERATING ACTIVITIES (A) 106 -37,505 -17,945
CASH FLOWS USED IN INVESTING ACTIVITIES
Investments in tangible and intangible assets -18,745 -17,754 -41,917
Proceeds from sale of tangible and intangible assets 405 239 612
Acquisition of subsidiaries* 0 -4,688 -5,516
NET CASH FLOWS USED IN INVESTMENT ACTIVITIES (B) -18,340 -22,203 -46,821
CASH FLOWS FROM FINANCING ACTIVITIES
Withdrawal/Repayment of current loans 4,475 -852 29,575
Withdrawal of non-current loans 8,000 0 11,170
Repayment of finance lease liabilities -1,932 -1,737 -3,755
Dividends paid -16,794 -16,800 -16,800
NET CASH FLOWS FROM FINANCING ACTIVITIES (C) -6,251 -19,389 20,191
Change in cash and cash equivalents (A+B+C) -24,485 -79,097 -44,575
Cash and cash equivalents on 1 Jan 76,545 120,900 120,900
Impact of exchange rate changes -429 -1,763 220
Cash and cash equivalents on 30 Jun/31 Dec 51,632 40,040 76,545
*) Acquisition of subsidiaries Ponsse Chile SpA, Chile and Ponsse Czech s.r.o., Czech Republic decreased by cash and cash equivalents at the time of acquisition
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR 1,000)
A = Share
capital
B = Share
premium and
other reserves
C = Translation
differences
D = Treasury
shares
E = Retained
earnings
F = Total
shareholders'
equity
EQUITY OWNED BY PARENT COMPANY SHAREHOLDERS
A B C D E F
SHAREHOLDERS' 7,000 3,460 12,701 -274 298,926 321,813
EQUITY 1
JAN 2023
Comprehensive
result:
Net result 22,812 22,812
for the period
Other items
included in
total
comprehensive
result:
Translation -5,258 -5,258
differences
Total -5,258 22,812 17,554
comprehensive
result for the
period
Direct entries 206 206
to retained
earnings
Transactions
with
shareholders
Share Plan
Dividend -16,800 -16,800
distribution
Acquisition -16 -16
of treasury
shares
Transactions -16 -16,800 -16,816
with
shareholders in
total
Other changes
SHAREHOLDERS' 7,000 3,460 7,443 -290 305,144 322,757
EQUITY 30
JUN 2023
SHAREHOLDERS' 7,000 3,460 8,347 -2 278,462 297,267
EQUITY 1
JAN 2022
Comprehensive
result:
Net result 14,367 14,367
for the period
Other items
included in
total
comprehensive
result:
Translation 13,638 13,638
differences
Total 13,638 14,367 28,005
comprehensive
result for the
period
Direct entries
to retained
earnings
Transactions
with
shareholders
Share Plan 30 30
Dividend -16,800 -16,800
distribution
Acquisition
of treasury
shares
Transactions -16,770 -16,770
with
shareholders in
total
Other changes -6 334 328
SHAREHOLDERS' 7,000 3,460 21,979 -2 276,393 308,830
EQUITY 30
JUN 2022
NOTES TO THE
RELEASE FOR
THE
HALF-YEAR
REPORT
The stock
exchange
release
for the half
-year report
has
been prepared
observing the
recognition
and
valuation
principles of
IFRS, and the
requirements
of
IAS 34 have
been
complied with.
The same
accounting
principles
were
observed for
the
closing of the
books as for
the
annual
financial
statements
dated
31 December
2022
except of the
IAS/IFRS
standard and
interpretation
changes that
entered into
forced on
January 1,
2023.
These standard
and
interpretation
changes did
not
have a
material
impact on the
half-year
report.
Ponsse has
classified the
Russian
operations
subject to
trade
as assets held
for sale and
reported them
as
discontinued
operations.
Unless
otherwise
specified, the
figures
presented in
this half-year
report refer
to
continuing
operations.
The above
figures have
not
been audited.
The above
figures have
been rounded
and
may therefore
differ from
those given in
the official
financial
statements.
Ponsse is
preparing for
the adoption
of
Pillar 2
minimum
tax rules in
the
beginning of
2024 and will
disclosure
information
about the
impacts in
2023
financial
statements
according to
IAS
12.
This
communication
includes
future
-oriented
statements
that
are based on
the
assumptions
currently made
by the
company's
management and
its current
decisions and
plans.
Although
the management
believes that
the future
expectations
are
well founded,
there is no
certainty that
these
expectations
will prove to
be
correct. This
is
why the
results
may
significantly
deviate from
the
assumptions
included in
the
future
-oriented
statements as
a
result of,
among
other things,
changes in the
economy,
markets,
competitive
conditions,
legislation or
currency
exchange
rates.
1. SEGMENT
INFORMATION
(EUR
1,000)
The Group has
operating
segments based
on a
geographical
division of
regions. The
operating
segments are
based on
reporting used
by the Group
Management
Team
in operational
decision
-making.
The group has
changed its
segmentation,
when the
operations in
Russia have
been
classified as
discontinued
operations and
assets held
for
sale in
accordance
with
the IFRS 5
standard and
are
not included
in
the report of
continuing
operations.
OPERATING
SEGMENTS
1-6/2023
Northern
Central and
North and
Other
Total
Europe
Southern
South
countries
Europe
America
Net sales of
the 264,617
88,197
129,848
12,289
494,952
segments
Revenues
between
-80,131
-3,131
-1,752
-111
-85,124
segments
NET SALES FROM
184,486
85,067
128,097
12,178
409,828
EXTERNAL
CUSTOMERS
Operating
result 3,497
11,682
10,277
2,385
27,841
of the segment
Unallocated
-1,007
items
OPERATING
RESULT 3,497
11,682
10,277
2,385
26,834
DEPRECIATION
AND 13,157
490
1,819 97
15,564
AMORTISATION
OPERATING
SEGMENTS
1-6/2022
Northern
Central and
North and
Other
Total
Europe
Southern
South
countries
Europe
America
Net sales of
the 240,855
82,699
120,435
14,361
458,350
segments
Revenues
between
-102,796
-2,086
-1,304
-120
-106,307
segments
NET SALES FROM
138,060
80,612
119,131
14,241
352,043
EXTERNAL
CUSTOMERS
Operating
result -298
9,472
11,491
2,122
22,787
of the segment
Unallocated
-914
items
OPERATING
RESULT -298
9,472
11,491
2,122
21,873
DEPRECIATION
AND 11,348
426
1,524 103
13,402
AMORTISATION
30 30 31
Jun Jun Dec
23 22 22
2. LEASING 994 1,019 1,047
COMMITMENTS
(EUR 1,000)
3. CONTINGENT 30 30 31
LIABILITIES Jun Jun Dec
(EUR 1,000) 23 22 22
Guarantees 0 20 0
given on
behalf of
others
Responsibility 5,757 6,645 6,100
of checking
the VAT
deductions
made on real
property
investments
Other 305 246 200
commitments
TOTAL 6,063 6,912 6,300
4. PROVISIONS (EUR 1,000) Guarantee provision Other provisions Total
1 January 2023 4,164 6,483 10,647
Provisions added 349 20 369
Provisions cancelled -517 0 -517
Exchange rate difference 0 431 431
30 June 2023 3,996 6,934 10,930
To item other provisions the Group has recognised a provision in the item of other provisions based on an agreement entered into by Ponsse Latin America Ltda, as the fulfilment of the contractual obligations is estimated to generate expenses that exceed the expected economic benefits obtained from the agreement. The provision has been measured based on the best possible estimate of the expenses arising from the fulfilment of the obligations on the closing date.
5. DIVIDENDS 30 Jun 23 30 Jun 22
PAID (EUR
1,000)
Dividends 16,800 16,800
per share
EUR 0.60
(EUR 0.60)
6. PROPERTY, 1-6/23 1-6/22
PLANT AND
EQUIPMENT
(EUR 1,000)
Increase 14,586 17,760
Decrease -14,407 -10,653
TOTAL 179 7,106
7. RELATED 1-6/23 1-6/22
PARTY
TRANSACTIONS
Management's
employment
-related
benefits
(EUR 1,000)
Salaries and 2,118 2,411
other short
-term
employment
-related
benefits
Benefits 0 0
paid upon
termination
of
employment
Pension 622 587
liabilities,
statutory
and
voluntary
pension
security
Compensation 155 150
of the
members of
the Board of
Directors
8. DISCONTINUED OPERATIONS
On 28 June 2022, Ponsse has signed a deed of sale regarding the sale of all shares in OOO Ponsse to the Russian company OOO Bison. While the process to complete the transaction is continuing, it has not yet been approved by the Russian authorities. Ponsse aims to complete the sale as soon as possible. Ponsse has classified the sold functions as assets for sale and reported them as discontinued operations.
The reorganisation has no material impact on profit, and no significant impairment or sales profit due to the sale has been recorded in the income statement for the period under review. The cumulative RUB/EUR translation difference was EUR 9.3 million at the end Q2/2023. The cumulative translation difference will be recognised as income on the income statement once the sale has been concluded. RUB/EUR average rate of 84.61957 and closing rate of 97.59500 is used in the half-year report (source: Kauppalehti).
PROFIT AND LOSS STATEMENT FROM DISCONTINUED OPERATIONS (EUR 1,000)
1-6/23 1-6/22 1-12/22
NET SALES 2,533 23,407 32,561
Increase -20 -1,177 -1,992
(+)/decrease (
-) in
inventories of
finished goods
and work in
progress
Other 260 91 497
operating
income
Raw materials -796 -14,154 -17,320
and services
Expenditure on -752 -3,027 -4,246
employment
-related
benefits
Depreciation -1 -1,112 -1,182
and
amortisation
Other -278 -1,872 -2,472
operating
expenses
OPERATING 947 2,157 5,844
PROFIT
Financial 77 -2,357 -2,389
income and
expenses
RESULT BEFORE 1,024 -201 3,456
TAXES
Income taxes 20 1 -526
NET RESULT FOR 1,043 -200 2,930
THE PERIOD
THE EFFECT OF DISCONTINUED OPERATIONS ON THE STATEMENT OF FINANCIAL POSITION (EUR 1,000)
30 Jun 23
ASSETS HELD FOR SALE
Intangible assets 15
Property, plant and equipment 6,443
Deferred tax assets 417
Inventories 4,704
Trade receivables 2,856
Income tax receivables 30
Other current receivables 1,529
Cash and cash equivalents 2,024
ASSETS HELD FOR SALE TOTAL 18,018
LIABILITIES RELATED TO ASSETS HELD FOR SALE
Interest-bearing liabilities 3
Deferred tax liabilities 12
Tax liabilities for the period 3
Trade creditors and other current liabilities 437
LIABILITIES RELATED TO ASSETS HELD FOR SALE TOTAL 454
STATEMENT OF CASH FLOWS FROM DISCONTINUED OPERATIONS (EUR 1,000)
1-6/23 1-6/22 1-12/22
Cash flows -943 -8,581 -10,712
from
operating
activities
Cash flows 395 -908 4,235
used in
investing
activities
Cash flows -9 -10 -21
from
financing
activities
Cash flows -557 -9,500 -6,499
for the
period under
review
KEY FIGURES 30 Jun 23 30 Jun 22 31 Dec 22
AND RATIOS
R&D 14.0 14.0 27.7
expenditure,
MEUR
Capital 18.7 17.5 41.9
expenditure,
MEUR
as % of net 4.6 5.0 5.6
sales
Average 2,090 2,016 2,016
number of
employees
Order books, 294.2 357.1 353.7
MEUR
Equity ratio, 54.3 59.0 55.0
%
Diluted and 0.78 0.52 1.22
undiluted
earnings per
share (EUR),
continuing
operations
Diluted and 0.04 -0.01 0.10
undiluted
earnings per
share (EUR),
discontinued
operations
Diluted and 0.81 0.51 1.33
undiluted
earnings per
share (EUR)
Equity per 11.53 11.03 11.49
share (EUR)
Order intake, 350.3 396.6 796.2
MEUR
FORMULAE FOR FINANCIAL INDICATORS
Return on capital employed, % (including discontinued operations):
Result before taxes + financial expenses
---------------------------------------------------------------------------------------------------------------------
Shareholder's equity + interest-bearing financial liabilities (average during the year) * 100
Average number of employees:
Average of the number of personnel at the end of each month from continuing operations. The calculation has been adjusted for part-time employees.
Net gearing, % (including discontinued operations):
Interest-bearing financial liabilities - cash and cash equivalents
-----------------------------------------------------------------------------------
Shareholders' equity * 100
Equity ratio, % (including discontinued operations):
Shareholders' equity + Non-controlling interests
------------------------------------------------------------------------
Balance sheet total - advance payments received * 100
Earnings per share, continuing operations:
Net result from continuing operations for the period - Non-controlling interests
-----------------------------------------------------------------------------------------------------------
Average number of shares during the accounting period, adjusted for share issues
Earnings per share, discontinued operations:
Net result from discontinued operations for the period - Non-controlling interests
-----------------------------------------------------------------------------------------------------------
Average number of shares during the accounting period, adjusted for share issues
Earnings per share (including discontinued operations):
Net result for the period - Non-controlling interests
-----------------------------------------------------------------------------------------------------------
Average number of shares during the accounting period, adjusted for share issues
Equity per share (including discontinued operations):
Shareholders' equity
---------------------------------------------------------------------------------------------
Number of shares on the balance sheet date, adjusted for share issues
Order intake:
Net sales from continuing operations for the period + Change in order books from continuing operations during the period
Vieremä, 15 August 2023
PONSSE PLC
Juho Nummela
President and CEO
FURTHER INFORMATION
Juho Nummela, President and CEO, tel. +358 400 495 690
Petri Härkönen, CFO, tel. +358 50 409 8362
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Principal media
www.ponsse.com
Ponsse Plc is a company specialising in the sales, manufacture, servicing and technology of cut-to-length method forest machines and is driven by genuine interest in its customers and their business. Ponsse develops and manufactures sustainable and innovative harvesting solutions based on customers' needs.
The company was established by forest machine entrepreneur Einari Vidgren in 1970, and it has been a leader in timber harvesting solutions based on the cut-to-length method ever since. Ponsse is headquartered in Vieremä, Finland. The company's shares are quoted on the NASDAQ OMX Nordic List.