Finnish forestry machinery manufacturer Ponsse recently presented its interim report for 1 January – 31 March 2007.
The report says that the demand for forest machines developed positively in almost all company`s main market areas in the beginning of the year: our turnover grew by 50 per cent compared to the previous year. The demand for timber developed and forest machine utilisation rates were high. The demand for the environmentally friendly and timber-saving cut-to-length method forest machines is growing. The trade in used machines was also active.
The global area organisation taken into use at the end of 2006 has proven to be functional: sales power was stronger than previously and closeness to the customer is more prominent in company`s operations. At the end of March, order books were at a higher level than in the previous year.
Ponsse`s turnover increased during the period under review compared to the first quarter of the previous year. Turnover stood at EUR 78.4 million (EUR 52.3 million in 2005), showing growth of 49.9 per cent year on year.
Ponsse recorded an operating profit of EUR 9.4 million (EUR 6.7 million in 2005) for the period under review, representing 12.0 per cent of turnover (12.8 per cent in 2005). Return on capital employed (ROCE) stood at 40.6 per cent (33.9 per cent in 2005).
The improvement of operational result and the working capital reduction during the period under review improved the cash flow from consolidated business operations, which totaled EUR 8.1 million (EUR –1.7 million in 2005). Cash outflow from investing activities stood at EUR –1.9 million (EUR –2.2 million in 2005).
The order intake for the period totalled EUR 77.6 million (EUR 52.9 million in 2005), while period-end order books were valued at EUR 58.1 million (EUR 55.4 million in 2005). The order books included dealers` minimum purchase commitments, based on previous practice.
Ponsse Plc and Lako Oy, its fully-owned subsidiary, approved a merger plan during the period under review, according to which Lako Oy will merge with its parent company on 31 August 2007. The arrangement will simplify the Group structure and improve competitiveness.
The company estimates that the demand for forest industry products will develop positively in most main markets during the current year. The global mechanisation rate of wood harvesting is also estimated to increase with the increase in the utilisation rate of the cut-to-length method. The harvesting volumes of forest energy and small wood will increase globally. This is estimated to increase the demand for the company`s current products.
The expanded product range creates the preconditions for delivering more comprehensive solutions for the needs of forest companies and wood harvesting companies than at present. The company continues to develop its maintenance service and distribution network. This creates the preconditions for profitable growth of business operations. The rapid growth of the machine base increased the company`s maintenance service operations.
Ponsse estimates that the good demand and order books create a sound basis for positive development.
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