Ponsse's Interim Report for 1 January - 30 September 2022
July-September (continuing operations):
- Net sales amounted to EUR 178.5 (140.2) million
- Operating profit totalled EUR 13.0 (14.1) million, equalling 7.3 (10.0) per cent of net sales
January-September (continuing operations):
- Net sales amounted to EUR 530.5 (435.1) million
- Operating profit totalled EUR 34.9 (40.9) million, equalling 6.6 (9.4) per cent of net sales
- Net result was EUR 24.2 (26.9) million
- Earnings per share were EUR 0.86 (0.96)
- Order books stood at EUR 365.5 (272.5) million at the end of period under review
- Cash flow from business operations was EUR -50.8 (50.1) million
- Equity ratio was 56.7 (61.8) per cent at the end of period under review
- The company’s euro-denominated operating profit in 2022 is expected to be on a par with the comparable operating profit of its continuing operations in 2021 (EUR 50.0 million). The company’s relative profitability is expected to decrease significantly, however, due to divesting its Russian business, difficulties in the availability of parts and components, and heavy inflation
PRESIDENT AND CEO JUHO NUMMELA:
During the period under review, demand for PONSSE forest machines and services remained healthy for the continuing operations. Our customers’ stable rate of employment had a positive impact on the demand for new machines and aftersales services. Our order intake was approximately EUR 187 million. Our order book at the end of the period under review stood at EUR 365.5 (272.5) million for the continuing operations.
The net sales were EUR 178.5 (140.2) million in the past quarter. Towards the end of the period under review, we were able to deliver machines to our customers at a good rate while improving our net sales, thanks to the excellent development of aftersales services. Epec Oy, our technology company and one of our business areas, also experienced strong growth. In general, our customers’ rate of employment was excellent across our markets, supported by a good market situation in the pulp industry and the absence of Russian timber and sawn timber in the European market.
The corporate acquisition of our Russian subsidiary OOO Ponsse is awaiting approval by Russian authorities, and we are aiming to conclude the sale as soon as possible.
The discontinuation of business in Russia, heavy inflation, and the notable decline in the availability of parts and components continue to have a material effect on Ponsse. We continue to adapt to this difficult business environment. We concluded our change negotiations, started on 7 June, during the period under review. The problems with the availability of parts and components continued during the period under review, impacting both the company’s profitability and cash flow. The company’s production and aftersales services continue to suffer due to limited availability. Regardless, our production has continued without interruption, and we are constantly working to stay on schedule.
Operating profit was 7.3 (10.0) per cent of net sales. Higher new machine delivery rates improved our situation towards the end of the past quarter, in addition to the excellent result of our aftersales services. Our profitability was diminished by our business costs rising faster than our net sales. We are actively prioritising our operations and have a clear target for savings. We are looking for the best means to improve profitability with our personnel through productivity and managing business and product costs.
Our cash flow diminished to EUR -50.8 (50.1) million. We were able to turn our cash flow in a positive direction at the end of the past quarter. Capital is temporarily tied up in machines lacking parts and raw material stock stuck in storage. Our stock of trade-in machines increased as well.
During the period under review, Ponsse launched major product and service solutions, which were presented at forest machinery fairs around the world. In addition to conventional harvesting technology, we launched completely new technology with our subsidiary Epec: the electrically driven PONSSE EV1 forest machine concept. The interest of developing forestry towards Ponsse’s and Epec’s new products has been highly encouraging. We continue to target pioneering product technology with our investments.
