Ponsse's Half-year Report for 1 January - 30 June 2023
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.