Ponsse's Interim Report for 1 January - 31 March 2024
January-March:
- Net sales amounted to EUR 169.7 (201.7) million
- Operating profit totalled EUR 1.2 (16.6) million, equalling 0.7 (8.2) per cent of net sales
- Net result was EUR -3.4 (14.0) million
- Earnings per share were EUR -0.12 (0.50)
- Order books stood at EUR 226.0 (336.9) million at the end of period under review
- Cash flow from business operations was EUR 8.5 (2.4) million (continuing and discontinued operations)
- Equity ratio was 57.6 (56.8) per cent at the end of period under review (continuing and discontinued operations)
- Ponsse published a new profit guidance on 19 April 2024: The company’s euro-denominated operating profit is estimated to be slightly weaker in 2024 than in 2023 (EUR 47.2 million).
PRESIDENT AND CEO JUHO NUMMELA:
The first quarter of the year was challenging for Ponsse. A brief market recovery at the beginning of the year faded towards the end of the reporting period. Orders received amounted to EUR 163.5 million and the company's order book stood at EUR 226.0 (336.9) million at the end of the period.
Our turnover decreased by approximately 16% to EUR 169.7 (201.7) million. Ponsse was significantly affected by the political strikes that took place in Finland at the beginning of the year. Export deliveries of new machines were interrupted by the strikes in March and machine invoicing remained weak. Turnover in service sales remained at a normal level thanks to the relatively good working conditions of our customers. Turnover at Ponsse's technology company, Epec, also fell due to the general slowdown in machine building. We were pleased to see an increase in our used machine sales, and we were able to deliver used machines to our customers well. The factory operated partly in one shift during the period under review but is returning to two shifts in the second quarter. Our Vieremä factory is running very well and there are no problems with the availability of parts.
Our operating profit was poor in the first quarter and our relative profitability was 0.7 (8.2) percent. The weak operating profit was affected by poor invoicing of new machines and by challenges at Ponsse's Brazilian subsidiary, Ponsse Latin America Ltda. The full-service contract that underlies the challenges at our Brazilian subsidiary is moving in the right direction, but patient development work is needed to correct the challenging situation.
Cash flow for the period amounted to EUR 8.5 (2.4) million. In particular, cash flow improved due to an improvement in the turnover of materials and supplies and a slight decrease in the stock of used machines. Some of our capital is still tied up in raw material inventories and in the used machines stock, which increases our working capital. The company's solvency has remained at a very good level.
The change in Ponsse's operating model, published on 20 February 2024, is progressing and has been at its most intense at the end of the quarter. The change is important for Ponsse's long-term development, but at the same time it is hard for the company's staff. The global organisational structure that will come into force on 1 June 2024 brings new development opportunities for the staff, improves the efficiency of the group's operations, and allows the sales and services of our country-organisations to focus more on serving our customers. It is important to Ponsse that this change is promoted respecting the company's strong values and culture.
