Ponsse's Half-year Report for 1 January - 30 June 2024
April-June: Net sales amounted to EUR 188.0 (208.1) million, pperating profit totalled EUR -0.6 (10.2) million, equalling -0.3 (4.9) per cent of net sales. January-June: Net sales amounted to EUR 357.7 (409.8) million. Operating profit totalled EUR 0.6 (26.8) million, equalling 0.2 (6.5) per cent of net sales. Net result was EUR -11.7 (21.8) million. Earnings per share were EUR -0.42 (0.78). Order books stood at EUR 210.4 (294.2) million at the end of period under review. Cash flow from business operations was EUR 25.4 (0.1) million. Equity ratio was 52.8 (54.3) per cent at the end of period under review. Ponsse published a new profit guidance on 9 August 2024: The company’s euro-denominated operating profit is estimated to be significantly lower in 2024 than in 2023 (EUR 47.2 million).
President and CEO Juho Nummela:
The uncertainties in the forest machine market continued in the past quarter. There were positive signals in the forest industry, but in general, interest rates and the poor situation in European construction are weakening demand for forest machinery. Among market areas, the Nordic countries were the best performers, led by Finland and Sweden. Orders received during the second quarter totaled EUR 172.4 million, bringing the company's order book to EUR 210.4 (294.2) million at the end of the period. Despite the challenges in the market, the company's order book has remained at the same level throughout the first half of the year.
Net sales in the second quarter decreased by approximately 10 per cent compared to the comparison period, amounting to EUR 188.0 (208.1) million. In the second quarter, the delivery volumes of forest machines were lower than in the comparison period. Turnover from service sales remained at a normal level due to the relatively good working conditions of our customers. However, the market situation for used machines was challenging and turnover was below target. Demand for products from Ponsse's technology company Epec Oy also continued to be weak and turnover was on a downward trend. Our Vieremä factory performed excellently and there were no problems with parts availability.
The profitability of Ponsse’s Brazilian Full Service contract remains challenging. The company has updated the financial forecast of the contract, and therefore we are preparing for higher-than-expected losses on the contract for 2024 and 2025. The operating profit for the period includes an expense of EUR 18.6 million related to the Full Service contract. Productivity and mechanical utilisation of the machines involved in the contract have developed favorably and are generally in line with the targets. The contract is fixed term and will expire at the end of 2026. The deterioration in the general market situation and the reduction in Epec's turnover have also had a wide-ranging impact on our profitability. The company's relative profitability in the second quarter was -0.3 (4.9) percent. We are continuously working both to improve the Full Service situation in Brazil and to increase the profitability of our core business as a whole.
Our cash flow for the reporting period was EUR 25.4 (0.1) million. Our cash flow has developed in the right direction, but some of our capital is still tied up in inventories of materials and supplies and especially in inventories of used machines. Our stock of used machines increased during the period under review as the market situation deteriorated. Working capital efficiency is at the core of our operations and one of our top priorities, together with profitability development. The company's solvency has remained at a very good level.
Ponsse's new operating model was introduced on 1 June 2024.Our organisation has been in the midst of changes during the spring and summer, and we are working hard to consolidate the new operating model. The change is important for Ponsse’s long-term development and will create new development opportunities for our staff. At the same time, it improves the efficiency of the group's operations, and allows the country-organisations to focus on serving our customers.
The coming autumn will kick off a busy season of fairs and customer events at Ponsse, which will also involve some highly anticipated product launches. We welcome our customers and business partners to our events around the world!
