RAKENTAJAIN KONEVUOKRAAMO OYJ'S INTERIM REPORT 1-9/2004

Transcription

1 :30 RAKENTAJAIN KONEVUOKRAAMO OYJ'S INTERIM REPORT 1-9/2004 RAKENTAJAIN KONEVUOKRAAMO OYJ'S INTERIM REPORT 1-9/ Turnover for Q3/2004: EUR 21.3 million (15.5) - Profit before extraordinary items for Q3/2004: EUR 5.1 million (4.0) - Turnover for Q1 and Q3/2004: EUR 54.9 million (40.5) - Profit before extraordinary items for Q1 and Q3/2004: EUR 9.1 million (7.9) - Earnings per share for Q1 and Q3/2004: EUR 0.44 (0.40) TURNOVER Rakentajain Konevuokraamo Oyj's consolidated turnover for 1 January-30 September 2004 came to EUR 54.9 million (40.5). The machinery and equipment rental business posted a turnover of EUR 26.3 million (17.4), this improvement being due to Suomen Projektivuokraus Oy's consolidation into the Group. Construction-site services recorded a turnover of EUR 5.7 million (5.7). The moveable building business improved its turnover to EUR 23.3 million (17.9). This growth came from increasing sales of new and used buildings. Intra-Group turnover came to EUR 0.45 million (0.35). PROFIT Consolidated profit after financial items and before extraordinary items and taxes totalled EUR 9.1 million (7.9), showing an improvement of EUR 1.2 million, or 14.5 per cent. Since the beginning of the accounting period, fixed manufacturing costs have been included in acquisition costs under fixed and current assets, which improved the profit for the period by EUR 0.2 million. Earnings per share (diluted) were EUR 0.44 (0.40). Taxes recorded for the period, EUR 2.7 million, include a reversal of EUR 0.3 million in deferred tax liabilities, due to the reduction in the Finnish corporate income tax rate from 29 per cent to 26 per cent, effective as of DEPRECIATION AND AMORTISATION Depreciation amounted to EUR 7.4 million (5.2), of which planned depreciation on fixed assets accounted for EUR 6.6 million and Group goodwill amortisation accounted for EUR 0.8 million. FORECAST FOR 2004 We expect the total construction volume to continue to grow during the fourth quarter and remain relatively steady next year, with commercial and industrial construction activity taking off and housing construction activity slowing down. The summer and autumn seasons saw the expected growth in the machine and equipment rental business, and we expect the fourth quarter to show a better profit performance than a year ago. As a result of streamlining measures, the construction-site services business improved its profitability. During the current year, municipalities have been more active in making decisions on school and day-care centre projects, which is reflected in greater demand than in the previous year. Municipal budgets for 2005 are expected to show a moderate increase in demand for moveable buildings. Demand for buildings replacing school buildings under renovation will continue its growth, whereas demand for moveable buildings for industry will remain subdued during the current year, due to low industrial investment activity and industrial job losses. Based on our revised forecast for 2004, we expect to post a turnover of EUR million (59) and profit before extraordinary items of EUR million (9.8).

2 BUSINESS OPERATIONS Due to rationalisation planned for the Tilamarkkinat Oy Group, Tilamarkkinat Oy's subsidiaries, Suomen Ykköstilat Oy and Master Tilaelementit Oy, will enter into joint discussions with employees, based on the statutory Information and Consultation procedures, on whether the housing module prefabrication plant in Kouvola or Leppävirta may possibly be closed down or production outsourced, and on any resulting effects on the personnel. We will open our second rental service office in Tallinn, Estonia, at the beginning of December, consolidating our position in the region and providing scope for growth next year. During the current year, we expanded our service office network in Finland by opening four rental outlets, and closed one down. The Group has initiated a number of development projects aimed at continuous internal efficiency gains. CAPITAL EXPENDITURE Investments of EUR 8.8 million (5.6) were mainly allocated to rental machinery. Maintenance-related purchases of EUR 2.2 million (1.5) were expensed as incurred. The book value of moveable buildings sold included in rental machinery amounted to EUR 0.6 million (1.3). LIABILITIES Interest-bearing liabilities were EUR 23.4 million (19.2). ORGANISATION AND GROUP STRUCTURE In addition to the parent company, the sub-groups of Tilamarkkinat Oy and Suomen Projektivuokraus Oy as business entities are part of Rakentajain Konevuokraamo Group. Machinery and equipment rental services are provided by the parent company's network of 59 service offices, Suomen Projektivuokraus Oy's five service offices in the Helsinki Metropolitan Area, and service offices in St. Petersburg and Tallinn run by subsidiaries. Construction-site services include cutting and drilling with diamondtipped precision boring machinery, drying services, floor-smoothing services and concrete laser screed placement services - all provided by the parent company in 25 locations across Finland. Tilamarkkinat Oy, a subsidiary based in Ylöjärvi, is responsible for the moveable building business with its three production plants. PERSONNEL The reported number of Group employees averaged 511 (433). INCREASE AND REDUCTION OF SHARE CAPITAL On the basis of the employee stock options based on the bond with warrants decided by the Annual General Meeting of 14 May 1998, the number of B Series shares subscribed from 8 November until 31 December 2003 totalled 203,100, at the subscription price of EUR 2.45 per share. The increase of share capital was registered with the Trade Register on 19 January 2004, and the trading of the new B Series shares began on the Helsinki Exchanges on 20 January The increase of share capital was EUR 343,239.00, i.e. the share capital totalled EUR 24,950, The recorded issue premium came to EUR 154, The Annual General Meeting of 2 April 2004 decided to reduce the share capital from EUR 24,950, to EUR 23,926,355.83, or by EUR 1,024,158.59, by cancelling, without repayment, 606,011 B Series shares acquired as part of the company's share buyback scheme. The value of this reduction, which was transferred from the share capital to the issue premium fund, corresponds to the combined counter book value of the cancelled shares. On the basis of the employee stock options based on the bond with

3 warrants decided by the Annual General Meeting of 14 May 1998, the number of B Series shares subscribed during the report period totalled 156,900, at the subscription price of EUR 1.95 per share. The increase of share capital was registered with the Trade Register on 23 June 2004, and the trading of the new B Series shares began on the Helsinki Exchanges on 24 June The increase of share capital was EUR 265,161.00, i.e. the share capital totalled EUR 24,191, The recorded issue premium came to EUR 40, TREASURY SHARES Rakentajain Konevuokraamo Oyj bought back a total of 606,011 own B Series shares, at a total price of EUR 2,582, in The average price was EUR 4.26 per share. The counter book value of shares bought back amounted to EUR 1,024, Pursuant to the decision made by the Annual General Meeting of Rakentajain Konevuokraamo Oyj on 2 April 2004, 606,011 own B Series shares in the company's possession have been cancelled. The reduction has been registered in the Trade Register on 22 April BOND WITH WARRANTS The loan period for the EUR 27, bond with warrants for employees, decided by the Annual General Meeting of 14 May 1998, expired on 5 June Due to the threefold increase in the number of shares subscribed resulting from the bonus issue in 2001, the stock options entitled their holders to subscribe for a total of 495,000 B Series shares as of 1 May 2000 and a total of 495,000 B Series shares as of 1 May The share subscription period terminated on 31 May The stock options were traded on the Helsinki Exchanges until 24 May A total of 9,300, 106,500, 596,700 and 156,900 B Series shares were subscribed in 2001, 2002, 2003 and 2004 respectively, totalling 869,400 shares. STOCK OPTIONS The Annual General Meeting of 4 April 2002 decided to offer the key employees of the Rakentajain Konevuokraamo Group stock options, entitling their holders to subscribe for a total of 670,000 B Series shares. Of these B Series shares, a total of 335,000 will be subscribed with 2002A- stock options from 1 May 2004 to 31 March 2007 and the remaining 335,000 from 1 May 2006 to 31 March The share subscription price will be the trade weighted average price for Rakentajain Konevuokraamo Oyj B Series share quoted on the Helsinki Exchanges from 5 April to 4 June 2002 plus 10 per cent or EUR 5.27, and it will be reduced annually by the amount of dividend paid. After the dividend distribution decided by the Annual General Meeting of 2 April 2004, the share subscription price is EUR No shares have yet been subscribed. The Group's 2002 A stock options have been traded on the Helsinki Exchanges since 3 May BOARD AUTHORISATIONS The Board was authorised by the Annual General Meeting of 2 April 2004 to decide, until the Annual General Meeting of 2005 or within one year of the Annual General Meeting of 2 April 2004, on the increase of the share capital by issuing new shares in one or several issues so that the share capital may be increased by EUR 3,388, at the most by issuing at the most 2,005,223 new B Series shares, each with an accounting par value of EUR However, with regard to the total amount of the increase of the share capital and the total number of new shares to be issued, the authorisation and the Board's other valid unused authorisations may not in aggregate exceed one-fifth of the registered share capital and the votes attaching to the shares at the time of the authorisation decision of the ordinary shareholders' meeting and the decision of the Board to increase the share capital. The Board has no valid authorisations to issue stock options, or to issue convertible bonds.

4 The Annual General Meeting of 2 April 2004 authorised the Board to buy back a maximum of 738,000 outstanding B Series shares, or 5 per cent of the Group's share capital, with distributable funds. The Annual General Meeting of 2 April 2004 authorised the Board to use all the above-mentioned B Series shares bought back, based on the authorisation, as a consideration in the event of purchasing assets pertaining to the company's business or in the event of business acquisitions or other co-operation-related arrangements. The authorisations to buy back and dispose of shares will be valid for one year from the Annual General Meeting's decision or until the Annual General Meeting of 2005 at the latest, and will replace the authorisations given by the Annual General Meeting on 2 April The Board has not yet exercised said authorisations. ANNUAL GENERAL MEETING OF 2 APRIL 2004 The Annual General Meeting made decisions on the following matters: - Matters in accordance with Section 15 of the Articles of Association - Reduction of share capital by cancellation of own shares - Board authorisation regarding increase of share capital by issuing new shares - Board authorisation regarding share buyback and transfer The notification of the decisions was given on 2 April NOTIFICATIONS REGARDING CHAPTER 2, SECTION 9 AND 10 IN ACCORDANCE WITH THE SECURITIES MARKET ACT During the report period on 19 January 2004, Keskinäinen Henkivakuutusyhtiö Suomi announced that its shareholding in Rakentajain Konevuokraamo Oyj had decreased to less than one-tenth (1/10) of the company's share capital. The notification of the announcement was given on 29 January During the report period as of 22 April 2004, Keskinäinen Henkivakuutusyhtiö Suomi announced that its shareholding in Rakentajain Konevuokraamo Oyj had exceeded one-tenth (1/10) of the company's share capital. The notification of the announcement was given on 27 April During the report period as of 16 August 2004, the share of ownership of Schroder Investment Management Limited has exceeded one-twentieth (1/20) of Rakentajain Konevuokraamo Oyj's share capital. The notification of the announcement was given on 25 August ADOPTION OF IFRS The company will disclose its first IFRS-compliant financial statements for the financial year The IFRS transition date will be 1 January Before its first interim report for 2005, the Group will release a stock exchange release on the resulting changes in the IFRS opening balance sheet. All of the interim reports for 2005 will be based on IFRS. The most significant effect on the balance sheet pertains to changes in the recognition of moveable building sales and rental. Buildings sold to the financing company, under a repurchase commitment, will be recognised on the balance sheet, minor effects relate to deferred tax liabilities involved in land revaluation and fixed production costs being recognised as part of the costs of conversion of inventories. Deferred tax assets and liabilities will be shown gross, as opposed to the previous net figures. The opening IFRS balance sheet total on 1 January 2004 will increase by around EUR 17 million, the table below showing the most significant changes. (EUR million) FAS IFRS Change

5 Intangible assets Receivables Shareholders' equity Long-term liabilities Short-term liabilities Balance sheet total Equity ratio, based on the opening balance sheet, is around 51 per cent (FAS: around 61 per cent). FAS = Finnish Accounting Standards IFRS = International Financial Reporting Standards According to IFRS, Group goodwill is not subject to planned amortisation; instead, the asset must be tested annually for impairment, on the basis of which the asset may be subject to amortisation. The impairment test on the transition date did not indicate any need for recognising Group goodwill impairment. TABLES OF THE INTERIM REPORT CONSOLIDATED PROFIT AND LOSS ACCOUNT 1 January - 30 September 2004 (EUR 1,000) 1-9/04 1-9/03 Change% 1-12/03 Turnover 54,888 40, ,729 Share of associated companies profits Other operating income Operating profit 9,525 8, ,100 % of turnover Profit before extraordinary items 9,057 7, ,788 % of turnover Profit before taxes 9,057 7, ,788 % of turnover Profit for the period 6,342 5, ,021 CONSOLIDATED BALANCE SHEET (EUR 1,000) Change% ASSETS FIXED ASSETS Intangible assets Group goodwill 10,823 11,879 11,614 Tangible assets 60,616 44, ,151 Long-term investments Holdings in associated companies 0 4,856 0 Treasury shares 0 2,582 2,582 Other shares and holdings TOTAL FIXED ASSETS 72,063 64, ,976 INVENTORIES AND CURRENT ASSETS Inventories 4,341 5,437 3,656 Receivables 7,320 8,808 7,208 Cash and bank ,372 TOTAL INVENTORIES AND CURRENT ASSETS 12,476 14, ,237 TOTAL ASSETS 84,541 79, ,213 LIABILITIES AND SHAREHOLDERS' EQUITY SHAREHOLDERS' EQUITY Share capital 24,191 23, ,607 Share issue Issue premium fund 1, Treasury shares 0 2,582 2,582 Other shareholders' equity 23,993 22, ,776

6 TOTAL SHAREHOLDERS' EQUITY 49,739 49, ,798 LIABILITIES Deferred tax liability 2,803 3, ,867 Long-term liabilities 17,628 9, ,713 Short-term liabilities 14,370 16, ,833 TOTAL LIABILITIES 34,802 29, ,415 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 84,541 79, ,213 FUNDS STATEMENT (EUR 1,000) 1-9/04 1-9/ /03 NET CASH FLOW FROM OPERATIONS +12,650 +4, ,017 NET CASH FLOW FROM INVESTMENTS -8,022-4,082-15,025 CASH FLOW FROM FINANCING Rights issue ,462 Dividends paid -7,078-6,780-6,780 Change in long-term loans +4,915 +3,176 +5,898 Change in short-term loans -3,292 +2,335 +2,245 Change in long-term receivables Translation difference NET CASH FLOW FROM FINANCING -5, ,746 CHANGE IN LIQUID ASSETS LIQUID ASSETS AT PERIOD-START 1, LIQUID ASSETS AT PERIOD-END ,372 CONTINGENT LIABILITIES (EUR 1,000) On own behalf Mortgages on real estates 5,662 5,662 5,662 Mortgages on companies 10,957 10,957 10,957 Pledges 22,456 17,473 23,993 Other contingent liabilities 12,803 11,950 13,617 The Group has no liabilities resulting from derivative contracts. KEY FIGURES Value of outstanding orders, EUR 1,000 13,531 15, ,000 Gross capital expenditure, EUR 1,000 8,848 5, ,586 % of turnover Number of personnel Earnings/share, EUR Earnings/share, diluted EUR *) Shareholders' equity/share, EUR Equity ratio, % Issue-adjusted average number of A Series shares 1,728,000 1,728,000 1,728,000 Issue-adjusted average number of B Series shares 12,586,507 12,438,918 12,832,518 Number of shares adjusted by the dilution effect of options 14,526,763 14,608,289 14,839,929 TURNOVER BY BUSINESS (EUR 1,000) 1-9/04 1-9/03 Change% 1-12/03 Construction machinery and equipment rental 26,257 17, ,221 Construction-site services 5,734 5, ,590 Sale and rental of moveable buildings 23,343 17, ,333 Intra-Group turnover TURNOVER, TOTAL 54,888 40, ,729

7 OPERATING PROFIT BY BUSINESS (EUR 1,000) Construction machinery and equipment rental 5,327 4, ,831 Construction-site services Sale and rental of moveable buildings 3,533 3, ,544 OPERATING PROFIT, TOTAL 9,525 8, ,100 Group goodwill amortisation of EUR 625,500 recorded in the nine-month profit and loss account and that of EUR 834,000 recorded in the profit and loss account for the entire year reduce the operating profit posted by the moveable building business. Group goodwill amortisation of EUR 166,500 recorded in the nine-month profit and loss account and that of EUR 222,000 recorded in the profit and loss account for the entire year reduce the operating profit posted by the construction machinery and equipment rental business. QUARTERLY KEY FIGURES 1-3/04 4-6/04 7-9/04 7-9/03 Change% Turnover, EUR 1,000 16,176 17,377 21,335 15, Operating profit, EUR 1,000 1,774 2,473 5,278 3, % of turnover Profit before extraordinary items EUR 1,000 1,621 2,352 5,084 4, % of turnover Earnings/share, EUR Earnings/share, diluted EUR *) *) Adjusted by the dilution effect of shares entitled by warrants Taxes for the January-June period are proportionate to the profit for the period. The figures are unaudited. RAKENTAJAIN KONEVUOKRAAMO OYJ Board Vesa Koivula President and CEO tel , , fax DISTRIBUTION Helsinki Exchanges Major media