Operating profit hurt by lower sales volumes - Ahlstrom
October 23, 2012 - Finland
Ahlstrom interim report for January-September 2012 released.
Jan Lång, President & CEO
Combining the Label and Processing business area with Munksjö is a significant step in our strategy execution, allowing us to focus our resources on areas where we see the most attractive growth opportunities. Another recent strategic step is the Munktell acquisition, which is a prime example of our growth ambition. The transaction enables us to broaden our product portfolio and expand our geographical presence.
- We were able to improve our profit margin somewhat in the third quarter, helped by good pricing management despite the weakening market. However, our profit was hurt by the shortfall in sales volumes and adverse currency effects.
- In Europe, we saw a slowdown in demand especially towards the end of the quarter, while a recovery in China has been delayed. Our sales volume development for the remainder of the year is expected to be weaker than we had earlier anticipated, and as a result we have revised our guidance. We have actively sought to mitigate the impact from the shortfall in sales volumes and will continue to do so.
Ahlstrom's third-quarter 2012 operating profit was EUR 9.4 million (EUR 17.3 million loss), including non-recurring items of EUR 0.1 million (EUR -25.3 million). Operating profit excluding non-recurring items was EUR 9.3 million (EUR 8.0 million). In 2011, the most significant non-recurring items included costs to end production of glassfiber and glassfiber mats in Karhula, Finland and close down a hybrid wallcover production line in Turin, Italy. All these assets were part of the Building and Energy business area.
The increase in profitability was mainly due to higher selling prices. The profit improvement program implemented at the end of last year and efficiency gains in the supply chain improved profitability. In addition, short-term cost mitigation, related to maintenance and temporary lay-offs, had a positive effect on profitability.
Operating profit was hurt by lower sales volumes and increased energy costs stemming from higher natural gas prices in Italy and Brazil. In addition, foreign exchange rates had a negative net impact of approximately EUR 3.7 million on operating profit. The EUR/USD exchange rate development affected pulp prices denominated in euros, hurting profitability mainly in the Label and Processing business area. This was partially offset by exports from the euro area priced in other currencies, mainly in U.S. dollars.
Ahlstrom's market-related downtime in production was 6.6% in the third quarter of 2012, compared with 8.7% in the corresponding period.
Ahlstrom's third-quarter 2012 operating profit was EUR 9.4 million (EUR 17.3 million loss), including non-recurring items of EUR 0.1 million (EUR -25.3 million). Operating profit excluding non-recurring items was EUR 9.3 million (EUR 8.0 million). In 2011, the most significant non-recurring items included costs to end production of glassfiber and glassfiber mats in Karhula, Finland and close down a hybrid wallcover production line in Turin, Italy. All these assets were part of the Building and Energy business area.
The increase in profitability was mainly due to higher selling prices. The profit improvement program implemented at the end of last year and efficiency gains in the supply chain improved profitability. In addition, short-term cost mitigation, related to maintenance and temporary lay-offs, had a positive effect on profitability.
Operating profit was hurt by lower sales volumes and increased energy costs stemming from higher natural gas prices in Italy and Brazil. In addition, foreign exchange rates had a negative net impact of approximately EUR 3.7 million on operating profit. The EUR/USD exchange rate development affected pulp prices denominated in euros, hurting profitability mainly in the Label and Processing business area. This was partially offset by exports from the euro area priced in other currencies, mainly in U.S. dollars.
Ahlstrom's market-related downtime in production was 6.6% in the third quarter of 2012, compared with 8.7% in the corresponding period.
On October 16, 2012, Ahlstrom revised its outlook for 2012. Net sales from continuing operations are expected to be EUR 1,550-1,630 million. Operating profit excluding non-recurring items from contintinuing operations is expected to be EUR 48-58 million.
Jan Lång, President & CEO
Combining the Label and Processing business area with Munksjö is a significant step in our strategy execution, allowing us to focus our resources on areas where we see the most attractive growth opportunities. Another recent strategic step is the Munktell acquisition, which is a prime example of our growth ambition. The transaction enables us to broaden our product portfolio and expand our geographical presence.
- We were able to improve our profit margin somewhat in the third quarter, helped by good pricing management despite the weakening market. However, our profit was hurt by the shortfall in sales volumes and adverse currency effects.
- In Europe, we saw a slowdown in demand especially towards the end of the quarter, while a recovery in China has been delayed. Our sales volume development for the remainder of the year is expected to be weaker than we had earlier anticipated, and as a result we have revised our guidance. We have actively sought to mitigate the impact from the shortfall in sales volumes and will continue to do so.
Ahlstrom's third-quarter 2012 operating profit was EUR 9.4 million (EUR 17.3 million loss), including non-recurring items of EUR 0.1 million (EUR -25.3 million). Operating profit excluding non-recurring items was EUR 9.3 million (EUR 8.0 million). In 2011, the most significant non-recurring items included costs to end production of glassfiber and glassfiber mats in Karhula, Finland and close down a hybrid wallcover production line in Turin, Italy. All these assets were part of the Building and Energy business area.
The increase in profitability was mainly due to higher selling prices. The profit improvement program implemented at the end of last year and efficiency gains in the supply chain improved profitability. In addition, short-term cost mitigation, related to maintenance and temporary lay-offs, had a positive effect on profitability.
Operating profit was hurt by lower sales volumes and increased energy costs stemming from higher natural gas prices in Italy and Brazil. In addition, foreign exchange rates had a negative net impact of approximately EUR 3.7 million on operating profit. The EUR/USD exchange rate development affected pulp prices denominated in euros, hurting profitability mainly in the Label and Processing business area. This was partially offset by exports from the euro area priced in other currencies, mainly in U.S. dollars.
Ahlstrom's market-related downtime in production was 6.6% in the third quarter of 2012, compared with 8.7% in the corresponding period.
Ahlstrom's third-quarter 2012 operating profit was EUR 9.4 million (EUR 17.3 million loss), including non-recurring items of EUR 0.1 million (EUR -25.3 million). Operating profit excluding non-recurring items was EUR 9.3 million (EUR 8.0 million). In 2011, the most significant non-recurring items included costs to end production of glassfiber and glassfiber mats in Karhula, Finland and close down a hybrid wallcover production line in Turin, Italy. All these assets were part of the Building and Energy business area.
The increase in profitability was mainly due to higher selling prices. The profit improvement program implemented at the end of last year and efficiency gains in the supply chain improved profitability. In addition, short-term cost mitigation, related to maintenance and temporary lay-offs, had a positive effect on profitability.
Operating profit was hurt by lower sales volumes and increased energy costs stemming from higher natural gas prices in Italy and Brazil. In addition, foreign exchange rates had a negative net impact of approximately EUR 3.7 million on operating profit. The EUR/USD exchange rate development affected pulp prices denominated in euros, hurting profitability mainly in the Label and Processing business area. This was partially offset by exports from the euro area priced in other currencies, mainly in U.S. dollars.
Ahlstrom's market-related downtime in production was 6.6% in the third quarter of 2012, compared with 8.7% in the corresponding period.
On October 16, 2012, Ahlstrom revised its outlook for 2012. Net sales from continuing operations are expected to be EUR 1,550-1,630 million. Operating profit excluding non-recurring items from contintinuing operations is expected to be EUR 48-58 million.