Ahlstrom Corporation Interim Report January-June 2006: Growth in net sales with stable profitability

Ahlstrom Corporation Interim Report January-June 2006: Growth in net sales with stable profitability

Ahlstrom Corporation STOCK EXCHANGE RELEASE 27.7.2006 at 9.00
 
Ahlstrom, a leader in high performance fiber-based materials, reports a slightly decreased operating profit for the second quarter at EUR 28.9 million (Q2/2005: EUR 30.3 million), representing a 7.1% margin (7.5%). Net sales increased in the second quarter to EUR 409.6 million (EUR 402.8 million). Return on capital employed (ROCE) was 11.7% (12.1%). Profit for the period improved by 16% and amounted to EUR 16.6 million (EUR 14.4 million).
 
April - June 2006 in brief
- Net sales, adjusted for divestments, grew by 3.8% and sales volumes by 2.0%.
- Raw material and energy prices continued to increase.
- Profit before taxes remained nearly unchanged and was EUR 25.2 million. ROCE was 11.7%.
- Ahlstrom announced an investment of approximately EUR 5 million in a new specialty glassfiber reinforcement plant in the USA.
 
Key figures
 
Q2/
Q2/
Q1-Q2/
Q1-Q2/
 
EUR million
2006
2005
2006
2005
2005
Net sales
409.6
402.8
824.2
787.1
1,552.6
Operating profit
28.9
30.3
58.5
58.9
117.2
Operating profit excl. non-recurring items
26.0
28.4
52.3
55.6
99.0
Profit before taxes
25.2
25.4
50.3
52.4
100.7
Profit for the period
16.6
14.4
32.4
32.4
62.6
Net cash flow from operating activities
11.3
25.9
37.2
37.1
126.6
Gearing ratio, %
30.0
65.4
30.0
65.4
57.7
Return on capital employed (ROCE),%
11.7
12.1
12.4
12.1
12.4
Cash earnings per share, EUR
0.21
0.71
0.89
1.02
3.48
Earnings per share, EUR
0.36
0.40
0.77
0.89
1.71
Average number of shares
during the period, 1000s
45,587
36,418
41,977
36,418
36,418
 
 
Jukka Moisio, President and CEO of Ahlstrom Corporation, comments on the second quarter result:
- Ahlstrom's net sales of continuing operations grew by 4% and volumes by 2%. Operating profit declined slightly and ROCE was 11.7%. We faced continued increases in raw material and energy prices. In this market environment, the Ahlstrom team achieved a reasonably good performance and I am pleased that we were able to improve our profit for the period by 16%.
 
- In the review period, we continued to increase our sales prices and reduce costs to offset the impact of the more expensive raw materials on our margins. We also worked on growth investments and announced a decision to build a glass nonwoven facility in the USA to serve windmill and marine industries. Our divestment program of non-core assets continued. In June, we divested a property in Germany. After the review period, we sold our 35.5% shareholding in the Sonoco-Alcore joint venture to Sonoco in July. The sale further simplifies Ahlstrom's corporate structure.
 
Outlook
Demand in Europe is expected to improve during the second half from the level of the first half-year of 2006. In the Americas, growth is anticipated to slow down while demand in Asian markets is expected to remain at a good level. The growth investments and add-on acquisitions implemented in 2005 and 2006 will increase Ahlstrom's sales volumes in 2006.
 
Ahlstrom expects its full-year net sales of continuing operations to grow compared with the level of 2005. Energy and raw material costs are anticipated to remain at the current high levels or rise, maintaining pressure on margins. Sales price increases and cost reductions are aimed to offset the effect of expensive raw materials and energy and to improve profitability.
 
Ahlstrom continues to work with growth initiatives especially in Asia, Russia and the Americas in line with its business strategy.
 
This interim report has been prepared in accordance with the International Financial Reporting Standards (IFRS). Comparable figures refer to the same period last year unless otherwise stated.
 
This report is unaudited.
 
Helsinki, July 27, 2006
Ahlstrom Corporation
Board of Directors
 
For additional information, please contact
Jukka Moisio, President and CEO, tel. +358 (0)10 888 4700
Jari Mäntylä, CFO, tel. +358 (0)10 888 4768
 
An international conference call will be held on Thursday, July 27, 2006 at 11.00 Finnish time. To participate in the teleconference, please dial +44 (0) 20 7162 0025 a few minutes before the call. Use the password: Ahlstrom. A replay number is available until July 31, 2006. The number for the replay is + 44 (0) 20 7031 4064, access code: 713321.
 
The presentation material will be available at www.ahlstrom.com > Investors > IR Presentations on July 27, 2006 immediately after the interim report has been published.
 
This report contains certain forward-looking statements that reflect the present views of the company's management. Due to the nature of these statements, they contain uncertainties and risks and are subject to changes in the general economic situation and in the company's business.
 
 
Distribution:
Helsinki Stock Exchange
www.ahlstrom.com
Main media
 
Ahlstrom's stock exchange and press releases can be ordered on www.ahlstrom.com > Media. Releases are delivered by e-mail.
 
Ahlstrom in brief
Ahlstrom is a global leader in the development, manufacture and marketing of high performance fiber-based materials. Nonwovens and specialty papers, made by Ahlstrom, are used in a large variety of everyday products, e.g. in filters, wipes, flooring, labels and tapes. The company has a strong market position in several business areas in which it operates, built upon the company's unique fiber expertise and innovative approach. Ahlstrom's 5,800 employees serve customers via sales offices and production facilities in more than 20 countries on six continents. In 2005, Ahlstrom's net sales amounted to EUR 1.55 billion. Ahlstrom share is listed on the main list of the Helsinki Stock Exchange. The company website is www.ahlstrom.com.
 
To view the entire report in pdf format, please click on the link below.
 
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