AKI OJANEN, CEO OF ASPO GROUP, COMMENTS ON THE FIRST QUARTER

(published in the Interim Report on May 3, 2018)

Aspo’s net sales and operating profit decreased from the comparative period, and profit for the period under review was only satisfactory. The first quarter is usually the weakest quarter of the year in Aspo. During this review period, Aspo’s profit was particularly affected by the exceptional cold in the northern hemisphere. Ice and weather conditions in the Baltic Sea had an impact on the operational efficiency and fuel economy of ESL Shipping. When operating in icy conditions in the Bothnian Bay, vessels reduce their speed to one third, while their fuel consumption triples. The exceptionally long cold period reduced the production volumes of basic industry in Russia and Ukraine, and postponed the start of the summer season in the construction industry, reducing Telko’s net sales in the region.

Of Aspo’s businesses, Leipurin continued to improve its results as expected. Telko almost reached the comparative period’s operating profit, even though it suffered from weather conditions in Russia and Ukraine. ESL Shipping produced good results, considering the difficult ice conditions, falling, however, significantly short of the comparative period. Kauko’s operating result continued to be negative. The Group’s administrative costs increased from the comparative period when the level of expenses was unusually low.

Aspo has not changed its view of the long-term development potential, even though international politics has had an impact, for example, on relations between Russia and the west and caused uncertainties over continuing free trade. The prices of raw materials have increased and the price of crude oil has strengthened. We estimate that our positive long-term development continues and Aspo’s operating profit increases significantly from the comparative year.

In addition, we expect that the new LNG-fueled vessels of ESL Shipping will be finalized at the shipyard in China and delivered to the shipping company. Taking these two vessels into operation in the Baltic Sea will have a positive impact on the profitability of ESL Shipping.

Aki_Ojanen

Updated: 06.06.2018