COMMENTS FROM CEO AKI OJANEN
Aki Ojanen's comments in the Aspo Group Interim Report on April 28, 2010:
”Aspo’s net sales are increasing.
Previous restructuring measures and increased operational efficiency have a positive effect in particular on Telko’s costs and the Group's overall administrative costs.
Exceptional ice, wind and labor market conditions made it difficult to plan shipping operations and burdened efficiency on the Baltic Sea.ESL Shipping has usually performed stably - the last time ESL Shipping performed weaker than expected and posted a EUR -0.5 million operating loss was in the icy winter 2003. This winter the conditions on the Baltic Sea were difficult. Vessels had to wait for ice breaking help but tried to operate efficiently without the help as well, which considerably increased fuel consumption. Demand for transport and cargo prices remained at normal levels. Despite the difficult circumstances, ESL Shipping was able to take care of the raw material transportation of its Scandinavian customers so that they did not have to limit production.
Telko and Leipurin improved their operating profit and increased their net sales. The Group’s strategic goal is to grow in Russia, Ukraine and other CIS countries. We were successful with this during the review period.Telko increased its net sales in Russia compared to the first quarter last year by 72% and Leipurin by 33%.
We have reached the efficiency level in Group administration costs that prevailed before the 2008 acquisition and the costs are not expected to increase as net sales grows.
We expect the EU to give its decision concerning the new tonnage tax legislation in Finland during the second quarter. Experts have estimated that law will be implemented retroactively from the beginning of 2010. If the law takes force the change would have a considerable positive effect on Aspo’s profit after tax.”
Aspo’s results for 2009, on February 15, 2010:
“Aspo’s 2009 was good despite the general economic recession. I would like to extend my thanks for the good result both to the personnel and our established and loyal customers.
Aspo is highly successful in its four strong business areas. Our guidance for 2009 was that Aspo had good preconditions to reach the 2008 level of result for continuing operations. We believe that, despite being challenging, this goal was attainable. We were successful in reaching our goals on a broad spectrum. In 2009, we managed to reduce our debt considerably, strengthen our capital structure and made all businesses profitable. We consider our fourth quarter operating profit particularly good in light of the market situation. We exceeded our annual target and reached an operating profit of EUR 15.3 million (14.1) for continuing operations.
Earnings per share did not, in accordance with our guidance, reach the 2008 record level when we recognized a sales gain from the divestment of Autotank Group.
In 2009, Aspo’s operations in Russia and Ukraine were able to increase their relative share of Group net sales, even though the local currencies had been heavily devalued at the turn from 2008 to 2009. We believe that the CIS and Ukraine economic area is among the global growth centers. Our local organization in these countries did a great job and generated profit while creating preconditions for further growth. Aspo’s subsidiaries are now also present, in addition to Western Russia, in Siberia, Tatarstan and the Volga region. At the end of 2009, Leipurin also launched operations in Ukraine.
Aspo has, in accordance with its strategy, been able to carry out several acquisitions in 2009. At the end of the year, Leipurin acquired the Latvian bakery food company Raugs un citas preces SIA.
In terms of Group administrative costs, we have reached the targeted efficiency and at an annual level the savings will amount to approximately EUR 2 million.
The stability of the conglomerate does not prevent growth, however. A conglomerate like Aspo has good preconditions for growth, as the practices that have proven good within one business area can quickly be applied to other business areas.”