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

(published in the Half Year Report on August 14, 2019)

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

“The second quarter was less positive regarding operating profit. The strong growth of Aspo’s net sales and its solid cash flow were in line with our expectations, but the operating profit for the second quarter was reduced by several unpredictable external factors. However, we expect the financial results to improve considerably during the second half of the year in all businesses, and believe that 2019 will be a record year with respect to operating profit, cash flow from operations and earnings per share.

Our shipping company business, traditionally a strong financial performer, fell considerably short of the operating profit of the comparative period. The largest Supramax vessels made a loss during the second quarter due to the weak market situation and realized freight volumes. During the review period, the main customer base of the shipping company experienced process-related challenges, in addition to which their raw material suppliers had interruptions in their deliveries and equipment breakages. The steel industry’s transport volumes fell considerably short of the comparative period’s figures, which reduced the operative efficiency and profitability of the shipping company business. Because the transport volumes were smaller than forecast, ESL Shipping docked vessels earlier than planned during the second quarter. The cranes of new LNG-fueled vessels have operated normally after the challenges in the beginning of the year, and the vessels as well as the acquisition of AtoB@C have had a positive impact on both the shipping company’s net sales and operating profit. It is essential from the perspective of the shipping company business that the earnings potential has not weakened, and we expect strong financial results for the second half of the year.

Leipurin developed well in bakery raw materials, but the financial results fell short of the comparative period due to the cyclical nature and losses of the machinery business. As a distributor holding inventory, Telko has suffered from decreasing raw material prices and smaller sales margins.

Russia and other eastern markets are important business areas for Aspo, and both Telko and Leipurin increased their net sales in the East. As a whole, the net sales of Aspo’s market area of Russia, other CIS countries and Ukraine decreased slightly, because ESL Shipping exceptionally had no net sales in Russia when the iron pellet deliveries to Europe were on hold. The pellet deliveries have since started again.”

Aki_Ojanen

Updated: 14.08.2019