(published in the Interim Report on May 5, 2020)

"The global coronavirus pandemic and the resulting restrictions have completely changed also Aspo’s operating environment in a short period. The conglomerate structure gives Aspo a certain backbone, also in exceptional circumstances. The Group’s cash flows are diversified both across businesses and geographic areas, and the cycles of Aspo’s businesses differ from one another, evening out the impact of economic trends on the Group’s results. However, we are not immune to tumults in the global economy. Although Aspo’s businesses suffered relatively little from the weaker market situation resulting from the pandemic during the first quarter of 2020, we expect the market situation to weaken in all businesses during the second quarter.

Aspo’s net cash from operating activities continued to develop strongly during the first quarter, with the free cash flow being EUR 13.3 (-1.1) million. The major investments of recent years have been successfully completed, which is now reflected in significantly improved cash flow figures. No major capital investments are planned for the next few years, and maintenance investments are minor, approximately EUR 5 million on an annual basis. Aspo’s gearing decreased during the first quarter, and the Group’s liquidity improved further from the 2019 year-end. Overall, Aspo’s liquidity position is strong. Cash and cash equivalents increased and were EUR 27.0 million at the end of the review period. Furthermore, the committed revolving credit facilities, totaling EUR 40.0 million, were fully unused.

Leipurin, the most defensive of Aspo’s businesses, increased its net sales and profitability during the first quarter of 2020. The collapsed price of oil had a negative impact on Telko’s net sales, while its operating profit rate increased and operating profit remained at the comparative period’s level. ESL Shipping’s operating environment weakened significantly during the entire review period, and the shipping company’s net sales and operating profit decreased during the first quarter, mostly due to the smaller transportation volumes of pre-cyclical industrial customers. All in all, I am satisfied with the Group’s operating profit of EUR 4.0 (4.9) million, which was achieved in unusually challenging market conditions.

On April 9, we announced that we will withdraw our guidance for 2020, issued in the financial statements release, as it is not possible, at present, to make justified estimates and provide any financial guidance on the basis of these due to the rapidly changing coronavirus situation.

The coronavirus pandemic also affected Aspo’s Annual Shareholders’ Meeting, which was held on May 4, 2020, using exceptional arrangements to protect the safety of shareholders and employees. Aspo has traditionally been a stable payer of dividends, and the company has aimed to pay increasing dividends in accordance with its dividend policy. Due to the exceptional and difficult to predict market circumstances, Aspo’s Board of Directors was, however, forced to reconsider its profit distribution proposal given in conjunction with the financial statements release. According to the Board of Directors’ new profit distribution proposal, the Annual Shareholders’ Meeting decided that EUR 0.11 per share will be paid in dividends for the 2019 financial year and authorized the Board of Directors to decide on the distribution of dividends of at most EUR 0.11 per share in one or more installments at a later date, when the company is able to more closely assess the impact of the coronavirus pandemic on the company’s operations in 2020.

I would like to thank the Group’s entire personnel for the professionalism and flexibility they have shown in carrying out the measures required in this exceptional situation. On March 16, employees of all of the Group’s businesses started to work remotely to the largest possible extent. By doing this, we aim to protect the health of our personnel, customers and other stakeholders. The Group’s management model has also been adjusted so that we can respond to rapidly changing conditions as quickly as possible. Unfortunately, we have been forced to adapt our operations and lay off some of our employees for a fixed term due to the market situation weakened by the coronavirus pandemic. Concurrently we are, however, working hard to prepare ourselves for the time after the pandemic and to strengthen our market position in different business operations."


Updated: 05.05.2020