(published in the half year financial report on August 15, 2017)
I’m pleased with how Aspo’s net sales have grown and operating profit improved in the second quarter.
Aspo is a conglomerate that gathers its earnings from operations that serve industrial clients. The positive economic trend that began in fall 2016 has continued, which has so far particularly benefited ESL Shipping and Telko’s western markets. Companies are usually getting benefit from early stage of cycle.
The turn of the eastern markets and the positive trend that began in the Russian economy in 2017 have initially been reflected in the value of the ruble, which is stronger than in the comparative period. The turn has a particularly positive impact on the long-term expectations of Telko and Leipurin. The strong growth in our volumes in the eastern markets is a good sign of our future performance potential.
The net sales of ESL Shipping increased, and profitability improved from the comparative period. The the transportation capacity utilization of Supramax vessels has been ensured for the rest of the year with new contracts for the Canadian Arctic, among other things. The transportation volumes continue to grow in the Baltic Sea, and the shipping company has signed renewable bioenergy transportation contracts.
Leipurin improved its profitability. The earlier reported turn in the profitability of the bakery machine operations shows already in the figures for the second quarter, but the return to normal profitability will not be fully visible until the second half of the year. We expect the profitability of Leipurin to improve further towards the target level during the second half of the year.
Kauko achieved positive operating profit in the second quarter, with all of the earnings generated in Finland. The new contracts for the application operations within mobile knowledge work, are proof of the success of earlier investments, and of development that is in line with the strategy.
Telko's net sales continued to grow particularly in the eastern markets, despite the decrease in prices. Relative profitability in the east decreased due to factors such as changes in exchange rates. The profitability improvement measures that have been launched, such as the enhancement of the logistics network and improvement of cost-efficiency, particularly in Russia, already showed results by the end of the period under review. The full impact will be visible in the fourth quarter.
Costs not included in the Group's business operations have decreased to the target level in accordance with the set objectives.
During the first half of the year, earnings per share increased by 31% and were EUR 0.21 (0.16). We have succeeded in generating growth and improving the efficiency of operations.
Aspo expects the positive trend to continue. As a result of better visibility, we specify our guidance from the previous operating profit estimate of EUR 22–27 million to the new operating profit estimate of EUR 23–26 million (20.4).