Ponsse's Half-year Report for 1 January – 30 June 2022

Ponsse's Half-year Report for 1 January – 30 June 2022


For the continuing operations, demand in Ponsse’s market areas remained at a healthy level throughout the second quarter. Our customers’ high rate of employment had a positive impact on the demand for new machines, used machines and aftersales services. The order intake for the second quarter was approximately EUR 185 million. Our order books of the continuing operations stood at EUR 357.1 (356.2) million at the end of the period under review.

During the period under review, Ponsse signed a deal to sell its Russian business. Ponsse halted all exports to Russia and Belarus on 2 March 2022. Continuing the operations of Ponsse’s subsidiary OOO Ponsse in Russia became extremely complicated and selling OOO Ponsse was the only workable solution.

The company’s net sales for the past quarter amounted to EUR 195.9 (152.1) million for its continuing operations. The fastest growth in the first half of the year was seen by our aftersales services and Epec, our technology company. Our aftersales services experienced strong growth thanks to our customers’ high rate of employment. Harvesting volumes increased and our customers’ work situation improved after the importing of Russian timber and sawn timber stopped. The market situation of our technology company Epec was good, and their new solutions are an excellent match for the demands for electrification and autonomous products.

The discontinuation of business in Russia, heavy inflation, and the notable decline in the availability of parts and components have a material effect on Ponsse. The war in Ukraine affects the company’s situation significantly. The discontinuation of our Russian business has weakened the company’s profitability while the heavy inflation of part and component prices as well as logistics hinders our performance. On 7 June, the company was forced to initiate change negotiations with its personnel in accordance with the Act on Co-operation within Undertakings. The negotiations will continue after the summer holiday period. Our production and aftersales services have faced difficult challenges due to the poor availability of parts and components. The limited availability of parts and components has hindered operations in production and aftersales services, and some production has fallen behind schedule. For now, we have managed to continue production without interruptions.

Increased production costs have forced company to raise the price of its products, but due to long order books the price increases will not affect the company’s profitability in the second and third quarter. The machines finished in the next months were sold to our customers almost a year ago when production costs were much more moderate. Sustained inflation introduces uncertainty regarding the sufficiency of the current price hikes.

Our operating profit continued to decrease, and our relative profitability for the past quarter was 6.6 (9.4) per cent for the continuing operations. Our business costs rising faster than our net sales also reduced profitability. We are actively prioritising our operations and have a clear target for savings. Together with personnel, we will be looking for the best means to improve profitability through productivity and managing business and product costs.

Cash flow diminished further to EUR -36.7 (-24.2) million. Capital was temporarily tied up in machines lacking parts and raw material stock stuck in storage. The machines no longer headed to Russia were sold in other market areas, and the stock level and turnover rate for used machines remained good. The company’s solvency remained strong. The company renewed its binding financial instruments intended for financing working capital for three more years.

Ponsse will be launching new technologies in mid-August and displaying a wide variety of its newest products at the FinnMETKO exhibition at the start of September. Despite the challenging situation, we will continue the strong development of our company in the Ponsse spirit and make targeted investments in pioneering product technologies.