Investidores

Ponsse´s interim report for 1 January - 31 March 2020

Ponsse´s interim report for 1 January - 31 March 2020

JUHO NUMMELA, PRESIDENT AND CEO (21 April, 2020)
 
Ponsse’s first quarter this year was reasonably good, considering the circumstances. Even so, the impact of the coronavirus pandemic began to be visible in both the demand for forest machines and the availability of components towards the end of the quarter. The weakening of the forest machine market occurred in 2019 and additional shock caused by the pandemic declined demand for forest machinery steeply in several market areas. The company’s order intake contracted towards the end of the period under review and order books fell to EUR 209.2 (367.9) million.
 
The company reacted rapidly to the situation and the management team started preparing alternative strategies to changing environment. In terms of financing, Ponsse has carried out all measures necessary for ensuring the company’s continuity.
 
We reacted rapidly to the situation that arose and held cooperation negotiations to adjust the factory’s operations resulting in temporary layoffs for the entire personnel. In practice, our Vieremä factory is operating under single-shift conditions at the moment and the clerical workers are having layoffs during second quarter agreed by function. Our subsidiary network has made their own plans for adjusting their activities.
 
A number of companies in our supplier network in Europe have had to suspend their operations due to the pandemic. Our operations have been especially affected by the production suspensions in our German suppliers’ subcontractor network in Northern Italy. We expect the factories in question to start up again by the end of April. Even so, the situation continues to be unstable and there are uncertainties concerning the re-start of our supplier network’s factories.
 
Ponsse’s net sales for the first quarter were EUR 144.5 (143.1) million. We were able to deliver machines to our customers almost normally and our invoicing was on the planned level. Our customers’ work situation varies greatly from one market area to the next. Whereas the mechanical forest industry is facing major challenges in several market areas, the final products for chemical industry seems to enjoy better demand. The net sales of our after sales services declined slightly from the comparison period due to our customers’ weak work situation. At the same time, however, our sales of trade-in machines was delightfully active.
 
Ponsse’s profit for the quarter amounted to EUR 13.4 (12.9) million. The operating result for the period under review was 9.3 (9.0) per cent. Fluctuations in exchange rates had a strong impact on the result, which was EUR 1.6 million negative despite the good operating profit. The unrealised exchange rate losses resulted from re-valuating balance sheet items and shown in the financial income and expenses, amounting around EUR 9.3 million, weighed heavily on the result. Cash flow for the first quarter was EUR -12.2 (2.6) million. Regardless of the good sales in trade-in machines, our trade-in machine stock was growing.
In the challenging operating environment, we are continuing to invest in sales, service and the availability of spare parts as well as in providing our customers with services as efficiently as possible. Our Vieremä factory has operated excellently throughout the period under review and has the readiness to return to two shifts when the situation allows for it. The uncertainty caused by coronavirus pandemic has rapidly changed the operating environment and had an impact on the decline in demand for forest machines.
 
The most important thing, however, is ensuring the health of our personnel, customers and other stakeholders under all circumstances.