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Ponsse´s interim report for 1 January - 30 September 2020

Ponsse´s interim report for 1 January - 30 September 2020

JUHO NUMMELA, PRESIDENT AND CEO (20 October, 2020)
 
Despite the difficult situation, Ponsse performed well during the third quarter. The problems with the availability of components that characterised the second quarter were solved, and demand picked up in nearly all markets. The slight recovery of the markets and the excellent performance of Ponsse’s network increased the value of orders to EUR 161.2 (116.9) million during the third quarter. Our order book remained at the second quarter’s level, being EUR 178.5 (326.4) million. This is an excellent performance considering the situation. After all, our factory operated at full capacity throughout the quarter, apart from the summer holiday period.

We have adapted effectively to the pandemic. Ponsse has handled all the major changes in working life, including remote working, excellently, and we have been able to keep projects running effectively in all operations. The successful investments in our factory in recent years and our excellent employees are key in enabling productive operations at our factory. Our factory is fully on schedule, and our operations are developing strongly, driven by continuous improvement. Disruptions in the supplier network have decreased, apart from a few individual companies.

Our existing order book allowed us to run our factory at full capacity after holidays, which led our company to a record-high third quarter in our history. Our net sales for the third quarter were excellent at EUR 155.0 (148.3) million. Our customers were fully employed throughout the quarter, which was reflected in the positive development of the net sales of our service businesses. At the same time, used machine sales increased clearly from the low level of the second quarter.

As operations picked up, the company had no temporary layoffs, and effective cost cuts enabled an excellent profitability. Ponsse’s operating profit for the quarter was EUR 21.6 (16.2) million, giving an operating margin of 13.9 (10.9) per cent. Although our net sales are slightly behind the previous year, our profitability reached the previous year’s level after the first nine months of the year. This is largely attributable to the successful third quarter. The cumulative cash flow was EUR 15.5 (14.1) million at the end of the third quarter. While our trade-in machine stocks continue to be a little high compared to a normal situation, the recovery of the market situation has also started to reduce their level.

Despite our successes during the third quarter, there are still significant uncertainties in the markets. According to our estimate total market has decreased approximately 20 per cent this year. The changed operating environment has a significant impact and the smaller order book no longer offers the same level of security to business cyclicality it has given us in the past. We will continue to invest normally in sales, after sales and the availability of spare parts and will serve our customers to the best of our abilities.

The factory will continue to run at full capacity in two shifts until the end of October. After this, our order book does not enable two shifts, and our factory will operate in one shift during November and December. Our network is working hard to keep our Vieremä factory busy.

We will continue to closely observe safety instructions in everything we do to prevent the coronavirus pandemic from spreading. The most important thing is to ensure the health of our personnel, customers and other stakeholders under all circumstances.