Stock Exchange release October 28, 2004 11:24:13 AM CET
Metso Corporation's Interim Review, January-September 2004: OPERATING RESULT CONTINUED TO DEVELOP POSITIVELY
In January-September 2004, Metso Corporation's net sales totaled EUR 2,884 million (1-9/2003: EUR 3,046 million).
Metso's operating profit before nonrecurring items and amortization of goodwill was EUR 107.5 million (EUR 80.7 million).
The operating profit improved to EUR 39.3 million (negative EUR 273.7 million). The operating profit includes EUR 26 million in nonrecurring expenses booked for July-September due to the renewal of Metso Paper's business concept and the streamlining of its cost structure.
The net profit was EUR 33 million, which includes a deferred tax asset of EUR 53 million booked for July-September.
Earnings per share were positive EUR 0.24 (negative EUR 2.36).
New orders worth EUR 3,405 million (EUR 3,296 million) were received. The Corporation's order backlog totaled EUR 1,918 million at the end of September (EUR 1,505 million at the end of 2003).
Gearing was 62.3 percent at the end of September (107.7% on December 31, 2003).
In the third quarter, Metso's operating profit before nonrecurring items and amortization of goodwill was EUR 55.9 million. The corresponding figure for continuing operations was EUR 58.8 million. In January-September, operating profit before nonrecurring items and amortization of goodwill from continuing operations strengthened to EUR 99.7 million (EUR 59.9 million).
Net nonrecurring expenses of EUR 41 million were booked during January-September, including EUR 26 million in nonrecurring expenses booked in the third quarter due to the renewal of Metso Paper's business concept. Metso's operating profit for the third quarter was EUR 18.8 million.
In January-September, Metso's loss before taxes was EUR 3 million. The net profit was EUR 33 million and included a deferred tax asset of EUR 53 million booked in the third quarter. Consequently, earnings per share turned positive and were EUR 0.24.
In January-September, Metso received more new orders than in the corresponding period one year earlier. The order backlog at the end of September was also clearly stronger than at the end of 2003 or at the end of September 2003.
Orders received by continuing operations increased by 9 percent and the order backlog strengthened by 36 percent.
The share of the Corporation's aftermarket operations increased slightly and accounted for 40 percent of net sales.
"Metso Minerals and Metso Automation have clearly improved their results. In the third quarter, which usually is somewhat quieter due to seasonal factors, they both succeeded in strengthening their operating profit margins compared with the previous quarter. This was achieved through the streamlined cost structure resulting from the efficiency improvement measures and supported by the favorable demand," says Jorma Eloranta, President and CEO.
"Metso Minerals has benefited from the market situation and enhanced the effects of its efficiency improvement measures.
Metso Automation has continued its positive profitability performance despite fragmented market situation. The renewal of Metso Paper's business concept continues as announced in June 2004. Metso Paper's result improved compared with the first half of the year.
In January-September Metso's gearing has decreased significantly due to the strong operating cash flow and divestitures. Metso will continue to strengthen its position as market leader and to ensure that the financial targets set for 2005 will be met, says Jorma Eloranta.
Metso Paper's market situation is expected to remain uncertain for the rest of the year. The pulp and paper industry's willingness to invest is essentially dependent on how paper and board prices develop in the future. Metso Paper's net sales and operating profit before nonrecurring items for 2004 are not estimated to reach the level of the previous year.
The demand for Metso Minerals' products is expected to remain good in the Americas and in Asia. In Europe, civil engineering industry demand is expected to recover gradually.
The mining industry investment outlook is good. The favorable profitability development is estimated to continue in Metso Minerals.
Metso Automation's market expectations remain satisfactory for the pulp and paper industry and good for the power, oil and gas industry. Profitability in Metso Automation is expected to remain good.
Overall, Metso Corporation's operating profit before nonrecurring items for 2004 is estimated to be better than that of the previous year. Earnings per share are expected to be positive.
For additional information, please contact
Jorma Eloranta, President and CEO, Metso Corporation, tel. +358 204 84 3000
Olli Vaartimo, Executive Vice President and CFO, Metso Corporation, tel. +358 204 84 3010
Eeva Mäkelä, Vice President, Investor Relations, Metso Corporation, tel. +358 204 84 3253
ATTACHMENTS Metso Corporation's Interim Review, January-September 2004