Stock Exchange release July 28, 2004 11:31:46 AM CET
Metso Corporation's Interim Review, January-June 2004: OPERATING RESULT MOVED INTO PROFIT AND ORDER BACKLOG STRENGTHENED SIGNIFICANTLY
- In January-June 2004, Metso Corporation's net sales totaled EUR 1,953 million (1-6/2003: EUR 2,055 million).
- Metso's operating profit before nonrecurring items and amortization of goodwill was EUR 51.6 million (EUR 46.7 million). From continuing operations the operating profit before nonrecurring items and amortization of goodwill was EUR 40.9 million (EUR 27.6 million).
- The operating profit was EUR 20.5 million (EUR 18.8 million). Earnings per share were negative EUR 0.14 (negative EUR 0.13).
- New orders worth EUR 2,539 million (EUR 2,309 million) were received. The Corporation's order backlog totaled EUR 1,974 million at the end of June (EUR 1,505 million at the end of 2003).
- Gearing was 70.9 percent at the end of June (101.7% on March 31, 2004).
In April-June, Metso's order intake was significantly up on both the first quarter of 2004 and the corresponding period of 2003. The Corporation's order backlog also strengthened further in April-June compared with both the first quarter of this year and April-June of last year. Aftermarket operations accounted for 39 percent of net sales.
Metso's operating result before nonrecurring items and amortization of goodwill showed a clear improvement in April-June. Metso's operating profit before nonrecurring items and amortization of goodwill from continuing operations improved significantly due to the positive development in April-June. According to Jorma Eloranta, President and CEO, Metso's operating profit development supports the chosen strategic direction. The achieved profitability can be regarded to be in line with expectations, but is still insufficient. The work to achieve the financial targets and improve profitability continues as planned.
"Metso Minerals and Metso Automation improved their profitability especially due to the efficiency improvement measures. Our challenge in Metso Paper is to reduce fixed costs further, especially in the Nordic countries and North America, as announced earlier. Now that Metso's balance sheet has strengthened considerably, we can turn our full attention to serving our customers and improving operational profitability," says Eloranta.
The market for Metso Paper's products is estimated to remain at its present level. The demand for new paper and board making lines is expected to continue in China, while the European and North American demand is expected to focus on modernizations and rebuilds. 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 North America and in the mining industry. In Europe, civil engineering industry demand is expected to remain at its current level. Metso Minerals' favorable profit performance of the first half of the year is estimated to continue.
In Metso Automation's markets, economic growth in North America is not expected to increase the short-term demand for automation. European markets are expected to recover with a delay. However, the favorable profitability development of the first half of the year is estimated to continue in Metso Automation.
Overall, Metso Corporation's operating profit before nonrecurring items for 2004 is estimated to be slightly better than that of the previous year. Income before taxes is estimated to be significantly better than in the previous year.
Metso Corporation's Interim Review for January-June 2004