Stock Exchange release February 2, 2005 11:24:16 AM CET
METSO CORPORATION'S FINANCIAL STATEMENTS 2004: OPERATING PERFORMANCE TURNED CLEARLY UPWARD
In 2004, Metso Corporation's net sales totaled EUR 3,976 million (EUR 4,250 million in 2003). The decrease was due to divestments. Net sales from continuing operations were at the level of the comparison year.
Operating profit before nonrecurring items and amortization of goodwill was EUR 173 million (EUR 133 million in 2003). After nonrecurring items and goodwill amortization, the operating profit was EUR 111 million (loss of EUR 229 million in 2003).
Earnings per share were EUR 0.51 (negative EUR 1.89 in 2003).
New orders worth EUR 4,374 million (EUR 4,256 million in 2003) were received. The Corporation's order backlog from continuing operations grew by 25 percent and reached EUR 1,745 million at the end of the year (continuing operations EUR 1,396 million in 2003).
Gearing at the end of the year was 50.0 percent (107.7% on December 31, 2003).
The Board proposes to the Annual General Meeting to be held on April 4, 2005 that a dividend of EUR 0.35 per share (EUR 0.20 per share in 2003) be distributed.
In 2004 the U.S. economy turned clearly upward, growth remained modest in Europe while China's rapid economic growth continued. The demand for Metso Paper's products was satisfactory, as in the previous year. The paper industry's market situation was reflected in cautious investment activity by customers, and few new paper machines were ordered. The demand for Metso Minerals' crushing and screening equipment improved considerably in North America and Asia. Due to the fact that metal prices have remained high for a long time the demand for mining industry equipment was good in South America and in the Asia-Pacific region. The demand for Metso Automation's field equipment increased significantly. The demand for automation systems remained at the previous year's level.
In Metso's continuing operations orders received increased by 10 percent. The order backlog of continuing operations was 25 percent higher. The total value of orders received by Metso increased by 3 percent from 2003, while the order backlog at the end of the year was 16 percent higher than a year earlier.
The operating profit before nonrecurring items and amortization of goodwill was EUR 173 million, or 4.4 percent of net sales. The positive performance was due to the substantially improved profitability of Metso Minerals and Metso Automation that resulted from efficiency improvement measures and increased volumes. In 2004, Metso's operating profit was EUR 111 million, or 2.8 percent of net sales. The operating profit of the fourth quarter was EUR 72 million, or 6.6 percent of net sales.
"Our focus in 2004 was in improving profitability and cash flow as well as in strengthening our balance sheet. The development in all these areas was positive. Our profitability developed favorably thanks to the good performance in Metso Minerals and Metso Automation. During the year our balance sheet strengthened substantially due to the cash flow generated and the proceeds from divestments, real estate and shares. Our net debt decreased by approximately EUR 600 million and was EUR 529 million at the end of the year," says Jorma Eloranta, President and CEO.
Improved capacity utilization in Metso Paper's customer industries is expected to gradually increase customers' willingness to invest. However, in the near future the demand for Metso Paper's products is expected to mainly focus on rebuilds and aftermarket services.
Metso Minerals' strong order backlog provides a solid foundation for net sales growth. Demand for products related to aggregates production is expected to remain good in North America and Asia. Due to the strong investment activity in the mining industry, the demand for Metso Minerals' products for minerals processing is expected to remain buoyant.
Metso Automation's markets are expected to remain good in the power, oil and gas industry and to recover in the pulp and paper industry.
The completed measures to streamline the cost structure and the strengthened order backlog will support favorable profit performance in Metso Corporation. Metso's operating profit is expected to be better in 2005 than in the previous year. The positive profit performance of Metso Minerals and Metso Automation will help the Corporation to attain its financial targets. However, the targets set for Metso Paper and Metso Ventures are demanding. The 2005 financial targets set for Metso Corporation as a whole are expected to be reached.
Metso is a global technology corporation serving customers in the pulp and paper industry, rock and minerals processing, energy industry as well as in selected other industries. In 2004, the net sales of Metso Corporation were approx. EUR 4 billion, and it has some 23,000 employees in more than 50 countries. Metso's shares are listed in the Helsinki and New York Stock Exchanges.