Cash flow and financing
In 2003, Metso's net cash provided by operating activities was EUR 146 million. The net result for the year includes substantial nonrecurring expenses that have no effect on cash flow. The most significant of these was a goodwill impairment made in Metso Minerals. The net working capital increased by EUR 54 million, which was mainly due to Metso Paper's ongoing project deliveries and their timing. The amount of net working capital decreased in Metso Minerals and Metso Automation.
Gearing, i.e. the ratio of net interest bearing liabilities to shareholders' equity, was 107.7 percent. The goodwill impairment and other nonrecurring items significantly increased the gearing ratio. Metso's equity to assets ratio was 28.3 percent at the end of the year.
Net interest bearing liabilities totaled EUR 1,109 million at the end of the year while they were EUR 1,118 million at the end of 2002. During the year under review, the previous syndicated revolving credits were replaced with a new five-year EUR 450 million credit agreement. Long-term debt accounted for 75 percent of total interest bearing debt at the end of 2003. The largest installments are scheduled for 2006 and 2007. The credit agreements do not include repayment covenants based on credit ratings.
On June 27, 2003, Standard & Poor's Rating Services lowered the outlook on the BBB long-term rating of Metso from stable to negative and, at the same time, the short-term rating was lowered from A-2 to A-3. Moody's Investors Service lowered the long-term ratings of Metso to Baa3 from Baa2 on June 23, 2003 with a stable outlook.