Quarterly report
2/2004
•Operating revenues increase to NOK 1573.4 million (1306.7)
•The new businesses Are and Mobilarum are performing as anticipated
•Operating profit in the second quarter totalled NOK 36.4 million (45.0),
which is a significant improvement compared to the three previous quarters
•The sale of the Group's own shares boosts equity by NOK 35.6 million
•The non-residential building market in Norway and Sweden has stabilised at
a low level of activity
•The market for sawn white wood timber should remain stable in the
European markets, while the prospects for red wood is somewhat less
favou-rable
•The Board anticipates profit for the third quarter to be somewhat higher
than in previous years
Per 31.12 1sthalf-year 2004 2003 2002 2004 2003 2002 2003 2002 Intangible assets -24.4 -10.5 -12.9 10.4 15.0 41.1 29.2 32.7 Tangible assets 11.4 46.0 -14.1 1,128.6 866.4 779.9 860.9 803.5 Financial assets 4.1 -0.9 -0.8 131.3 155.0 142.5 125.4 152.3
Total fixed assets -8.9 34.6 -27.8 1,270.3 1,036.4 963.5 1,015.5 988.5
Stocks -33.7 36.7 -67.4 982.5 767.8 704.9 708.2 665.0
Receivables and deposits -0.5 46.5 13.3 873.6 776.1 786.0 639.8 486.7 Total current assets -34.2 83.2 -54.1 1,856.1 1,543.9 1,490.9 1,348.0 1,151.7 Total assets -43.1 117.8 -81.9 3,126.4 2,508.3 2,454.4 2,363.5 2,140.2
Share capital* 14.2 0.0 0.0 647.7 579.8 579.8 579.8 579.8
Other equity and capital 39.3 41.8 30.3 449.7 402.8 338.9 343.7 338.7
Total equity 53.5 41.8 30.3 1,097.4 982.6 918.7 923.5 918.5
Long-term liabilities -42.0 94.2 -45.9 1,138.8 871.6 906.9 738.6 578.5 Current liabilities -54.6 -18.2 -66.3 890.2 726.1 628.8 701.4 643.2 Total liabilities -96,6 76.0 -112.2 2,029.0 1,597.7 1,535.7 1,440.0 1,221.7 Total equity and liabilities -43.1 117.8 -81.9 3,126.4 2,580.3 2,454.4 2,363.5 2,140.2
Net interest bearing debt -75 71 -21 1,041 791 782 624 498
Capital employed -64 113 10 2,138 1,774 1,701 1,594 1,418
Net working capital 2 71 0 1,385 1.094 999 895 742
NOK mill.
Per 30.06
Changes in total equity for the Group
Opening balance 1,043.9 940,8 888,4 923.5 918,5 878,9 918,5 878,9
Profit/loss 15.1 24,9 30,3 14.1 43,4 40,2 31,9 74,2
Total from share issue 0,0 0,0 0,0 118.1 0,0 0,0 0,0 0,0
Foreign currency translation -1.6 16,6 -0,6 0.2 20,5 -0,6 13,0 -2,8
Provisions for dividend 0.0 0,0 0,0 -1,1 0,0 0,0 -17,9 -29,8
Own shares 35.6 0,0 0,8 38.3 0,0 0,8 0,0 0,8
Change in reclassified assets 4.5 0,0 0,0 4.5 0,0 0,0 -22,2 0,0
Minority interests -0,1 0,3 -0,2 -0.2 0,2 -0,6 0,2 -2,8
Changes for year/period 53.5 41,8 30,3 173.9 64,1 39,8 5,0 39,6
Total equity 1,097.4 982,6 918,7 1,097.4 982,6 918,7 923,5 918,5
*129,542,384 shares at NOK 5.-, adjusted to account for 1,100 own shares.
The quarterly report has been prepared using the same accounting principles as those used in the annual accounts and according to NGAAP.
NOK mill. 2004 2003 2002 2004 2003 2002 2003 2002
Operating revenues 1,573.4 1,306.7 1,246.0 2,980.4 2,450.1 2,378.6 4,864.1 4,618.4
Depreciation 41.8 36.9 35.8 84.3 73.0 72.1 146.1 147.4
Cost of goods sold 1,021.7 814.7 763.2 1,906.8 1,484.8 1,443.1 3,020.7 2,772.7 Operating expenses 473.5 410.1 394.4 947.5 816.7 787.5 1,596.7 1,558.9
Operating profit 36.4 45.0 52.6 41.8 75.6 75.9 100.6 139.4
Income from associates -0.5 -0.1 0.4 -2.2 -13 0.6 -5.9 -0.4
Interest and other financial income 2.8 5.1 0.2 6.4 10.3 4.0 14.7 9.2 Interest and other financial expenses -16.0 -14.5 -11.1 -30.9 -25.2 -44.9 -49.1
Operating result before tax 22.7 35.5 42.1 15.1 60.6 55.3 64.5 99.1
Estimated tax cost 7.4 10.0 12.0 0.8 17.0 15.7 32.3 27.7
Minority interests -0,2 -0.6 0.2 -0.2 -0.2 0.6 -0.3 2.8
Net profit 15.1 24.9 30.3 14.1 43.4 40.2 31.9 74.2
Proforma, incl. Are-Group 2003 and 2002
Operating revenues 1,573 1,492 1,421 2,980 2,825 2,689 5,564 5,239
Depreciation 41 44 43 84 88 85 177 179
Operating profit (in %) 37 52 62 42 90 94 128 177
Net Operating margin 2.3 3.5 4.4 1.4 3.2 3.5 2.0 3.0
Total assets 3,126 3,105 2,934 3,126 3,105 2,934 2,829 2,615
Equity (in %) 35.1 35.4 35.3 35.1 35.4 35.3 35.0 39.0
No. of employees 3,195 3,282 3,409 3,284 3,257 3,424 3,150 3,420
Total
Profit and Loss Account
Balance Sheet
2ndQuarter
2004 2003 2002 2004 2003 2002 2003 2002
Net operating margin (in %) 2.3 3.4 4.2 1.4 3.1 3.2 2.1 3.0
Gross operating margin (in %) 5.0 6.3 7.1 4.2 6.1 6.2 5.1 6.2
Return on capital employed (in %) 4.0 11.1 12.4 4.2 9.5 9.1 6.8 9.1 Earnings per share (in NOK) 0.12 0.21 0.26 0.11 0.37 0.35 0.28 0.64 Cash flow per share (in NOK) 0.48 0.65 0.54 0.79 1.22 0.96 1.96 2.05 Inv. in fixed assets, excl. acquisition (NOK mill.) 57 48 29 90 72 42 189 119
Equity ratio (in%) 35.1 38.1 37.4 35.1 38.1 37.4 39.1 42.9
Total oper. revenue outside Scandinavia (in %) 22 23 26 20 22 26 22 25 Number of employees 3,195 2,982 3,109 3.284 2,957 3,124 2,853 3,108
Number of shareholders 995 999 1,005 993 999 1,001 996 999
Average number of shares 127 433 300115 953 313 115 953 313 121 666 700 115 953 313 115 953 313 115 954 584 115 953 313
NOK mill.
Total
2004 2003 2002 2004 2003 2002 2003 2002
Net cash flow from operations 78.3 24.6 31.3 -140.1 -139.6 16.1 116.5 405.1 Cash from operating result 61.5 75.1 63.0 96.4 141.2 111.6 227.7 237.9 Cash flow from working capital 16.8 -50.5 -31.7 -236.5 -280.8 -95.5 -111.2 167.2 Cash flow from/to investments -46.4 -45.5 -32.5 -66.5 -74.9 -41.5 -176.7 -110.8 Cash flow from/to financing -49.9 55.0 36.3 184.4 241.5 37.4 68.6 -303.2 Net cash flow for the period -18.1 32.3 -37.5 -22.2 27.0 12.0 8.4 -8.9
Liquid funds -18.4 32.3 -37.5 23.3 64.4 56.7 45.4 37.4
Unutilised credit facilities 40.6 -89.9 6.2 664.2 376.2 448.2 630.8 733.8
Available liquid funds 22.2 -57.6 -31.3 687.5 440.6 504.9 676.2 769.3 Net. investments from acquisitions and sales
Fixed assets 0,0 20.6 0,0 294.8 294.8 0,0 20.0 -5.1
Current assets 0,0 36.7 0,0 274.0 36.7 0,0 36.7 -0.1
Liquid funds 0,0 0.6 0,0 32.5 0.6 0,0 0.6 0.3
Total assets 0,0 57.9 0,0 601.3 57.9 0,0 57.3 -4.9
Equity 0,0 -0.3 0,0 186.4 -0.3 0,0 -0.3 1.0
Interest bearing debt 0,0 44.3 0,0 248.0 44.3 0,0 44.3 -5.5
Interest free debt 0,0 13.9 0,0 166.9 13.9 0,0 13.3 -0.4
Total capital 0,0 57.9 0,0 601.3 57.9 0,0 57.3 -4.9
NOK mill.
Total 1sthalf-year
2002: Sale of Norra Ny Skogs AB and Moelven Iberica SA. Acquisition of Nordisol Akustik in Karlstad AB.
2003: Aquisition of Finnforest Danmark A/S, Plyfa Göteborg AB and Woodpaint in Karlstad AB. Deconsolidation of Aicher GMBH as associated company. 2004: Aquisition of Are-Group and Mobilarum AB.
1sthalf-year
Quarterly in 2002 - 2004 Quarterly in 2002 - 2004
Cash Flow Statement
Key figures
Operating revenues Operating profit
Change in 2ndQuarter
Highlights
On 1 June, Agder-Telemark Skogeierforening and
Haldenvassdragets Skogeierforening purchased 4.5 per cent and 3.0 per cent, respectively, of the shares in the Moelven Group, while Glommen Skogeierforening and Mjøsen Skogeierforening expanded their ownership stake to 17.8 per cent and 9.4 per cent, respectively. The Finnish Metsäliitto Andelslag and its subsidiary Finnforest Oyj maintain their majority interest with a total of 65.2 per cent of the shares. No changes have been made to the com-pany's corporate assembly or Board of Directors as a result of the chang-es in share ownership.
Demand for the Group's products has remained relatively stable in the second quarter. The non-residential building market is expected to remain weak in large parts of Scandinavia, and will have a particu-lar impact on businesses in the Moelven Building Group. The activi-ty level in the residential repair and maintenance sector is satisfactory both in Norway and Sweden, and this is of major importance for the Group's planing mill and laminated timber factories. For the sawmills, the availability of raw materials and the relationship between prices for raw timber and prices for processed wood products is critical for profita-bility. Low logging activity in large
parts of Norway and a disproportion between the high price for red wood timber in Sweden and the low price for finished wood products in Europe, have been the two greatest challenges for this part of the busi-ness in the second quarter. The mar-ket situation for white wood products has been normal.
In the course of the past years, the Group has invested considerably in fire-prevention measures, involving considerable efforts to change attitu-des and improve routines, combined with an investment programme in technical fire prevention equipment totalling NOK 45 million. These efforts have increased the availability of more reasonable insurance rates, and a new insurance agreement has been signed on better terms that will take effect in the third quarter 2004.
Second quarter profits for
Group
Operating revenues in the second quarter increased to NOK 1573.4 million, compared to NOK 1306.7 million for the same period last year. The increase is due both to the acquisition of businesses and due to increased business activity in the existing facilities. Operating profit in the second quarter was NOK 36.4 million (45.0), which is a significant improvement compared to the three previous quarters. Compared to the same period last year, the sawmills are still operating at a low level of profitability, while the planing mills in Moelven Wood posted a significant
increase in profits. Net financial expenses totalled NOK 13.2 million (9.4). The increase in financial expenses is primarily due to higher interest-bearing debt as a result of acquired businesses. Profit after taxes totalled NOK 15.1 million (24.9), corresponding to NOK 0.12 per share (0.21).
Operating revenues after the first six months of the year were NOK 2980.4 million (2450.1), with opera-ting profit at NOK 41.8 million (75.6) and profit after taxes at NOK 14.1 mill (43.4).
Business areas
Moelven Timber GroupOperations in the businesses in the former Are Group, which became part of Moelven from 1 January this year, have met the expectations. The internal consolidation of the Group's businesses is continuing as planned, and the closing of plants in Gol, Hen and Kværnum has been carried out without having to reduce the overall activity level in the Moelven Timber Group. Laminated timber production in the second quarter has been con-centrated at three instead of four plants. The fourth plant (one of the Norwegian plants) was sold to Moelven Massivtre AS, in which Moelven has a 47 per cent owners-hip stake. The plant will commercia-lise the production and sale of solid wood elements and will according to plans start production in October 2004.
NOK mill. 2004 2003 2002 2004 2003 2002 2003 2002
Operating revenues
Moelven Timber Group 1,247.2 976.2 936.6 2,364.5 1,781.3 1,759.8 3,554.3 3,380.8 Timber - sawmills 819.9 626.5 629.7 1,620.2 1,239.4 1,235.2 2,398.1 2,360.1 Wood - processing 536.5 382.9 366.1 998.4 637.2 644.0 1,404.0 1,273.8 Laminated Timber 107.7 101.4 95.9 190.7 200.3 177.7 386.1 364.6
Operating profit/loss
Moelven Timber Group 36.4 42.4 46.3 50.3 77.4 60.8 93.2 129.1 Timber - sawmills 16.7 38.1 32.5 28.1 73.2 47.8 92.3 93.6 Wood - processing 15.2 3.5 14.7 16.2 1.6 18.1 -0.6 40.6
Laminated Timber 4,5 0.8 -0.9 6.0 -1.7 -5.1 1.5 -5.1
1sthalf-year Total
Moelven Timber Group
Directors’ report
Operating revenues in the second quarter for the Moelven Timber Group totalled NOK 1247.2 million (976.2), with operating profit at NOK 36.4 million (42.4). Both the planning mills at Moelven Wood, as well as the laminated timber busi-ness, have had satisfactory progress. The sawmills in the Moelven Timber Group, however, generated a lower profit, which in large part was due to an imbalance in the costs for raw materials and the prices for finished products made at the sawmills in Sweden processing red wood.
In the first six months of the year, operating revenues totalled NOK 2364.5 million (1781.3), and opera-ting profit was NOK 50.3 million (77.4).
Moelven Building Group
The vacancy rate for offices in the largest cities in Sweden and Norway is still quite high and the demand for new non-residential buildings has stabilised at a low level. The need to adapt capacity has been largest in the area modular system interiors. The Moelven Building Group has experi-enced an increase in deliveries as a result of the acquisition of busines-ses and increased deliveries for multi-family housing. After the acquisition of Mobilarum, the Group now produces building modules at four plants in Sweden. The work coordinating operations between the plants, which will involve some degree of product specialisation, is progressing as planned, and
profitabi-lity at the Swedish module factories is improving.
Operating revenues for the Moelven Building Group in the second quarter were NOK 333.3 mil-lion (336.0), and operating profit totalled NOK 9.2 million (11.8). Both Moelven Modular Buildings and Moelven Modular System Interiors posted a somewhat weaker final result.
Operating revenues the first six months were NOK 628.5 million (680.7), and operating profit totalled NOK 9.6 million (18.8).
Other businesses
This business area consists of the Group's two holding companies and joint services in Norway and Sweden, as well as some smaller businesses that are not involved in core Group business activities. Operating revenues in the second quarter totalled NOK 20.9 million (11.8), with an operating loss of NOK 9.2 mill (-9.0). For the first six months, operating revenues totalled NOK 36.6 million (24.1), with an operating loss of NOK 18.1mill (-20.6).
Employees
At the end of the second quarter, the Group had 3284 employees (2957). The number of employees has incre-ased by 29 in the course of the second quarter, which is due to nor-mal seasonal variations and a somewhat higher level of contract activities in parts of the Moelven
Building Group. Absenteeism due to illness was 6.4 per cent (6.8) in the second quarter.
Investments, balance
sheet and financing
Investments totalling NOK 57 mill (48) were made in the second quarter, primarily in the area of maintenance. The largest single investment was linked to the con-struction of Telemarksbruket, which is scheduled to be completed by the beginning of the fourth quarter.
At the end of the second quarter, the Group had assets totalling NOK 3126.4 million (2580.3) and employ-ed capital totalling NOK 2138 mill (1774). The increase is due to the acquisition of the Are Group and Mobilarum. The amount of capital employed has been reduced somew-hat in the second quarter, which is a development that will continue as a result of normal seasonal variations through the last six months of the year.
In connection with the changes in ownership structure, the Group sold own shares, which strengthened equity by NOK 35.6 million. Equity at the end of the second quarter totalled NOK 1097.4 mill (982.6), corresponding to an equity ratio of 35.1 per cent (38.1). The reduction compared to the year before is the product of the recent acquisitions. The goal of the Board is to increase the equity ratio gradually to approxi-mately 40 per cent.
NOK mill.
Total
2004 2003 2002 2004 2003 2002 2003 2002
Operating revenues
Moelven Building Group 333.3 336.0 312.9 628.5 680.7 628.6 1,340.7 1,241.5 Modular Buildings 203.4 190.0 165.4 370.3 386.5 337.1 762.9 655.8 Modular System Interiors 130.3 146.8 147.8 259.5 295.1 292.0 579.8 586.9
Operating profit/loss
Moelven Building Group 9.2 11.8 9.3 9.6 18.8 22.5 37.0 41.7
Modular Buildings 5.9 7.4 3.6 3.9 7.2 8.7 15.7 10.3
Modular System Interiors 3.3 4.4 5.7 5.7 11.6 13.8 21.3 31.4
1sthalf-year
SENDER:
Moelven Industrier ASA P.O. Box 134, N-2391 Moelv Tel. +47 62 34 70 00 Fax. +47 62 36 92 80 Internett: http://www.moelven.com E-mail: [email protected] HUGIN Online: http://www.huginonline.no/MOE/
Net interest-bearing debt totalled NOK 1041 million (791), and the liquidity reserve was NOK 687.5 mill (440.6).
Prospects
The Board expects that the non-resi-dential building market will remain slow during the second half of the
year. The Moelven Building Group has focussed on industrialised, module-based concepts and the sale of these should perform somewhat better than the overall market. The market for wood-based con-struction material, which in large part is used for repair and mainte-nance of residential building, is expected to remain at a satisfactory
level, while prices for certain types of sawn red wood timber is expected to continue to be low. Overall, the Board expects that profit this year for the Group will be somewhat lower than last year.
Board of Directors, Moelven Industrier ASA
Moelv, 23 July 2004
