Published on : Thursday, August 1, 2019
• Operating profit was EUR 4.9 million (MEUR 5.9), down 16% from the comparison period. The result before taxes was EUR 5.1 million (MEUR 6.0).
• Earnings per share were EUR 0.94 (EUR 1.09), and diluted earnings per share were EUR 0.94 (EUR 1.08).
• Net sales for the second quarter were EUR 37.0 million and operating profit was EUR 2.3 million. Order intake was EUR 26 million. The order book at the end of the reporting period came to EUR 72 million (MEUR 127), a significant proportion of which is scheduled for 2020 and a smaller amount for 2021.
• On June 25, 2019, Raute changed its guidance for 2019. Raute’s net sales for 2019 are expected to decrease and operating profit is expected to weaken from the comparison period.
Market situation in customer industries
Raute’s customers in the plywood and LVL (Laminated Veneer Lumber) industries are engaged in the manufacture of wood products used in investment projects and are thus highly affected by fluctuations in construction, housing-related consumption, international trade and transportation. We estimate that the growth trend in wood construction will create demand for our customers and indirectly for Raute, and will also strengthen growth opportunities in the long term.
The situation in the global economy and the financial markets in early 2019 did not change considerably with respect to Raute. The economic outlook became increasingly uncertain. A few of our customers have informed us that they are experiencing a decline in demand and prices.
Many of Raute’s established and traditional customers have invested heavily during the past few years. As demand among this traditional customer base dwindles, the demand for our technology continues to shift towards new and different types of customer accounts. A few of the orders we have received are concrete proof of this shift.
Demand for wood products technology and technology services
Although investment activity among Raute’s customers has decreased from what it was in recent years, it remains at least at a reasonable level. Enquiry activity for new capacity projects and larger projects involving replacement and efficiency-boosting investments has remained at a good level, and contracts are being actively negotiated.
Demand remains the strongest in industrialised market areas, especially Russia. In the emerging markets of Asia, China included, and South America, demand has not been as strong, but it has been brisker in recent months. There is growing interest in Raute’s offering in these markets, which presents opportunities to obtain new customers.
Demand for maintenance and spare parts services remained at a good level, which is an indication of the good capacity utilization rates of Raute’s customers’ production plants.
OUTLOOK FOR 2019
On June 25, 2019, Raute changed its guidance for 2019 concerning net sales and operating profit, estimating that the company’s net sales will decrease and operating profit will weaken in 2019 compared to the record figures of the previous year. The revised guidance was based on scheduling delays concerning a few projects that were in the implementation phase, as well as the related costs, and to the postponement from previous estimates of a few major new orders that are in the negotiation phase.
The company’s current situation and outlook for the rest of the year give no cause to change the guidance issued on June 25, 2019. Raute’s net sales will decrease and operating profit will weaken in 2019 compared to 2018.