Ahlstrom interim report January-June 2010: profitability improved, driven by increased demand

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Source: Ahlstrom Corporation

April-June 2010 compared to April-June 2009:

  • Net sales EUR 489.4 million (EUR 398.9 million).
  • Operating profit EUR 29.8 million (EUR 9.7 million). The figure includes non-recurring items of EUR 0.8 million (EUR -3.0 million).
  • Profit before taxes EUR 22.5 million (EUR 4.7 million), and earnings per share EUR 0.29 (EUR 0.05).
  • Net cash flow from operating activities EUR 45.1 million (EUR 72.8 million).

January-June 2010 compared to January-June 2009

  • Net sales EUR 930.4 million (EUR 775.0 million)
  • Operating profit EUR 43.8 million (loss EUR 1.0 million). The figure includes non-recurring items of EUR 1.1 million (EUR -3.7 million).
  • Profit before taxes EUR 29.8 million (loss EUR 13.9 million) and earnings per share EUR 0.38 (EUR -0.21).
  • Net cash flow from operating activities EUR 77.2 million (EUR 93.7 million).

Events during April-June 2010

  • Ahlstrom announced its new organization and operating model in May to support its revised strategy.The new operating model took effect on July 1, 2010.
  • The Mundra medical nonwovens plant in India was inaugurated.
  • The company started a development project to reduce production waste, aiming to improve earnings by approximately EUR 20 million annually.

Outlook for 2010

  • Ahlstrom raises its net sales estimate for 2010 as a result of strong demand and successful price increases. The company estimates that net sales in 2010 will be above the 2008 level, whereas it had earlier estimated that net sales would reach approximately the same level as in 2008. Operating profit excluding non-recurring items is expected to increase from 2009, unchanged from the earlier forecast.

Jan Lång, President and CEO:

  • Continued favorable demand in most of our customer segments was the main driver for the significant improvement of profitability in the second quarter. Furthermore, efficiency improvement measures initiated earlier are now bearing fruit. We were also able to pass on rapidly rising raw material costs to our sales prices.
  • It has been delightful to note that demand has recovered at such a rapid phase and our net sales returned to the pre-recession levels of the second quarter in 2008. The fastest growth was again seen in Asia, where we today took a significant step in our growth strategy by agreeing to acquire Shandong Puri Filter & Paper Products Limited.
  • During the first part of this year, we prepared an extensive renewal of our organization and operating model, which became effective on July 1, 2010. This allows us to implement our revised strategy more effectively. It also enables us to introduce a stronger customer focus to a fairly traditional industry. Furthermore, we aim to improve cost efficiency in the entire supply chain.

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