29.04.2008, 08:04
Lassila & Tikanoja’s performance improved significantly by a non-current capital gain on sale. Operative profitability was burdened by a decline in the demand for recycled fuels and biofuels due to the mild winter. Full-year net sales are expected to increase more than 10 per cent. The operating profit excluding non-recurring and imputed items is expected to remain at the same level as in the previous year. Earnings are expected to improve due to the gain on sale.
Net sales for the first quarter grew to EUR 147.3 million (EUR 129.1 million). This represented an increase of 14.1%. Operating profit grew to EUR 22.8 million (EUR 9.2 million) and earnings per share to EUR 0.51 EUR (EUR 0.15). The profit for the period was improved by a capital gain of EUR 14.2 million on the sale of Ekokem shares.
Strong organic growth continued thanks to successful new sales. Waste management improved efficiency of collection and its earnings improved. New service products were again introduced in Property and Office Support Services, and the division’s performance improved. Operations outside Finland also improved their performance.
The operating profit excluding non-recurring and imputed items totalled EUR 8.8 million (EUR 10.3 million). It was burdened by a decline in the demand for recycled fuels and biofuels due to the mild winter and increased raw material costs of L&T Biowatti’s as well as rapid fluctuations in the demand for Industrial Services and the failure to adapt production to the changes quickly enough.
Construction of substantial added capacity was initiated at the Kerava recycling park. New capacity will be completed step by step during 2009 and 2010. The capacity of the Kerava plant will be doubled and the recovery rate will increase substantially. L&T Biowatti will start the production of wood pellets during the current year at two locations in Finland. The joint venture L&T Recoil’s re-refinery for used lubricating oil is expected to be completed towards the end of the year.
The demand prospects for Lassila & Tikanoja’s markets remain mostly good. Cost development and passing the rise in the costs on to prices, however, will be challenging. Organic growth is expected to remain strong. Full-year net sales are expected to increase in line with the long-term target, which is more than 10 per cent. The operating profit excluding non-recurring and imputed items is expected to remain at the same level as in the previous year. Earnings will improve due to the capital gain.