POWERFLUTE OYJ INTERIM FINANCIAL REPORT

POWERFLUTE OYJ INTERIM FINANCIAL REPORT

Powerflute Oyj, the packaging and paper group today announces its interim results for the six months ended 30 June 2011. Powerflute is quoted on the AIM market and on First North, the alternative market of the OMX Nordic Exchange Stockholm AB.

FINANCIAL HIGHLIGHTS

  • Revenues from continuing operations increased by 15% to €58.3m (2010: €50.9m)
  • EBITDA from continuing operations improved to €9.0m (2010: €2.2m)
  • Operating profit from continuing operations improved to €6.9m (2010: €0.2m)
  • Earnings per share from continuing operations improved to 1.6 cents (2010: 0.8 cents loss)
  • Dividend of 1 cent per share for year ended 31 December 2010 paid in June 2011
  • Group effectively "debt-free" at 30 June 2011, with net cash of €2.1m, consisting of cash of €27.9m and total loans and borrowings of €25.8m (net debt at 31 December 2010: €29.1m)

OPERATIONAL HIGHLIGHTS

  • Disposal of the Graphic Papers business for a total consideration of €38.5 million in May 2011, generating a significant return on the Group's initial investment
  • Strong performance from the Packaging Papers business as favourable market conditions encountered in the second half of 2010 continued into 2011
  • €28m of liquid funds available for investment and gross indebtedness of only 1.4 times EBITDA from continuing operations
  • Capital projects completed at Savon Sellu during the annual maintenance shutdown are expected to yield benefits in the second half
  • The operating environment continues to be broadly favourable and we remain confident that the Group will perform well in the second half.

Dermot Smurfit, Chairman of Powerflute, commented as follows:
"The Group's results for the six month period reflect continuation of the good progress achieved in the second half of 2010, resulting in a substantial increase in operating margins, profits and earnings per share compared with the same period of the prior year.

"The disposal of the Graphics Papers business substantially improved the Group's financial position and is consistent with Powerflute's strategy to create value for shareholders through the acquisition and restructuring of underperforming paper and packaging assets. We continue to search for further acquisition opportunities in the paper and packaging sectors which match our demanding investment criteria.

"During the first half of 2011, our continuing business activities benefited from favourable market conditions, returns on investments made in 2010 and tight control of costs.

"Despite an increasingly uncertain economic environment, we currently expect market conditions to remain broadly favourable for Packaging Papers for the remainder of the year. Capital investment projects completed during 2010 and the first half of 2011 are expected to yield further benefits during the second half of the year and we remain confident that the Group will continue to perform well."

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