Diversified Finnish Forest Products Group Vapo Reported a 6.5% Drop in Interim Turnover

Diversified Finnish forest products group Vapo reported a 6.5% drop in interim turnover, due to a decline in activity across its various business areas, but increased profits by around 2%. Group sales for the six months to July were €391m against €418m the year before, while profits rose from €31.6m to €32.3m. The major reason for the drop in turnover, said chief executive Tomi Yli-Kyyny, was a €15.6m contraction in its sales of “energy peat”, with production hit by the wet summer. Turnover in the company’s timber division fell around €10m to €59.3m and its trading loss increased .4m to €7.4m. Mr Yli-Kyyny attributed this to a sluggish European economy and, particularly, continuing decline in construction in its main markets. Vapo’s pellet sales were down marginally at €57.6m, but the division’s operating loss was halved to €3m. In the company’s bioheat and biofuels operations turnover and profit fell thanks to lower electricity prices and an unusually warm winter depressing sales. Mr Yli-Kynny predicted that turnover for the year would be “substantially” down due to continuiing contraction in timber and biofuels turnover. Profits in the timber division, he said, had plunged since the interim results reporting period and business showed little signs of imminent improvement. In the meantime, Vapo has concluded a deal with Metsä Group to build a joint biodiesel plant in Ajos. Source: ttjonline