LEHTO GROUP OYJ
Stock exchange release
Restructuring progressing well: significant improvement in operating result; balance sheet and financial position stabilised
This half-year financial report has been prepared in accordance with the IAS 34 standard. The company complies with half-yearly reporting according to the Finnish Securities Markets Act. The financial information presented in this business review is unaudited. Figures in brackets refer to the corresponding period of the previous year, unless otherwise stated.
Summary January-
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Group 4-6/202 4-6/201 1-6/2020 1-6/2019 1-12/2019
0 9
Net sales, EUR million 135.1 128.5 254.5 246.3 667.7
Change in net sales, % 5.1% -31.9% 3.3% -15.6% -7.5%
Operating result, EUR million -1.6 -18.3 -5.1 -27.5 -41.8
Operating result, % of net -1.2% -14.2% -2.0% -11.2% -6.3%
sales
Profit for the period, EUR -2.0 -15.2 -5.8 -22.8 -35.7
million
Order backlog at period end, 531.9 752.5 531.9 752.5 481.8
EUR million
Earnings per share, EUR -0.03 -0.26 -0.10 -0.39 -0.61
Cash and cash equivalents,
million[1)]
Interest-bearing liabilities, 171.7 259.9 171.7 259.9 189.2
EUR million
Lease liabilities in interest 60.0 85.2 60.0 85.2 46.8
-bearing liabilities, EUR
million
Equity ratio, % 30.7% 25.8% 30.7% 25.8% 29.6%
Net gearing ratio, % 119.7% 189.4% 119.7% 189.4% 115.9%
Equity ratio, excl. IFRS 16 37.0% 31.2% 37.0% 31.2% 33.8%
lease liabilities, %
Net gearing ratio, excl. IFRS 63.0% 121.4% 63.0% 121.4% 74.1%
16 lease liabilities, %
1) Cash and cash equivalents do not include deposit guarantees (
· First-half net sales remained at the same level as in the corresponding period of the previous year at
· The operating loss was
· The balance sheet position remained stable. Interest-bearing liabilities decreased slightly, and cash and cash equivalents declined to
· The order backlog rose to
· The Social Care and Educational Premises service area was integrated operationally into the two other service areas as of
Net sales by service area, EUR million 1-6/2020 1-6/2019 Change 1-12/2019
Business Premises 88.0 96.2 -8.5% 201.8
Housing 166.4 150.1 10.9% 465.9
Total 254.5 246.3 3.3% 667.7
CEO
"Our restructuring programme is starting to generate results. Net sales for the first half of the year were at the same level as last year, and our operating result also improved significantly when some major loss-making projects ended at the turn of the year. Our company's restructuring programme has progressed according to plan, and this work has played an important role in creating a foundation for future success after some exceptionally strong years of growth. Our balance sheet and financial position also stabilised during the first half of the year. However, our operating result is still being burdened by weak performance in projects relating to social care and educational premises, as well as the costs associated with bringing the Swedish project to completion.
Sales have been going well, and our order backlog stood about
According to public forecasts, the Finnish economy is weakening and construction is set to fall over the coming years. Yet we have already seen that good demand for affordable construction can be maintained even during weaker economic situations. However, difficulty in obtaining financing appears to be significantly hindering the launch of new construction projects.
The coronavirus pandemic has also affected our business. The startup of some construction projects has been postponed and housing sales to consumers have slowed. However, housing sales did start to pick up at the end of the second quarter.
There have been coronavirus infections at two of our construction sites, but we are not aware of any serious cases. Construction sites have been taking the necessary protection and prevention measures, and work is also continuing on the aforementioned two sites. Work is currently progressing in a relatively normal manner, both in offices and on construction sites, in line with the company's coronavirus guidelines.
During the spring, we merged the Social Care and Educational Premises service area into our other two service areas. Our school operations now continue under Business Premises and our care home operations under Housing. This change was made to achieve synergy benefits. From a functional perspective, schools are more like business premises, while care facilities are closer to regular housing.
At the end of June, we signed a financing agreement with our banks that will run to the end of 2022 and create a good foundation for future business promotion. We are also planning to organise a rights issue, with the aim of raising gross funds of approximately
Outlook for 2020
In a stock exchange release dated
Although the coronavirus pandemic has not had any significant impacts on Lehto's business to date, its operating environment is still subject to many uncertainties. Lehto predicts that customers' difficulties in obtaining financing may delay or even cancel the launch of new construction projects. Due to the economic situation and general uncertainty in
As employees work closely together on Lehto's construction sites, coronavirus cases may arise in spite of the preventive measures in place, and this could also slow down progress. Coronavirus cases among subcontractors and goods suppliers could also cause delays to projects.
Due to the prevailing uncertainly, Lehto is not issuing any guidance on its 2020 financial outlook.
Video presentation on the half-year report
Lehto will release a video presentation on its half-year report for January-
Business development in the review period
GENERAL MARKET ENVIRONMENT
Although construction remained brisk in
In
In
Financing has become more difficult to obtain during the review period. This has been particularly evident in the availability of financing for developer-contracted housing projects and customers' difficulties in obtaining financing for their business premises. In the construction sector, the established practice is for external guarantee institutions to arrange guarantees as collateral against contractual and warranty liabilities. Obtaining these guarantees also become more difficult during the review period.
BUSINESS PREMISES
In the Business Premises service area, Lehto builds office premises, retail premises, logistics, warehouse and production facilities, leisure facilities, and large shopping and activity centres. Business premises are designed according to customers' needs and are built using the structural and spatial solutions that have been developed or tried and tested by Lehto. This area serves local, national and international customers.
Business Premises conducts most of its operations using a `design and implement' model in which Lehto is responsible for both the design and actual construction. Lehto also builds some business premises in the form of developer contracting, which means that Lehto acquires the plot and designs and builds the property either wholly or partly at its own risk.
As of
Business development in the review period
The service area's net sales experienced a year-on-year decrease of 8.5% to EUR 88.0 (96.2) million. The single biggest factor behind this decrease was the recognition of income from the Swedish daycare project during the comparison period. The service area's net sales in
Fourteen business premises were completed and handed over during the review period, the largest of which was a commercial building in Vantaa. At the end of the review period, 13 projects were under construction, most notably three hotel projects in the
New contract agreements valued at
Due to the coronavirus crisis, the start-up of a number of projects was delayed, and contract negotiations on some projects were halted. Projects started up before the crisis have progressed in line with plans and there have been no significant disruptions in their implementation.
Lehto has developed the Hippos2020 project with the City of Jyväskylä. Progress on the project is now more uncertain as a result of the coronavirus crisis. Lehto and the City of Jyväskylä are engaging in ongoing dialogue about the conditions necessary to continue with the project.
Complete renovation operations
Lehto's
The Business Premises service area still has two complete renovation projects to implement based on earlier commitments. The first of these projects is a complete renovation contract valued at about
In the future, new complete renovation projects will only be undertaken selectively on condition that the renovation is related to new construction projects or when it is a significant part of a larger commercial entity.
School business
Our school business was operatively transferred to the Business Premises service area on
On
HOUSING
In the Housing service area, Lehto builds new apartment blocks, balcony access blocks and terraced houses, and also carries out pipeline renovations, mainly in the
Most - more than 70% - of Lehto's housing properties are concrete Nero apartment buildings and are built using the kitchen/bathroom modules developed and manufactured by Lehto. These modules include the main electricity, water, ventilation and sewerage solutions for the apartment and building. The modules are completely prefabricated at Lehto's own factory and transported to the construction site, where they are lowered into the building through the roof and connected to each other. This building method ensures rapid completion of construction, improves quality and produces cost savings.
A growing share of Lehto's housing production comprises wooden balcony access blocks and apartment buildings. Apartments in the Deco product family are manufactured as space elements in the factory - the interior surfaces of the apartment are fully finished when it leaves the factory. Space elements are self-supporting modules that are built in the factory and assembled on site. Deco apartments involve a substantially higher amount of industrial prefabrication than Nero apartments.
In its care home business, Lehto designs and builds care homes and assisted living units for both care operators and municipalities. These construction projects are implemented either under ordinary construction contracts or as investment transactions, where Lehto signs a lease agreement with the service operator and sells the completed property to a fund that invests in properties in the sector. The majority of care homes are 1-2-storey concrete or wooden buildings.
Business development in the review period
Net sales in the Housing service area grew by 10.9% on the comparison period to
A total of 1,290 housing units were sold during the review period, most of which were built through contract projects. 210 of the sold units were related to the DWS portfolio. Housing sales to consumers and small investors were as expected in January-February, but the coronavirus crisis led to a clear fall in demand in March-May before returning to the projected level in June.
Sold housing units during 1-6/2020 1-6/2019 1-12/2019
the review period
Contract 1,071 226 338
Developer contract 219 819 1,499
Sold housing units during 1,290 1,045 1,837
the review period, total
During the review period, 774 (933) housing units were completed and the construction of 1,050 (701) new units was started. More than 60% of startups were in the
Housing units under construction 1-6/2020 1-6/2019 1-12/2019
Under construction at the beginning of the period 1,485 3,322 3,322
+ started up during the period 1,050 701 1,035
- postponed project -90
- completed during the period -774 -933 -2,872
Housing units under construction, total 1,671 3,090 1,485
At the end of the review period, 461 housing units were either under construction or completed yet unsold. This is noticeably less than during the comparison period (1,443), but slightly higher than the last quarter (432). This is due not only to the good trend in sales, but also the fact that the focus in housing projects has shifted from developer contracting to contract projects. In a contract project, all the housing units are considered to have been sold at the time of signing.
Unsold housing units
Under construction 298 1,269 518
Completed 163 174 276
Unsold housing units, total 461 1,443 794
including DWS units 192 542 402
The Housing service area's order backlog grew to
After the review period, a long project development phase was completed when the agreements for a housing complex project in Kalasatama,
Pipeline renovations
Pipeline renovations are carried out by Lehto's Housing service area. The pipeline renovation business has remained stable and seven projects were completed during the review period. Eleven projects were under construction at the end of the review period.
Work on construction sites has continued to go well in spite of the exceptional circumstances resulting from the state of emergency. The required communication with housing companies and their shareholders has been carried out remotely.
Demand from housing companies has also remained good, although some delays were seen in decision-making. In Lehto's opinion, demand for pipeline renovations will remain stable in the future, and all project-related decisions and communications with customers can be handled remotely in an effective manner.
Care home construction
The care home unit was operatively transferred to the Housing service area on
SWEDISH OPERATIONS
During the review period, the focus of Swedish operations was on completing an ongoing daycare centre project and starting up the construction of wooden blocks of flats.
Lehto has developed a type of wooden block of flats based on prefabricated space elements that is especially suitable for the Swedish market. Lehto is currently negotiating with customers and financiers on the implementation of the first pilot project. In the first phase, the intention is to carry out the projects as fixed-price contracts, with the construction phase being implemented with local partners.
FACTORY PRODUCTION
The use of prefabricated products lies at the core of Lehto's business. Lehto manufactures a variety of building modules and elements at its own production facilities for its own use. Lehto has production facilities in Oulainen, Hartola, Humppila, Siikajoki and Ii, totalling about 50,000 m².
Capacity at production facilities was reduced during the review period. In addition, co-operation negotiations were started at the Humppila's factory, during which it was planned wheather to move the production of roof elements to the facilities of the Hartola factory. 255 people worked in factory operations at the end of the review period (285 on 31 December 2019).
Balance sheet and financing
Consolidated balance sheet, EUR million
Non-current assets 66.9 51.8 55.8
Current assets
Inventories, excluding IFRS 16 assets 179.7 294.1 210.3
Inventories, IFRS 16 assets 53.5 118.1 40.1
Current receivables 91.0 142.0 86.3
Cash and cash equivalents 45.0 22.8 59.2
Total assets 436.2 628.8 451.8
Equity 105.8 125.2 112.1
Financial liabilities 111.7 174.8 142.4
Lease liabilities 60.0 85.2 46.8
Advances received 91.1 142.8 73.2
Other payables 67.6 100.9 77.3
Total equity and liabilities 436.2 628.8 451.8
The balance sheet total fell slightly compared with the 2019 closing date. The main changes in the balance sheet were a decrease in inventories and interest-bearing liabilities. Several housing projects were also handed over during the review period, which removed the inventories and liabilities relating to these ongoing projects from the balance sheet.
Financial liabilities rose to
Cash and cash equivalents rose to
Due to the repayment of debts, interest-bearing net debt (excluding lease liabilities in accordance with IFRS 16) decreased to
At the end of the review period, the equity ratio (taking lease liabilities into consideration) stood at 30.7% (29.6% on
New financing agreement
The new revolving credit facility agreement is done with the same bank syndicate formed by
Lehto is planning to organise a rights issue, with the aim of raising gross funds of approximately
This financing agreement will not have a direct impact on Lehto's indebtness ratios. If realised in full, the gross income from the planned rights issue is expected to increase Lehto's equity ratio by about 3-4 percentage points (
Personnel and remuneration
The average number of personnel during the review period was 1,138 (1,547). The number of personnel at period end was 1,036 (1,274 on
On
On
The company has a long-term share-based incentive plan in place. The aim of the plan is to combine the objectives of the shareholders and the key employees in order to increase the value of the company in the long term and to commit key employees to the company. The plan is directed at a maximum of 70 key employees and the rewards are paid after a restriction period of two years, partly in the company's shares and partly in cash. The cash proportion is intended to cover taxes and tax-related costs arising from the reward.
On
On
In addition, the CEO of
Repurchasing and transferring company's own shares
On
On
On
The number of company shares is 58,309,558. After the repurchasing and transferring company's own shares as part of the incentive plan and to reward Board members, the number of shares held by the company is 249,509.
Resolutions of the Annual General Meeting
In accordance with the proposal of the Board of Directors, the Annual General Meeting of
The AGM confirmed the number of Board members to be five. Pursuant to the proposal made by the shareholders' nomination committee,
At its organisation meeting, the Board of Directors decided to elect
The above-mentioned and other decisions of the Annual General Meeting were disclosed in the stock exchange release of
Risks and uncertainty factors
Lehto assesses risks in its daily operations on a continual basis and develops Group-wide risk management practices together with its operative companies. Through the continuous development of risk management, we seek to attract new business opportunities and partners, as well as to further improve the profitability and predictability of our operations. Further improvement of risk management and responding to the challenges of a growing business are Lehto's top operational priorities.
The main risks in the operative business include general risks related to project pricing, schedules, quality, technical implementation and the adherence of stakeholders to agreements. Lehto's reliance on module production and the partial dependence of its housing production on the schedule and efficiency of module production present a risk related to deviations or interruptions in the implementation of modular products.
In its business operations, Lehto is also exposed to risks relating to the availability of financing, overall economic trends and political decision-making and other risks relating to the activities of the public sector. As part of its operational business, Lehto continuously concludes agreements with various parties. The related risks include the technical, legal and commercial condition of the acquired property. The unique and complex construction projects in Lehto's Business Premises service area, in particular, always involve risks related to implementation and costs.
Lehto's business is partly so-called traditional contracting and partly its own production, where the final customer is not always known when starting the construction project. These business models involve different risks. In traditional contracting, project income is recognised according to the degree of completion. The main risk in this model is that total costs for the project exceed the estimated costs or the completion of the project is delayed.
The main risk in own production is that the company is not able to sell the production within the planned time schedule or at the planned price. In addition, project costs can exceed the estimated costs. Failure in project pricing, technical implementation, estimating costs and time schedule, selling the property or finding financing can have a negative impact on the company's result and financial position.
Part of Lehto's business involves agreements according to which Lehto builds premises in line with the customer's needs and only sells the premises upon their completion or at a later stage to a fund, for example. Despite Lehto's completion of premises according to the agreed schedule and costs, Lehto carries a risk related to the capacity of the fund to provide the cash required for the purchase of the premises at the agreed time of payment.
The project business the Group carries out is characterised by variation, which can be significant, in profit between different reporting periods due to the accounting methods of projects. The Group's cash flow is usually generated in step with a project's degree of completion, however such that the last instalment payable after the completion is bigger than the other instalments. Thereby a delay of an individual project can have an effect on the sufficiency of financing. In addition, a project delay may mean that net sales and operating profit from that project are pushed back to the next financial period, thereby weakening net sales and operating profit in the current financial period.
As a result of business growth, working capital is tied up in inventories and receivables in particular. If the company's business is expanding simultaneously in several service areas, large purchase commitments for construction sites are realised and receivable payments from customers are delayed, the company may find itself in a situation in which its additional financing costs will increase.
Changing building regulations or zoning policies can also have significant effects on the company's business. In a period of economic growth in construction, the availability of skilled labour may also present a risk for the planned launch of a project in the agreed schedule.
Lehto aims to control risks at each level of the organisation. Risk management includes risk identification, estimation and plans to avoid them. More information on Lehto's risks and risk management is available at www.lehto.fi.
Key risks during the current financial year
The coronavirus pandemic coupled with a potential deterioration in
Both Lehto and its customers have found it increasingly difficult to obtain financing this year. This could result in delays to planned project startups, or even the complete cancelation of projects. Guarantees for construction projects have also become more difficult to obtain.
Lehto seeks to manage these risks with proactive sales efforts, monitoring sales trends, precise project monitoring and rapid corrective actions. Lehto has an ongoing Group-wide restructuring programme that is seeking to improve project margins and eliminate negative deviations in them. The programme focuses especially on improving the quality of project preparation prior to the construction phase.
In order to ensure sufficient financing and guarantees, Lehto is actively discussing options with financiers and guarantee institutions.
Shares and shareholdings
Lehto is listed on the official list of
The closing price of the share on the main list of
Lehto's Annual General Meeting of
The AGM also decided to authorise the Board of Directors to decide on the issue of a maximum of 5,800,000 shares through share issue or by granting option rights or other special rights entitling to shares in one or several instalments. The authorisation includes the right to issue either new shares or own shares held by the company either against payment or as a bonus issue. Among other things, the authorisation can be used to develop capital structure, to expand the ownership base, to implement incentive systems, and as a consideration in transactions when the company purchases assets linked to its operations. An authorisation to acquire 5,320,000 shares is valid until
The company did not receive any flagging notifications during the review period.
In a stock exchange release dated
Events after the review period
Co-operation negotiations concerning the Humppila factory were completed after the end of the review period. By decision of the employer, the production of roof elements at the Humppila factory will be transferred to the production facilities at the Hartola factory during the rest of 2020.
Vantaa,
Board of Directors
Further information:
+358 500 280 448
hannu.lehto@lehto.fi
+358 400 944 074
veli-pekka.paloranta@lehto.fi
TABLES
The accounting policies and formulas of key figures applied in this review are mainly the same as in the latest annual report.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 1-6 / 1-6 / 1-12 /
EUR million 2020 2019 2019
Net sales 254.5 246.3 667.7
Other operating income 0.5 1.7 1.5
Changes in inventories -30.5 90.7 -35.7
Capitalised production 0.0 0.0 0.0
Raw materials and consumables used -88.3 -140.2 -225.0
External services -94.3 -164.9 -335.6
Employee benefit expenses -34.0 -44.9 -82.2
Depreciation and amortisation -3.8 -4.2 -8.2
Other operating expenses -9.2 -12.2 -24.3
Operating result -5.1 -27.5 -41.8
Financial income 0.1 0.2 0.3
Financial expenses -2.1 -1.1 -4.0
Result before taxes -7.2 -28.5 -45.5
Income taxes 1.4 5.7 9.8
Result for the period -5.8 -22.8 -35.7
Result attributable to
Equity holders of the parent company -5.8 -22.8 -35.8
Non-controlling interest 0.0 0.0 0.0
-5.8 -22.8 -35.7
Components of other comprehensive income
Items that may be reclassified subsequently to profit
or loss
Translation difference 0.0 -0.1 -0.1
0.0 -0.1 -0.1
Comprehensive result, total -5.8 -22.8 -35.9
Comprehensive result attributable to
Equity holders of the parent company -5.8 -22.8 -35.9
Non-controlling interest 0.0 0.0 0.0
-5.8 -22.8 -35.9
Earnings per share calculated from the profit
attributable to shareholders of the parent company, EUR
per share
Earnings per share, basic -0.10 -0.39 -0.61
Earnings per share, diluted -0.10 -0.39 -0.61
CONSOLIDATED BALANCE SHEET
EUR million
Assets
Non-current assets
Other intangible assets 5.1 3.2 4.7
Property, plant and 24.9 28.8 26.6
equipment
Investment properties 0.7 0.7 0.7
Investments and receivables 13.5 0.7 2.7
Deferred tax assets 18.0 13.7 16.5
Non-current assets total 66.9 51.8 55.8
Current assets
Inventories 233.2 412.3 250.4
Trade and other receivables 91.0 142.0 86.3
Cash and cash equivalents 45.0 22.8 59.2
Current assets total 369.3 577.1 396.0
Assets total 436.2 628.8 451.8
Equity and liabilities
Equity
Share capital 0.1 0.1 0.1
Invested non-restricted 69.2 69.2 69.2
equity reserve
Translation difference -0.4 -0.2 -0.3
Retained earnings 42.7 78.9 78.9
Profit for the financial -5.8 -22.8 -35.8
period
Equity attributable to 105.8 125.2 112.1
shareholders of the parent
company
Non-controlling interest 0.0 0.0 0.0
Equity total 105.8 125.2 112.1
Non-current liabilities
Deferred tax liabilities 0.5 0.7 0.6
Provisions 10.2 8.8 9.4
Financial liabilities 5.1 6.3 5.9
Lease liabilities 57.6 80.6 44.7
Other non-current 0.1 7.0 0.1
liabilities
Non-current liabilities 73.6 103.4 60.6
total
Current liabilities
Financial liabilities 106.6 168.5 136.4
Lease liabilities 2.4 4.6 2.1
Advances received 91.1 142.8 73.2
Trade and other payables 56.7 84.4 67.2
Current liabilities total 256.8 400.2 279.0
Liabilities total 330.4 503.7 339.6
Equity and liabilities total 436.2 628.8 451.8
CONSOLIDATED
STATEMENT OF
CHANGES IN
EQUITY
EUR million Equity
attributable
to
shareholders
of the
parent
company
Share Invested Translation Retained Equity Non Equity,
capital non difference earnings attributable -controlling total
-restricted to
equity shareholders interest
reserve of the parent
company
Equity at 1 0.1 69.2 -0.2 93.0 162.1 0.3 162.4
Comprehensive
income
Result for -0.1 -22.8 -22.8 0,0 -22.8
the
financial
period
Total -0.1 -22.8 -22.8 0,0 -22.8
comprehensive
income
Transactions
with equity
holders
Distribution -14.0 -14.0 -14.0
of
dividends
Share-based -0.1 -0.1 -0.1
compensation
Transactions -14.1 -14.1 -14.1
with equity
holders,
total
Changes in
holdings in
subsidiaries
Acquisitions -0.3 -0.3
of
non
-controlling
interest
Equity at 30 0.1 69.2 -0.2 56.2 125.2 0.0 125.2
Equity at 1 0.1 69.2 -0.3 43.2 112.1 0.0 112.1
Comprehensive
income
Result for 0.0 -5.8 -5.8 0,0 -5.8
the
financial
period
Total 0.0 -5.8 -5.8 0,0 -5.8
comprehensive
income
Transactions
with equity
holders
Distribution 0.0 0.0 0.0
of
dividends
Share-based 0.0 0.0 0.0
compensation
Repurchasing -0.5 -0.5 -0.5
own
shares
Transactions -0.5 -0.5 -0.5
with equity
holders,
total
Equity at 30 0.1 69.2 -0.4 36.9 105.8 0.0 105.8
CONSOLIDATED CASH FLOW STATEMENT 1-6 / 1-6 / 1-12 /
EUR million 2020 2019 2019
Cash flow from operating activities
Profit for the financial period -5.8 -22.8 -35.7
Adjustments:
Non-cash items 0.8 1.8 3.2
Depreciation and amortisation 3.8 4.2 8.2
Financial income and expenses 2.1 0.9 3.7
Capital gains 0.0 -0.8 -0.8
Income taxes -1.4 -5.7 -9.8
Changes in working capital:
Change in trade and other receivables -15.5 1.2 48.9
Change in inventories 31.4 -96.5 27.9
Change in trade and other payables 1.6 73.1 -53.6
Interest paid and other financial expenses -3.4 -0.7 -3.3
Financial income received 0.1 0.2 0.3
Income taxes paid 0.0 -8.1 0.0
Net cash from operating activities 13.5 -53.2 -11.1
Cash flow from investments
Investment in property, plant and equipment -0.1 -1.9 -4.1
Investment in other intangible assets -1.2 -1.5 -3.6
Sales of associates 0.0 1.6 1.6
Proceeds from sale of tangible and intangible assets 0.0 0.0 0.1
Financial assets at fair value through profit or loss 0.0 0.0 -0.6
Loans granted -0.5 0.0 0.0
Repayments of loan receivables 0.5 0.0 0.0
Net cash from investments -1.3 -1.7 -6.6
Cash flow from financing
Loans drawn 19.1 63.0 132.6
Loans repaid -43.8 -20.8 -90.1
Lease liabilities paid -1.3 -3.5 -4.7
Acquisition of non-controlling interest 0.0 -0.3 -0.3
Dividends paid 0.0 -14.0 -14.0
Costs related to repurchasing own shares -0.5
Net cash used in financing activities -26.5 24.4 23.5
Change in cash and cash equivalents (+/-) -14.2 -30.5 5.9
Cash and cash equivalents at the beginning of the year 59.2 53.4 53.4
Effects of exchange rate change 0.0 -0.1 0.0
Cash and cash equivalents at the end of the period 45.0 22.8 59.2
2020 2019 2019
Net sales, EUR million 254.5 246.3 667.7
Net sales, change % 3.3% -15.6% -7.5%
Operating results, EUR million -5.1 -27.5 -41.8
Operating result, as % of net -2.0% -11.2% -6.3%
sales
Result for the period, EUR -5.8 -22.8 -35.7
million
Result for the period, as % of -2.3% -9.2% -5.4%
net sales
Equity ratio, % 30.7% 25.8% 29.6%
Gearing, % 63.4% 77.2% 49.9%
Net gearing ratio, % 119.7% 189.4% 115.9%
Return on equity, ROE, % -5.0% -16.9% -26.0%
Return on investment, ROI, % -1.5% -9.3% -14.3%
Order backlog, EUR million 531.9 752.5 481.8
Personnel during the period, 1,138 1,547 1,454
average
Personnel at the end of period 1,036 1,532 1,274
Gross expenditure on assets, 1.2 3.3 7.7
EUR million
Equity / share, EUR 1.82 2.15 1.92
Earnings per share, EUR, basic -0.10 -0.39 -0.61
Earnings per share, EUR, -0.10 -0.39 -0.61
diluted
Average number of outstanding 58,157,523 58,283,826 58,296,740
shares during the period, basic
Average number of outstanding 58,253,663 58,406,908 58,424,817
shares during the period,
diluted
Number of outstanding shares at 58,059,934 58,309,443 58,309,443
the end of the period
Market value of share at the 90.6 153.9 137.0
end of period, EUR million
Share prices, EUR
Highest price, EUR 2.63 5.33 5.33
Lowest price, EUR 1.19 2.14 1.48
Average price, EUR 1.81 3.34 2.66
Price at the end of period,
LIABILITIES AND GUARANTEES
EUR million
Loans covered by pledges on
assets
Loans from financial 84.2 58.1 47.8
institutions
Debts on shares in unsold 26.9 65.6 32.8
housing and real estate company
shares
Instalment debts 0.4 0.7 0.6
Total 111.5 124.5 81.2
Guarantees
Corporate mortgages 0.0 1.8 0.0
Real-estate mortgages 9.4 44.9 3.4
Pledges 47.0 27.7 60.5
Absolute guarantees 0.3 0.3 0.3
Total 56.7 74.8 64.2
Contract guarantees
Production guarantees 38.5 40.9 40.7
Warranty guarantees 21.1 14.5 18.0
RS guarantees 26.1 37.5 35.0
Payment guarantees 2.6 4.0 4.1
Total 88.4 96.9 97.8
The collateral for instalment debt is the financed equipment. Absolute guarantees include contract guarantees given on behalf of another Group company and loan guarantees for housing companies under construction. Pledges are inventory items and other financing assets pledged as collateral for financial institution loans and loans for housing companies under construction. Pledges are presented at carrying amount. Furthermore, a right of claim to a lease agreement entered into by the company was given as a collateral for a loan to a subsidiary.
REVENUE ANALYSIS
EUR million 1-6/2020 1-6/2019 1-12/2019
Revenue recognised over time 180.7 168.1 349.1
Revenue recognised upon delivery 73.1 78.1 318.0
Rental income 0.6 0.2 0.6
Total 254.5 246.3 667.7
SEGMENT INFORMATION
The Group has one operating segment,
RELATED PARTIES
The Group's related parties include Group companies, members of the
Transactions
with
related
parties
Sales Sales Purchases Purchases Sales Purchases
EUR million 1-6/2020 1-6/2019 1-6/2020 1-6/2019 1-12/2019 1-12/2019
Key 66.0 2.0 1.7 2.8 30.9 4.6
personnel
and
their
controlled
entities
Total 66.0 2.0 1.7 2.8 30.9 4.6
Receivables Receivables Liabilities Liabilities Receivables Liabilities
EUR million
2020 2019 2020 2019 2019 2019
Key 6.5 1.0 0.1 0.4 4.5 0.0
personnel
and
their
controlled
entities
Total 6.5 1.0 0.1 0.4 4.5 0.0
There has been no transactions with associates. A major part of related party transactions is connected with purchase of apartments and other premises from the company. The transactions are valued at the debt-free selling price of the completed site. Purchases are mainly equipment rents and other service purchases. There has been no transactions with associates.
https://news.cision.com/lehto-group-oyj/r/lehto-group-plc-s-half-year-financial-report-1-january-30-june-2020,c3167617
https://mb.cision.com/Public/16922/3167617/a638f64d767f11c5.pdf
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