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Ahlstrom Announces Q2 Financial Results

July 27, 2007

Quarterly sales and earnings results have been released by Ahlstrom, a supplier of high performance fiber-based materials.

Quarterly sales and earnings results have been released by Ahlstrom, a supplier of high performance fiber-based materials. While second quarter net sales reached €437 million (up 8.7% from €410 million during last year’s second quarter), operating profit for the quarter amounted to €21 million, down slightly from €29 million in Q2 2006. Profit before taxes was €16 million, a decline from €25 million in the year-earlier period, and earnings per share amounted to €0.26. Operating profit improved by 7.4% from the first quarter of 2007 due to increased sales volumes.
For the first six months of 2007, net sales amounted to €853 million versus €824 million during the comparable period last year.
The group's operating profit in the first half of 2007 was €44.4 million compared to €58.5 million in the first half of 2006.
During the second quarter, Ahlstrom began the integration of three acquisitions in the FiberComposites segment and completed the rebuild of its release base paper machine in France at the end of June. The investment standstill impacted the operating profit negatively by approximately €3.5 million.
Commenting on Ahlstrom's second quarter, Jukka Moisio, president and CEO, said the company worked intensively on several growth actions. “We completed three acquisitions and started the integration work to consolidate them with our operations. We expect to finalize the integration process by the end of 2007.” He added that Ahlstrom continued to ramp up several new manufacturing lines to be able to develop new products and deliver new volumes for its customers.
“At the end of the quarter, we completed our European capacity expansion program in release base papers through an investment at the La Gère plant in France,” he said. “This new capability as well as our announced joint venture in Brazil will strengthen our ability to serve growing labeling markets globally. I am satisfied with the progress of the growth actions so far and look forward to an active second half of 2007.”
Mr. Moisio described demand for Ahlstrom's products as good in most geographic areas. Growth in demand in Asia and Latin America improved from last year and the markets in Europe continued to show solid development. Overall, the North American market was stable, however the housing markets continued to slow, which affected the market for air filtration products.
Prices for raw materials and energy, especially pulp, remained very high.
The three acquisitions (Fabriano, Orlandi and Fiberweb's consumer wipes business) added sales of €22.3 million in the second quarter. Comparable net sales—adjusted for the acquisitions, the La Gère investment standstill and the currency effect—grew 4.6%. 
Sales volumes increased by 5.4% compared with the corresponding period of 2006. Growth was mainly driven by acquisitions and organic growth investments as well as good demand in most business areas.

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