Ahlstrom Corporation has reported key financial highlights from the April-June 2008 period. Net sales grew by 6.7% to €465.9 million from the second quarter in 2007. Excluding the currency impact, net sales grew by 12.3%. Operating profit excluding non-recurring items amounted to €19.5 million, an improvement of 5.6% from the first quarter of this year. Year-on-year, operating profit excluding non-recurring items decreased by 7.3%. The main reasons for the year-on-year decrease were the losses of the La Gère plant, low volumes of the wipes business in Europe, as well as escalating raw material prices. Although La Gère improved its performance from the first quarter, it was still burdening the Group result by €2.7
For the first six months of 2008, Group net sales amounted to €932.2 million, up 9.2% from €853.3 million during the same period of 2007. According to the company, most of the growth was generated by acquisitions, which increased net sales by 14.7%. The weak U.S. dollar decreased net sales by 5.4% and Ahlstrom’s closing of production units decreased sales by 7.4%. Comparable net sales adjusted for the currency effect, acquisitions and closures grew by 7.3% from the same period last year.
Due to the continuing overcapacity in release base papers and wipes in Europe, as well as the uncertainty in the global economy reflecting in the demand of some of Ahlstrom’s products, Ahlstrom has revised its full-year outlook. As a result of the continuing volume growth and the positive impact of the restructuring actions taken, Ahlstrom still anticipates the net sales and operating profit to improve from last year, but is now expecting a milder improvement than earlier stated. Operating profit for the second half of this year is still expected to be clearly better than in the second half of 2007.
“During April-June, Ahlstrom’s operating environment continued to be challenging,” said Risto Anttonen. “The anticipated softness of demand caused by the uncertainty in the global economy started to reflect in the volumes of some of our products toward the end of the quarter. Cost inflation remained strong, with average U.S. dollar price for pulp rising by approximately 20% compared with the corresponding period last year, and U.S. dollar price for energy by more than 40%. We are constantly implementing price increases to offset the cost effect, and their impact will be gradually visible.” Mr. Anttonen added that Ahlstrom has taken actions to tackle the challenges in the release base papers and wipes in Europe, such as organizing the wipes business into a separate business area.