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FINANCIAL STATEMENTS FOR 1 JANUARY - 31 DECEMBER 2011: ANOTHER RECORD YEAR FOR OKMETIC, PROFITABILITY REMAINED STRONG IN THE SEMICONDUCTOR INDUSTRY'S DOWNTURN


February 8, 2012 - London

OKMETIC OYJ STOCK EXCHANGE RELEASE  8 FEBRUARY 2012AT 9.00 A.M.

FINANCIAL STATEMENTS FOR 1 JANUARY - 31 DECEMBER 2011: ANOTHER RECORD YEAR FOR OKMETIC, PROFITABILITY REMAINED STRONG IN THE SEMICONDUCTOR INDUSTRY'S DOWNTURN

Unless otherwise stated, figures in parenthesis refer to the corresponding period in the previous year.

JANUARY-DECEMBER IN BRIEF:

  • Net sales amounted to 83.2 (80.9) million euro, up 2.8%.
  • Operating profit was 11.8 (10.4) million euro corresponding to 14.2% of net sales.
  • Profit for the period was 10.2 (10.0) million euro.
  • Basic earnings per share were 0.61 (0.60) euro.
  • Net cash flow from operations amounted to 11.7 (16.6) million euro.
  • The board of directors will propose to the annual general meeting that a dividend of 0.28 euro per share will be distributed for the financial year 2011.

             
OCTOBER-DECEMBER IN BRIEF:

  • Net sales amounted to 18.1 (23.1) million euro, down 21.4%.
  • Operating profit was 2.3 (3.4) million euro corresponding to 12.9% of net sales.
  • Profit for the period was 2.0 (2.1) million euro.
  • Basic earnings per share were 0.12 (0.13) euro.
  • Net cash flow from operations amounted to 5.4 (6.7) million euro.

PROJECTIONS FOR THE NEAR FUTURE

The customer industries are estimated to grow in all of Okmetic's main product groups in 2012 too, but the growth forecasts are so far moderate. The downturn in the semiconductor industry which started in mid 2011 continues during the first quarter, after which the demand is expected to pick up again.

The development of sensor wafer demand is estimated to be somewhat more stable in 2012 than the demand for semiconductor wafers. The sensor wafer growth forecast for the ongoing year is also a bit higher than that of semiconductor wafers. Technology sales will focus on solar crystal sales, and be fairly even throughout the year.

The net sales and operating profit for the whole year 2012 are estimated to exceed the level of 2011, although, due to the market trend, they will still remain under the level of the comparison period in the first quarter.

PRESIDENT KAI SEIKKU:

"Profitability remained strong also in the end of the year. Operating profit percent was 12.9% in the last quarter and 14.2% in the entire financial period. The figures clearly exceed the company's long-term objectives and represent a high level in component and material based business. Factors behind the good profitability were the strong demand for sensor wafers throughout the year, flexible supply chain that is partly based on contract manufacturing, and successful management of fixed costs.

The semiconductor industry continued to slow down in the end of the year, and as was anticipated, the last quarter was the weakest of the year. The comparison period's net sales included polysilicon sales, and the decrease of comparable sales in the last quarter was around 15%.

In April, the company published a significant, around 30 million euro investment programme to increase the production capacity of SOI wafers at the Vantaa production plant. The SOI wafer production volumes have increased month by month, and a new record level was still reached in December. The increasing capacity as well as other investments in demanding sensor wafers support the company's strategy where growth is sought from rapidly developing MEMS applications. Okmetic is the market's leading wafer supplier in this interesting sector.

The company increased its market shares also in the second half of 2011 although the total market development slowed down and turned negative at times. The beginning of 2012 will still be a continuation of slower demand in the semiconductor industry as customers are levelling their stocks. The company's view is that the demand picks up again in the second quarter and strengthens in the second half of the year. The estimates for the entire industry are cautious. However, of the customer areas important for Okmetic, MEMS applications and discrete and power semiconductors grow faster than the total market.

Technology sales will focus on serving the solar cell industry. This industry experienced strong volume increase of approximately 40% in 2011. The level of installations made during 2011 is estimated to have exceeded the level of 25GW. The growth was spurred by the price level plunging throughout the value chain, when the quickly increased overcapacity led to clearing the stocks. The market is expected to pick up during the second half of 2012, when the stock situation becomes balanced, and the strong end demand is likely to continue. Okmetic benefits from long-term customer agreements in this partly challenging market situation."

KEY FIGURES

1,000 euro 1.10.-
31.12.11
1.10.-
31.12.10
1.1.-
31.12.11
1.1.-
31.12.10
1.1.-
31.12.09
Net sales 18,134 23,072 83,186 80,907 54,361
Operating
profit
before
depreciation
(EBITDA)




3,848




5,050




18,069




17,102




7,121
Operating
profit

2,338

3,440

11,817

10,421

185
 % of net sales 12.9 14.9 14.2 12.9 0.3
Profit/loss for
the period

1,988

2,146

10,235

9,952

-513
Basic earnings
per share,
euro


0.12


0.13


0.61


0.60


-0.03
Net cash flow
from operating
activities


5,431


6,730


11,691


16,594


6,315
Net interest-
bearing
liabilities


-10,257


-18,047


-10,257


-18,047


-4,770
Equity ratio, % 78.9 76.6 78.9 76.6 78.9
Average number
of personnel
during the period


351


340


363


345


337

MARKETS

Customer industries sensor, semiconductor, and solar cell industries

Sensor industry

According to different estimates, the sale value of sensor industry increased by approximately 10 percent in 2011 compared to the previous year. The development of sensor sales has been influenced by the increased use of micro sensors in many consumer electronics products. In 2012, the sale value of sensor industry is estimated to increase by 10-20 percent compared to 2011. In terms of volume, the sensor shipments will clearly rise to a record level in 2012. In the near future, the sale value of sensor industry is estimated to grow 10-15 percent annually. (IHS iSuppli, Yole, Semico)

Certain silicon-based microelectromechanical (MEMS) products within the sensor segment have higher growth rates than the others. The shipment volumes of gyroscopes experienced especially strong growth in 2011, the annual growth was over 40 percent (IHS iSuppli). Also, the demand of pressure sensors, accelerometers, microphones, and micromechanical filters increased. Silicon-on-insulator (SOI) technology is increasingly used, among others, in the manufacture of these products. Okmetic is amongst the pioneering suppliers who provide SOI wafers to the sensor industry.

Semiconductor industry

The semiconductor industry's sales in US dollars have slightly declined during the last quarter of 2011 compared to both the corresponding period in 2010 and the third quarter of 2011. The sales of 2011 amounted to 299.5 billion US dollars (up 0.4%) (SIA).

The slowdown of the sales growth which started in mid 2011 has moderated, and once the stock levels start to decrease, the industry is expected to return to a solid growth path in the second half of 2012 (IHS iSuppli, Gartner, Morningstar).

The demand for DRAM memory circuits which significantly affects the total demand of the semiconductor market is still expected to decrease (IHS iSuppli). In a market essential for Okmetic, semiconductors for automotive electronics, for example, the outlook is positive, and a growth of 2.2-4.5 percent is predicted for the total market in 2012 (WSTS, Gartner, VLSI research). In 2012, the growth rate of power semiconductors is estimated to slightly exceed the semiconductor market average (IMS).

A group of growing applications, such as smart phones and tablet computers, play a key role in the growth of semiconductors (IC Insights, Gartner). For the near future, the growth estimates for semiconductor demand settle at a level of 4.8-6.0 percent (IDC, RNCOS).

Solar cell industry

The usage of solar energy for electricity production continued to expand rapidly during 2011. During the year, the industry's demand varied strongly due to oversupply and international financial crisis. Fluctuation in demand caused significant increase in stock levels and decline in prices throughout the industry's supply chain. Accelerated by the heavily increased demand at the end of the year, the market of the whole year is predicted to have exceeded the level of 25GW (IHS iSuppli, IMS Research). Oversupply is expected to continue in the beginning of 2012 and the market situation is estimated to recover gradually along with the declining stock levels and continuously growing market.

Silicon wafer market

According to the statistics published in February 2012 by SMG, the group of silicon wafer suppliers in SEMI, the surface area of wafer shipments in the whole silicon wafer industry in 2011 decreased by three percent compared to 2010 area shipments. The transfer of the market to bigger wafer sizes along with the technological development was stronger than average. Compared to the previous year, a growth of 3 percent is estimated for 2012.

Okmetic's central customer areas in the silicon wafer market

In line with its strategy, Okmetic seeks for special areas of the entire silicon wafer market that have greater growth rates than the market average and in which the company has special know-how. Okmetic supplies primarily 150mm and 200mm wafers. The sensor/MEMS industry is Okmetic's central growth area. The MEMS market grows as the portable consumer products, automotive electronics, and industrial process control increase.

In the semiconductor market, Okmetic's growth areas include discrete and power semiconductors. The growth areas of these markets are i.a. components used in the production of renewable energy, increasing automotive electronics, portable consumer products, developing applications of the medical and well-being industries as well as industrial process controlling.

SALES

In 2011, Okmetic's net sales increased by 2.8 (48.8) percent from the previous year amounting to 83.2 (80.9) million euro. The reasons behind the increase in net sales were the growth of sensor wafer sales and sales aimed at the solar cell industry. Okmetic's market share grew in the product areas which are important to the company.

Sales per customer area

1.10.-
31.12.11
1.10.-
31.12.10
1.1.-
31.12.11
1.1.-
31.12.10
1.1.-
31.12.09
Sensors 54% 41% 46% 43% 41%
Semiconductors 30% 40% 35% 42% 31%
Technology 16% 18% 19% 15% 28%

In 2011, the sensor wafer sales increased compared to the previous year. Within sensor wafers, the rise in production volumes of the strategically important SOI wafers was particularly positive. The use of sensors and their requirement level are expected to continue growing. Sensor applications are increasing in the automotive industry, and also particularly in consumer electronics products like smart phones, cameras, game consoles, and other mobile devices.

Semiconductor wafer sales decreased in the second half of 2011 due to the prevailing market situation. The growth estimates are moderate at the moment.

In 2011, technology sales increased and its net sales consisted mainly of solar crystal shipments.

Sales per market area

1.10.-
31.12.11
1.10.-
31.12.10
1.1.-
31.12.11
1.1.-
31.12.10
1.1.-
31.12.09
North America 43% 41% 37% 43% 37%
Europe   31% 22% 30% 25% 33%
Asia  27% 37% 33% 32% 30%

In 2011, Okmetic's sales increased in Europe and Asia, but decreased in North America.

PROFITABILITY

January-December

In January-December, Okmetic's operating profit was 11.8 (10.4) million euro. The operating profit accounted for 14.2 (12.9) percent of net sales. Profit for the period was 10.2 (10.0) million euro. Tax expenses in the financial period 2011 amounted to 1.1 million euro (in 2010 tax revenue of 0.1 million euro). The imputed taxes include 0.3 million euro of claims for the established losses of a foreign subsidiary. The deferred tax assets consisting of the established losses of the parent company were exhausted during the financial period 2011. Basic earnings per share were 0.61 (0.60) euro. Diluted earnings per share were 0.59 (0.58) euro.     

October-December

In October-December, Okmetic's operating profit was 2.3 (3.4) million euro. The operating profit accounted for 12.9 (14.9) percent of net sales. Profit for the period was 2.0 (2.1) million euro. Basic earnings per share were 0.12 (0.13) euro. Diluted earnings per share were 0.12 (0.12).

FINANCING

The company's financial situation is good. In 2011, net cash flow from operations amounted to 11.7 (16.6) million euro.

In 2011, the net cash flow from operations was weakened by 6.8 (0.2) million euro due to an increase in working capital available to business operations. This was caused by changes in normal net working capital items.

On 31 December 2011, the company's liabilities amounted to 1.0 (1.0) million euro.

At the end of 2011, cash and cash equivalents amounted to 11.3 (14.0) million euro. In addition, the company had 5.0 million euro worth of investments in fixed-income funds at the end of 2010. On 31 December 2011, the company's cash and cash equivalents exceeded the interest-bearing liabilities by 10.3 million euro (on 31 December 2010 cash and cash equivalents were 18.0 million euro higher than interest-bearing liabilities).

Return on equity amounted to 17.2 (18.6) percent. At the end of the year, the company's equity ratio was 78.9 (76.6) percent. Equity per share was 3.68 (3.49) euro.

INVESTMENTS

In 2011, Okmetic's capital expenditure amounted to 12.0 (2.2) million euro.

The investments concerned mainly the board's decision in April to increase SOI wafer production capacity by extending the Vantaa plant. The around 30 million euro investment programme, to be implemented in 2011-2013, includes the plant extension and different kinds of production equipment. Building of the plant extension started in August.

This investment, together with the SOI equipment investments decided earlier, more than triples the Vantaa plant's SOI wafer production capacity and enables increase of market share in SOI wafers.

At the beginning of the year, Okmetic purchased ten crystal growing furnaces located at the Vantaa production plant from the Norwegian company NorSun. The furnaces originate from an arrangement made in 2006, in which NorSun placed the furnaces in the Vantaa production plant. The total value of the investment amounted to 3.3 million euro.

As a result of the investment, Okmetic's own crystal growing capacity increased significantly. The purchased furnaces are used for the production of solar crystals and for the crystal growing required for the own production and contract manufacturing of silicon wafers. Okmetic thus secured sufficient production capacity for the needs of coming years.

PRODUCT DEVELOPMENT

In 2011, the company expensed 2.4 (2.1) million euro in product development projects. Product development costs accounted for 2.9 (2.6) percent of net sales. The product development costs have not been capitalised.

In 2011, Okmetic's product development was mainly directed at SOI wafers and crystal growing. In addition to these areas, the aim was to develop the processes of all production lines further. Regarding SOI wafers, in addition to expanding the production capacity, the focus was on improving the performance and productivity, as well as on developing the SOI product family further. In crystal growing, Okmetic's aim was to improve productivity and performance of the process, and also to expand the portfolio of high resistivity products by including FZ materials in the product range.

Okmetic engaged in several strategic research projects with customers, research institutes, and other partners. In 2011, Okmetic participated in national technology programmes funded by Tekes, the leading Finnish funding agency for technology and innovation, and in international EU-funded programmes as well as in creation of the national and international MEMS Roadmap. The purpose of the MEMS Roadmap is to coordinate the longer term R&D investment of MEMS.

Okmetic's research and development work increases the company's technological expertise and competitiveness. Research and development focuses on developing new products and improving the features and the production process performance of the existing products. Okmetic also collaborates closely with equipment and material manufacturers, in particular when purchasing new equipment, in order to secure an optimal equipment base.   

PERSONNEL

The significance of the personnel as a factor contributing to Okmetic's success has been recognised in the company's strategy, and is emphasised in the values as well as in human resources and quality policies of the company.

On average, Okmetic employed 363 people in 2011 (2010: 345 and 2009: 337). At the end of the year, 312 of the group's employees worked in Finland, 34 in the US, three in Japan, and one in Hong Kong.

Women accounted for 26 (27) percent and men 74 (73) percent of the personnel. White-collar employees accounted for 36 (36) percent and blue-collar employees for 64 (64) percent. The average age of Okmetic's employees was 43 (42) years and the average length of employment was 10.9 (10.3) years.

Salaries and bonuses are based on the level of skills required in each position throughout the organisation. In 2011, salaries and bonuses amounted to 20.7 million euro (2010: 19.8 million euro and 2009: 15.9 million euro) including 1.2 (1.3) million euro expenses of the share reward schemes. The group's parent company complies with the collective labour agreements of the Technology Industries of Finland.

All employee groups at Okmetic are eligible for an incentive scheme. Monthly targets are set for the blue-collar employees' productivity, and the resulting bonuses are paid once a month. White-collar employees are paid bonuses according to group level targets. Bonuses for meeting the targets are calculated as a percentage of the employees' annual income. The bonuses account for no more than 12-20 percent of annual income depending on the personnel group.

ENVIRONMENTAL ISSUES

Okmetic recognises the environmental risks associated with its business. The company devises both a universal risk management plan and plans for individual processes. Ecologically sustainable operations boost Okmetic's competitiveness and profitability.

Measures devised for eliminating environmental risks are integrated to Okmetic's operational processes. Environmental considerations are factored into the development of products and operations in line with continuous improvement principles. Planning of preventive measures is fundamental to managing environmental risks.

Okmetic keeps an eye on environmental legislation development both in Finland and internationally, and adjusts its operations to meet the regulations. During 2011, a new legislation monitoring application was deployed. It makes following up the continuously changing legislation straightforward and efficient.
Okmetic follows the chemical regulations of the European Union (REACH) and all Okmetic's products meet the requirements set in the RoHS-directive.

The main goal of Okmetic's environmental programme in 2011 was to launch and sertificate an environmental system for the epi wafer production plant in the US. The operation was granted an ISO 14001 certificate in June 2011.

Okmetic has now ISO 9001:2008, TS 16949:2009 and ISO 14001:2004 certified quality and environmental systems at both plants. The company's plants have been built with environmental considerations in mind. Okmetic expects its most important subcontractors and suppliers to comply with the ISO 9001 and ISO 14001 certifications.

The consumption of energy and the use of water and main raw materials have been assessed to have a significant environmental impact. The company strives to use them as efficiently as possible. Recycling of waste and materials is emphasised. At the Vantaa plant, the objective of the environmental programme was to reduce the landfill waste to zero. This objective was reached in 2011.

Okmetic had no major environmental non-conformities in 2011. Okmetic's environmental management methods were found to match the high requirement level of international customer companies. The company is not subject to emissions trading regulations.

The key figures on environmental protection at the Vantaa plant in 2011 are as follows:

Energy consumption (GWh): electricity 32.9 (34.2), district heating 2.7 (3.1).
Water comsumption (tm3): water 560 (558), waste water 474 (477).
Waste volumes (t): hazardous waste 264 (187), landfill waste 0 (170), recycled waste 299 (244).

BUSINESS RISKS

Okmetic's business operations are exposed to risks which may arise from the company's operations or changes in the business environment.

Okmetic's silicon wafer sales are targeted at the sensor and semiconductor producers in the electronics industry. The demand for semiconductor wafers is sensitive to economic fluctuations and changes in the market situation can be sudden and dramatic. The demand for sensor wafers is more stable. The proliferation of sensors in consumer electronics applications may, however, increase the susceptibility of this market too to economic fluctuations. Technology sales comprise mainly crystal sales, which is mainly affected by the economic situation of the solar cell industry.

Okmetic's share of the global silicon wafer market is around one percent and the market prices have a notable effect on the price development of Okmetic's products. The company only has considerable pricing power with its own special products. The pricing of other wafers is mainly based on global market price.

Okmetic operates globally, and therefore the company's business operations are affected by risks due to currency fluctuations, consisting of the cash flows of purchases and sales. A significant part of sales are conducted in US dollars. The Japanese yen is another notable trading currency. Despite hedging, the company remains exposed to exchange rate fluctuations.

Great volumes of electricity are used in Okmetic's production. Despite hedging, the company is also exposed to fluctuations in the price of electricity.

SHARES AND SHAREHOLDERS

On 31 December 2011, Okmetic Oyj's paid-up share capital, as entered in the Finnish Trade Register, was 11,821,250.00 euro. The share capital is divided into 17,287,500 shares. The shares have no nominal value attached. Each share entitles its holder to one vote at general meetings. The company has one class of shares. The company's shares are included in the Finnish book-entry securities system.

Major shareholders
on 31 Dec 2011
Shares,
pcs
Share,
%
Ilmarinen Mutual Pension
Insurance Company

1,666,601

9.6
Mandatum Life Insurance
Company

807,700

4.7
The State Pension Fund 600,000 3.5
Varma Mutual Pension
Insurance Company

477,175

2.8
Veritas Pension
Insurance Company

462,695

2.7
Okmetic Management Oy 400,000 2.3
Etra-Invest Oy Ab 400,000 2.3
Nordea Nordic Small
Cap Fund

370,660

2.1
Okmetic Oyj 297,576 1.7
Aktia Secura Fund 242,146 1.4
Foreign investors and
nominee accounts held by
custodian banks


3,171,183


18.3
Others 8,391,764 48.5
Total 17,287,500 100.0

Shareholders by group
on 31 Dec 2011
Shares,
pcs
Share,
 %
Corporations 2,750,285 15.9
Financial and insurance
institutions

1,685,823

9.8
Public organisations 3,267,327 18.9
Non-profit organisations 151,059 0.9
Households 6,261,823 36.2
Foreign investors and
nominee accounts held by
custodian banks


3,171,183


18.3
Total 17,287,500 100.0

Distribution of shareholdings
on 31 Dec 2011
Number of
shareholders
% of
shareholders
Shares,
pcs
% of
share
capital
Shares,
pcs
1-100 1,237 16.8 89,714 0.5
101-500 3,363 45.7 991,355 5.7
501-1,000 1,394 18.9 1,147,011 6.6
1,001-5,000 1,142 15.5 2,507,541 14.5
5,001-10,000 122 1.7 897,232 5.2
10,001-50,000 77 1.0 1,633,207 9.4
50,001-100,000 7 0.1 526,459 3.0
100,001-500,000 12 0.2 3,473,439 20.1
500,001- 4 0.1 6,021,542 34.8
Total 7,358 100.0 17,287,500 100.0

SHARE PRICE DEVELOPMENT AND TRADING

A total of 10.9 (14.0) million shares were traded between 1 January and 31 December 2011, representing 63.1 (81.4) percent of the weighted average of share total of 17.3 (17.2) million during the period. The lowest quotation of the reporting period was 3.50 (2.98) euro, and the highest 6.65 (5.70) euro, with the average being 5.48 (4.22) euro. The closing quotation for the period was 4.92 (5.29) euro. At the end of the period, the market capitalisation amounted to 85.1 (91.5) million euro.

Okmetic is listed on the Small Cap list of NASDAQ OMX Helsinki Ltd. under the trading code OKM1V. According to the International Classification Benchmark (ICB), which the exchange uses, Okmetic Oyj is listed under the Technology Industry. The company website can be found at www.okmetic.com.

OWN SHARES AND DIRECTED SHARE ISSUES

On 16 February 2011, Okmetic's board of directors decided on a transfer of 125,390 own shares, held by the company, as a part of the company's share-based incentive scheme for the executive management group, of which the company has given a stock exchange release on 11 February 2010. All the shares were issued to the members of the executive management group in deviation from the shareholders' pre-emptive rights (directed share issue). The rewards of the share reward programme were paid on one hand in Okmetic shares and on the other hand in a monetary amount covering taxes.

In line with the decisions of the annual general meeting and the board of directors, Okmetic Oyj transferred 11,711 shares to the board members as payment of the 2011 annual remuneration on 2 May 2011.

On 18 August 2011, Okmetic Oyj's board of directors announced of its decision to transfer 9,432 own shares held by the company, for free, to a member of the executive management group belonging to Okmetic's share-based incentive scheme 2010-2011, as a proportion of reward to be paid as shares on the basis of earning period 2010.

Okmetic's board of directors decided on 5 August 2011, based on an existing authorisation of the board of directors, to repurchase a maximum of 280,000 company's own shares. The share repurchase started on 16 August 2011 and ended on 14 November 2011. An aggregate number of 240,865 shares were repurchased corresponding to approximately 1.4 percent of the total number of Okmetic shares and votes. The shares were repurchased with the company's distributable assets and the repurchase decreased the company's distributable equity by 1,147,375.32 euro. The shares were repurchased in a proportion other than that of the shares held by the shareholders through public trading on the NASDAQ OMX Helsinki Ltd. at market price prevailing at the time of repurchase. The average purchase price per share was 4.76 euro.

The repurchased shares may be used in developing the company's capital structure, as compensation in possible corporate acquisitions or in other business arrangements, as part of the company's incentive scheme or transferred or cancelled in other ways.

At the end of the year, the company held a total of 297,576 shares, which is approximately 1.7 percent of Okmetic's all shares and votes.

OTHER EVENTS IN THE FINANCIAL YEAR

Okmetic's board of directors approved the company's revised long-term financial objectives in April. The company's aim is that the organic net sales grow a minimum of 10 percent annually and that the operating profit is over 10 percent of the net sales.

The company's previous long-term financial objectives stated that organic net sales grow a minimum of 6 percent annually and that operating profit is over 10 percent of net sales. At the same time, the company discarded other specifically defined long-term financial objectives such as a 50 percent equity ratio and consistent annual dividend distribution.

Based on an existing authorisation of the board of directors, Okmetic's board of directors decided in November to distribute 0.15 euro per share as additional dividend (totaling 2,548,488.60 euro). The dividend was paid on 8 December 2011.

Okmetic opened a sales office in Hong Kong that serves the important Asian market outside Japan in the autumn.

EVENTS AFTER THE END OF THE FINANCIAL YEAR

The company Kiinteistö Oy Piitalot which was part of Okmetic group has merged with Okmetic Oyj on 1 January 2012. Its assets and liabilities were transferred to Okmetic Oyj.

 
The Helsinki Court of Appeal gave a verdict in January in which it decided not to change the acquittal for President Kai Seikku rendered by the Helsinki District Court on 20 December 2010 and dismissed the prosecutor's claims on negligent abuse of insider information. The charge was related to Seikku's actions while he was still working for his previous employer HKScan Oyj.

MANAGEMENT AND AUDITOR

In 2011, Okmetic's board of directors comprised Henri Österlund as the chairman, Esa Lager as the vice chairman until 7 April 2011, Tapani Järvinen as the vice chairman since 7 April 2011, and members of the board Hannu Martola, Mervi Paulasto-Kröckel since 7 April 2011, and Pekka Salmi.

Kai Seikku acts as the President of Okmetic Oyj and Mikko Montonen, Executive Vice President, Customers and Markets acts as the Deputy to the President.

In addition to the president, the group's executive management group includes Mikko Montonen, Executive Vice President, Customers and Markets and Deputy to the President; Petri Antola, Senior Vice President, Technology Projects; Juha Jaatinen, Senior Vice President, Finance, IT, and Communications; Jaakko Montonen, Senior Vice President, Supply Chain; Markku Tilli, Senior Vice President, Research; Markus Virtanen, Senior Vice President, Human Resources, Quality, and Environment; and Anna-Riikka Vuorikari-Antikainen, Senior Vice President, Products.  

The company's auditors are PricewaterhouseCoopers Oy, Authorised Public Accountants, with Mikko Nieminen, Authorised Public Accountant, acting as the principal auditor.

THE BOARD OF DIRECTORS' PROPOSAL REGARDING DIVIDEND DISTRIBUTION

According to the financial statements dated on 31 December 2011, the parent company's distributable earnings amount to 26.5 million euro. No significant changes have taken place in the company's financial position after the end of the financial year.

The board of directors of Okmetic Oyj proposes to the annual general meeting that Okmetic Oyj distributes a dividend of 0.28 euro per share for 2011, which, based on the 17,287,500 shares registered on 8 February 2012, amount to 4.8 million euro.

CONDENSED FINANCIAL STATEMENTS AND TABLES 1 JANUARY - 31 DECEMBER 2011

ACCOUNTING POLICIES

This financial statements release has been prepared in accordance with IAS 34, Interim Financial Reporting.

In preparing this financial statements release, Okmetic has followed the same accounting policies as in the financial statements for 2010 except for the effect of changes required by the adoption of the following new or revised standards and interpretations as of 1 January 2011:

IAS 24 (revised), Related Party Disclosures
IAS 32 (amendment), Financial Instruments: Presentation - Classification of Rights Issues
IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments
IFRIC 14 (amendment), Prepayments of a Minimum Funding Requirement
Improvements to IFRSs, May 2010

The adoption of the aforementioned standards and interpretations has not had an effect on the figures presented from the reporting period.

Okmetic has applied hedge accounting as defined in IAS 39 to the electricity derivative contracts entered into after 1 April 2011 hedging highly probable forecast cash flows associated with electricity purchases. The effective portion of changes in the fair value of derivatives that are designated as cash flow hedges is recognised in other comprehensive income and presented in hedge reserve. Such accumulated fair value changes are reclassified to the income statement in the periods when the hedged cash flow affects profit or loss. The gain or loss relating to the ineffective portion is recognised immediately in the income statement within other operating income and expenses.

From the start of 2011 Okmetic has changed the place where changes in fair values of currency derivative contracts and their realised profits and losses are presented in the statement of comprehensive income. In line with the new policy, the changes in the fair values of currency derivative contracts and their realised profits and losses are presented with the financial income and expenses. Previously these items were presented with other operating income and expenses. Okmetic has reported of the change in accounting policies on the interim report published on 27 April 2011.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

1,000 euro 1 Oct-
31 Dec,
2011
1 Oct-
31 Dec,
2010
1 Jan-
31 Dec,
2011
1 Jan-
31 Dec,
2010
Net sales 18,134 23,072 83,186 80,907
Cost of sales -13,388 -17,783 -61,876 -62,274
Gross profit 4,746 5,288 21,310 18,633
Other income
and expenses

-2,408

-1,849

-9,493

-8,212
Operating
profit

2,338

3,440

11,817

10,421
Financial
income and
expenses


101


-468


-479


-610
Profit before
tax

2,439

2,972

11,339

9,811
Income tax -451 -826 -1,104 141
Profit for
the period

1,988

2,146

10,235

9,952
Other
comprehensive
income:
Cash flow
hedges

-144

-

-177

-
Translation
differences

469

118

808

624
Other
comprehensive
income for the
period, net of
tax




326




118




631




624
Total
comprehensive
income for
the period



2,313



2,264



10,866



10,576
Profit for the
period
attributable
to:
Equity holders
of the parent
company


1,988


2,146


10,235


9,952
Total
comprehensive
income
attributable
to:
Equity holders
of the parent
company


2,313


2,264


10,866


10,576
Basic earnings
per share,
euro


0.12


0.13


0.61


0.60
Diluted
earnings per
share, euro


0.12


0.12


0.59


0.58

CONDENSED CONSOLIDATED BALANCE SHEET

1,000 euro 31 Dec,
2011
31 Dec,
2010
Assets
Non-current assets
Property, plant and
equipment

34,887

29,069
Other receivables 3,255 2,441
Total non-current assets 38,142 31,510
Current assets
Inventories 13,114 9,987
Receivables 15,374 15,674
Financial assets
at fair value through
profit or loss


-


5,004
Cash and cash equivalents 11,257 14,043
Total current assets 39,745 44,708
Total assets 77,887 76,217
Equity and liabilities
Equity
Equity attributable to
equity holders of the
parent company
Share capital 11,821 11,821
Other equity 49,151 46,420
Total equity 60,973 58,242
Liabilities
Non-current liabilities 2,968 1,245
Current liabilities 13,946 16,730
Total liabilities 16,914 17,976
Total equity and
liabilities

77,887

76,217

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

1,000 euro 1 Jan-
31 Dec,
2011
1 Jan-
31 Dec,
2010
Cash flows from operating
activities:
Profit before tax 11,339 9,811
Adjustments 7,575 7,007
Change in working
capital

-6,782

210
Financial items -401 -492
Tax paid -39 58
Net cash from
operating activities

11,691

16,594
Cash flows from investing
activities:
Purchases of property,
plant and equipment

-11,319

-2,173
Investments in fixed
income funds

5,016

-5,000
Net cash used in
investing activities

-6,302

-7,173
Cash flows from financing
activities:
Repayments of
long-term borrowings

-

-1,500
Payments of finance
lease liabilities

-

-39
Share issue - 1,200
Repurchase of own shares -1,147 -1,868
Dividends paid -7,331 -834
Net cash used in
financing activities

-8,478

-3,041
Increase (+) / decrease
(-) in cash and cash
equivalents


-3,089


6,381
Exchange rate changes 304 355
Cash and cash
equivalents at the
beginning of the period


14,043


7,307
Cash and cash
equivalents at the
end of the period


11,257


14,043

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

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Comment on this story


Equity attributable to equity holders of parent company



1,000 euro
Share
capital
Share
pre-
mium
Reserve
for in-
vested
unre-
stricted
equity
Other
re-
serves
 1)
Retained
earnings
Total
Balance at
31 Dec, 2010

11,821

20,045

1,200

1,039

24,137

58,242
Profit for
the period

10,235

10,235
Other com-
prehensive
income, net
of tax:
Cash flow
hedges

-177

-177
Translation
differences

808

808
Total com-
prehensive
income for
the period



631



10,235



10,866
Repurchase
of own
shares


-1,147


-1,147
Share-based
payments

544

544
Dividend
distribution

-7,531

-7,531
Balance at
31 Dec 2011

11,821

20,045

1,200

1,670

26,238

60,973
Balance at
31 Dec 2009

11,821

20,045

-

415

16,461

48,742
Profit for
the period

9,952

9,952
Other com-
prehensive
income, net
of tax:
Translation
differences

624

624
Total com-
prehensive
income for
the period



624



9,952



10,576
Share issue 1,200 1,200
Repurchase
of own
shares


-1,868


-1,868
Share-based
payments

426

426