Third quarter on red
Suominen Corporation generated net sales of EUR 43.4 million (44.2) in the third quarter. Operating profit was EUR -1.8 million (1.0), profit before taxes EUR -2.9 million (-0.6) and profit after taxes EUR -2.1 million (-0.4).
The third quarter result was negative mostly due to low production during the summer months.
Net sales for the nine-month period totalled EUR 128.1 million (134.5). Operating profit was EUR -2.2 million (6.1), profit before taxes EUR -5.3 million (1.4) and profit after taxes EUR -4.0 million (1.2).
Suominen’s net sales for the nine-month period in 2010 declined by 5 per cent compared to the corresponding period in 2009. Reasons behind the decrease were the decline in the prices of wet wipes in the beginning of the year and the decline in the delivery volumes of nonwovens.
Cost-savings measures could not compensate for the decrease in net sales and delivery volumes. The rise in raw material prices continued until the end of summer, and has levelled off thereafter. The majority or current sales contracts adjust sales prices in line with rises in raw material costs some months after costs have risen. The price increase had a considerable negative impact on the Group’s result.
Employee negotiations were started in Flexibles in September, with the purpose of safeguarding the competitiveness of the operations. The proposal includes the discontinuation of the Nastola plant’s operations in 2011. If the proposal is realised, it would represent an estimated EUR 2.5 million in non-recurring costs, a big part of which would be incurred in the course of 2010.
The company negotiated an amendment to the financial covenants of the present credit agreements in regard to the situation on 30 September 2010. Negotiations on the terms and conditions of financing are underway, for the future too, and the intention is to reach a conclusion in the fourth quarter.
Investments still remained on a low level.