Financial position

Financial Statements Bulletin 2016
9 February 2017

Balance sheet, financing and cash flow

On 31 December 2016, the balance sheet total was EUR 968.0 million (1,035.5), of which shareholders' equity accounted for EUR 333.7 million (377.6). Shareholders' equity includes EUR 34.8 million (111.6) hybrid bond. During Q4, the company executed a partial repurchase of its hybrid bond and repurchased notes to a nominal amount of EUR 34.8 million out of the outstanding EUR 70 million. The hybrid bond was issued in 2014, and the company is entitled to redeem the remaining EUR 35.2 million share of it earliest in March 2018. During Q1, the Group redeemed fully the outstanding share, nominal value EUR 42.9 million, of the hybrid bond issued in 2012. Both transactions affected the company's equity ratio and gearing.

The Group's operating capital on 31 December 2016 amounted to EUR 388.2 million (474.8). The decrease is mainly due to decline in net working capital. At the end of the year, net working capital stood at EUR 187.8 million (258.7). Net working capital has been mostly reduced by housing sales in Finland and Russia.

Interest-bearing debt at the end of the year amounted to EUR 212.5 million (254.7) and interest-bearing net debt totalled EUR 81.1 million (126.8). Long-term interest-bearing debt accounted for 56.3% (48.3) of the loan portfolio at the end of the period. Liquid funds totalled EUR 131.4 million (127.9). Of the company's interest-bearing debt, EUR 99.7 million (99.7) comprises bonds, EUR 80.7 million (104.1) borrowings of housing and commercial property companies included in inventory, EUR 31.0 million (34.8) finance lease liabilities and EUR 1.1 million (3.0) other financial liabilities. No commercial papers were outstanding at the end of 2016 (13.1). In addition, the company had available committed revolving credit facilities worth EUR 185.0 million (185.0) and overdraft limits worth EUR 12.4 million (12.3) at the end of the period. Of the loan portfolio, 66% (55) was at a fixed interest rate. In December 2016, after evaluating its capital structure, Lemminkäinen cancelled the EUR 75 million part of the revolving credit facility which was no longer needed.

Net finance costs amounted to EUR 4.8 million (5.1) in October–December and EUR 18.4 million (20.6) in January–December. The finance costs have been reduced due to lower currency hedging costs. The interest expenses of the hybrid bonds are not recorded under finance costs in the income statement; instead, their impact can be seen in earnings per share and equity.

Cash flow from operating activities amounted to EUR 38.5 million (30.5) in October–December and EUR 131.7 million (106.6) in January–December. Cash flow from operations was supported mainly by housing sales in Building construction, Finland.

The company has successfully strengthened its financial position. The company will continue to manage the balance sheet and cash flow, and its aim is to increase plot investments in growth centres in building construction in Finland. In addition, the company started ten new residential development projects during Q4/2016.


Interim report 1 Jan–30 September 2016
27 October 2016

Balance sheet, financing and cash flow

On 30 September 2016, the balance sheet total was EUR 1,156.7 million (1,235.6), of which shareholders' equity accounted for EUR 346.5 million (370.5). Shareholders' equity includes EUR 69.3 million (111.6) hybrid bond. The hybrid bond was issued in 2014, and the company is entitled to redeem it in March 2018. During Q1/2016, the Group redeemed fully the outstanding share of the 2012 issued hybrid bond, which affected the company's equity ratio and gearing.

The Group's operating capital on 30 September 2016 amounted to EUR 394.6 million (486.1). The decrease is mainly due to decline in net working capital. At the end of the quarter, net working capital stood at EUR 188.8 million (261.8). Net working capital has been reduced by housing sales in Finland and Russia, improved invoicing efficiency and improved inventory turnover in the Paving segment.

Interest-bearing debt at the end of the period amounted to EUR 273.7 million (301.7) and interest-bearing net debt totalled EUR 82.0 million (154.4). Long-term interest-bearing debt accounted for 43% (42) of the loan portfolio at the end of the period. Liquid funds totalled EUR 191.8 million (147.3). Of the company's interest-bearing debt, EUR 92.5 million (114.8) comprises borrowings of housing and commercial property companies included in inventory, EUR 99.7 million (99.7) bonds, EUR 49.6 million (44.9) commercial papers, EUR 29.7 million (37.9) finance lease liabilities and EUR 2.3 million (4.5) other financial liabilities. In addition, the company had available committed revolving credit facilities worth EUR 185.0 million (185.0) and overdraft limits worth EUR 12.5 million (12.2) at the end of the period. Of the loan portfolio, 51% (46) was at a fixed interest rate.

Net finance costs amounted to EUR 4.9 million (4.3) in July–September and EUR 13.6 million (15.5) in January–September. The finance costs in January-September have been mainly reduced by lower currency hedging costs. The interest expenses of the hybrid bonds are not recorded under finance costs in the income statement; instead, their impact can be seen in earnings per share and equity.

Cash flow from operating activities amounted to EUR 86.0 million (50.1) in July–September and EUR 93.2 million (76.2) in January–September. Strong cash flow from operations in July-September was supported by Paving and housing sales in Building construction, Finland.


Interim report 1 Jan–30 June 2016
28 July 2016

Balance sheet, financing and cash flow

On 30 June 2016, the balance sheet total was EUR 1,055.5 million (1,292.3), of which shareholders' equity accounted for EUR 316.1 million (369.9). Shareholders' equity includes EUR 69.3 million (111.6) hybrid bonds, issued in 2014, which the company is entitled to redeem in March 2018. During Q1/2016, the Group redeemed fully the outstanding share of the 2012 issued hybrid bond, which affected the company's equity ratio and gearing.

The Group's operating capital on 30 June 2016 amounted to EUR 446.4 million (547.0). The decrease is mainly due to decline in net working capital. At the end of the quarter, net working capital stood at EUR 236.9 million (303.8). Net working capital has been reduced by housing sales in Russia and Finland, improved invoicing efficiency and improved inventory turnover in the Paving segment. In addition, the divestment of the building construction business in Sweden during Q3/2015 decreased net working capital.

Interest-bearing debt at the end of the period amounted to EUR 281.3 million (334.7) and interest-bearing net debt totalled EUR 165.2 million (211.7). Long-term interest-bearing debt accounted for 43% (40) of the loan portfolio at the end of the period. Liquid funds totalled EUR 116.2 million (122.9). Of the company's interest-bearing debt, EUR 98.4 million (128.8) comprises borrowings of housing and commercial property companies included in inventory, EUR 99.7 million (99.7) bonds, EUR 49.6 million (56.3) commercial papers, EUR 31.3 million (44.4) finance lease liabilities and EUR 2.5 million (5.5) other financial liabilities. In addition, the company had available committed revolving credit facilities worth EUR 185.0 million (185.0) and overdraft limits worth EUR 12.4 million (32.8) at the end of the period. Of all interest-bearing debt, 50% (42) was at a fixed interest rate.

Net finance costs decreased, amounting to EUR 4.8 million (5.5) in April–June and EUR 8.7 million (11.2) in January–June. The finance costs were reduced by lower currency hedging costs and interest expenses. The interest expenses of the hybrid bonds are not recorded under finance costs in the income statement; instead, their impact can be seen in earnings per share and equity.

Cash flow from operating activities amounted to EUR 25.6 million (23.5) in April–June and EUR 7.2 million (26.0) in January–June. The lower number of completed residential development projects in Finland and adjusted housing production in Russia had the biggest impact on the decreased cash flow from operating activities for January–June.


Interim report 1 Jan–31 March 2016
28 April 2016

Balance sheet, financing and cash flow

On 31 March 2016, the balance sheet total was EUR 949.6 million (1,206.4), of which shareholders' equity accounted for EUR 301.7 million (393.7). Shareholders' equity includes EUR 69.3 million (138.4) hybrid bonds, issued in 2014, which the company is entitled to redeem in March 2018. During the first quarter, the Group redeemed fully the outstanding EUR 43 million of the 2012 issued hybrid bond, which affected the company's equity ratio and gearing.

The Group's operating capital on 31 March 2016 amounted to EUR 450.4 million (554.4). The decrease is mainly due to lower investments and decline in net working capital. At the end of the quarter, net working capital stood at EUR 235.8 million (301.9). Net working capital has been reduced by decreasing housing start-ups in Russia and Finland, improving invoicing efficiency and improving inventory turnover in the Paving segment. In addition, the divestment of the building construction business in Sweden during Q3/2015 decreased the net working capital.

Interest-bearing debt at the end of the period amounted to EUR 289.0 million (345.1) and interest-bearing net debt totalled EUR 186.6 million (198.7). Long-term interest-bearing debt accounted for 42% (40) of the loan portfolio at the end of the period. Liquid funds totalled EUR 102.4 million (146.4). Of the company's interest-bearing debt, EUR 104.1 million (119.5) comprises borrowings of housing and commercial property companies included in inventory, EUR 99.7 million (99.7) bonds, EUR 49.6 million (72.7) commercial papers, EUR 32.9 million (47.8) finance lease liabilities and EUR 2.7 million (5.4) other financial liabilities. In addition, the company had available committed revolving credit facilities worth EUR 185.0 million (185.0) and overdraft limits worth EUR 12.3 million (33.3) at the end of the period. During the first quarter, the company agreed on amending the terms of its EUR 185 million committed revolving credit facility by extending its maturity and by increasing its amount to EUR 260 million of which EUR 75 million is available when agreed conditions are met. The amended revolving credit facility will mature during the first quarter in 2018. According to the amended agreement, the previous restriction of a maximum of 40 per cent dividend distribution of the Group's net profit has been removed. The removal of the restriction will be applicable starting from the financial year 2016. Of all interest-bearing debt, 48% (41) was at a fixed interest rate.

Net finance costs decreased, amounting to EUR 3.9 million (5.8) in January–March. The finance costs were reduced by lower interest expenses and currency hedging costs. The interest expenses of the hybrid bonds are not recorded under finance costs in the income statement; instead, their impact can be seen in earnings per share and changes in equity.

Cash flow from operating activities amounted to EUR -18.4 million (2.5) in January–March. The lower number of completed residential development projects in Finland and adjusted housing production in Russia had the biggest impact on the decreased cash flow from operating activities for January–March.

 

Updated 9 February 2017