RAUTE CORPORATION INSIDE INFORMATION 22 JUNE 2022 at 9:00 a.m.
RAUTE TO BOOK PROVISIONSFORWRITE-OFFS RELATED TO RUSSIAN BUSINESS, STRENGTHEN ITS PERFORMANCE IMPROVEMENT PROGRAM, AND ISSUE NEW GUIDANCE
As previously reported, Raute's order book for 2022 included a significant amount from projects in Russia. Since the end of February Raute has not made any new agreements with Russian operators and the Russian business is gradually scaling down, in accordance with sanctions and local laws and regulations in both countries.
Raute has analyzed the prerequisites for the execution of each project including the contractual commitments, sanctions, and constantly changing impacts on logistics, financing and payment transactions, and continues to adjust its order book to reflect the outcome. As a result of this, Raute will book provisions currently estimated at approximately 8-9 million euros in the second quarter reporting for write-offs related to either trade-sanctioned or otherwise cancelled projects and receivables. Additionally, the second quarter result will include approximately 1 million euro cost for business restructuring including severance.
Raute's profitability during H1 2022 has been negatively impacted from scaling down the deliveries to Russia and related reorganizing of delivery projects. In addition poor availability and increased prices of components and logistics have negatively affected the result.
To mitigate the impacts of underlying negative drivers, Raute is strengthening its development program to improve competitiveness and profitability targeting margin improvement and cost efficiencies during 2022 and 2023.
Market situation and demand for the business outside of Russia has been healthy and current order intake shows positive signs. Provided that these current market conditions remain largely as today, Raute expects that the situation stabilizes during H2 2022 and profitability will start improving.
Raute Corporation's Board of Directors withdrew the 2022 financial guidance on March 2, 2022. In accordance with the above noted matters the Board of Directors now expects Raute's 2022 operating profit to stay significantly negative and below last year's level. Raute's operating profit for 2021 was -2.2 million euros.
Interim President and CEO
Mr. Petri Strengell, Interim President and CEO, tel. +358 40 758 6580
Ms. Minna Yrjönmäki, Interim CFO, tel. +358 40 570 2067
Nasdaq Helsinki Ltd, main media, www.raute.com
RAUTE IN BRIEF:
Raute is a technology and service company that operates worldwide. Raute's customers are companies operating in the wood products industry that manufacture veneer, plywood, LVL (Laminated Veneer Lumber) and sawn timber. Its technology offering covers the entire production process for veneer, plywood and LVL and special measurement equipment for sawn timber. As a supplier of mill-scale projects, Raute is a global market leader both in the plywood and LVL industries. Additionally, Raute's full-service concept includes technology services ranging from spare parts deliveries to regular maintenance and equipment modernizations. Raute's head office is located in Lahti, Finland. The company's other production plants are located in Kajaani, Finland, the Vancouver area of Canada, the Shanghai/Changzhou area of China and in Pullman, Washington, USA. Raute's net sales in 2021 were EUR 142.2 million. The Group's headcount at the end of 2021 was 802. More information about the company can be found at www.raute.com.