Ahlstrom Corporation Interim Report January-September 2006:Steady profitability in challenging market conditions

Ahlstrom Corporation STOCK EXCHANGE RELEASE 27.10.2006 at 12.45

 

 

July-September 2006 in brief

 

- Net sales grew by 3.8% (adjusted for divestment and currency effect).

- Slight increase in profit before taxes (excluding net non-recurring gains) from last year's level. Earnings per share amounted to EUR 0.36.

- Ahlstrom invested an additional EUR 5.0 million in a further expansion of a new specialty glassfiber reinforcement plant in South Carolina, USA.

- Ahlstrom continued to streamline its structure by announcing that it will close down the Nümbrecht, Germany plant and by divesting its shareholding in the Sonoco-Alcore joint venture.

 

Key figures

The third quarter 2006 result includes net non-recurring gains totaling EUR 4.4 million (Q3/2005: non-recurring gains totaling EUR 12.4 million).

 

Jukka Moisio, President and CEO of Ahlstrom Corporation, comments on the third quarter:

- Ahlstrom's comparable net sales grew by 3.8% while sales volumes remained stable. Our profit before taxes, excluding non-recurring items, improved slightly from the corresponding quarter of 2005. Our return on capital employed was 10.3%. Gas and oil prices were at their recent high in August but have declined by the end of September. Prices for fibers and chemicals continued to rise through the quarter. We continued our efforts to increase sales prices and reduce costs to offset the impact of the more expensive raw materials on our margins.

 

- During the review period, we announced the decision to double the size of our glass nonwoven investment in the USA to better meet the growing demand. We continued to further streamline the company and reduce fixed costs. Consequently, we decided to close down the Nümbrecht, Germany plant and divested certain non-core assets.

 

Outlook

 

For the remainder of the year, the demand in Europe is expected to be at higher level than in 2005. In North America, the markets have not yet experienced the anticipated slow down. Demand in South America and Asia remains good. We expect our full-year net sales and volumes of continuing operations to grow in 2006 compared to the level of 2005.

 

Costs for fibers and chemicals continued to increase through the third quarter maintaining pressure on margins. This trend continued in October, and prices for raw materials are anticipated to rise further or remain at the current high level. Sales price increases and cost reductions are implemented to offset the effect of more expensive raw materials.

Oil and natural gas prices started to decline in the third quarter. If sustained, this decline will over time lower our energy and synthetic fibers costs.

 

We continue to see promising opportunities in the fiber-based materials business, and proceed with our global growth initiatives in line with our business strategy.

 

 

This interim report has been prepared in accordance with the International Financial Reporting Standards (IFRS). Comparable figures refer to the same period last year unless otherwise stated.

 

This report is unaudited.

 

Helsinki, October 27, 2006

 

Ahlstrom Corporation
Board of Directors

 

For additional information, please contact:

 

Jukka Moisio, President and CEO, tel. +358 (0)10 888 4700
Jari Mäntylä, CFO, tel. +358 (0)10 888 4768

 

A conference call for analysts and investors will be held on Friday, October 27, 2006 at 15.00 Finnish time. To participate in the teleconference, please dial +44 (0) 20 7162 0125 a few minutes before the call. Use the password: Ahlstrom. A replay number is available until October 31, 2006. The number for the replay is + 44 (0) 20 7031 4064, access code: 724650. The presentation material will be available at www.ahlstrom.com > Investors > IR presentations on October 27, 2006 after the interim report has been published.

 

This report contains certain forward-looking statements that reflect the present views of the company's management. Due to the nature of these statements, they contain uncertainties and risks and are subject to changes in the general economic situation and in the company's business.

 

Distribution:

Helsinki Stock Exchange
www.ahlstrom.com
Main media

 

Ahlstrom's stock exchange and press releases can be ordered on www.ahlstrom.com > Media. Releases are delivered by e-mail.

 

Ahlstrom is a global leader in the development, manufacture and marketing of high performance fiber-based materials. Nonwovens and specialty papers, made by Ahlstrom, are used in a large variety of everyday products, e.g. in filters, wipes, flooring, labels and tapes. The company has a strong market position in several business areas in which it operates, built upon the company's unique fiber expertise and innovative approach. Ahlstrom's 5,700 employees serve customers via sales offices and production facilities in more than 20 countries on six continents. In 2005, Ahlstrom's net sales amounted to EUR 1.55 billion. Ahlstrom share is listed on the Helsinki Stock Exchange. The company website is www.ahlstrom.com.

 

To view the entire Interim report, please click on the link below.