Ahlstrom Corporation plans to cut jobs
Ahlstrom Corporation announces Interim report of January to March 2009.
Key highlights in January-March 2009
• Due to weak demand, net sales decreased by 19.3% compared to the first quarter of 2008.
• EBIT amounted to EUR -10.7 million (EUR 19.3 million).
• Net cash from operating activities of EUR 20.9 million virtually covered net cash from investing activities of EUR -21.6 million.
• The market environment will continue to be very challenging in 2009, with a very short-term visibility of the demand. According to current estimates, the market demand for Ahlstrom products will continue at a low level.
Jan Lång, President & CEO, comments on the first quarter of 2009:
In the first quarter of 2009, Ahlstrom strongly and successfully retained its long-standing customer relationships. On the other hand, the global recession had a significant effect on our financial performance. A number of initiatives were started to adjust our operations to the changed situation. Despite the challenging environment, we maintained our activity level in developing new products.
• In order to adjust to the weak demand, we announced the initiation of a further restructuring program with the aim of gaining annual cost reductions of EUR 50 million. In addition, we have increased the emphasis on our operational improvement programs to enhance our cost efficiency. A high priority is also given to working capital with the target to improve its turnover.
The very challenging market conditions that impacted Ahlstrom's business in the fourth quarter of 2008 prevailed in the beginning of this year. Consequently, the demand pattern for most of Ahlstrom's products continued to weaken in the first quarter of 2009 compared to the fourth quarter of 2008.
In the Fiber Composites segment, the markets related to the automotive, construction and marine industries were exceptionally challenging due to the decline in these industries, e.g. the Filtration business area suffered from the significant slowdown in the automotive industry. More recently, there has been a decrease of demand for the windmill applications of glass nonwovens materials. On the positive side, market demand for the food packaging and teabag materials as well as for nonwovens in medical applications was close to normal.
In the Specialty Papers segment, demand was affected by the decline in construction, automotive, furniture, textile as well as release and labeling industries.
Market prices for Ahlstrom's main raw materials, natural and synthetic fibers, chemicals and energy prices, continued to decrease.
FINANCIAL PERFORMANCE IN JANUARY-MARCH 2009
During the January-March period, a strong decline in the demand for most of Ahlstrom's products, which became evident towards the end of 2008, continued.
Group net sales totaled EUR 376.1 million (EUR 466.2 million), decreasing by 19.3% compared to the same period last year.