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Ferronordic Machines AB: Ferronordic Machines AB (publ) Interim Report January - March 2016

Press Release

Stockholm, 19 May 2016


· Revenue increased by 23% (43% in rubles) to SEK 309.6m (SEK

· Operating profit amounted to SEK 17.1m (SEK -12.4m)
· Operating margin was 5.5% (-4.9%)
· EBITDA increased to SEK 26.6m (SEK 7.3m)
· The after-tax result increased to SEK 14.3m (SEK -11.0m)
· Earnings per ordinary share amounted to SEK 0.18 (SEK -2.35)
· Cash flow from operating activities amounted to SEK 43.1m (SEK

SEK M First quarter2016 First quarter 2015
Revenue 309.6 252.4
EBITDA 26.6 7.3
Operating profit 17.1 (12.4)
After-tax result 14.3 (11.0)

Net debt / (cash) (131.0) 81.1
Net debt / EBITDA (0.9x) 0.5x


· The decline of the Russian economy continued in the first quarter.
GDP declined by 1.2% compared to the same period last year. The
market for new construction equipment also continued its backward
movement and dropped over 20% compared to an already very low level
in 2015. Compared with the same period two years ago, the total
market is down 80% and is at the lowest level recorded since
relatively reliable market statistics were introduced in 2004.

· Despite this, the first quarter of 2016 was the most profitable
first quarter since the company was founded in 2010. This was
achieved despite revenue of only 310 MSEK, compared with revenue of
approximately 500 MSEK in same

period in 2012 to 2014.The improved profitability was a result of hard
work throughout the company - with increased aftermarket sales, well
executed price realization on used and new machines, lower costs,
reduced inventory and with a very strong net cash position as a

· During the quarter, we recorded a positive result per ordinary
share, which is calculated after dividends on preference shares. I am
very pleased with this result given the current difficult market

· Despite the drop of the total market, we increased our sales of
new machines in units by nearly 50% and hence continued to gain
market share.

· Cash flow from operations during the quarter amounted to SEK 43
million, which contributed to a stronger net cash position than three
months earlier. Towards the end of this year, we will probably be
seeing a more challenging cash flow as we need to increase our

· Despite the strong first quarter, we have clear challenges ahead
of us, and the rest of the year is likely to become even more
demanding. There are no clear signs that the Russian economy and our
market would improve in the short term. In addition, recently the
ruble appreciated. As many of our competitors buy goods in hard
currency, this will impair our competitiveness going forward. This in
an already hard-pressed market with a strained general price picture.
We will probably have to respond to pressure on our margins during
the remainder of the year.

· In April it was announced that the proposal of the Board to the
AGM is that no dividends should be paid on the preference shares for
the time being. This does not mean that the payment of dividends has
been cancelled. The intention is that dividend payments should be
paid. But in a year like this, with the Russian market continuing to
fall, it would not be prudent to make a decision already now in May
to pay dividends in October 2016 and April 2017. In the same way as
last year, if the financial position allows it, the Board will call
for an extraordinary general meeting in October 2016 and/or April
2017 where the dividend payments can be decided.

About Ferronordic Machines

Ferronordic Machines is the authorized dealer of Volvo Construction
Equipment and Terex Trucks in Russia. The company began its
operations in June 2010 and has expanded rapidly across Russia and is
today well established in all federal districts with approximately 65
outlets and almost 700 employees. In addition to distributing and
providing aftermarket support to Volvo Construction Equipment
machines, the company has also been appointed aftermarket dealer for
Volvo and Renault Trucks as well as dealer for Volvo Penta in certain
parts of Russia. The company has also signed up some other high
quality brands such as Logset and several attachment manufacturers.
The vision of Ferronordic Machines is to be regarded as the leading
service- and sales company in the CIS markets. The preference shares
of Ferronordic Machines are listed on NASDAQ OMX First North Premier.
The company has appointed Avanza Bank AB as its Certified Advisor.

For more information, please contact:

Anders Blomqvist, CFO and Head of IR, Tel: +46 8 5090 7280, or

Presentation of first quarter report

A presentation of the first quarter report will be held by phone on 20
May 2016 at 9:30 a.m. CET.

The presentation can be accessed on the company's website prior to the
meeting. To join the presentation, please dial the phone number no
later than five minutes prior to the announced time.

Call-in numbers:

· Sweden Toll Number: 08 5059 6306
· Sweden Toll-Free Number: 0200 899 908
· UK Toll Number: 0203 139 4830
· UK Toll-Free Number: 0808 237 0030
· Russia Toll Number: 049 564 693 04
· Russia Toll-Free Number: 810 800 2136 5011

Participant code: 76112647#

Ferronordic Machines discloses the information herein pursuant to the
Securities Markets Act and/or the Financial Instruments Act. The
information was submitted for publication on 19 May 2016, 11:30 CET.


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