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Nurminen Logistics Plc                                                    Half Year Financial Report 7 August 2020 at 1:00 p.m.


Our China cargo train an engine of growth in the first half of the year: Net sales increased, and operating loss decreased. Cash flow from operating activities was positive.

Nurminen Logistics KEY 1.1.-30.6.2020 1.1.-30.6.2019
Net sales 36.5 34.5
Operating result -0.5 -1.7
Operating result-% -1.4% -5.0%
Net result -1.6 -3.2
Earnings per share (€) -0.05 -0.11
Cash flow from operating 3.4 0.1



Net sales increased and operating loss decreased in the first half of the year. China cargo train sales growth had an evident impact on the operating result for the first half of the year. April-June's operating result was EUR 0.1 million positive. Positive performance will continue and, in the second half of the year, we expect to see a significant improvement compared to first half of 2020.

Fixed costs are estimated to decrease by EUR 0.4-0.5 million in the second half of 2020 in comparison to first half. On the annual level fixed costs are estimated to decrease further by EUR 1 million compared to 2020.

The first half of the year was twofold, the January-March period was difficult performance-wise. The forest industry strike, a shipping container shortage, and disturbances in inland traffic in China due to the COVID-19 outbreak had a negative effect on business. Our China cargo train operations were stalled for over a month due to the exceptional COVID-19 situation as restrictions imposed by the authorities disrupted China inland traffic and the distribution of goods. At no point were any restrictions set on the movement of trains, which demonstrates the operational reliability of the cargo train product.  

I am delighted with the determination and competence of our personnel in developing and improving our business, despite the difficult circumstances during the first half of the year. The development has been noticeable in improved customer service which has influenced both net sales growth and the operating result turning positive in April-June. The ratio of fixed costs to net sales is still too high. To ensure continued improvement in profitability, net sales growth especially in China cargo train transport and operational efficiency improvements regarding all Finnish operations will remain our focus.
The China cargo train product highlights our unique operational capability, including Forwarding services and the Vuosaari cargo handling services, vast customer base representing different industries and trade, as well as a growing international clientele who benefit from our train service in shipments to Central Europe. These factors combined enable profitable growth in the future. Our China cargo train played a significant role in securing the availability of medical supplies for Finnish health care.

In June, we signed a contract with the Port of Narvik, with the aim of becoming a key player in fresh fish export to China. Deliveries will begin during 2020. We are introducing temperature-controlled reefer containers in our China cargo train transport, which opens up a notable new market and competitive advantage for us also in the export of fresh meat and beverages.

We strengthened our organisation in the international railway business to ensure continued good progress with China cargo train business. This enables the company to stay in pole position in logistics throughout the EU when it comes to accessibility of the China market. Our highly efficient cargo train product is the single greatest logistics innovation on the Finnish market in the 21st century. The growth prospects for the business are good.

A new operative management structure was introduced in June and it will emphasise profit responsibility and improve service development in the future.

Both cargo handling and forwarding volumes remained more stable than expected during the quickly evolving market situation. This stable development was attributed to our vast clientele across various industries and the regional coverage of our offices.

Cargo terminal services operated at a loss in the first half of the year and we will accelerate efficiency measures, which will lower fixed costs and improve service. Terminal handling was still strained by high rent level in offices where space is leased.  Cargo terminal handling services are expected to be more profitable in 2021. Higher performance standards will be set especially for the unique chemical terminals in Kotka and the Heavy terminal in Vuosaari.

Forwarding services continued to operate at a profit. Earlier investments in IT systems support upright development also in the future, considering the dependency on Finnish import and export volumes. Baltic operations remained stable.

All in all, the company's profitability is still unsatisfactory and further measures are needed to improve profitability and balance sheet structure.


Finland's economic growth slowed down in the first half of 2020 as a result of the COVID-19 pandemic. Trade between Finland and China remained at a good level. This was manifested in Nurminen Logistics' operations positively. China cargo train transport volumes grew rapidly due to the reliability and strong operational capability of the services as well as uncertainty related to other transport modes.


EUR 1000 1-6/2020 1-6/2019
Net sales 36,480 34,470
EBIT -508 -1,709

Net sales for the first half of 2020 increased to EUR 36.5 (34.5) million, growing 5.8 percent from 2019. EBIT improved to EUR -0.5 million (-1.7). Positive development is primarily due to growth in China cargo train services. Operating result grew also in forwarding services in the beginning of the year. Fixed administrative costs declined substantially from 2019.


The result for the first half of 2020 improved substantially from 2019, where ramping up costs of China cargo train burdened the company's operating result heavily. The COVID-19 pandemic influenced global logistics during the first half of the year. The reduction in industrial production was evident in declining transport volumes. Sea freight connections were limited and traffic between continents decreased.

A challenging operating environment was reflected in China cargo train services especially in February-March when shipments were delayed due to movement restrictions. The strong recovery in China in the second quarter together with reduced sea and air freight capacity and price increases supported sales growth for China cargo train business. The clientele expanded. Growth in net sales was manifested in the result. In January-June 2020, net sales of the China cargo train business increased by 44 percent from 2019 to EUR 4.1 million (2.9). The China cargo train business's share of total net sales is 11 percent (8).

Net sales of the Forwarding business grew, and the operating result improved in the first half of 2020. Positive development was seen especially in the first quarter when volumes were high in the forest industry and in steel imports. The COVID-19 effects were evident in consignment volumes mainly in May. In January-June, net sales totalled EUR 6.6 million (4.9) and growth from previous year was 36 percent. The Forwarding business amounts to 18 percent of group net sales (14).

In the Cargo handling business, the effects of the paper industry strike in January-February remained minor and the first quarter result improved from 2019. The influence of the paper industry strike and the COVID-19 pandemic were seen in the second quarter in declining inventory levels and delays in project deliveries. COVID-19 affected business less than expected. In January-June, net sales decreased by 8 percent from previous year to EUR 7.0 million (7.6). The Cargo handling business accounts for 19 percent of group net sales (22).  

Nurminen Logistics nominated a new operative management board in June. The operative management board enables the improvement of the service level and efficiency. It will support especially the development of fast-growing China rail service business.

Net sales for the Russian company and its profitability decreased year-on-year in the first half of 2020. The COVID-19 pandemic did not affect operations directly. In June, Olga Stepanova joined the operative management board and took over China rail freight service business. She was appointed Managing Director, OOO Nurminen Logistics. Stepanova has taken part in building the cargo train services network between China and Europe from its very beginning as Sales Director at Russian Railways. She has solid background knowledge and connections within the market and within the vast European customer base. Her know-how in bulk transport creates growth potential in Russian rail freight business.

In the first half of 2020, net sales of Baltic business declined and operating profit decreased from 2019. The effects of the COVID-19 pandemic remained minor. Strong export volumes supported the Lithuanian operations. The Latvian operations' net sales grew due to project deliveries to Russia and Central Asia. Net sales of the Baltic business decreased by 2 percent to EUR 18.7 million (19.2) in January-June. The business amounts to 51 percent of group net sales (56). The profitability of the Baltic business is at a good level and the prerequisites for business are good.


Nurminen Logistics estimates that the growth of the economy and markets will continue to slow down due to the effects of the COVID-19 pandemic. We believe that Nurminen Logistics' China cargo train business will continue its growth. The company's profitability will continue to improve. Demand for the company's specialised logistics services will remain good on account of our expertise.


Nurminen Logistics is not issuing financial guidance for 2020.


Any weakening in world trade and particularly weakening in Finnish exports and imports, due to the current situation would have a negative impact on the demand for the company's services and the result. The company's business development turning out significantly weaker than expected would have a negative impact on the company's financial position.

A second big wave of the COVID-19 epidemic in China would affect the country's inland logistics, which would in turn affect feeder lines.

The growth rate of China cargo train services may slow down from what is expected, particularly with regard to new types of shipments and new route connections, if COVID-19 passenger travel restrictions continue or are further tightened. The passenger travel restrictions may complicate commercial negotiations for our clients especially considering launches of new products.

More detailed information about the company's risk information can be found on the Investors page on Nurminen Logistics' website


Cash flow from operating activities amounted to EUR 3.4 million. Cash flow from investing activities totalled EUR -0.2 million. Cash flow from investing activities was impacted by investments in IT systems and digitaliza...

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