The Finnish company’s net sales grew by 15 percent to €77.6 million for the second quarter ended June 30, a quarterly record. On a currency-neutral basis, Rapala’s sales were up by 5 percent; favorable currency effects contributed €6.3 million to the top line.
The company reported an operating profit of €12.5 million for the period, but excluding non-recurring items, the adjusted operating profit grew by 23.5 percent to €12.6 million, resulting in an increase in the comparable operating margin rose by 1.1 percentage point to 16.2 percent. The quarterly net profit increased by 14 percent to €8.4 million.
Rapala saw signs of recovery in the global economy, particularly in Eastern Europe, where several countries are back to their pre-recession trend of sales growth. The market has stabilized in the Nordic countries, Western Europe and Asia, and started to show improvement. The Nordics has a sales increase of 20 percent, and the rest of Europe rose by 23 percent. The North American market was stable from last year, and Rapala’s sales there rose by 10 percent. Revenues in the rest of the world jumped by 45 percent.
Turnover from the group’s fishing products segment grew by 13 percent, and its operating profit leapt by 41 percent. Net sales of third-party products, such as those of Shimano in certain countries, increased by 20 percent.
Rapala’s working capital initiative to reduce inventories and improve cash flow progressed during the second quarter, and the company introduced new products for 2011 at major fishing tackle shows in Europe and the U.S. Its Sufix 832, a new braided fishing line, won the Best Line Award at the International Convention of Allied Sportfishing Trades in Las Vegas this month.
As of June 30, orders were up by 47 percent to €33.2 million. The company expects net sales and the comparable operating margin for the full fiscal year to exceed last year’s, excluding non-recurring items.
In addition, the company has set a maximum budget of €600,000 to buy back up to 100,000 of its own shares, about 0.25 percent of the total equity. They will be used to help finance or carry out acquisitions or other investments, to settle Rapala’s equity-based incentive plans, to be transferred for other purposes, or to be canceled.
