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Ukraine crisis hits Nurminen

November 11 - Despite ongoing challenging market conditions, Nurminen Logistics continued to implement efficiency measures in the third quarter of 2014 to improve the company's cost structure.

Although net sales were down from EUR16.7 million (USD20.7 million) in the third quarter of 2013 to EUR12.6 million (USD15.6 million) in the same period of 2014; the company's operating result in the third quarter improved clearly, up from EUR-0.3 million (USD-0.37 million) to EUR0.2 million (USD0.24 million) year-on-year.

Olli Pohjanvirta, president and ceo of Nurminen, commented: "Positive development in our forwarding and value added services business unit continued, and we succeeded in increasing our market share in export and import services in Finland, despite the declining overall market. 

"As a result of strict cost control, the special transports and projects business unit clearly improved its result during the review period. However, postponements of customers' project deliveries into the future had a negative impact on the unit's net sales and result in the third quarter."

Market conditions continue to be challenging for the company, due to the tense international political situation around Russia. Nurminen believes that the decrease of volumes in railway logistics is over, but traffic from Finland to Russia will remain at a particularly low level, while Ukrainian traffic is still at a standstill.

In the special transport and project market, the uncertainty in the world economy and the tightening of financial markets were reflected in demand, which remained weak. The volumes of international project deliveries by the engineering industry continue to be low, said the company.

Despite year-on-year decreases in the company's projects business, Nurminen has intensified its customer acquisition efforts in project business in Russia, through means such as opening an office in Moscow.

Nurminen foresees that its key market of Russia and its neighbouring countries will reduce in importance in 2014 due to the continuation of the crisis in Ukraine, but that it will pick up again quickly, especially with regard to rail transport volumes and project transport, when the international political situation settles.

In September, Nurminen announced plans to implement cost savings by temporarily laying off all of its Finnish personnel for a maximum of 30 days during the last quarter of 2014 and in 2015.

The negotiations have been concluded and the company has decided to lay off all Finnish personnel for two weeks. Nurminen estimates that this will achieve cost savings of approximately EUR0.5 million (USD0.62 million).

The management team of Nurminen has decided to take part in the savings programme, and will give up two weeks' salary during the last quarter of 2014.

Senior vice president of the company, Fedor Larionov, resigned from his position at Nurminen on October 27.

www.nurminenlogistics.com

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