Showing posts with label Uponor. Show all posts
Showing posts with label Uponor. Show all posts
Monday, 25 February 2013
Finnish competition authority against Uponor KWH Group joint venture
Uponor Corporation (OMXH: UNR1V) said moments ago that The Finnish Competition and Consumer Authority is proposing fr the Market Court not to approve a joint venture plan of Uponor and KWH Group. The companies have been planning to merge their infrastructure solutions businesses. Competition authority feels that the transaction could lead to significant competition impediments in infrastructure products. Uponor and KWH are contemplating their next move.
Saturday, 31 December 2011
Tax authorities ruling goes against Uponor
Plumbing and indoor climate solutions provider Uponor Corporation (OMXH: UNR1V) is mired in disagreement with tax officials. Within a week Uponor gave two separate stock exchange notices on back taxes ordered in Finland. In the first release Uponor said that Finnish tax authorities ordered Uponor to pay 3.2 million for adjusted 2005 taxes and a week later a taxation adjustment decision for 2006-2009 was received and it too contains an order to pay back taxes, this time at 11.4 million Euro clip, consisting of taxes, interest and surcharges.
Uponor’s and tax authorities’ dispute rises from market-based internal transfer charges to Finnish subsidiary Uponor Business Solutions Oy. Tax authorities feel that the transfer prices needed to be taxed Group-wide instantly whereas Uponor’s view is that the payment on the taxes should be scheduled over a longer time as was applied by the company in its accounts as per OECD transfer pricing guidelines: in this case when the service (Uponor Group’s common information system implementation, maintenance and development) for the payment in question was taken into use in individual Group companies.
The penalties are due in January 2012. Uponor pretty much claims it has failed to make tax authorities to understand how the issue should be handled and plans to appeal and submit a request for rectification to the Board of Adjustment. Another potential sword falling in the horizon is a possible class action suit stemming from water damages caused by allegedly faulty plumbing fittings made and sold by a now defunct related company in the USA years ago.
Uponor has traditionally paid a hefty dividend and during the past five years, dividend was larger than EPS on 4 of them and not far off in the fifth. Although this can be explained by Uponor’s extremely strong financial position in 2006, with continued weak profitability since 2009 and these potential charges, the 2009-2010 level of 0.50-0.55 cents per share dividend shouldn’t be considered automatic for 2011 despite a still quite healthy financial position.
Uponor has performed relatively well in the past 10+ days in spite of the tax ruling mainly on better than expected data from US housing market. Prior to that there was a considerable dip on some heavy selling from a larger owner, which was quickly eaten away by bargain-hunters. Uponor starts seeing improved orders with a few month delay after housing market starts to pick up. In a down-cycle, Uponor is able to offset some of the decline from renovation works. A longer-term industry wide movement from copper pipes into plastic has been working in the company’s favour.
Uponor’s and tax authorities’ dispute rises from market-based internal transfer charges to Finnish subsidiary Uponor Business Solutions Oy. Tax authorities feel that the transfer prices needed to be taxed Group-wide instantly whereas Uponor’s view is that the payment on the taxes should be scheduled over a longer time as was applied by the company in its accounts as per OECD transfer pricing guidelines: in this case when the service (Uponor Group’s common information system implementation, maintenance and development) for the payment in question was taken into use in individual Group companies.
The penalties are due in January 2012. Uponor pretty much claims it has failed to make tax authorities to understand how the issue should be handled and plans to appeal and submit a request for rectification to the Board of Adjustment. Another potential sword falling in the horizon is a possible class action suit stemming from water damages caused by allegedly faulty plumbing fittings made and sold by a now defunct related company in the USA years ago.
Uponor has traditionally paid a hefty dividend and during the past five years, dividend was larger than EPS on 4 of them and not far off in the fifth. Although this can be explained by Uponor’s extremely strong financial position in 2006, with continued weak profitability since 2009 and these potential charges, the 2009-2010 level of 0.50-0.55 cents per share dividend shouldn’t be considered automatic for 2011 despite a still quite healthy financial position.
Uponor has performed relatively well in the past 10+ days in spite of the tax ruling mainly on better than expected data from US housing market. Prior to that there was a considerable dip on some heavy selling from a larger owner, which was quickly eaten away by bargain-hunters. Uponor starts seeing improved orders with a few month delay after housing market starts to pick up. In a down-cycle, Uponor is able to offset some of the decline from renovation works. A longer-term industry wide movement from copper pipes into plastic has been working in the company’s favour.
Wednesday, 10 August 2011
Uponor's recovery painfully slow
Uponor (OMXH: UNR1V) is the pet stock for many retail investors due to its generous dividend policy of the past and the considerable ownership that Paasikivi family maintains, but the results of last couple of years have been so lacklustre, that the company cannot keep paying such a high yield for long. The company headlines the interim report notice with ’strong organic growth continues’. However right after that Uponor admits that growth in key market areas excluding Germany softened.
When compared to Q2 2010, net sales were still up 8.8% to 222.6 million Euro, with all segments slightly on the plus side when corrected for currency effects. Some of that comes from an acquisition in Germany. Building Solutions North America was lagging the most. Second quarter cash flow from business operations was -10.5 million Euro, down from a positive number of the same magnitude last year. Profit for the period was 9.3 million.
Uponor maintains guidance of improved operating profit and accelerating organic growth when compared to 2010. Uponor foresees efficient net working capital management help to retain a good cash flow and investments not to exceed depreciation. Uponor foresees significant regional variations, anticipates slowdown of growth rate in Germany and says such has already happened in the Nordic and that the current crisis may escalate. The stock has plummeted 15% in the aftermath.
When compared to Q2 2010, net sales were still up 8.8% to 222.6 million Euro, with all segments slightly on the plus side when corrected for currency effects. Some of that comes from an acquisition in Germany. Building Solutions North America was lagging the most. Second quarter cash flow from business operations was -10.5 million Euro, down from a positive number of the same magnitude last year. Profit for the period was 9.3 million.
Uponor maintains guidance of improved operating profit and accelerating organic growth when compared to 2010. Uponor foresees efficient net working capital management help to retain a good cash flow and investments not to exceed depreciation. Uponor foresees significant regional variations, anticipates slowdown of growth rate in Germany and says such has already happened in the Nordic and that the current crisis may escalate. The stock has plummeted 15% in the aftermath.
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