Aug 22, 2011. /Lesprom Network/. The turnover of the Vapo Group in the January-June 2011 was Euro 418.1 million compared to Euro 387.6 million in the same period in 2010. Group operating profit amounted to Euro 30.8 million, or 7.4% of turnover, as the Group said in a press release received by Lesprom Network. The turnover of the business areas grew as follows: Biofuels 8.7%, Bioheat 21.1%, Environment 12.6% and Timber 0.3%. Profitability suffered from the oversupply situation in the pellet markets, increased transportation costs and higher raw timber prices. The Vapo Biofuels business area is responsible for the Group’s energy peat and environmental peat production, wood energy and energy crops and pellet production. The business area posted turnover of Euro 233.6 million and operating profit of Euro 25.4 million. The cold winter significantly increased energy peat usage, and due to the situation in the electricity market more electricity was generated in condensing power plants from fuel peat. In Sweden, demand for energy peat was at the previous year’s level. Wood energy, energy crops and the pellets businesses posted heavy losses. Within environmental peat, turnover and profitability developed positively. The Vapo Timber business area is responsible for the Group’s sawn timber production and sales. The turnover of the business area was Euro 69 million and operating earnings Euro -0.1 million. There was severe oversupply in sawn timber markets, which led to lower sales prices and higher inventory levels. Vapo Timber increased output by 5% in the first half, but sales prices were 3% lower than the reference period. According to Vapo’s CEO, Tomi Yli-Kyyny, the first half went almost as expected. We expect turnover in the full year to grow over the previous year, but relative profitability will not reach the previous year’s level. The main reason for this is the very difficult weather conditions in the current peat production season, which will lead to lower peat production volumes than in the previous year. Additional challenges in the second half include higher raw timber prices and the general uncertainty in the economy.