Klockner & Comapny SE announced the significant increase in earnings in H1 2014
1. Shipments up 0.5% to 3.4 million tons despite restructuring and scaling back of low margin business;
2. Sales marginally down by 2.1% to around EUR 3.3 billion due to weaker US dollar and lower price level in Europe;
3. Focus on higher-margin business lifts gross profit margin from 18.3% to 19.3%;
4. EBITDA improves by 41% from EUR 72 million to EUR 101 million and EBIT nearly tripled from EUR 19 million to EUR 56 million;
5. Positive net income of EUR 13 million posted compared with a loss of EUR 20 million in the prior year period;
6. KCO 6.0 and KCO WIN self help measures contribute EUR 27 million to EBITDA;
7. Swiss reinforcing steel specialist Riedo fully acquired;
8. Third quarter EBITDA expected to be on a par with the prior quarter at EUR 50 million to EUR 60 million;
9. Significant increase in EBITDA to between EUR 190 million and EUR 210 million targeted for the current fiscal year;
10. Resumption of dividend payments planned for the fiscal year 2014.
At 3.4 million tonnes, shipments in the H1 of 2014 were up 0.5% on the prior year figure despite the scaling-back of low-margin business. Sales declined by 2.1% to EUR 3.3 billion due to the deterioration in the USD/EUR exchange rate and lower steel prices in Europe.
The focus on higher-margin business enabled the gross profit margin to be lifted from 18.3% to 19.3%. As a result, gross profit rose by 3.1% to EUR 627 million despite the decline in sales (previous year: EUR 608 million). EBITDA improved by 41% from EUR 72 million to EUR 101 million. The main drivers behind the rise in earnings were the contributions from the KCO 6.0 and KCO WIN restructuring and optimization programs totaling EUR 27 million.
EBIT nearly tripled from EUR 19 million to EUR 56 million. Net income returned to positive figures, with an amount of EUR 13 million being posted compared with a loss of EUR 20 million in the prior year period. Basic earnings per share rose accordingly from a negative EUR 0.19 to a positive EUR 0.13.
Mr Gisbert Ruhl CEO of Klockner & Company SE said that “After returning to profit in the first quarter, we sustained the upward trend in the second quarter too, despite conditions in Europe remaining difficult. This shows that the expansion of our activities in the USA and the very comprehensive restructuring measures are already proving increasingly effective.”
Source – Strategic Research Institute