The HIRSCH Servo Group reports sharp increases in sales, substantially higher raw material prices and foreign exchange earnings in the primary business segment of EPS Processing for the first six months of the fiscal year. Its Machinery and Plant Engineering segment returned a break-even result for the traditionally weak first half year. Profit on ordinary activities (POA) was down 0.26 MEUR to 2.05 MEUR (previous year 2.31 MEUR), although sales rose 39% to 44.3 MEUR (PY 31.8 MEUR).
In the period under review, the primary business segment EPS Processing saw the facility in Cluj/Romania and the extension in Wroclaw/Poland going into operation on schedule, and the plants in Lodz/Poland and Glanegg/Austria being expanded for some 6 MEUR. In spite of the initial losses from the expansion investments, the POA remained around the previous year’s level at 2.05 MEUR (PY 2.11 MEUR). Favorable here was the high increase in sales and the Hungarian forint exchange gain of 0.6 MEUR. What had a depressing effect was raw material prices rising by more than 35% over the past nine months, which could not be compensated for immediately by increasing sales price in the first half year. Passing the raw material price increases onto the customers should however have a positive impact in the second half year. All in all, sales in the primary business segment grew organically by 31%. If the sales from the Slovakian companies acquired in the previous fiscal are included, a rise of 62% to 34.5 MEUR can be reported (PY 21.3 MEUR).
The Machinery and Plant Engineering business segment achieved a break-even result (PY 0.21 MEUR). Sales were down 7% to 9.8 MEUR (PY 10.5 MEUR), although the highest number of orders in the company’s history at December 31, 2006 points towards a much more positive second half year.
Profit and sales trends for the business segments in the 1st Half Year 2006/07:
|
|
1st Half Year |
1st Half Year |
Change in % |
Fiscal 2005/06* |
|
POA |
2.31 |
2.05 |
-11 |
4.58 |
|
EPS Processing |
2.11 |
2.05 |
-3 |
2.89 |
|
Machinery and Plant Engineering |
0.21 |
0.00 |
- |
1.67 |
|
Other activities |
- |
- |
- |
0.02 |
|
Sales |
31.8 |
44.3 |
+39 |
68.7 |
|
EPS Processing |
21.3 |
34.5 |
+ 62 |
44.8 |
|
Machinery and Plant Engineering |
10.5 |
9.8 |
-7 |
23.8 |
|
Other activities |
- |
- |
- |
0.1 |
|
Employees (annual average) |
408 |
570 |
+40 |
438 |
Outlook
Management has raised the forecast for the full fiscal year 2006-07 regarding POA from 5.3 MEUR (PY 4.6 MEUR) to 5.7 MEUR and the earnings per share from 8.60 euros (PY 7.44 euros) to 9.30 euros and therefore expects a improvement in earnings per share of 25% over the previous year.
Given that the first half year is meeting expectations, organic sales growth are higher than the previous year in the primary business segment of EPS Processing and the growth strategy is being implemented, the basis has been created for sustainable attractive growth in earnings and the following forecast for the coming years.
Forecast POA in MEUR Earnings per Share in euros 2006/07 5.7 9.30 2007/08 6.5 10.70 2008/09 7.5 12.30
The next date on the financial calendar is April 30, 2007 when the results for the third quarter 2006/07 will be announced.
*The HIRSCH Servo Group is the EPS specialist on the Vienna Stock Exchange with manufacturing facilities in Austria, Hungary, Poland, Slovakia, Italy and Romania. EPS products (EPS stands for expandable polystyrene and is better known under the brand name of Porozell®) support a variety of functions, including energy savings, as well as sustainable and eco-friendly growth. Their wide-ranging applications cover packaging, shape-molded parts, building insulation, modular boards for underfloor heating, construction blocks and Thermozell® lightweight concrete products.
For further information, please contact Michaela Promberger, Tel: +43 4277 2211-312,
Fax ext.: 370, michaela.promberger@hirsch-gruppe.com, www.hirsch-gruppe.com