• EPS Processing on a growth curve
• Increased sales in Technology business segment
• Logistics business segment not yet affecting net income
• Outlook unchanged from today's point of view
Despite the difficult market environment, the HIRSCH Servo Group reports an improvement in the revenue figures for the first quarter 2008/09 compared with the first same period in fiscal year 2007/08. The EPS Processing business segment in particular succeeded in continuing its growth curve, achieving higher sales and an improvement in operating profit (EBIT). Sales revenue in the Technology business segment was higher than the first quarter of the previous year, but has not yet had a positive impact on the operating profit. The Logistics business segment did not yet generate any income in the first quarter. EBIT as a whole rose 19% to 0.68 MEUR (previous year: 0.57 MEUR) and POA (profit on ordinary activities) improved to -0.50 MEUR (PY: -0.57 MEUR). Sales showed an increase of 19% to 27.6 MEUR (PY: 23.1 MEUR).
|
Profit and sales trends |
1st Quarter |
1st Quarter |
Change in % |
|
Sales |
23.1 |
27.6 |
19 |
|
EPS Processing business segment |
20.4 |
24.1 |
18 |
|
Technology business segment |
2.7 |
3.5 |
30 |
|
Logistics business segment |
0.0 |
0.0 |
- |
|
Other activities |
0.0 |
0.0 |
- |
|
EBIT |
0.57 |
0.68 |
19 |
|
EPS Processing business segment |
1.18 |
1.66 |
41 |
|
Technology business segment |
-0.57 |
-0.58 |
- |
|
Logistics business segment |
-0.04 |
-0.41 |
- |
|
Other activities |
0.00 |
0.00 |
- |
|
POA |
-0.57 |
-0.50 |
- |
|
EPS Processing business segment |
0.18 |
0.74 |
311 |
|
Technology business segment |
-0.71 |
-0.81 |
- |
|
Logistics business segment |
-0.04 |
-0.43 |
- |
|
Other activities |
0.00 |
0.00 |
- |
|
Employees (annual average) |
704 |
725 |
3 |
Profit after tax was up 21% to -0.33 MEUR (PY: -0.42 MEUR). The balance sheet profit was 11.03 MEUR (June 30, 2008: 11.36 MEUR).
The equity ratio was down slightly to 22.7% (June 30, 2008: 23.0%).
In the period under review, cash flow from operating activities of 1.96 MEUR (PY: -4.1 MEUR) was achieved.
At the reporting date September 30, 2008, the HIRSCH Servo Group employed 736 people (PY: 718). The annual average rose to 725 employees (PY: 704) with the increase entirely in EPS Processing.
Given the lack of contributions to operating profit last year, the HIRSCH Servo Group invested some 1.1 MEUR in the period under review, which was substantially less than in the same period the previous year (PY: 3.3 MEUR). The focus lay on investments in Austria and Slovakia.
Business segment development in 1st Quarter 2008/09
In the EPS Processing business segment with the two divisions EPS Packaging and EPS Insulation, sales increased organically by around 18% to 24.1 MEUR (PY: 20.4 MEUR). The higher sales in packaging and insulation meant that EBIT was up 41% to 1.66 MEUR (PY:1.18 MEUR). Streamlining production processes and additional orders also led to a substantial improvement in profitability and capacity utilization. The POA rose to 0.74 MEUR (PY: 0.18 MEUR).
In the Technology business segment, sales climbed 30% in the typically weak first quarter to 3.5 MEUR (PY: 2.7 MEUR). Despite the higher sales figures, EBIT and POA did not yet show a return to the black. EBIT remained virtually unchanged at -0.58 MEUR (PY: -0.57 MEUR) and POA dropped to -0.81 MEUR (PY: -0.71 MEUR), as the measures implemented (developing new markets, cost reduction program) did not yet have a perceptible impact in the first quarter.
The Logistics business segment with the two product groups Satellite Plants and Pallet Activities did not yet generate any income in the period under review. In the medium term, the segment expects Global Green Built GmbH, which supplies mobile manufacturing plants and also provides additional services, to win contracts from over 30 project inquiries from 20 countries and four continents. Since it has more or less completed development of the two-part pallet, marketing the pallet manufacturing plants can now begin.
Taking the difficult market environment into consideration, Logistics expects to sell some projects but as yet the resultant margins will not cover the fixed costs. As a result, the segment anticipates EBIT of -1 MEUR for the current fiscal year. The break-even point should be achieved following the increased business volume expected for 2009/10, once the products have become better known and the initial launch risk for the pallet production facilities no longer applies.
Outlook
From today's point of view , the management expects EBIT of 5.0 MEUR for the current fiscal year 2008/09 and consequently results that build on the performance already shown. Given the fact that meeting projected targets depends to a great extent on our project business, we wish to stress that on the basis of the information currently available we expect to deliver the forecasted results despite the effects of the financial crisis. However, in view of the global economic downturn, which in our opinion will affect all sectors of industry in the medium term and not therefore lead to any improvements in the market environment for the HIRSCH Servo Group, we cannot predict the actual course of business activities.
On the basis of our new and energy-saving products in the pipeline, such as the mobile satellite plants, pallet manufacturing facilities and a facade panel consisting of a shape-molded part, and our good strategic positioning in Eastern Europe, our Group with its four business segments (EPS Packaging, EPS Insulation, Technology, Logistics) has attractive potential for the future.
Changes did not occur in the contingent liabilities and contingent claims shown in the 2007/08 annual report.
The quarterly report meets the requirements of IAS 34. In addition, the same accounting practices and valuation methods were used as for the 2007/08 annual report.
No events of particular significance occurred after the reporting date that would have led to a different portrayal of the net assets, financial position and results of operations.
The quarterly report was not checked by the auditor.
Announcement regarding 1st Quarter 2008/09 Report
The report for the first quarter 2008/09 from July 1, 2008 to September 30, 2008 can be downloaded from www.hirsch-gruppe.com and is also available from HIRSCH Servo AG, 9555 Glanegg Nr. 58, Austria or Bank Austria Creditanstalt AG, Vordere Zollamtstrasse 13, 1030 Vienna, Austria.
The next date on the financial calendar is February 27, 2009 when the results for the first half year 2008/09 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, Thermozell® lightweight concrete products and transport pallets.
For further information, please contact Michaela Promberger, Tel: +43 4277 2211-312, Fax: +43 4277 2211-370, E-mail: michaela.promberger@hirsch-gruppe.com, www.hirsch-gruppe.com