- Sales revenue in EPS Processing down slightly due to drop in volume in Packaging division
- Reluctance to purchase also felt in Technology business segment
- Further steps taken to cut costs
- Still no earnings forecast because of volatile market environment
On account of the volatile market conditions, the results for the first half of fiscal 2011/12 fell short of the same period the previous year. Lower revenue in the EPS Processing business segment was mainly due to a decline in sales volume in the Packaging division as a result of consumers’ reluctance to buy household appliances and electronic devices. The Technology business segment also felt that customers were exercising restraint because of the general global economic situation. Following reintegration into the two core segments (effective June 30, 2010), the Logistics business segment did not generate any sales in the period under review.
Total sales revenue amounted to €43.4 million for the reporting period (PY: €47.0 million). The operating profit (EBIT) was minus €1.16 million (PY: €0.62 million), while the profit on ordinary activities (POA) fell to minus €2.90 million (PY: minus €0.66 million).
|
Sales and Earnings Trends |
1st Half Year |
1st Half Year |
Change in % |
|
Sales |
47.0 |
43.4 |
-8 |
|
EPS Processing business segment |
39.2 |
37.6 |
-4 |
|
Technology business segment |
7.8 |
5.8 |
-25 |
|
Logistics business segment |
0.0 |
0.0 |
- |
|
Other activities |
0.0 |
0.0 |
- |
|
EBIT |
0.62 |
-1.16 |
- |
|
EPS Processing business segment |
2.04 |
0.39 |
-81 |
|
Technology business segment |
-1.18 |
-1.37 |
- |
|
Logistics business segment |
-0.25 |
-0.18 |
- |
|
Other activities |
0.00 |
0.00 |
- |
|
POA |
-0.66 |
-2.90 |
- |
|
EPS Processing business segment |
1.11 |
-0.99 |
|
|
Technology business segment |
-1.40 |
-1.65 |
- |
|
Logistics business segment |
-0.36 |
-0.26 |
- |
|
Other activities |
0.00 |
0.00 |
- |
|
Employees (annual average) |
619 |
592 |
-4 |
Profit after tax fell to minus €2.91 million (PY: minus €0.98 million) with the net loss at minus €11.38 million (June 30, 2011: minus €8.72 million).
The equity ratio was 12.7 percent, which was lower than at the balance sheet date (June 30, 2011: 15.2 percent).
At the reporting date December 31, 2011, the HIRSCH Servo Group employed 577 people (PY: 603). The payroll fell to 592 on average for the year (PY: 619).
The investments in the first half of the current fiscal year totaled €0.6 million (PY: €0.7 million). Primarily aiming to ensure liquidity, we will continue to restrict investing activities in the current financial year.
Business Segment Development in the First Half of 2011/12
In the EPS Processing business segment, which consists of the two divisions EPS Packaging and EPS Insulation, sales revenue totaled €37.6 million in the period under review (PY: €39.2 million). What accounted for the 4 percent decline in sales was lower volumes than the previous year in the Packaging division. The drop in volume as a result of consumers’ reluctance to buy household appliances and electronic devices, and higher fixed costs because of a change in the way Group charges are allocated resulted in a lower EBIT of €0.39 million (PY: €2.04 million). Furthermore, foreign exchange losses and higher interest expenses due to the higher interest rates had a negative impact on the financial result. The POA was minus €0.99 million (PY: €1.11 million).
The Technology business segment generated sales revenue of €5.8 million in the reporting period (PY: €7.8 million). What caused the decrease in sales was the lower number of units shipped, which however resulted in slightly higher contribution margins compared with the same period the previous year. Although non-recurring effects such as provisions and specific allowances for doubtful debts had a negative impact on the result, the change in the way Group charges are allocated meant that the fixed costs were still lower in total than the same period the previous year. Together with the slightly higher contribution margins, they led to a marginal reduction in the EBIT - in relation to the decline in sales - to minus €1.37 million (PY: minus €1.18 million). The POA was minus €1.65 million (PY: minus €1.40 million).
Effective June 30, 2010, the Logistics business segment was integrated in the two business segments EPS Processing and Technology, which was why it did not report any revenue. The EBIT totaling minus €0.18 million (PY: minus €0.25 million) is primarily due to accumulated depreciation and amortization. In addition, interest expenses led to a POA of minus €0.26 million (PY: minus €0.36 million).
Outlook
Continuing the restructuring measures, taking further steps to cut costs, and implementing the long-term financing plan will create a sound basis for the future of the HIRSCH Servo Group. Given the general economic situation and volatile market environment, we still do not however propose to forecast earnings for fiscal 2011/12.
Changes did not occur in the contingent liabilities and contingent claims shown in the 2010/11 annual report.
The half-year report meets the requirements of IAS 34. In addition, the same accounting practices and valuation methods were used as for the 2010/11 annual report.
No events of particular significance occurred after the balance sheet date that would have led to a different portrayal of the net assets, financial position, and results of operations.
The half-year report of 2011/12 did not undergo full auditing or review by the auditors.
Announcement Regarding First Half Year 2010/11 Report
The report for the first half of 2011/12 from July 1, 2011 through December 31, 2011 can be downloaded from www.hirsch-gruppe.com and is also available from HIRSCH Servo AG, Nr. 58, 9555 Glanegg , Austria or UniCredit Bank Austria AG, Schottengasse 6-8, 1010 Vienna , Austria .
The next date on the financial calendar is May 31, 2012 when the results for the third quarter of 2011/12 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, Phone: +43 4277 2211 312, E-mail: michaela.promberger@hirsch-gruppe.com
Marlene Wieland, Phone: +43 4277 2211 126, E-mail: marlene.wieland@hirsch-gruppe.com