KHD EBIT close to breakeven in the first half
- Low order intake due to poor market conditions
- Revenues slightly higher than in the previous year
- Positive development in the service business partially offsets weak margin development in the project business
- Higher investments in strategic growth
- Comfortable liquidity and equity base
Cologne, Germany, August 28, 2014. The earnings position of KHD Humboldt Wedag International AG (KHD), one of the world’s leading providers of equipment and services for the cement industry, continued to be affected by weak market conditions and unsatisfactory margin quality in the order backlog in the first half of 2014. Revenues slightly increased to € 114.8 million with a slightly negative EBIT of € -0.9 million. The positive contribution to earnings of the Parts & Service segment was not able to fully offset the disappointing results in the Capex segment.
Although KHD’s order intake of € 52.0 million was higher than in the previous year (€ 40.4 million), it remained well below expectations. In the Capex segment a significant new order in Russia could not be booked as order intake due to continuing uncertainties in connection
with the Ukraine crisis. Therefore, new orders in the Capex segment amounted to a low € 24.6 million. The Parts & Services segment contributed € 27.4 million to H1 2014 order intake. As a result of the low order intake and the ongoing execution of existing projects KHD’s order backlog as of June 30, 2014 was at € 276.5 million and thus significantly lower than for the same period last year.
Revenues of € 114.8 million (previous year: € 111.5 million) came in largely from projects, which were taken in recent years under strong margin pressure. This affected KHD’s gross profit, which amounted to € 16.0 million (previous year: € 17.6 million), bringing gross profit margin to 13.9% (previous year: 15.8%). Earnings before interest and taxes (EBIT) amounted to € -0.9 million (previous year: € 3.1 million) in the reporting period. This corresponds to an EBIT margin of -0.8%. Positive EBIT in the Parts & Services business of € 6.3 million was offset by negative EBIT in the Capex segment of € -7.2 million. Earnings per share were € -0.02 (previous year: € 0.05).
“Despite the weak market and margin situation, we are investing in the expansion of our business model,” said KHD CEO Jouni Salo. “We have strengthened our service business and once again intensified research and development activities.”
Total cash and cash equivalents of € 228.0 million remain virtually unchanged when compared with the end of 2013. As of June 30, 2014, the equity ratio was at a comfortable 55.2%.
For the 2014 financial year, the Group is expecting total order intake to be slightly lower than the previous year’s figure (€ 172.4 million) and a revenue decline of up to 10%. The Group’s EBIT margin is expected to be slightly negative. Profit before tax should be positively affected over the course of the year, due to the conclusion of lending agreements to AVIC with attractive interest rates.
The complete 2014 Half-Year Report for KHD Humboldt Wedag International AG is available at www.khd.com under Investor Relations/News and financial reports.
KHD is a global leader for providing equipment and services to cement producers with over 150 years of experience in the cement industry. Process engineering and project management are among the core competencies of the technology-focused group. KHD offers a wide spectrum of products and services for the cement industry and is a leader in environmentally friendly and energy-efficient products for the grinding and pyro processing sections of the plants. The holding company KHD Humboldt Wedag International AG, based in Cologne, Germany, coordinates its internationally operating subsidiaries. The group employs more than 750 employees worldwide, including customer service centers in growing markets like India, Russia and the Asia Pacific region. KHD Humboldt Wedag International AG (ISIN: DE0006578008, WKN: 657800) is listed on the Frankfurt stock exchange (General Standard). More information: www.khd.com.
KHD Humboldt Wedag International AG
Tel.: +49 (0)221 – 6504-1500