MTI Global posts net loss and 7.5 percent drop in sales for Q2

Mississauga, Canada - MTI Global Inc. posted a C$210 000 (€146 444) net loss for the second quarter of the year and a modest C$115000 net profit for the first six months on the back of currency fluctuations and delivery delays.

The Canadian silicone manufacturer also suffered a 7.5 percent drop in sales for the quarter to C$15.2 million but boosted first-half revenues by 1.1 percent to C$31.4 million.

The company blamed the flat sales on a weaker US dollar and Euro, compared to last year.

''The second quarter of fiscal 2006 has proven to be a challenging one from the standpoint of revenues and profitability due to the continuing effects of the strengthening Canadian dollar and significant delays in deliveries,'' MTI Global president and chief executive Bill Neill said.

The results compared to a net profit of C$1.2 million in the second quarter of last year and C$1.4 million for the first six months of 2005.

''However, the quarter was strong on several fronts including the awarding of new contracts in the aerospace division and the achievement of a number of milestones from the perspective of improved efficiencies at [MTI] Leewood,'' Neill said.

''At Leewood we have made progress towards achieving our goal of being profitable by the end of fiscal 2006.

''During the quarter, we purchased a high capacity oven line for sheet silicone production.

''The equipment is currently being built and is expected to be installed and operational during the fourth quarter.

''The addition of this equipment is aimed at improving production efficiencies on current business lines, as well as providing us with potential markets for high production sheet silicone typically used in industrial applications.''

Sales at MTI Global's Leewood elastomer unit -- based in Bremen, Germany and Stockholm, Sweden - rose by 24 percent in the first six months of this year and stayed unchanged in the second quarter, compared to results last year.

MTI's European silicone division reported a 17.8 percent jump in second-quarter sales to C$3.3 million and a 38.6 percent rise in sales for the half to C$7.1 million.

Aerospace division sales were 5.4 percent lower for the quarter at C$6 million but 2.6 percent higher for the half at C$11.8 million.

Revenues at the fabricated products division were 19.7 percent lower for the quarter at C$1.4 million and 12.3 percent lower for the quarter at C$3.2 millin.

The North American silicone unit suffered an 18.9 percent drop in quarter sales to C$4.5 million and a 13.6 percent reverse for the half at C$9.3 million.

''While [second quarter] results for fiscal 2006 were disappointing, we are still on target for the second half of the year,'' Neill said.

''On the currency front, we continue to work hard in implementing our strategy of matching the currency of our revenues with the cost of production.

''We continue to believe this is a sound strategy to mitigate currency risks.''