Daetwyler continues restructuring efforts

ERJ staff report (DS)

Altdorf, Switzerland -- Daetwyler Group said it continued to grow revenue and profit during the six months to June 2008, beating the record performance of the first half of 2007. Net revenue was up 8.4 percent to CHF 648.1 million (Euro 401 million), from CHF597.7 million a year previously. For the second half of the year, Daetwyler expects continued good demand. With the addition of the ELFA Group consolidated since May 2008, the Group expects profit for the year to increase by approximately 30 percent.

The Rubber Division, operating as Daetwyler Rubber, built on last year's performance during the first six months of 2008. Net revenue increased 2.6 percent to CHF 80.0 million (Euro 50 million) from CHF 78.0 million a year ago even though Daetwyler Rubber had to contend with a decline in automotive activity in the US and weaker construction activity in Europe. Added to that, the same period last year included revenue from the sheet product segment that was sold. Despite adverse currency effects and rising prices for petroleum-based elastomeric materials, operating profit (EBIT) was also up, improving 3.2 percent year on year to CHF 6.7 million from CHF 6.5 million. The EBIT margin remained constant at 8.4 percent compared with 8.3 percent a year ago.

Daetwyler said work to gear up for a major contract from the consumer goods industry, announced a year ago, went ahead on schedule. Full mass production will get underway in the second half of 2008. The new factory being set up in Mexico has progressed according to plan and is scheduled to come into operation in the third quarter of 2008, despite difficult market conditions in the US.

Daetwyler said an expiring third-party manufacturing contract is forcing the division to reduce the workforce at its Czech plant by some 90 people by the end of the year. However, as part compensation, Daetwyler Rubber won additional attractive contracts for special gaskets and seals for tunnelling projects in Eastern Europe, India and the USA, while demand for construction seals increased again towards mid-year.

With the healthy order book, Daetwyler is confident that the Rubber Division will be able to grow revenue and profit for the second half of the year. To combat upcoming increases in raw material costs, Daetwyler Rubber is raising its prices, optimising the product mix and implementing further efficiency enhancements.

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Press release from Daetwyler