Raw materials costs hit Semperit business outlook

Vienna – Semperit Group is now expecting a “very weak” result and has suspended its business forecast for the first quarter of 2017, the Austrian gloves and industrial rubber products maker said 10 April.

Higher raw materials costs were only partially passed on to customers, and with a time lag, said Semperit. This, it forecast, will have “a considerable negative impact on operating earnings compared with the previous year over the coming months.”

Adjusted EBIT for the 2017 financial year – without one-off effects from its Thai joint venture transaction – will therefore be significantly below the equivalent 2016 result – €41 million after deduction of the earnings contribution from the Thai SSC / Siam Sempermed Corp. Ltd.

The board has determined that the long-term earnings outlook for the Sempermed medical products segment requires a critical review compared with the previous assessment.

Semperit said that while it “continues to pursue organic growth in future and was taking measures to increase efficiency, including a review of its IT strategy. The measures, it added, might lead to significant one-off charges in the next quarters.

“These developments have prompted the board to change the outlook for 2017. Due to limited visibility and the number of issues mentioned above, the outlook for 2017 has been suspended.”

Due to the high inflow of cash from the JV transaction, net debt was reduced by more than €150 million by the end of March, compared with the end of December 2016.

“We would like to use the next few months to identify further potentials to make the group profitable on a sustainable basis. As soon as there is better visibility after our current review we will inform about further progress,” said Gumbinger.