Semperit suspends outlook after tough H1

Vienna – With a new management team, Semperit Group has taken its first steps in a transition phase intended to restore the profitability of key business segments, the Austrian medical and industrial rubber products group said 17 Aug.

Promising a thorough strategic review of the existing portfolio, new Semperit Group CEO Dr Martin Füllenbach said: “We will not leave any stone untouched in the organisation. To establish profitable growth in our corporate DNA, we will need to review core technology and processes.”

The comments accompanied Semperit’s first-half results statement, which reported "productivity gains" at Sempermed – a major international supplier of medical and industrial gloves and the group's largest business segment – through reducing costs in production, marketing and sales. The measures included a 14% reduction in employee numbers.

The six months also saw impairment costs of €26.0 million at Sempermed, restructuring expenses at Sempertrans in France of €6.8 million and €4.0 million valuation adjustments of capitalised IT costs at the group’s ‘corporate center’ segment.

All segments, except conveyor belts unit Sempertrans, contributed to the 5.2% year-on-year increase in first-half revenue, "largely driven by strong sales and higher volumes.

Semperit’s earnings for the period included a one-off gain of €84.8 million from the closing of the joint venture with Sri Trang of Thailand as well as negative one-off effects of €36.7 million. Excluding one-off effects, though, operating earnings (EBIT) slumped 81.6% year-on-year to €6.2 million

Within its Industrial sector – Semperflex, Sempertrans and Semperform –revenue increased in all segments except Sempertrans, taking total revenue up 4.2% to €280.3 million. However, higher raw materials prices meant profitability (EBITDA) fell 49.6% year-on-year to €26.4 million and EBIT by 61.1% to €16.6 million.

In terms of EBIT, earnings were particularly impacted by the restructuring expenses of €6.8 million at Sempertrans in France, the group noted.

The group’s sole Medical Sector unit Sempermed faced “a very difficult market environment, driven by price pressure and excess capacities,” during the first half.

Excluding one-off effects, operating EBITDA at Sempermed was down to €1.7 million from €5.3 million in the prior-year first half.

In its outlook for the full year, Semperit said it continued to have “limited visibility during the transition phase while, at the same time, volatility in raw material prices makes any attempt to provide reasonable guidance even more difficult.”

The group did, however, conclude that earnings for 2017 “will be significantly below the 2016 result and that outlook remains suspended for the financial year 2017.”