Semperit earnings remain weak despite higher income

Vienna – Semperit Group’s earnings (EBIT) for the first nine months of the year have declined 1.1% year-over-year to €46.1 million due in part to ‘one-off’ expenses related to restructuring at its conveyor belts segments.

The Austrian group announced 16 Nov that its revenue increased 3.5% for the nine months to end of September to €670m, compared to the same period in 2016.

Sales volumes increased in all segments but Sempertrans, the conveyor belts business of Semperit.

The decline in earnings, explained the Vienna-based rubber products manufacturer, was due to one-off effects such as “an impairment” of €26.0 million in the medical segment Sempermed and the €11.6 million expenses of the closure of the Sempertrans production site in France.

Operational EBIT, without one-off effects, fell to €7.9 million for the nine months – a significant decrease by 81.2% compared with the previous year.

While industrial hoses segment Semperflex and industrial products segment Semperform achieved positive EBIT contributions, operational earnings at Sempertrans “continued to be negatively impacted by margin pressure”, said Semperit.

The industrial sector, which includes Semperflex, Sempertrans and Semperform, reported a 5.3% increase in revenue to €409.8 million for the first nine months but its profitablity was significantly impacted by raw materials prices and the delay in passing price changes to customers.

Year-on-year, EBITDA for the sector fell by 56.8% to €31.0 million while EBIT decreased by 71.1% to €16.5 million. The closure of the French production site particularly impacted the sector’s EBIT.

“The reported loss in the third quarter largely results from one-off effects, however these results are by no means satisfying,” said chairman of the management board, Martin Fuellenbach.

For the coming quarters, Fuellenbach expects the company to focus on “a competitive cost structure” and an increased level of cost awareness in the entire company.

Semperit announced 9 Oct that its management board intended to initiate a “transformation process” based on the findings of a strategic study to be completed in the second quarter of 2018.

“Continuous and potentially new measures to increase profitability and to strengthen the balance sheet structure remain at the very top of the agenda of the management board,” said Semperit.

As a result, the company is considering further significant non-recurring charges in addition to already initiated measure will be in the coming quarters.

“Due to these developments, the outlook will remain suspended for the coming quarters,” the group statement concluded.