Malmo, Sweden – Hexpol AB has reported 3% year-on-year growth in operating profit to SEK1.13 million (€108 million) in the first half of 2019, on 11% higher sales of SEK 7.5 million.
Exchange rate fluctuations affected the overall revenue positively by SEK496 million, mainly due to a strengthening of the US dollar, the Swedish rubber group said in a statement 18 July.
Hexpol noted a “continued softening” in demand, mainly from automotive related customers, which led to a negative organic sales development in the three months to end of June, according to Mikael Fryklund, president and CEO.
Despite an increase in operating profit, the operating margin fell from 16.3% in the first six months of 2018 to 15.2% this year.
Hexpol attributed the decline to lower organic volume, mix changes and amortisation of acquired intangible assets.
Exchange rate fluctuations affected the operating profit positively by SEK81 million during the first six months of the year.
First half sales in Hexpol’s Compounding business area rose 11% to SEK6.9 million, while operating profit increased 4% to SEK1.06 million.
Revenue in the Engineered Products business area rose 5% to SEK 533 million, while operating profit remained flat at SEK68 million.
Hexpol acquired US-based Preferred Compounding in the beginning of July.
The acquisition, according to Fryklund, is expected to strengthen Hexpol's global positions within advanced polymer compounds.
Preferred Compounding, he added, offers “improved supply chain, excellence within polymer materials and solid application knowhow.”