Malmo, Sweden – Slow demand caused by Covid-19 has resulted in double-digit drops Hexpol AB’s half-year results as the Swedish group continues ‘intensive work’ to cut costs.
Operating profit (excluding non-recurring items) fell 30% year-on-year to SEK796 million on 11% lower sales of SEK6.7 billion during the first six months of the year, Hexpol announced 17 July.
The second quarter was particularly impacted by the pandemic as production was partially suspended and demand fell from most customers, especially the automotive industry, said Peter Rosén acting CEO & CFO.
Sales fell 31% to SEK2.5 billion during the quarter, due to low demand, while profits dropped by 62% to SEK209 million.
To meet and compensate the slump in demand, Rosén said his company has carried out “intensive work” to lower costs since the start of the year.
In addition to introducing ‘short term work’ across all its unit, Hexpol also implemented “significant cost savings through reduction of the number of employees, both in production and among white-collar workers,” the acting CEO said.
A breakdown of group performance showed that sales for Hexpol Compounding fell by 11% to SEK6.2 billion, while operating profit dropped 31% to SEK732 million.
The business area, said Hexpol, saw sales decreases to "a majority of the customer segments", mainly the automotive industry as well as general industry in all regions.
Hexpol’s Engineered Products segment reported a 7% decline in sales to SEK498 million for the first half. Operating profit fell 6% to SEK64 million during the period.
Here, all three product areas – gaskets, profiles and wheels – showed slightly lower sales compared to the corresponding period previous year.