Vienna – Sepmerit Group has reported higher first quarter earnings (EBITDA) despite lower sales and Covid-19 impact.
Earnings rose 2.3% to €16.9 million over the first three months of the year on 6.5% lower sales of €199 million, the Austrian rubber group announced 19 May.
Semperit linked the improvement in profitability to its extensive restructuring scheme which has been underway since 2018.
“This is clear evidence of how well and successfully the measures of our restructuring and transformation process… are taking effect,” said Martin Fuellenbach, chairman of the board of Semperit AG Holding.
As part of the restructuring programme, Semperit's industrial sector now consists of four segments Semperflex, Sempertrans, Semperseal and Semperform.
Under the new layout, recently created Semperseal deals with sealing profiles and elastomer sheets while Semperform combines the business units handrails, cable car rings, ski foils and engineered solutions (SES).
Semperflex remains focused on hose production while Sempertrans is specialised in conveyor belts manufacturing.
During the three months to end of March, industrial sector’s earnings fell 28% to €17.7 million on 14.0% lower revenue of €122 million. Semperit linked the decline largely to “economic situation”, particularly attributable to the Semperflex segment.
By contrast, the troubled medical sector Sempermed posted earnings of €4.8 million, up from €100,000 loss, on 8.4% higher sales of €78 million.
The medical unit’s higher sales was attributed to higher volumes, particularly achieved through improved capacity utilisation.
In addition, the initial effects of the coronavirus pandemic were reflected in increased demand for rubber gloves.
According to Fuellenbach, Sempermed saw a “drastic improvement” due to turnaround measures, while the Covid-related increase in demand for medical gloves will, for the most part, be reflected in future quarterly results.
For the full year, Semperit said it had “limited visibility” as the effects of Covid-19 pandemic on global economy remained unclear.
The Austrian group said it expected a business year characterised by “significant challenges”, particularly within its industrial sector which was already impacted by global economic slowdown prior to Covid-19 outbreak.
Semperit said it had taken “preventive measures” to secure alternative suppliers in the course of the corona crisis but noted that ‘ongoing burdens’ such as production halts and disruption in supply chains will weigh on global economy.
“These market-relevant external factors will increasingly influence the business of the Semperit Group in the second half of 2020,” it concluded.