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Sales lift significantly year-on-year – third quarter improves slightly on first-half result – additional external financing In the first nine months of 2006, Swissmetal generated gross sales of CHF 240.5 million, a rise of CHF 93.2 million, or 63%, on the same period of the previous year. Gross added value sales, i.e., gross sales less the impact of metal valuations, amounted to CHF 89.3 million. That was CHF 11.1 million (14%) more than in the previous year. Three major factors are reflected in this figure: On the downside, sales were lost as a result of the strike in Reconvilier and it became necessary to turn down individual customer orders due to limited working capital. The acquisition of Busch- Jaeger Metallwerk GmbH in February 2006, on the other hand, had a positive effect. Gross margin for the first nine months of the year stood at CHF 98.5 million, a 22% increase year-on-year.
In the third quarter, Swissmetal was able to improve slightly on the first-half result. EBIT came in at CHF 7.2 million, a 170% advance on the year-back position. This figure includes the impact of the programme currently underway to improve inventory management, which led to overall stock being reduced to 13,500 tonnes at end-September 2006. The third-quarter operating result is broadly in line with expectations, since the annual shutdown common throughout the industry, and largescale maintenance work, traditionally fall within this period. However, a much better result would have been achievable this year. A slight increase in personnel expenses, attributable to the high sickness rate at Reconvilier, combined with the subsequent necessity of employing temporary staff at a comparatively high cost prevented this. Operating and administrative expenses rose substantially in the third quarter to CHF 25.2 million owing to consultancy expenses in connection with the integration of Busch-Jaeger Metallwerk GmbH and the effects of the strike at the Reconvilier plant, plus unplanned technical maintenance work.
After-tax earnings (EAT) came to CHF 3.1 million in the period under review, CHF 0.5 million up on the prior-year figure.
Total assets were CHF 208.5 million on 30 September 2006, an increase of CHF 45.7 million from the end of 2005, principally because of the acquisition of Busch-Jaeger Metallwerk GmbH.
Swissmetal generated an operating cash flow of CHF 13.9 million in the first nine months of this year, CHF 1.8 million lower than in the same period of 2005. Free cash flow stood at CHF -4.5 million, a decline of CHF 13.0 million year-on-year. Swissmetal is experiencing heavy investment activity this year, with capital spending of CHF 18.3 million to date. CHF 10.1 million of this was for the acquisition of Busch-Jaeger Metallwerk GmbH and CHF 5.7 million for the construction of a new extrusion press in Switzerland. The remainder represents investment in a new continuous type furnace for special alloys in Reconvilier and capital expenditures for the modernization and upgrading of facilities at all three sites.
Additional external financing |
