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Swissmetal: Gratifying first-half result as business conditions improve Operating conditions in the industry have created a favourable demand situation since the start of the year. At the same time, metal prices soared to an all-time high during the period, which represents a particular challenge for the company's pre-financing capacity.
Gross sales in the first half of 2006 amounted to CHF 157.6 million, which represents an advance of CHF 54.8 million, or 53%, on the same period of 2005. This substantial increase was due to the acquisition of Busch-Jaeger Metallwerk GmbH, much higher metal prices and an improvement in the economic climate. The Group's gross added value sales (i.e. gross sales less metal at standard metal costs) came to CHF 63.1 million. The company thus generated CHF 7.4 million, or 13%, more gross added value sales in the first half of 2006. The gross margin of CHF 68.5 million was CHF 10.7 million, or 19%, up on the previous year, owing mainly to the increase in sales. This figure includes a profit of CHF 6.0 million from sales of metals from stock.
The one-off impact of the aforementioned acquisition and the costs incurred directly as a result of the strike was a factor which affected all cost items. All told, the cost of the strike to earnings before interest and tax (EBIT), including the missing contributions to profit due to the loss of output, in the first half-year amounted to an estimated CHF 4-5 million. Even so, in the first six months the Swissmetal Group still managed to generate earnings before interest, tax, depreciation and amortization (EBITDA) of CHF 13.3 million (H1 2005: CHF 9.1 million). EBIT amounted to CHF 6.4 million, which was CHF 3.6 million, or 129%, up on the first half of 2005. The bottom line was earnings after tax (EAT) of CHF 3.1 million (H1 2005: CHF 2.5 million).
The Group's total assets increased by CHF 49.5 million to CHF 212.3 million overall compared to 31 December 2005, mainly due to the acquisition of Busch-Jaeger Metallwerk GmbH.
Swissmetal generated an operating cash flow of CHF 11.8 million in the first half of 2006, improved by CHF 1.6 million (+15%) compared to the same period a year ago. Despite the increase in metal prices and the growth in sales, CHF 3.3 million of additional liquid funds were created through more efficient management of net current assets.
There was a sharp rise in investment spending in the first six months (due, among other things, to acquisitions and the investment in the new extrusion press at Dornach), the net result of which was a marked swing in the Swissmetal Group's free cash flow in the first half of 2006 to CHF -4.4 million from CHF +5.9 million in the comparable period of 2005.
Swissmetal is expecting a continuingly favourable overall situation and a corresponding result for the 2006 financial year.
--------------------------- 1 The figures for Busch-Jaeger Metallwerk GmbH, which was acquired on 10 February, are included for the period from 1 February to 30 June 2006. 2 The 2006 figures for gross added value sales are not exactly comparable with those for 2005, since the values contained therein for the newly-added Busch-Jaeger Metallwerk GmbH are based on calculations that are sometimes different. They are currently still being harmonized. |
