August 21, 2013
Remanufacturer looks to secure US acquisition as first half (H1) revenue comes in below budget.
German remanufacturer Turbon AG has released its first half sales and earnings figures, as well as announcing its plans to finalise an “asset deal” that will see the company acquire an unnamed US company described as an “established sales structure including an established brand and a wider range of products”, reports OPI.
Turbon stated that “all contracts are signed” and that only “final due diligence work” needs to be done before the deal is finalised; with the company expecting the acquisition to boost sales and earnings for the year as well as contribute to its goal of achieving “transactions worth hundreds of millions”.
Sales for H1 were reported to be €37.4 million ($50 million), a 14 percent decline on last year, with weaker demand and continued price pressure listed as the main reasons for the decline, although the deconsolidation of the Kores Nordic Belgium subsidiary at the end of last year accounted for around a third of the sales drop.
Earnings before interest and taxes (EBIT) fell by 30 percent in H1 to €2.9 million ($3.8 million) while net profit fell to €1.4 million ($1.9 million) from the previous year’s €2.3 million ($3.1 million). The company has however seen signs of a turnaround, with a year-on-year rise in sales during July, and expects this to rise from September following the US acquisition. Depsite this, Turbon has lowered its full-year sake forecast to €80 million ($107 million) and predicts a pre-tax profit of around €5 million ($6.7 million) for the end of 2013.
Turbon stated that its goal for the medium term is “to return to known sales in the hundreds of million with corresponding effects on earnings”, although it added that this would largely depend on the future price development in the industry.
To tackle the “extreme pressure on prices” faced by the company, Turbon said that it would “respond to these movements in terms of cost”, achieving reasonable price levels by focusing on quality and service levels; with the company admitting that “establish[ing] a more concrete profit forecast is difficult in the current market environment”.
Categories : City News