UPPSALA, Sweden--Regulatory News:
CEO’s comments After five consecutive quarters of increased year-on-year earnings, the Group’s (STO:BEIAB) profit declined during the first quarter of the year. We are seeing the effects of continued sluggish demand from industrial companies worldwide. During the preceding year, this was offset by strong demand in the nuclear power segment in Habia and the Chassis Springs business area in Lesjöfors. While demand from customers in the nuclear power sector remained strong at the beginning of 2016, Chassis Springs reported a weaker trend. Overall, this meant that sales during the first quarter declined approximately 1 percent and that profit after net financial items fell from MSEK 112 to MSEK 107. The operating margin declined from 12.6 percent to 12.1 percent during the quarter.
Cash flow after capital expenditures amounted to a negative MSEK 2 (neg: 34). As in the preceding year, this negative cash flow was mainly attributable to higher accounts receivable in Lesjöfors due to a seasonal sales increase in the Chassis Springs business area. Net debt totaled MSEK 205 (490). Net debt for 2015 was impacted by the payment of dividends. This year, dividends were paid after the close of the quarter.
Lesjöfors’s invoicing fell 5 percent to MSEK 510. The company’s two business areas – Chassis Springs and Industrial Springs – experienced an equal decline. Within Chassis Springs, which grew substantially in 2015, both invoicing and order bookings decreased. This decline was primarily attributable to the UK market, which displayed the fastest growth during 2015. These operations are strongly seasonal in nature, with peak sales in the first and second quarters. The level of incoming orders also indicates a slightly weaker trend at the beginning of the second quarter. Industrial Springs continued to feel the impact of the declining demand in general industry. Similar trends were reported in all geographic regions. Order bookings were in line with invoicing in both Industrial Springs and Chassis Springs.
Operating profit amounted to MSEK 90, compared with MSEK 100 in the year-earlier period, and the operating margin declined slightly. This decline in earnings was mainly attributable to the Industrial Springs business area.
Habia’s invoicing increased 8 percent to MSEK 204. This increase in invoicing was mainly attributable to higher sales of cables to customers in the nuclear power industry. The company’s other customer areas reported unchanged invoicing compared with preceding year. Order bookings were higher than invoicing and significantly higher than order bookings in the preceding year. This year-on-year improvement was attributable to customers in the telecom, nuclear power and defense industries, while order bookings from customers in general industry declined.
Operating profit totaled MSEK 22, compared with MSEK 21 in the year-earlier period, which means that the operating margin was largely unchanged.
Beijer Tech’s invoicing amounted to MSEK 188, which was unchanged compared with the preceding year. Fluid Technology reported weak growth and unchanged profitability. Industrial Products reported slightly lower sales than in the year-earlier period and weaker earnings. Profit was mainly impacted by the trend in the offshore sector in Norway.
Operating profit totaled MSEK 4 (1). It should be noted that the first quarter of the preceding year was charged with severance expenses of approximately MSEK 4 related to the change of President.
The trend noted in the first quarter of the year continued into the beginning of the second quarter. Demand in the operating areas impacted by the general economy remained weaker than in the year-earlier period. Sales in Lesjöfors’s Chassis Springs business area were also weaker than in 2015. This was partly offset by the strong performance of certain other segments, such as nuclear power cables in Habia. Overall, the comparative data for the second quarter is challenging.
Beijer Alma AB (publ) is an international industrial group that focuses on component production and industrial supplies. The Group includes Lesjöfors, one of Europe’s largest spring manufacturers, Habia Cable, one of Europe’s largest manufacturers of custom-designed cables and Beijer Tech, with strong positions in industrial supplies in the Nordic region. Beijer Alma is listed on NASDAQ OMX Stockholm Mid Cap.
Beijer Alma AB (publ) Dragarbrunnsgatan 45, Box 1747, SE-751 47 Uppsala, Sweden. Telephone 46 18 15 71 60. Fax 46 18 15 89 87. Registered office: Uppsala. Corp. Reg. No: 556229-7480. www.beijeralma.se
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