SIMONA Group records slowdown in growth due to weak investment dynamics
The SIMONA Group continued to feel the adverse effects of sluggish investment spending in the second quarter as economic conditions remained volatile. In the first half of 2012, the plastics processing company generated sales revenue of €149.0 million, down €13.3 million or 8.2 per cent on the figure posted for the extremely buoyant first six months in 2011. In the second quarter, sales revenue declined by 10.5 per cent to €76.4 million (Q2 2011: €85.4 million).
"The SIMONA Group has been affected to an increasing extent by the progressive economic downturn since as early as the second half of 2011. Around the globe, companies' fundamental confidence has plunged as a result of the European sovereign debt crisis. Lower confidence translates into a lower propensity to invest; the impact on our business is particularly strong," says Wolfgang Moyses, CEO of SIMONA AG.
EBIT fell by 39.2 per cent to €6.5 million (HY1 2011: €10.6 million). The EBIT margin was 4.3 per cent (HY1 2011: 6.5 per cent). The year-on-year decline was attributable primarily to the continued rise in material costs up to May 2012 as a result of high commodity prices as well as a contraction in overall business.
Total assets increased slightly to €262.8 million compared with 31 December 2011. Equity declined marginally as a result of the dividend payment completed in June 2012. In 2011, the dividend had been paid in the second half of the year. At 66 per cent, the equity ratio remained high.
SIMONA is bracing itself for another period of sluggish business in the second half of the year. The lack of momentum in terms of investment spending has resulted in a decline in contracts and more intense competition to secure new orders. "Overall, we anticipate that demand will stabilise at the current level, provided that markets are not hit by any events of extreme proportions. We remain committed to our 2012 targets of annual sales revenue in excess of €300 million for the SIMONA Group as a whole and an EBIT margin of 5 per cent. However, they will be difficult to meet," says Moyses.
Other news from the department business & finance
