SW Umwelttechnik Stoiser & Wolschner AG
euro adhoc: SW Umwelttechnik Stoiser & Wolschner AG
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SW Umwelttechnik announces results for the first half of 2007
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
6-month report
08.08.2007
. Revenue up 15% in the first half year . Improvements of E1 million (m) and E4m in EBIT and POA, respectively . Record E25m investment program for 2007
Vienna listed SW Umwelttechnik Stoiser & Wolschner AG posted a 15% increase in revenues, from E36.2m to E41.5m for the first half of 2007. High capacity utilisation and a significant improvement in finance costs/income helped the Group to return its first-ever profit on operating activities (POA) for the first half. In order to speed up expansion the investment programme was boosted to a record E25m.
Second quarter revenues of E25.5m were slightly down on an exceptionally strong second quarter of 2006 (E27.0m), but the total for the first half was up by 15% to E41.5m.
First half revenue in Hungary advanced by 11% to E27.3m (HY1 2006: E24.5m), but this market's contribution to the total dropped to 66% (HY1 2006: 68%). The share accounted for by Austria also declined, from 24% to 19%, while Romania generated 9% compared to 5% in the like period of the previous year. Revenue from other EU member states was up to 6% of the total (2006: 3%).
The Infrastructure sector continued to perform well in Austria and Hungary, with revenue rising to E23.4m (HY1 2006: E18.6m). The Water Conservation sector recorded a fall in revenue, however, with Hungarian sales losing most ground. The revenue contribution from the Infrastructure sector was 56% of the total (HY1 2006: 52%) and that from the Water Conservation business 26% (HY1 2006: 31%), while the share from Engineering was virtually unchanged at 18% (HY1 2006: 17%).
While earnings before interest and tax (EBIT) were still negative, in line with the normal seasonal pattern, the loss narrowed by E1m year-on-year to E0.2m (HY1 2006: E1.2m), reflecting early production restarts due to mild winter. This strong beginning to the year was the main factor behind the E1.3m gain in EBITDA to E2.1m (HY1 2006: E0.8m).
Finance costs/income were driven by the steady appreciation of the Romanian lei due to heavy foreign investment, and the recovery of the Hungarian forint in response to budget consolidation measures, which together lifted the first-half financial result from a net loss of E3.1m in 2006 to a profit of E0.6m in 2007. This, in turn, turned POA positive by E0.4m, compared to a negative E4.3m for the period in 2006.
Trends by geographical markets Last year's cut in the number of production sites in Austria from five to three has led to excellent capacity utilisation in the Infrastructure and Water Conservation sectors so far in 2007. The restructuring actions sharply increased first-half earnings, while revenues held steady despite the merging of facilities.
In Hungary, capacity utilisation in the Infrastructure sector was outstanding, chiefly as a result of deliveries to industrial and commercial clients. The Water Conservation sector was impacted by disappointing public contract awards due to the deficit reduction measures. The Engineering sector was also hit by the public spending cuts. Although its market share rose from 4% to 7%, total contract awards for the first half were more than halved year on year. In Romania, the Infrastructure sector registered growth in deliveries but the performance of the Water Conservation sector fell short of expectations owing to project deferrals. This added to start-up costs, depressing consolidated EBIT by about E1m. It should be noted that projects are experiencing ongoing delays due to failure to make full use of available EU support payments.
Investment The Group's investment budget for 2007 totals a record E25m (2006: E15.8m). Capital expenditure for the first half was E14.6m, of which E6.9m went to the Hungarian operations and E6.4m to Romania.
The disposal of a six hectare property in Budapest will bring gains of E0.6m this year, and the main amount of E3m will likewise be reported as income from the realisation of undisclosed reserves in 2008. Migration of the remaining production equipment to the new South Budapest plant is scheduled for completion by October 2007. This will mark the conclusion of the investment programme in Hungary, where SW Umwelttechnik has spent some E45m on factory modernisation since 2000.
Other investment activity will mainly be focused on expansion in Romania. The medium-term plan is to build up to four factories. The first plant, in Timisoara has been operating since September 2006. The first development phase at the new Bucharest site, involving capacity for the Infrastructure sector, is in full swing with production scheduled to start up in autumn of 2007. Work on the second phase, which will create production facilities for the Water Conservation sector, is due to commence towards the end of 2007, and this capacity will be commissioned near the end of 2008. A ten hectare site has been acquired in Targu Mures and applications for planning permission are being processed. A search for a suitable site for a fourth factory, in neighbouring Moldova has been initiated.
Employees The Group's headcount contracted to 770, from 811 at the end of the first half of 2006. The decline is mainly explained by the successful restructuring exercises in Austria.
Order backlog Order backlog as at 30 June 2007 was down to E26.8m from E40m a year earlier, largely reflecting weak order intake by the Engineering sector in Hungary. Order bookings are not expected to pick up until the fourth quarter at the earliest.
Balance sheet The heavy investment programme swelled non-current assets from E47.4m to E71.4m, while revenue growth buoyed current assets to E45.8m (HY1 2006: E35.7m). Total assets rose by about 40% to E117.3m (HY1 2006: E83.1m). Financial liabilities climbed from E46.6m to E62.6m due to borrowing to finance expansion. The marked upturn in retained earnings was reflected in a 60% increase in equity from E17.1m to E27.2m.
Share price performance SW Umwelttechnik's return to the prime market segment of the Vienna Stock Exchange on 21 May 2007 was testimony to the shareholder confidence that has brought a share price run-up of almost 200% since the start of the year. Capital Bank is acting as the specialist for SW Umwelttechnik's stock.
Outlook for 2007 as a whole Due to the good operating results for the first half of the year, management is forecasting significant earnings growth, despite the reduction in public contract awards in Hungary and higher than expected start-up costs in Romania.
. The factory closures in Austria have led to a big improvement in EBIT. . The ambitious investment programme in Hungary will to all intents and purposes be completed in the third quarter. Capacity utilisation in the Infrastructure and Water Conservation sectors is expected to be high in the second half, while the Engineering sector is also expected to make up lost ground as public sector orders pick up. . In Romania, the next step after the start-up of the first factory in Timisoara in September 2006 will be the opening of a second site in the Bucharest area in autumn of 2007. A site for the third Romanian works, in Targu Mures, central Transylvania, has been acquired, and a fourth plant in Moldova is also planned.
Founded in 1910, SW Umwelttechnik remains a family business, though it has been listed on the Vienna Stock Exchange since 1997. The company is widely identified with sustainable enterprise and rapid expansion in Central and Southeastern Europe. Its innovative environmental technology is playing a major part in infrastructure renewal in CSE countries. In 2006 SW Umwelttechnik had a workforce of 836 at 16 sites and posted revenue of E102m.
Financial highlights
Q2 2007
|EUR m |2007 |2006 | |Revenue |25.5 |27.0 | |EBIT | 1.1 | 2.1 | |EBITDA | 2.3 | 3.1 | |POA | 1.8 | 0.6 |
HY1 2007
|EUR m |2007 |2006 | |Revenue |41.5 |36.2 | |EBIT |-0.2 |-1.2 | |EBITDA | 2.1 | 0.8 | |POA | 0.4 |-4.3 |
HY1 Balance Sheet
|EUR m |HY1 2007 |HY1 2006 | |Non-current assets | 71.5 | 47.4 | |Current assets | 45.8 | 35.7 | | | | | |Total equity and |117.3 | 83.1 | |liabilities | | | | | | | |Equity | 27.2 | 17.1 | |Borrowings | 90.1 | 66.0 | |whereof bank loans | 62.6 | 46.6 |
end of announcement euro adhoc 08.08.2007 08:00:00
Further inquiry note:
Dr. Bernd Wolschner, member of the SW Umwelttechnik Management Board
tel: +43 (0)463 32 109; fax: +43 (0)463 37 667
Mag. Romed Lackner, IR and Marketing
tel: +43 (0)664 811 7670; fax: +43 (0)463 37 667-170
E-mail: romed.lackner@sw-umwelttechnik.com
Website: www.sw-umwelttechnik.com
Branche: Technology
ISIN: AT0000808209
WKN: 910497
Index: WBI
Börsen: Börse Berlin / free trade
Börse Frankfurt / free trade
Wiener Börse AG / Regulated free trade