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SW Umwelttechnik Stoiser & Wolschner AG

EANS-Adhoc: SW Umwelttechnik announces first quarter figures

  ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
  distribution. The issuer is solely responsible for the content of this
  announcement.
3-month report
28.05.2009
. Revenue EUR8.4 million - similar to Q1 2005/2006
. Good prospects for Water Conservation business
. Results impacted by volatile exchange rates in CSE
. EUR41m order backlog points to positive outlook
SW Umwelttechnik's results for the first quarter of 2009 were 
impacted by the late restart to construction activity due to cold 
weather, and by the extreme volatility of Central and Southeast 
European (CSE) exchange rates. "On top of the harsh trading 
environment, especially in Hungary, we were hit by a very long winter
and the resulting low levels of construction activity, as well as CSE
exchange rate volatility," said CEO Bernd Wolschner, commenting on 
the interim results. The first quarter is normally seasonally weak 
for SW Umwelttechnik, and is not indicative of full-year performance.
In line with expectations, SW Umwelttechnik suffered steep declines 
in first- quarter revenue and earnings relative to a record-breaking 
comparative period in 2008. Revenue was 54% down year on year to 
EUR8.4 million (m) (Q1 2008: EUR18.4m) - similar to first-quarter 
levels in 2005 and 2006, when there were also severe winters.
Earnings before interest, tax, depreciation and amortisation (EBITDA)
were negative by EUR2.3m (Q1 2008: -EUR0.4m), and EBIT by EUR3.7m (Q1
2008: -EUR1.6m). These figures, too, were roughly the same as in 2005
and 2006.
Net finance costs reflected accounting (non-cash) exchange losses of 
EUR4.4m due to further heavy devaluations of CSE currencies. The 
Hungarian forint (HUF) and the Romanian lei (RON) hit historic lows 
of 309 and 4.3 to the euro, respectively. This led to a loss on 
ordinary activities of EUR8.9m (Q1 2008: -EUR3.8m).
As anticipated, by mid-May IMF and ECB support had lifted the HUF to 
278 and the RON to 4.15 to the euro. While both exchange rates are 
likely to remain volatile for some time they are seen stabilising at 
around the year-end 2008 mid rates of HUF 265/EUR and RON 4.0/EUR 
towards the end of this year.
Segment performance In line with management's forecasts, there were 
big shifts in segmental revenue performance.
The company's Water Conservation sector generated 48% of revenue (Q1 
2008: 27%) while revenue fell by 20% year on year, mainly as a result
of the unfavourable weather conditions. Revenue in the Infrastructure
sector was down by 72% for a 41% share of the total (Q1 2008: 68%), 
depressed by the slump in demand for industrial and commercial 
buildings and by weak residential construction, especially in the 
core Hungarian market. The revenue contribution of the Engineering 
sector advanced to 11% (Q1 2008: 8%) though revenue shrank by 38% 
year on year - likewise affected by the late resumption of 
construction work due to the cold weather. However order intake in 
this business rose sharply.
There were also marked performance variations between geographical 
markets. Revenue in SW Umwelttechnik's main market, Hungary, plunged 
by 66%, and the country accounted for only 40% of revenue (Q1 2008: 
62%), while sales in Austria dropped by 21% for a revenue share of 
30% (Q1 2008: 17%) and Romanian sales decreased by 45% for a 21% 
revenue contribution (Q1 2008: 17%).
Balance sheet Non-current assets were down from EUR77.6m to EUR69.7m;
exchange rate movements in the first quarter were responsible for 
EUR7m of the decline. Current assets also fell markedly, from 
EUR39.7m to EUR28.7m. Currency effects caused EUR4m of the change, 
and EUR6m was due to reduced inventories and receivables.
The EUR4.5m operating loss cut equity from EUR20.5m to EUR16m. In 
addition, noncash writedowns arising from foreign exchange rate 
volatility totalled about EUR10m (only in the first quarter of 2009),
leaving equity according to IFRS at EUR6.2m.
Applying the normal exchange rates of HUF 254/EUR and RON 3.60/EUR 
ruling on 31 December 2007 to non-current assets (which represent the
company's intrinsic value) and including EUR10m in undisclosed 
reserves in the shape of surplus land results in figures of EUR27.3m 
for equity and EUR119.6m for total assets (equity ratio 23%).
The company's debt burden increased by EUR2.3m from EUR77.6m to 
EUR79.9m during the first quarter, due to seasonal factors. However 
the ratio of long-term to total borrowings remained above 60%.
Order backlog Order backlog also mirrors the current economic 
situation, and the recent shifts between geographical markets and 
business segments. Order bookings during the quarter vindicated the 
company's strategy of securing local authority contracts for its 
Infrastructure and Water Conservation business sectors. As at 31 
March 2009 order backlog was down only 12% year on year, at EUR41m.
Order books slid by 60% to EUR12m in Hungary (Q1 2008: EUR31m), but 
climbed by 30% to EUR4m in Austria (Q1 2008: EUR3m) and more than 
doubled to EUR21m (Q1 2008: EUR10m) in Romania.
Order books were roughly stable in the Water Conservation sector at 
EUR7m, were up by 45% year on year in the Engineering sector at 
EUR17m, and were 40% down to EUR17m in the Infrastructure sector, 
which largely depends on demand for industrial and commercial 
buildings.
Outlook Trading conditions are set to remain challenging throughout 
2009. However local government investment spending should pick up 
because of the announced stimulus packages and the IMF's support for 
adjustment to EU standards.
Management sees maintaining liquidity as one of its key goals for the
current financial year. Because of this planned expansion, 
investments in Romania have been postponed and replacement 
investments are being limited to EUR2m. Inventory and receivables 
management have been optimised in order to increase liquid resources.
Thanks to the restructuring measures that have already been 
implemented, the company is well placed to cope with today's changed 
trading environment. The restructuring programme is expected to 
reduce fixed costs by EUR5m, leading to a marked improvement in 
profitability.
The company anticipates a decline in revenue due to the slump in 
investment by industrial and commercial clients, but expects this to 
be partly offset by increased public sector investment as a result of
the stimulus programmes. SW Umwelttechnik has an excellent reputation
as a local government contractor, as shown by current order intake.
Founded in 1910, SW Umwelttechnik remains a family business, though 
it has been listed on the Vienna Stock Exchange since 1997. The group
is known for its commitment to sustainable enterprise and rapid 
expansion in Central and Southeastern Europe (CSE). Its innovative 
environmental technology products are contributing to infrastructure 
renewal in CSE.
end of announcement                               euro adhoc

Further inquiry note:

Bernd Wolschner
Member of the Management Board
Tel: +43 (0)7259 31350
Mobile: +43 (0)664 3413953
Fax: +43 (0)7259 31356

Michaela Werbitsch
Investor Relations
Tel: +43 (0)7259 31350
Mobile: +43 (0)664 8117662
Fax: +43 (0)7259 31356
E-mail: michaela.werbitsch@sw-umwelttechnik.com
Web: www.sw-umwelttechnik.com

Branche: Technology
ISIN: AT0000808209
WKN: 910497
Index: WBI
Börsen: Berlin / free trade
Frankfurt / free trade
Wien / Regulated free trade

Plus de actualités: SW Umwelttechnik Stoiser & Wolschner AG
Plus de actualités: SW Umwelttechnik Stoiser & Wolschner AG