GESCO: First half of the year negatively impacted by postponement of orders, outlook narrowed
* First half of the year marked by delays in major orders * Improvement in the third quarter, negative impacts in the fourth quarter * Outlook for the full year narrowed
Wuppertal, 14 November 2016 - The economic environment in the capital goods industry, in which the majority of GESCO Group companies operate, remained cautious in the first half of financial year 2016/2017 (1 April to 30 September 2016). Ongoing issues in the eurozone, persistently low oil prices and general political uncertainty continued to dampen investment propensity. Many companies recorded low capacity utilisation overall, which ramped up the pressure on prices.
Against this backdrop, GESCO Group sales and earnings fell short of the previous year's figures in the first half of the year, as expected. The first half of the year was also impacted by clients postponing deliveries of major orders until the third quarter that were originally scheduled for the first or second quarter. All told, incoming orders amounted to EUR 250.3 million (previous year's period: EUR 258.1 million), and sales stood at EUR 228.7 million (EUR 237.3 million). The earnings figures were down significantly. As a result, EBIT stood at EUR 10.6 million (EUR 16.0 million), and Group net income after minority interest came in at EUR 4.8 million (EUR 7.9 million).
Cash flow, by contrast, posted remarkably positive development in the first half of the year. Cash flow from ongoing business activity improved significantly year on year, from EUR -3.2 million to EUR 13.9 million.
Quite a few machines were delivered during the third quarter, which accounts for the months from July to September 2016 in the case of the subsidiaries, meaning that they had an impact on sales and earnings. Incoming orders and sales were satisfactory, amounting to approximately EUR 126 million (previous year's period: EUR 120 million) and to approximately EUR 128 million (EUR 132 million) respectively.
Some deliveries will also be made during the fourth quarter, but operating business as a whole is exhibiting a downward trend. In addition, one-time expenses are negatively impacting earnings. We announced in the statement for the first quarter that we expected Group sales for the full financial year 2016/2017 of EUR 480 million at best and Group net income for the year after minority interest of EUR 13.5 million at best. We confirm this forecast for Group sales. From today's perspective, Group net income after minority interest of EUR 13.5 million is no longer realistically attainable. We now expect that figure to be between EUR 11.5 million and EUR 12.5 million.
The full half-year interim report is available at http://www.gesco.de/en/investor-relations/financial-reports/.
About GESCO GESCO AG is an industrial group with market and technology leaders in the investment goods industry focusing on production process technology, resource technology, health and infrastructure technology and mobility technology. As a stock listed company on the Prime Standard, GESCO AG offers private and institutional investors access to a portfolio of leading small and medium-sized industrial German companies, so-called hidden champions of Germany's Mittelstand.
Investor Relations * Oliver Vollbrecht Tel. +49 202 24820-18 * Fax +49 202 24820-49 E-mail: firstname.lastname@example.org * Internet: www.gesco.de
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Language: English Company: Gesco AG Johannisberg 7 42103 Wuppertal Germany Phone: +49 (0)202 248200 Fax: +49 (0)202 2482049 E-mail: email@example.com Internet: www.gesco.de ISIN: DE000A1K0201 WKN: A1K020 Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service