TenCate to streamline production in order to further reduce costs
01 Nov '07
5 min read
Sales in the third quarter increased by more than 15% to € 233 million (autonomous +13.3%). The currency effect amounted to – 4.6%.
There was above-average growth in fire-resistant fabrics (including TenCate Defender M and TenCate TecaSafe). Sales of personal and vehicle protection (antiballistics) fell behind in the third quarter too. In the fourth quarter there will be a strong catch-up effect, as a result of which the year in this segment will end well.
In a cautious market, sales of geotextiles (geosynthetics) in the United States remained stable. Ongoing sales growth was generated in Asia and Europe. In the Netherlands there was a considerable expansion and reconstruction operation in synthetic turf production this year. This involved some start-up problems and it has not produced the required output.
In the third quarter the operating result increased by 9% to € 18.4 million (autonomous – 1%). The autonomous decline can mainly be attributed to the Geosynthetics & Grass sector. The reticent American economy resulted in lower profit margins at TenCate Geosynthetics.
The machine fleet at the Grass group in the Netherlands, which is not functioning to its maximum, exercised a considerably negative effect on the result. The production of synthetic turf yarns in Dubai (TenCate Thiolon Middle East) was in line with expectations.
The continuing weakening of the dollar resulted in a currency effect on EBIT level of – 6.7%. The net profit (excl. result on divestments) in the third quarter amounted to € 11.2 million (+ 3.6%).
Developments in the first nine months. Sales for the first nine months rose by 10% to € 660 million (autonomous +10.2%, currency effect – 4.2%). The operating result (EBIT) increased by 19.6 % to € 48.3 million (autonomous + 11.2%). The EBIT margin improved from 6.7% to 7.3%.
An amount of € 2.5 million (2006: € 0.4 million) was included in the operating result up to and including the third quarter for the amortization of intangible assets. Excluding this item, the operating result (EBITDA) increased by 24.5%. The net profit before amortization and before the result on divestments (cash earnings) rose by 21%.
The reported net profit for the first nine months amounted to € 30.6 million. Adjusted for the result on divestments, net profit rose by 13% (autonomous +12.9%; currency effect - 2.4%) to € 30.5 million. Earnings per share (adjusted for the result on divestments) increased by 4% to € 1.34.
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