Earnings Release • Aug 27, 2008
Earnings Release
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keywords: Financial Figures/Balance Sheet/6-month report
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Despite an adverse trading environment, particularly in Hungary, Vienna listed SW Umwelttechnik AG maintained its strong performance in the second quarter. First half figures confirm management's forecast of a 60% rise in EBIT and a gain in revenue of around 20% for the full year. Order backlog more than doubled year on year to stand at E55.6m on 30 June 2008, supporting upbeat second-half earnings expectations.
SW Umwelttechnik posted a 24% increase in revenue to E51.3m in the first six months of 2008 (H1 2007: E41.5m). Despite difficult trading conditions, improvements in revenue were seen across the group's core Austrian, Hungarian and Romanian markets.
Although SW Umwelttechnik normally reports negative EBIT for the first half due to seasonal factors, this year, for the first time ever, the group posted a profit for the year to 30 June of E2.4m (H1 2007: loss of E0.2m). EBITDA also improved, from E2.1m to E5.2m. The Engineering business put in a particularly encouraging performance, with earnings up year on year due to project completions.
Second quarter revenue registered a 29% year-on-year increase to E32.8m (H1 2007: E25.5m), while EBIT more than tripled from E1.1m to E4.0m.
Net finance costs for the first half as a whole reflected the group's recent rapid expansion and resultant large investments abroad. Non-current assets were boosted by the strong forint, but higher borrowings due to the investment projects and higher interest rates combined to push up net finance costs to E0.7m (H1 2007: net finance income of E0.6m).
Profit on ordinary activities (POA) rose sharply from E0.4m in 2007 to E1.7m in the first half of 2008. Second-quarter performance was outstanding, with POA jumping to E5.4m from E1.8m in the comparative period.
Order backlog Order backlog as at 30 June 2008 amounted to E55.6m - more than double the E26.8m year-earlier figure.
Segmental performance The segmental distribution of revenue in the first half of 2008 was as follows: Infrastructure 49.6% (H1 2007: 56.3%); Water Conservation 31.8% (H1 2007: 25.5%); and Engineering 18.6% (H1 2007: 18.2%).
The highest revenue contribution again came from the Hungarian market. The revenue share generated in Romania doubled to 17.4% as anticipated, while the Austrian share held up reasonably well at 17.7%, and Slovakia accounted for 1.9% of revenue and other markets for 2.5% of the total.
In the first half of 2008 the group invested E5.9m mainly in Hungary and Romania. The first development phase at the Bucharest plant is now complete, as is development of the pipe works at the South Budapest site.
The fallout from troubled financial markets did not leave SW Umwelttechnik's share (SWUT) untouched, and the price ended the half-year 30% down on the close on 1 January. Despite current bearish sentiment, the group's focus on Central and Southeastern Europe (CSE), infrastructure and environmental protection makes it an attractive sustainable investment.
Management's expectation of 20% revenue growth is based on the current order backlog of E55.6m, leadership of the Hungarian market and expanding market shares in Romania. The main reasons for forecasting a disproportionate increase in EBIT, by some 60%, are the positive earnings contribution from the Romanian operations and the improved performance of the Engineering sector.
Industrial and commercial demand in Hungary is seen picking up slightly in the second half of 2008. However, municipal investment looks set to remain well below year earlier levels as a result of the public expenditure cuts. A big increase in local authority spending is expected from mid-2009 onwards, with the Water Conservation sector the main beneficiary.
Demand from the Romanian industrial and commercial sectors is still booming, and municipal investment is set to grow noticeably in the second half of this year - though sharp increases are not expected before mid-2009. The second development phase at the Bucharest works, which will create capacity for the Water Conservation business, will begin towards the end of this year and is scheduled for completion in the summer of 2009. Construction of a third plant in Targu Mures in central Transylvania is now planned for the second half of next year.
Revenue from the Austrian market rose in 2008 on the back of product innovations, and the trading environment is expected to remain positive in the market segments the group serves.
Management is confident that the past year's strong trading performance in Slovakia will continue. Moves to export to Bulgaria, Moldova and Serbia from Hungary and Romania are under way. SW Umwelttechnik is also preparing to purchase land in these target countries in order to build new factories.
| E m | H1 2008 | H1 2007 |
|---|---|---|
| Revenue | 51.3 | 41.5 |
| EBIT | 2.4 | -0.2 |
| EBITDA | 5.2 | 2.1 |
| POA | 1.7 | 0.4 |
| E m | Q2 2008 | Q2 2007 |
| Revenue | 32.8 | 25.5 |
| EBIT | 4.0 | 1.1 |
| EBITDA | 5.6 | 2.3 |
| POA | 5.4 | 1.8 |
Founded in 1910, SW Umweltechnik 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 products are contributing to infrastructure renewal in CSE countries.
| Further inquiry note: Dr. Bernd Wolschner |
||
|---|---|---|
| Member of the Management Board | ||
| Tel: | +43 / (0) 7259 / 31 35-0 | |
| Mobile: | +43 / (0) 664 / 34 13 953 | |
| Fax: | +43 / (0) 463 / 37 667 | |
| Michaela Werbitsch | ||
| Investor Relations | ||
| Mobile: | +43 / (0) 664 / 811 76 62 | |
| E-mail: | [email protected] | |
| Website: | www.sw-umwelttechnik.com | |
| emitter: | SW Umwelttechnik Stoiser & Wolschner AG Bahnstraße 87-93 A-9020 Klagenfurt |
|
| phone: | 0043-463-321090 | |
| FAX: | 0043-463-37667 | |
| mail: | [email protected] | |
| WWW: | http://www.sw-umwelttechnik.com | |
| sector: | Technology | |
| ISIN: | AT0000808209 | |
| indexes: | ||
| stockmarkets: | ||
| language: | English |
Aussendung übermittelt durch euro adhoc The European Investor Relations Service
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