KBA Posts Pre-tax Profit in Third Quarter as Incoming Orders SpikeNovember 15, 2010
Finances and balance sheet outperform industry average
Notwithstanding an increase in working capital to support a bigger turnover in the fourth quarter, higher earnings and payments received helped to swell cash flows from operating activities to €11.6 million (2009: €9.5 million). This was much better than the half-year figure of €-18.1 million. Following investment payments the free cash flow came to €0.4m (2009: €-4.6 million). Alongside access to ample credit lines the group had funds amounting to €67.9 million. Its net financial position remained positive at €24.7 million, due in part to a reduction in bank loans to €43.2 million. Despite a €69.6m increase in the balance sheet total to €1,130 million the equity ratio was an above-average 37.3 percent.
Export level rises to 87.8 percent
The export level rose to an exceptionally high 87.8 percent. The proportion of group sales generated in the rest of Europe (30.3 percent) was well below the pre-crisis level, having slipped from 34.8 percent last year. The same applied to North America (9.7 percent). By contrast, sales to Asia and the Pacific accounted for 26.8 percent (2009: 23.5 percent) of the Group total, largely thanks to brisk demand from China. The figure of 21 percent for Africa and Latin America was also much higher. On the whole, KBA’s sales distribution reflects major regional differences in global market activity.
Positive outlook for 2010 – dividend on the cards
In the third-quarter report KBA president Helge Hansen reaffirmed the goals for 2010 stated in the spring: “I am confident that the scheduled rise in fourth-quarter sales will enable us to boost the year-end total by around 7 percent to achieve our goal of €1.1bn-plus. On current readings, our pre-tax profit will also be appreciably higher than in 2009 (€2.7m). If this is confirmed at the end of December, we shall consider paying a dividend again after a two-year hiatus.”
KBA is still pursuing its goal of engaging in a new, high-potential field of operation alongside its core business of press technology. Says Hansen: “Unfortunately this is taking far longer than I originally expected and predicted. Not every project that at first glance appeared promising and relatively quick to implement could withstand closer scrutiny.”
In view of the current economic and political uncertainties, management will not be venturing any projections for 2011 until March next year, when KBA’s financial statements for 2010 are published.
Source: Financial release.