Even after two extremely difficult years in 2008 and 2009, Rieter still has a sound balance sheet. The equity ratio on June 30, 2010, was 33% (36% on December 31, 2009) and net liquidity amounted to -18.0 million CHF (10.4 million CHF on December 31, 2009). Net cash from operating activities was marginally positive at 0.2 million CHF (-13.5 million CHF in 2009), despite the volume-related increase in net working capital and restructuring expenditures.
Capital expenditure in the first six months increased only slightly compared with the same period of the previous year to 26.7 million CHF (22.8 million CHF in 2009).
However, Rieter is planning to double capital expenditure in the second half of 2010 compared with the same period of 2009, primarily due to the expansion of capacity in Asia and for new customer projects. The financial stability of the Rieter Group was further reinforced by the successful placement of a 250 million CHF bond issue on March 30, 2010, thus enabling Rieter to diversify its financial resources and their maturities.
Rieter's workforce totaled 12'490 at the end of the period under review (12'761 on December 31, 2009), which corresponds to a reduction of 271 jobs in the reporting period. While personnel numbers were reduced by some 700 in the first half of 2010 as a result of restructuring measures and divestments, this reduction was partially offset by the continued expansion of both divisions in China and India as planned, and the Automotive Systems capacity increase in North America in response to high demand.
The overall proportion of personnel employed in high-cost countries continued to decline from 62% to 60%. The proportion employed in low-cost countries increased accordingly to 40% due to further expansion in Asia. More temporary personnel was hired at both divisions to manage the upswing.
Textile Systems: four-fold increase in orders received and marginally positive operating result The investment climate in the textile industry improved significantly in the first half of 2010. Markets are reviving across the board. The main reason for this is the especially favorable margin situation for spinning mills, as demand for yarn has grown and yarn prices have risen. At the same time raw material prices – especially for cotton – have not increased to the same extent. Added to this is a backlog of demand for investment in plant replacements and updates.
Orders received by Rieter Textile Systems in the first six months of 2010 increased by 290% to 738.6 million CHF (189.6 million CHF in 2009). The upswing was most pronounced for staple fiber machinery, but demand for technology components was also strong. The largest volume of orders came from Turkey, India and China. Other Asian markets such as Indonesia, South Korea, Bangladesh and Pakistan also recorded very strong growth.
More investments were also made by customers in the US and Brazil. After focusing mainly on plant replacementsin the second half of 2009, demand for new installations increased substantially in the period under review.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
