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SSM Textile Machinery's order intake lower in H1
18
Aug '08
Sale of Satisloh division communicated mid-June. Orders received for continuing operations reached CHF 89.2 million (-24%) in the first half.

Gross revenues amounted to CHF 91.0 million (-16%). The exchange rate of the US dollar, which on average was 15% weaker than during the year-back period, had a negative impact both on sales and on the financial result.

The Group reported an operating profit from continuing operations of CHF 0.4 million (1H 2007: 5.6 million). The operating result includes restructuring costs amounting to some CHF 4 million at SSM Textile Machinery (closure of Hacoba).

The net loss from continuing operations amounted to CHF -1.5 million (1H 2007: +5.1). Net earnings (incl. Satisloh operations held for sale) came to CHF 9.2 million (1H 2007: 21.2). This includes currency losses of CHF -5.4 million (1H 2007: +2 million).

In a difficult sector environment, SSM Textile Machinery's order intake was 9% lower than the previous year. Sales declined by 15%. While the order intake from the Indian subcontinent and Latin America increased, Asia remained at the same level as the previous year.

Turkey recorded a marked decline. Despite a lower volume, the gross margin increased slightly. All costs (CHF 4 million) arising in connection with the closure of the Wuppertal site announced at the beginning of the year were recorded in the first half of the year.

The operating result was therefore only just above break-even point, but will no longer be depressed by restructuring costs in the second half of the year.

Mid-June saw the announcement of plans to sell the Satisloh division to the French group Essilor. The documentation has since been submitted to the competition authorities. The transaction is expected to go ahead in the second half of 2008. The division's operations are thus stated as "held for sale."

Satisloh reported an 18% drop in new orders and an 11% fall in sales. After adjustment for currency factors, the decline still came to 10% and 2% respectively.

The gross margin increased slightly after adjustment for currency factors. Thanks to rigorous cost management, operating profit came to CHF 15.7 million (1H 2007: 16.6), which corresponds to 14% profitability (1H 2007: 13%).

Ismeca Semiconductor recorded a sharp drop in new orders, which were down by one third on the previous year's high figure. The weakness of the US dollar was compounded by a slump in the semiconductor industry.

Thanks to a good order backlog at the beginning of the year, sales came to a respectable CHF 45 million. The improvement in the gross margin – thanks to shifts in costs – had a positive impact.

This led to a slight improvement in the operating result of CHF 1 million (1H 2007: CHF 0.6) despite an 18% fall in sales.

Outlook:
Business conditions in the second half of the year are expected to remain challenging in all divisions. Thanks to solid strategic positions and a lean cost base, the prospects for a satisfactory year remain intact

Schweiter Technologies AG

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