TenCate records profit growth of 47% for H1

20 Aug '08

5 min read

General performance second quarter 2008: Sales in the second quarter of 2008 increased by 28% to € 302 million. In autonomous terms growth was 11%. The currency effect on sales amounted to -8%. The growth can be attributed to both American military orders for protective fabrics and vehicle armour (acquisition of Composix) and to European military orders for vehicle armour.

In addition, there were increasing sales of aerospace composites, mainly due to the deliveries to Airbus Industries and strong growth in the sales of synthetic turf activities.

Apart from the geosynthetics market in the US, which is mainly related to activities in the construction and infrastructure industry, there was in the second quarter a continuation of the growth in the core markets in which TenCate occupies leading positions worldwide.

The recent opening of the production site in China for geosynthetics and the joint venture in Thailand for safety fabrics has strengthened the position in the rapidly growing Asian markets.

The operating result before amortization (EBITA) rose in the second quarter to € 31.9 million (+59%). In autonomous terms, the rise amounted to 10%. The currency effect on EBITA amounted to -13% in the second quarter.

The EBITA margin rose from 8.5% to 10.5% in the second quarter.

The net profit before amortization and excluding the result from divested activities and exceptional items (cash earnings) increased by 52% to € 21.8 million in the second quarter. (Amortization amounted to € 3.8 million in the second quarter.)

First half 2008:
Sales in the first half amounted to € 511.6 million (2007: € 426.3 million). This sales growth of 20% was to a large extent the result of acquisitions. On an autonomous basis sales increased by 8%.

The currency effect on sales amounted to -8%, primarily as a result of the weak American dollar.

The operating result before amortization was € 45.3 million, a rise of 45% compared to the first half of 2007. In autonomous terms the rise was 5%. The currency effect was -12%.

The EBITA margin rose from 7.3% to 8.9% in the first half of the year.

Cash earnings amounted to € 30.3 million for the first six months of 2008 (compared to 2007: +47%). The growth is above the previously indicated profit growth based on provisional figures, due to the completion of the processing of acquisitions.

The total amortization charge rose to € 4.9 million (2007: € 1.3 million) as a result of the acquisitions made during the first half

The net profit for the first half of 2008 amounted to € 25.4 million (2007: € 19.4 million).

Net earnings per share for the first six months were € 1.08 (2007: € 0.86).

Outlook for 2008:
The market outlook for TenCate's major core markets remains favourable. TenCate therefore expects once again a strong annual result.

The net profit before amortization and excluding the result from divested activities and exceptional items (cash earnings), which amounted to € 46.6 million in 2007, is expected to increase by at least 30%, barring unforeseen circumstances. The amortization charge for 2008 as a whole will be approximately € 10 million (2007: € 3.6 million).

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