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Fibertex reports good first half year overall
20
Aug '10
Fibertex upgrades its profit guidance on full capacity utilisation in Personal Care in the second half year.

The improvement was mainly attributable to Martin, as this company reduced its losses relative to 2009 by a substantial margin. Grene and Fibertex also contributed to the improvement, while BioMar, Hydra-Grene and Xergi all reported lower profits relative to H1 2009.

Fibertex reported a good first half year overall. Full capacity utilisation in Fibertex Personal Care for the rest of the year will help to offset the pressure on margins in both divisions caused in the short term by surging raw materials prices. Against this background, Fibertex upgrades its EBIT forecast from the lower end of the previous forecast range to an interval at the upper end of the previous guidance.

Fibertex generated revenue of DKK 821.4 million in H1 2010, compared with DKK 643.0 million in H1 2009. The positive performance was the result of an increase in business activity in both Fibertex Personal Care and Fibertex Industrial Nonwovens, and of higher selling prices caused by higher raw materials prices.

H1 2010 EBIT was DKK 64.0 million as compared with DKK 59.9 million in H1 2009. The main reason why the EBIT performance did not match the improvement in revenue was the development in raw material prices, which especially in the first quarter lifted earnings. The H1 2010 profit before tax was DKK 50.1 million against DKK 46.0 million in H1 2009.

Relative to the end of the first half year of 2009, Fibertex has lowered its net interest-bearing debt by DKK 768.9 million to DKK 771.2 million at June 30, 2010. Net interest-bearing debt at December 31, 2009 was DKK 713.5 million. The change was the result of growing business activity and capacity expansion in Malaysia as well as dividend payments to Schouw & Co. of DKK 30.0 million in the first quarter of 2010.

The overall working capital grew by DKK 69.2 million from DKK 274.2 million at June 30, 2009 to stand at DKK 343.4 million at June 30, 2010. The working capital tie-up at December 31, 2009 was DKK 276.2 million.

Fibertex Industrial Nonwovens
Fibertex Industrial Nonwovens has thoroughly restructured and modernized its production facilities in recent years, launching new and improved products in a bid to build a platform for satisfactory earnings in a competitive market. As a result of these efforts, new super-efficient production lines are now in operation at the factories in Denmark and the Czech Republic. Earnings have improved in the Czech Republic, but the full effects of the new production platform have yet to feed through due to the lower-than-expected demand.

Demand is recovering in the industrial markets following the decline in 2009 and the severe winter that impacted infrastructure construction in Europe in early 2010. Demand is growing in all business segments, but the severe price competition prevails. At June 30, 2010, prices had been raised sharply in order to offset the steeply rising raw materials prices.


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