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Rieter begins processing order backlog amidst Covid-19

29
May '20
Pic: Rieter
Pic: Rieter
Rieter, a supplier of systems for short-staple fibre spinning, has announced that amidst Covid-19, the order backlog of well in excess of CHF 500 million is being processed largely according to plan, despite the existing bottlenecks in the supply chains. Less than 5 per cent of the orders in the order backlog have been cancelled, the company said.
 
The company stated that due to Covid-19, a large number of spinning mills have stopped production worldwide. Since the end of March 2020, this has led to low demand for spare parts and wear & tear parts and delays in testing programmes during the development of new machines. Customers are postponing investment projects or unable to implement them due to restrictions imposed by national governments. This results in low demand for new machines.
 
The company further reported that it expects sales and earnings in the first half of 2020 to be significantly below the prior year level. Rieter expects sales in the first half of 2020 to be less than CHF 300 million. Despite the countermeasures implemented at the net profit level, this will lead to a loss in the mid double-digit million range.
 
Rieter also considers to apply for short-time working for the areas with forecasted low capacity utilisation at the locations in Switzerland and Germany. The application will be for 40 per cent short-time working in the third quarter of 2020.
 
Also, as a sign of solidarity, Rieter’s board of directors, group executive committee and the senior management will waive 10-20 per cent of their salaries temporarily.

Fibre2Fashion News Desk (JL)


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