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SGL Carbon Fibers & Composites sees significant improvement
03 Sep '08
7 min read
SGL Group – The Carbon Company – continued the growth path in the first half year 2008 and increased its sales by 14% to €735.1 million supported by the continued good demand in all three Business Units. On a currency-adjusted basis, the increase in sales was significantly higher at 18%.
Considerable increases in raw material costs were compensated by higher prices and volume, a continued high capacity utilization as well as by cost savings of around €12 million.
Due to these improvements and the robust economic environment, particularly in the core steel and aluminum markets, EBIT rose by 24% to €151.3 million (H1/2007: €122.0 million).
For the fiscal year 2008 SGL Group confirms its positive outlook: Group sales is expected to grow by 10-15%. Earnings guidance related to EBIT will be raised from so far 15-20% to approx. 20%.
Robert Koehler, CEO of the SGL Group, "The first half of 2008 has been successful for the SGL Group. All Business Units recorded growth, some even significant growth. We benefit in our traditional businesses from the strong steel and aluminum economic environment.
In our growth activities around carbon fiber technology we profit from greater demand for alternative materials in the aerospace industry, the wind energy as well as in increasing degree from the automotive industry.
Given our full order books and positive signals from our customer industries, the full year 2008 will be another record year for us, despite the increasingly pessimistic economic environment."
As expected, net financing costs improved from -€50.3 million to -€16.3 million in the reporting period. There were one off expenses for refinancing and early repayment costs incurred in the first half 2007.
Due to the new financing of May 2007 the interest expense on loans decreased considerably by 31% to €9.2 million. Profit before taxes improved substantially by 88% from €71.7 million to €135.0 million.
The tax ratio improved by four percentage points to 27.1% compared to 31.1% in the first half of 2007, resulting in a net profit of €98.1 million (H1/2007: €49,4 million). Earnings per share (basic) nearly doubled from €0.78 to €1.53.
Due to the cash provided by operating activities of €92.9 million and the comparatively lower capital expenditure, net debt as at June 30, 2008 decreased by €5.4 million to €279.8 million compared to December 31, 2007 (€285.2 million).
Despite the increase in total assets, equity ratio rose from 42.9% at December 31, 2007 to 46.4%. Gearing (net debt/equity) decreased from 0.44 to 0.38. Free cash flow at €4.0 million remained on the level of the first half of 2007, in spite of the substantial increase in capital expenditure in property, plant, equipment and intangible assets by €48.1 million to €86.0 million as well as other investing activities of €2.9 million in the first half of 2008.
The increase in cash used ininvesting activities is primarily attributable to continued capital expenditures for our new graphite electrode and cathode plant in Malaysia as well as our carbon fiber capacity expansion.
Performance Products (PP) with record return on sales
The continued strong demand from the steel and the aluminum industry resulted in rising selling prices across all Business Lines as well as higher unit sales especially in graphitized cathodes.
As a consequence, sales in the first half 2008 increased by 14% to €441.1 million (H1/2007: €387.1 million). This corresponds to a currency adjusted increase of 20%. Despite higher raw material and electricity prices as well as unfavorable currency translation effects, EBIT in the first half of 2008 increased by 24% to €141.0 million (H1/2007: €113.6 million).
This improvement resulted from the price and volume effects mentioned above as well as cost savings of around €7 million. Return on sales thus reached a record level of 32.0%. This was partially the result of raw material inventory from the previous year as a result of which the cost of goods sold in the first half did not fully reflect full year raw material price increases. Capacity utilization remained very high across all Business Lines.
Considerable increases in raw material costs were compensated by higher prices and volume, a continued high capacity utilization as well as by cost savings of around €12 million.
Due to these improvements and the robust economic environment, particularly in the core steel and aluminum markets, EBIT rose by 24% to €151.3 million (H1/2007: €122.0 million).
For the fiscal year 2008 SGL Group confirms its positive outlook: Group sales is expected to grow by 10-15%. Earnings guidance related to EBIT will be raised from so far 15-20% to approx. 20%.
Robert Koehler, CEO of the SGL Group, "The first half of 2008 has been successful for the SGL Group. All Business Units recorded growth, some even significant growth. We benefit in our traditional businesses from the strong steel and aluminum economic environment.
In our growth activities around carbon fiber technology we profit from greater demand for alternative materials in the aerospace industry, the wind energy as well as in increasing degree from the automotive industry.
Given our full order books and positive signals from our customer industries, the full year 2008 will be another record year for us, despite the increasingly pessimistic economic environment."
As expected, net financing costs improved from -€50.3 million to -€16.3 million in the reporting period. There were one off expenses for refinancing and early repayment costs incurred in the first half 2007.
Due to the new financing of May 2007 the interest expense on loans decreased considerably by 31% to €9.2 million. Profit before taxes improved substantially by 88% from €71.7 million to €135.0 million.
The tax ratio improved by four percentage points to 27.1% compared to 31.1% in the first half of 2007, resulting in a net profit of €98.1 million (H1/2007: €49,4 million). Earnings per share (basic) nearly doubled from €0.78 to €1.53.
Due to the cash provided by operating activities of €92.9 million and the comparatively lower capital expenditure, net debt as at June 30, 2008 decreased by €5.4 million to €279.8 million compared to December 31, 2007 (€285.2 million).
Despite the increase in total assets, equity ratio rose from 42.9% at December 31, 2007 to 46.4%. Gearing (net debt/equity) decreased from 0.44 to 0.38. Free cash flow at €4.0 million remained on the level of the first half of 2007, in spite of the substantial increase in capital expenditure in property, plant, equipment and intangible assets by €48.1 million to €86.0 million as well as other investing activities of €2.9 million in the first half of 2008.
The increase in cash used ininvesting activities is primarily attributable to continued capital expenditures for our new graphite electrode and cathode plant in Malaysia as well as our carbon fiber capacity expansion.
Performance Products (PP) with record return on sales
The continued strong demand from the steel and the aluminum industry resulted in rising selling prices across all Business Lines as well as higher unit sales especially in graphitized cathodes.
As a consequence, sales in the first half 2008 increased by 14% to €441.1 million (H1/2007: €387.1 million). This corresponds to a currency adjusted increase of 20%. Despite higher raw material and electricity prices as well as unfavorable currency translation effects, EBIT in the first half of 2008 increased by 24% to €141.0 million (H1/2007: €113.6 million).
This improvement resulted from the price and volume effects mentioned above as well as cost savings of around €7 million. Return on sales thus reached a record level of 32.0%. This was partially the result of raw material inventory from the previous year as a result of which the cost of goods sold in the first half did not fully reflect full year raw material price increases. Capacity utilization remained very high across all Business Lines.
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