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Gurit has reported net sales of CHF 182 million for the first half of 2016.
According to Gurit, this represents a currency-adjusted growth of 3% and +2.5% in reported Swiss francs over the previous year. The operating profit margin reached 10.5% at CHF 19.1 million operating profit in the first six months of 2016 containing one-off expenses of CHF 2.5 million, mainly related to non-cash impairment charges in the UK of CHF 2.0 million. Operating profit improved by 21% compared to CHF 15.8 million in the first half of 2015. Operating profit margin before one-off costs reached remarkable 11.8% of net sales.
The business unit, Composite Materials, is said to have achieved net sales of CHF 136.0 million in the first half of 2016 (1HY 2015: CHF 136.6 million), a decrease of -0.6% on currency-adjusted basis and -0.4% in reported Swiss francs. Wind energy material demand saw a sales contraction of -3.1% on currency-adjusted basis and -2.7% in reported Swiss francs. Despite growth in most other global wind energy regions, the anticipated weaker demand in the Chinese wind energy industry of some 15% compared to the record year 2015 had its overall negative impact on the Company due to its high importance for Gurit. Sales to other material markets (Marine, Aerospace, Industrial, Automotive Materials, and Ballistics) increased by 2.4% to CHF 62.5 million in the first half of 2016.
The business unit, Composite Components (car parts, bus components, structural engineering), reported sales of CHF 9.4 million for the first half-year 2016 as compared to CHF 14.9 million in the first six months of 2015. This represents a decrease of -35.4% on a currency-adjusted basis (‑36.8% in reported Swiss francs) and results from the known contract expirations over the course of 2015. Optimisation of the future operational footprint of the business unit led to the majority of the reported, mostly non-cash effective one-off expenses from asset impairments in the UK.
In Tooling, sales of wind turbine blade moulds and related equipment in the first six months of 2016 increased by 44.3% to CHF 36.8 million (1HY 2015: CHF 26.3 million) on a currency-adjusted basis and +40.2% in reported Swiss francs. International customer demand for mould systems was much stronger than anticipated in the first six months of 2016, and Chinese mould demand for longer blades held up stronger than expected, as well.
Gurit says it achieved a strong operating profit of CHF 19.1 million in the first six months of 2016. The operating profit margin accordingly rose to 10.5% of net sales containing one-off expenses of CHF 2.5 million, mainly related to non-cash impairment charges in the U.K. of CHF 2.0 million. Operating profit improved by 21% compared to CHF 15.8 million in the first half of 2015. Operating profit margin before one-off costs reached remarkable 11.8% of net sales.
Profitability in particular benefited from the continued good turnover in the tooling business as well as a favourable product mix in the composite materials business. Moreover, it says the ongoing operational improvements contributed strongly to the excellent profitability level. Equally, the raw material sourcing conditions were favourable in the first half-year of 2016.
In total, Gurit says that it generated a positive net cash flow from operating activities of CHF 12.6 million in the first half-year 2016 (1HY 2015: CHF 7.3 million) mainly due to the higher operating profit. Capital expenditures of CHF 7.5 million in the first six months of 2016 (1HY 2015: CHF 6.6 million) mainly related to completion of the setup of an additional Tooling production hall in China, finalisation of the setup of a semi-automated car part production facility in Hungary, completion of the balsa wood production expansion in Ecuador and the setup of balsa wood production at the existing site in China.
With an equity ratio of 72.9% at the end of June 2016 as compared to 71.4% at the end of December 2015, Gurit explains that its balance sheet remains very solid.
The Company confirms the target to deliver single-digit revenue growth for the full year 2016. In terms of profitability, some of the positive effects on profitability experienced in the first six months of the year are expected to even out over the course of the year resulting in an overall profitability level within the target range of eight to ten percent operating profit margin for the full-year 2016.
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