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KBA posts profit in first 6 months, Softer sales in some sectors

Monday, August 21, 2006

Press release from the issuing company

On August 11th for the first six months the KBA group posted a modest 5.1% lift in sales to €726.5m (2005: €691m). While the volume of new orders, at €719.3m, fell short of the prior year's exceptionally high figure of €860.9m following softer sales of sheetfed, webfed gravure and security presses, the pace picked up again in July. An order backlog of €1,033.7m (2005: €1,062.9m) will keep production plants busy for the rest of the year. A substantial boost in earnings from web and special presses in the second quarter transformed an operating loss of €6.5m from the first quarter into an €18.8m profit (2005: €0.4m loss), even though sheetfed earnings were well below target. According to KBA president and CEO Albrecht Bolza-Schünemann, efforts to secure an innovation premium commensurate with the competitive benefits delivered over more conventional sheetfed technology are frustrated by market pressures. After deducting a financial loss of €0.1m (2005: €5.7m loss) KBA posted a pre-tax profit of €18.7m (2005: €6.1m loss), closing the quarter with a net profit of €12.5m (2005: €6.6m loss) and a proportional profit per share of 77 cents (2005: loss per share of 41 cents). Cash flows from operating activities eased to €52.9m, from €64.2m a year earlier, while the free cash flow shrank to €32.5m (2005: €56.5m). Funds at the end of June (€143.4m) were substantially higher than at the end of 2005 (€129m). Equity stood at €456.2m, or 31.8% of the balance sheet total. Surge in exports to Asia and the Pacific While more sheetfed presses were installed in Germany, there were fewer installations of newspaper, commercial and gravure presses, as a result of which domestic sales dropped 12% to €120.1m (2005: €136.5m) and the export level climbed to 83.5% (2005: 80.2%). In keeping with the industry trend, exports to the rest of Europe, which remains KBA's biggest export market, climbed to €347.9m or 47.9% of group sales, a 7.4% improvement over last year's €323.9m and 46.9%. Following a stream of shipments to China, sales to Asia and the Pacific soared from €97.4m in 2005 to €162.2m, or 22.3% (14.1%) of the group total, and thus moved into second place ahead of North America (€66.6m and 9.2%). This will change in the second half-year when a big increase in sheetfed orders works its way through the system and a number of web presses are delivered. Increase in group payroll At the end of June the group workforce totalled 7,936. Excluding the addition of 73 staff following the first-time consolidation of subsidiaries KBA (UK) and KBA-France, the payroll increased by 87, most of them hired by KBA's production plants in Radebeul (Germany), Austria and the Czech Republic. 2006: €1.7bn-plus sales and leap in earnings Notwithstanding the negative impact of hostilities in the Middle East on energy and commodity prices, currency movements and exports, KBA is targeting an increase in group sales to €1.7bn or more and a substantial improvement in profits compared to 2005.

 

 

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