Oce Announces Second Quarter Results: Declining Revenue
Press release from the issuing company
CHICAGO, July 8 -- Oce reported earnings for the second quarter today. In the second quarter revenues declined by 1.4%. The organic growth in revenues amounted to 2.9%. After adjustment for the book profit of Euro 10.0 million on the sale of the lease portfolio, the organic growth in revenues amounted to 1.4%.
Non-recurring revenues increased by 16% [or by 10% excluding the sale of leases].
Recurring revenues [service, rental, leasing, business services and media] decreased by 1.3%.
In the first quarter the decrease in recurring revenues had still amounted to 3.0%.
Following the distinct upward trend in non-recurring revenues in the previous quarters, an upturn is now visible in recurring revenues as well.
The gross margin increased from 42.0% to 43.0%. This increase was mainly achieved thanks to an improved factory utilization level and a favorable product mix.
The positive effect of sale of the lease portfolio [0.9%] was cancelled out by the lower hedge results than in 2003 [- 1.1%].
Operating expenses increased by 1%.
Interest charges and tax charges were substantially lower.
Net income, including the book profit on the sale of the lease portfolio, increased by 13% to Euro 21.4 million.
Net income per ordinary share outstanding amounted to Euro 0.25 [2003: Euro 0.22].
Results first six months 2004
Revenues amounted to Euro 1,304.6 million, a decrease of 4.7% compared to the corresponding period of the previous year.
Revenues grew organically by 1.1%. This is largely the result of an increase in non-recurring revenues, which rose organically by 12.3%. After adjustment for the book profit on the sale of the lease portfolio [Euro 12.7 million], the increase in revenues amounted to 8.3%.
The effect of exchange rates on revenues amounted to 5.6%.
For the third quarter in succession growth was booked in the sales of printing systems.
The organic decrease in recurring revenues amounted to 2.1%.
The gross margin increased by 1.2% to 42.7%.
The results achieved on hedging operations reduced the margin by 0.4%.
Operating expenses remained at the same level as in the first six months of 2003. The organic increase in these expenses amounted to 4.3%, chiefly in marketing and sales.
These expenses increased as a result of the actions taken to expand Oce's distribution capacity and the costs of the corporate advertising campaign.
Operating income [EBIT] amounted to Euro 64.6 million, a decrease of 14.7%.
Financial expense [net] decreased by 42.1%.
The tax charge decreased by more than 2% to 28%. It is expected that this level can be maintained during the remainder of the year.
Net income amounted to Euro 38.6 million [- 3.8%].
Net income per ordinary share outstanding was Euro 0.44 [2003: Euro 0.46].
Oce realized for the third quarter in succession an acceleration of the sales of printing systems.
Continued growth in sales of machines, software and professional services is expected in the second six months of 2004.
Also the recurring revenues, although slightly decreasing, are starting to show an upward trend as well.
This development is encouraging and seems to point to a structural improvement, which should also begin to make itself felt in the development of income over the forthcoming quarters.
However, the strong euro will also continue to have a negative impact on revenues and income during the second six months of this year.
Under the present circumstances it is therefore not possible to give a forecast of the results for the full 2004 financial year.
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