JV termination led to high revenue growth for Semperit

May 17, 2017

SemperitDue to the termination of almost all joint ventures of Semperit Group with the Thai Sri Trang Agro-Industry Public Co Ltd Group, the Vienna-based publicly listed company saw high positive one-off effects in the first quarter of 2017. Although, the company’s operational business recorded negative earnings effects due to higher raw material prices.

Semperit increased corporate revenue by 4.5% from EUR 219.5 million to EUR 229.3 million compared with the same period of previous year. Both the Industrial and the Medical Sector contributed to this growth in sales with a strong sales performance and increase in volumes. EBITDA rose to EUR 94.4 million (after EUR 26.7 million in Q1 2016), while EBIT increased to EUR 86.4 million (after EUR 18.6 million).

This strong increase was due to the positive one-off effects from the successful closing of the joint venture transaction on 15 March 2017.

In the Industrial Sector (Semperflex, Sempertrans and Semperform segments), the production sites of all three segments were well utilised. Semperflex and Semperform generated further increases with a very good sales performance, whereas Sempertrans continued to be burdened by weak demand for heavy conveyor belts. Increases in raw material prices caused additional margin pressure in all three segments, having an above average negative effect on the Sempertrans segment.

The Sector revenue increased in the first quarter of 2017 particularly due to a very strong development in the Semperflex segment of EUR 133.6 million, a 4.9% increase to EUR 140.1 million. EBITDA declined significantly from EUR 25.1 million to EUR 17.2 million (-31.4%).

The Medical Sector (Sempermed segment) profited from the positive one-off effects of the joint venture transaction in the first quarter of 2017. This was offset by negative effects on raw material prices, persistently high margin pressure as well as generally unsatisfactory profitability.

The Sector’s revenue increased in the first quarter of 2017 by 3.9% to EUR 89.2 million due to volume growth. EBITDA rose to EUR 78.1 million (after EUR 6.1 million in Q1 2016) due to one-off effects from the joint venture transaction. The adjusted EBITDA, without the one-off effects attributable to the Sempermed segment, amounted to zero.

The Semperit Group continues to have a limited visibility for its operational business because of a very high volatility in the development of raw material prices. Semperit assumes that the weak market development of the first quarter of 2017 might partially continue in the upcoming reporting periods, so that considerable negative effects on operational results in comparison with the previous year must be expected.

Semperit’s Management Board has initiated further measures to increase profitability and review the IT strategy. This might also lead to significant one-off charges in the following reporting periods.

During this transition phase, the Management Board will focus primarily on increasing profitability. This shall be achieved by the above-mentioned measures in addition to a focus on cost reduction and efficiency enhancement in all segments and on the corporate level.

Due to limited visibility, an outlook for the financial year 2017 can still not be provided.

Semperit continues to focus on organic growth. Investments in the expansion of capacities will be continued. Total capital expenditures (CAPEX) of around EUR 80-90 million (2016: EUR 65 million) have been planned for 2017.

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(as of 15, May 2018)

Monthly The prices shown above do not include VAT @4% on purchase and expenses towards packing, transportation, warehousing  and other incidentals

Source: India Rubber Board


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