Nordex with robust growth in the first half of the year
• Increase in H1 sales to EUR 513 (H1 2008: 466) million
• 12% increase in H1 gross profit to EUR 112 (100) million
• CEO Richterich confirms guidance for 2009: “Nordex has sufficient financial resources and is investing in its operations to secure future growth”
Hamburg.- In the first half of 2009, the Nordex Group (ISIN: DE000A0D6554) achieved a 10 percent increase in sales to EUR 512.5 million (previous year: EUR 465.9 million) in line with expectations. This was accompanied by quarter-on-quarter growth of around 20 percent in its business volumes. Sales in the second quarter of 2009 amounted to EUR 279.2 million (Q1 2009: EUR 233.3 million). During the period under review, the major source of growth was in the United States, where Nordex achieved around 12 percent of its sales for the first time, up from roughly one percent in the previous year. Contributing around 80 percent to sales, business in Europe remained stable.
With fixed costs largely steady together with higher business volumes, gross profit widened by 12 percent over the previous year, rising by around 16 percent in the second quarter to EUR 60.0 million (Q1 2009: EUR 51.8 million). Consequently, earnings before interest and taxes increased by EUR 9.2 million to EUR 9.5 million, compared with the first quarter (previous year: EUR 16.2 million). An EBIT margin of 3.3 percent was recorded in the second quarter (previous year: 3.8%).
At the same time, the cost-of-materials ratio contracted by 70 basis points to 78.6 percent. However, the increase in the staff cost ratio to 10 percent in particular exerted pressure on operating earnings in the first half of the year. On the other hand, other operating expenses were reduced for the second consecutive quarter thanks to the cost-cutting measures taken. Consolidated net profit for the period dropped to EUR 2.3 million (previous year: EUR 13.4 million) primarily as a result of net borrowing costs of EUR 3.3 million and higher tax expense.
The equity ratio was at a high stable level of around 38 percent as of the balance sheet date. In addition, the Company believes that it has sufficient liquidity of EUR 106 million. Nordex took further steps to ensure future liquidity by means of two debt issues of EUR 125 million in total, which are not included in full in the balance sheet as of June 30, 2009. In the period under review, the working capital ratio rose to 20.3 percent (December 31, 2008: 4.8 percent), but had declined slightly towards the end of the period. This was due to high inventories of EUR 391.9 million and weaker new business, which declined by around 39 percent to some EUR 440 million in the first half of 2009 (previous year: EUR 717 million).
Orders in hand amounted to EUR 2.5 billion as of the balancesheet date (December 31, 2008: EUR 3.0 billion) and comprised firm orders worth EUR 791 million and contingent orders (basic agreements including reservation fee) of around EUR 1.7 billion. Thus, on the basis of firm orders and projects completed, Nordex is already assured of reaching its sales target for 2009. Assuming that sales volumes as a whole remain flat across the entire industry, Nordex still anticipates an increase in its own sales to approx. EUR 1.2 billion for the year as a whole, although profitability is likely to be weaker than in the previous year. As a result of higher business volume, the Management Board expects higher earnings in the second half of the year, compared with the first half. The working capital ratio is expected to decline to around 15 percent thanks to reduced inventories by the end of the year.
“With demand for project finance still strong, our customers are still experiencing a certain lack of credit availability. On a positive note, however, the economic stimulus packages have now been implemented and are beginning to take effect. I remain optimistic with respect to new business at the end of this year and the beginning of next year. For this reason, we are investing around EUR 70 million in our operations this year to prepare for greater growth in 2010. Thus, in the transitional year of 2009, we are retaining our core staff and have already decided to go ahead with the construction of production facilities in the United States,” said Thomas Richterich, CEO of Nordex AG.
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