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SMS Group: Customers Remain Reluctant to Invest in New Plants
06/25/2015 - Order intake by the SMS group in the last business year declined to EUR 3.167 billion, (2013: EUR 3.309 billion). Sales, at EUR 3.406 billion, remained at the same level as the previous year (2013: EUR 3.495 billion).
In business year 2014, the SMS group pre-tax result declined to EUR 31 million (2013: EUR 178 million). The expenses for restructuring the SMS group depressed the result achieved in 2014.
In Business Area SMS Siemag (including Paul Wurth), order intake decreased by EUR 92 million to EUR 1.952 billion (2013: EUR 2.044 billion).
Business Area SMS Meer generated an order intake of EUR 1.050 billion, also hovering below the previous year’s figure (2013: EUR 1.104 billion).
Finally, the elexis group contributed EUR 175 million (2013: EUR 181 million) to the order intake.
Prospects
Burkhard Dahmen, Spokesman of the Managing Board of SMS Holding GmbH, says: “Up until the beginning of this year, our customers’ hopes of a bottoming-out of the steel market led us to expect positive impacts on our business. However, due to the global overcapacities, our customers remain reluctant to invest in new plants. What’s more, the enduring political uncertainty in our important sales markets of Russia and Ukraine is depressing our business even more.
We continue to see a large potential in the area of modernizations toward green, energy-efficient plant technology as well as in the entire field of services. Yet, looking at the overall market situation, consolidation and capacity reductions are necessary.
In view of this, we expect order intake in the current business year of 2015 to only match last year’s level.
There’ll likely be an increase in pre-tax profits – due to a drop in restructuring expenses.
Already being implemented is a wide-ranging cost-cutting program involving further process improvements. We’ll also continue to expand our growth areas of modernization, electrical and automation systems, service, and energy and green technology.
Looking at sales, we anticipate a similar level as in 2014 seeing that we’ll be able to work through the order backlog still on our books.”
To continue reading the full press release, click here.
In Business Area SMS Siemag (including Paul Wurth), order intake decreased by EUR 92 million to EUR 1.952 billion (2013: EUR 2.044 billion).
Business Area SMS Meer generated an order intake of EUR 1.050 billion, also hovering below the previous year’s figure (2013: EUR 1.104 billion).
Finally, the elexis group contributed EUR 175 million (2013: EUR 181 million) to the order intake.
Prospects
Burkhard Dahmen, Spokesman of the Managing Board of SMS Holding GmbH, says: “Up until the beginning of this year, our customers’ hopes of a bottoming-out of the steel market led us to expect positive impacts on our business. However, due to the global overcapacities, our customers remain reluctant to invest in new plants. What’s more, the enduring political uncertainty in our important sales markets of Russia and Ukraine is depressing our business even more.
We continue to see a large potential in the area of modernizations toward green, energy-efficient plant technology as well as in the entire field of services. Yet, looking at the overall market situation, consolidation and capacity reductions are necessary.
In view of this, we expect order intake in the current business year of 2015 to only match last year’s level.
There’ll likely be an increase in pre-tax profits – due to a drop in restructuring expenses.
Already being implemented is a wide-ranging cost-cutting program involving further process improvements. We’ll also continue to expand our growth areas of modernization, electrical and automation systems, service, and energy and green technology.
Looking at sales, we anticipate a similar level as in 2014 seeing that we’ll be able to work through the order backlog still on our books.”
To continue reading the full press release, click here.
