HESSLE, England—Fenner P.L.C.'s sales and earnings fell in the first half of fiscal 2015, principally because of the ongoing struggles of the firm's Engineered Conveyor Solutions division in the declining conveyor belting market.
While reporting a strong performance by its advanced engineering products segment, the Hessle-based company said that the ECS division underperformed in almost all of its target markets. It said that, in particular, ECS Americas continued to encounter weak market conditions in the U.S. as the company's coal mining customers faced falling natural gas prices, decreased coal mining production and the impact of a severe winter.
Fenner recorded a $5.4 million loss in the first half compared to net income of about $19 million in the first half of fiscal 2014. Sales fell to approximately $377 million from about $389 last year.
While the ECS division faced challenging market conditions, the AEP division's results were much better, said Fenner CEO Nicholas Hobson.
“AEP's industrial, medical, and other non-oil specialty polymer businesses, which account for some 70 percent of AEP's revenue, are expected to continue to perform well,” he said in a statement. “The financial results for the second half of the year will also benefit from the acquisition of Charter Medical.
“The remainder of AEP is seeing an impact from lower levels of activity in the oil and gas industry as a result of sharply reduced oil and gas prices.”
As for the Asia-Pacific region, Fenner reported an “on-going pricing pressure in Australia” while also experiencing reduced demand for belting products and services.
The growth previously anticipated in newer markets such as West Africa was not achieved as the mining industry suffered from lower commodity prices and the outbreak of Ebola, Fenner said.