Semperit sales fall, earnings increase

VIENNA—Amid difficult first half trading conditions, Austrian group Semperit A.G. reported that its earnings grew 4.8 percent, to $59.5 million, on sales of $494 million, 2.7 percent lower than in the first six months of last year.

Increased sales and higher profitability in the industrial sector helped to counter a weaker performance in the medical sector, the maker of latex gloves and industrial rubber products reported.

“Due to our strong sales performance, a capacity utilization above the industry average and new capacities in the industrial sector, we showed a stable operational development,” CEO Thomas Fahnemann said in the first half review.

On the other hand, low demand in “economically sensitive” markets, rising energy and raw material costs, and weak sales prices in the Sempermed medical and examination glove business impacted the group.

Semperit's industrial sector unit produces hydraulic and industrial hoses, conveyor belts, escalator handrails, construction profiles, cable car rings, and products for railway superstructures.

First half revenues from the industrial sector rose 3.7 percent to $303 million, while EBITDA climbed 2.3 percent to $59 million. The integration of the German profiles manufacturer Leeser partly helped the performance.

Sales at the Sempermed medical segment fell 11.4 percent to $190.3 million on price pressure and “the focus on high-margin customer relationships.” EBITDA dropped 32 percent to $8.9 million.

The “burdening influences” of the cooperation with Thai joint venture partner Sri Trang, and non-recurring costs from an ongoing capacity expansion in Malaysia, also impacted Sempermed.

Another concern for Semperit was the deterioration in business during the second quarter, with group sales down 6.1 percent to $247 million, and EBITDA 8.4 percent lower at $29.3 million.

In response, Fahnemann said the group was implementing programs for optimization and efficiency, while also targeting new markets.

“This and our new highly efficient production sites make us well prepared to perform better than the market even in the current environment,” he said.

For the full year, Semperit forecast the generally low demand in the industrial sector to continue due to the current economic situation. Medical product demand is expected to develop steadily but with higher raw material and energy costs and continuing price pressure.

Overall, the Austrian group said it was “not capable of achieving the operational results of 2015,” despite a good order situation for the coming months. Last year, Semperit generated sales of $1.03 billion and an EBITDA of $108 million.

In the medical sector, it said, the focus will be on the implementation of further production capacities in Malaysia and lifting profitability by process optimizations, efficiency enhancements and cost reductions.

Group-wide, capital investments of around $67.7 million are planned for 2016.

Semperit is based in Vienna and has its global research and development center is in Wimpassing, Austria. It employs about 7,000 worldwide and operates 22 manufacturing facilities—in Austria, Hungary, Czech Republic, Poland, Italy, Germany, France, Thailand, China, India, Malaysia and the U.S.