VIENNA—Prices of raw materials and an in-house strategic transformation initiative, combined with a plant closure in France and impairments at its medical division, have left Semperit Group in the red for the 2017 fiscal year.
In a March 16 annual result statement, the Austrian rubber goods manufacturer said the restructuring measures had a negative impact on earnings of about $50 million.
Earnings (EBITDA) dropped to around $38.8 million in 2017, down significantly from about $79.7 million the year before.
However, the company's adjusted EBIT figures showed a loss of about $866,000, compared to a prior-year gain of roughly $43.7 million. Adjusted earnings after tax, meanwhile, was about $47 million in the negative, as opposed to a gain of $16.2 million the year before.
This, Semperit said, was due to higher financial expenses and significantly increased tax expenses.
"We are extremely unsatisfied with the earnings development in the past financial year and see a drastic need for action," said Martin Fuellenbach, chairman of the management board of Semperit A.G. Holding.
Therefore, he went on to say, the company initiated restructuring measures at the beginning of 2018 that primarily aim at going back to adequate returns.
Fuellenbach said the measures were "already bearing fruit," with improvement potentials identified.
"Optimization of the operational business processes will play an essential role, because here we have spotted positive effects in a medium double-digit million range," he added.
As part of the process, the Vienna-based company will aim to reduce complexity in its organization.