MALMO, Sweden—Hexpol A.B.'s half-year results suffered double-digit drops due to slow demand caused by COVID-19 and the Swedish group continues "intensive work" to cut costs.
Operating profit (excluding non-recurring items) fell 30 percent year-on-year to $89.5 million on 11 percent lower sales of $753 million during the first six months of the year, Hexpol reported July 17.
The second quarter was particularly impacted by the pandemic as production was partially suspended and demand fell, especially from customers serving the automotive industry, said Peter Rosen, acting CEO and chief fincial officer.
Sales fell 31 percent to $281 million during the quarter, due to low demand, while profits dropped by 62 percent to $23.5 million.
To meet and compensate the slump in demand, Rosen said his company has carried out "intensive work" to lower costs since the start of the year.
In addition to introducing "short term work" across its unit, Hexpol also implemented "significant cost savings through reduction of the number of employees, both in production and among white-collar workers," the acting CEO said.
A breakdown of group performance showed that sales for Hexpol Compounding fell by 11 percent to $697 million, while operating profit dropped 31 percent to $82.3 million.
The business area saw sales decreases to "a majority of the customer segments," mainly the automotive industry as well as general industry in all regions, Hexpol said.
Hexpol's Engineered Products segment reported a 7 percent decline in sales to $56 million for the first half. Operating profit fell 6 percent to $7.2 million during the period.
Here, all three product areas—gaskets, profiles and wheels—showed slightly lower sales compared to the corresponding period the previous year.