Semperit profitability up as restructuring continues

VIENNA—Semperit A.G. has reported a 19.5 percent year-on-year increase in first half earnings (EBITDA) at $43.5 million, as its reorganization measures take effect.

Sales for the six months to end of June fell 2.5 percent to $487 million during the first six months of the year, mainly due to a decline in Sempermed revenue.

This is the first time in two years the publicly listed group has achieved positive half year results with increasing profitability on EBITDA and EBIT level, the Vienna-based company reported Aug. 14."Our successful turnaround continues consistently and gained momentum, primarily in the second quarter, " Semperit Chairman Martin Fuellenbach said in a statement.

Semperit launched a major two-year reorganization bid in 2018, covering both its medical segment—Semermed—and industrial sector, which includes the Sempertrans conveyor belt manufacturing, Semperform construction materials and Semperflex hose production.

In March, the company announced that the turnaround in its industrial unit was completed and that focus would be on Sempermed, which produces goods for medical sector including latex gloves.

In addition to the restructuring bid, Fuellenbach said that the engineering group had launched a separate "SemperGrowth200" program to "define and create" the group's strategic reorientation throughout the next five years.

Fuellenbach did not elaborate on the new program, but said it is set for completion by 2024 to mark the company's 200th anniversary.

In its half year financial report, Semperit said it increased profitability amid subdued economic developments and global political uncertainties.

The raw material markets slightly eased compared with the previous year, but intensive competition continued for some materials, the company added.

In the industrial sector, revenue decreased by 0.7 percent to $323 million as Semperform recorded an increase, while Semperflex and Sempertrans showed slight declines.

The unit's overall profitability increased as EBITDA rose by 26.2 percent to $58.7 million. Semperit linked the growth to its ongoing restructuring and transformation.

In the Sempermed segment, strong competitive and price pressures, especially in North America, continued. Segment sales were down 5.9 percent at $164 million while earnings went into negative territory with a loss of $334,000.

Semperit, however, noted that the segment is returning to profitability, having registered positive EBITDA since March.

"The measures initiated in the course of the restructuring and transformation process have shown first positive effects (for Sempermed), although their sustainability still has to be proven," Semperit said, without giving further details.