Ahlstrom Corp, Finland

Ahlstrom Corp, Finland

COMPANY WATCH Ahlstrom Corp, Finland Alfa Laval AB, Sweden Key Figures ( million) Fourth quarter ended 31.12 2008 2007 Key Figures (SKr million)...

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COMPANY WATCH

Ahlstrom Corp, Finland

Alfa Laval AB, Sweden

Key Figures ( million) Fourth quarter ended 31.12 2008

2007

Key Figures (SKr million) Fourth quarter ended 31.12 2008

2007

Net Sales Of Which: Filtration

419.0

462.5

Order Intake

6181

6576

66.2

78.7

Net Sales

8096

7220

Operating Profit/(Loss)

(35.4)

(34.7)

Cost of Goods Sold

4905

4354

Profit/(Loss) before Taxes

(49.5)

(43.2)

Gross Profit

3191

2866

Profit/(Loss) for the Period

(37.0)

(29.0)

215

206

Return on Capital Employed (%)

(10.8)

(10.7)

1488

1624

870

1056

2008

2007

1802.4

1760.8

Full year ended 31.12 2008

2007

Order Intake

27 464

27 553

306.5

332.5

Net Sales

27 850

24 849

14.6

25.8

Cost of Goods Sold

16 481

15 340

Profit before Taxes

(20.6)

0.2

Gross Profit

11 369

9509

Profit/(Loss) for the Period

(16.1)

1.3

R&D Costs

718

643

1.4

2.5

Operating Income

5736

4691

Net Income

3807

3180

R&D Costs Operating Income Net Income

Year ended 31.12 Net Sales Of Which: Filtration Operating Profit

Return on Capital Employed (%)

COMMENT Ahlstrom concluded a difficult fiscal 2008 with a disappointing fourth quarter that saw net sales fall 9.4% to 419.0 million and the company post an operating loss of 35.4 million. Jan Lång, Ahlstrom’s president and CEO, said the global economic downturn had been reflected in the company’s performance with a strong decline in the demand for most of its products emerging towards the end of the year coupled with a downsizing of inventory levels in the supply chain. Sales volumes decreased by 16.6% during the quarter, while comparable net sales adjusted for currency effects, plant closures and acquisitions decreased by 4.5%. Fourth quarter net sales in Ahlstrom’s Fiber Composites segment totalled 229.1 million, down 8.2% on the 2007 comparator due to lower volumes and pricing pressures in many products, especially in

March 2009

transportation filtration, wipes for home and personal care and in industrial nonwovens products. More positively, net sales grew in medical and food nonwovens applications. The Fiber Composites division posted a net loss for the quarter of 24.7 million, compared with a profit of 2.7 million a year earlier, representing 70% of the overall operating loss. Lång said that most of the decline was related to non-recurring items and writedowns related with the restructuring actions. Excluding the non-recurring items and writedowns, the operating loss for the segment was 4.5 million, compared with a year earlier profit of 15.7 million, reflecting the significantly lower level of demand and the weak performance of the wipes business. In addition, profitability was burdened by ramp-up and integration costs. ■ www.ahlstrom.com

COMMENT Alfa Laval enjoyed a good fiscal year in 2008 with net sales up 13.4% on a year earlier at SKr27 850 million and net income 19.7% stronger at SKr3807 million. Tightening demand in the fourth quarter, however, suggests more difficult times lie ahead. “2008 was a very good year for Alfa Laval with record sales and record profit,” Lars Renström, Alfa Laval’s president and CEO, said. “The demand, however, decreased towards the end of the year.” Results for the fourth quarter were mixed with net sales up 12.1% to SKr8096 million, while net income fell 17.6% to SKr870 million. The slowdown in demand during the period, meanwhile, was reflected in Alfa Laval’s order intake falling 15% on a year earlier to SKr6181 million.

Renström said that the decrease in demand was most significant within its Marine sector, while the recent positive trends for the company’s Energy & Environment and Parts & Service segments continued. In term of geographic markets, Renström said the downturn was especially apparent in Central and Eastern Europe and Asia, while Western Europe and North America performed on a similar basis to the corresponding period in 2007. Renström added that due to the expectations of a tough year in 2009, Alfa Laval had intensified restructuring initiatives to reduce capacity and costs. He said the company was projecting demand to decline further during the first quarter of fiscal 2009. ■ www.alfalaval.com

Filtration Industry Analyst

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