Theo Hoen, CEO of Marel, highlighted the main results of the second quarter ending 30 June.
The total revenues amounted 178.4 million which is a decrease of 4.3% compared to the second quarter of 2012. Operating profit (EBIT) was 12.3m or 6.9% of revenues. Net profit for the quarter was 5.2m.
“We had a decent quarter considering challenging market conditions. While remaining optimistic about the prospects, we anticipate that market recovery will take longer time despite our earlier view. The underlying market growth is present with investment need building up. We are ready to capture increased demand when markets recover.”
Theo explained the main growth drivers of the industry underpinning his view that Marel is well positioned in an attractive market that is growing. There is increased demand for food safety, automation in processing and more sophisticated products.
Marel sees that demand for new equipment and update of existing technology keeps building up. Clear signs of improvement are visible in the US after three years of low investment level in the poultry processing industry.
Erik Kaman, CFO:
Erik Kaman, CFO, gave a comprehensive overview of the key financials. He discussed the decrease of revenues between quarters:
“Lower revenues put pressure on the EBIT margin (6.9%), which has improved from Q1 but was below the Company‘s long-term target of 10-12%.”
Continued economic uncertainty and delay in investments is reflected in lower order book than in Q1.
“The reason for a slower pace in new orders is the hesitation to invest, in particular in larger projects, whereas standalone equipment, and spare parts and service are on track.”
He pointed out that net debt had decreased by 10.5 million in the second quarter which has been the trend in previous quarters. Marel will continue to maintain focus on operational efficiency and cost control.
At the same time it is clear that the Company’s overall cost base is geared towards capturing increased sales and market share in the near term.