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Electronics Production | August 23, 2011

Komax doubles operating profit in 1H/2011

Komax was able to improve its results further in the first half of 2011. Net sales amounted to CHF 183.6 million, corresponding to a 16.7% increase. On a currency-adjusted basis, growth was as high as 23.5%.
The operating profit (EBIT) rose by 117.7% to CHF 26.7 million, while the EBIT margin came in at a high 14.5%. Group profit after taxes (EAT) amounted to CHF 17.0 million, an increase of 98.9% on the first half of 2010. Komax is expecting a very good result for the full year 2011 too.

The three business units – Wire, Solar and Medtech – benefited from the healthy order level at the start of the year and from a strong order entry in the first six months of the 2011 financial year. New orders for the first half of 2011 came in at CHF 210.7 million (previous year: CHF 168.5 million).

Net sales amounted to CHF 183.6 million (previous year: CHF 157.3 million). This equates to growth of 16.7%, or as much as 23.5% on a currency-adjusted basis. The operating profit (EBIT) increased to CHF 26.7 million, more than double the equivalent figure for the previous year (CHF 12.3 million).

Here the currency impact was less pronounced at -1.4%, as a relatively large proportion of costs can be generated abroad. The EBIT margin was at a high 14.5%. Group profit after taxes (EAT) reached CHF 17.0 million (previous year: CHF 8.6 million).

Komax’s financial situation continues to be very robust. The equity ratio stood at 64.3% as of 30 June 2011.

Wire business unit

Growth continued at an impressive rate in the Wire business unit. Despite a number of disadvantageous competitive parameters caused by Switzerland being the main production location, Komax Wire was able to consolidate its already strong market position. The very pleasing result was attributable to broad-based geographic demand, an advantageous product mix, further efficiency improvements and a greater sourcing of materials abroad.

Net sales amounted to CHF 103.2 million, while the operating profit (EBIT) came in at CHF 26.8 million. This represents a substantial improvement of 21.3% at net sales level and 41.0% for the operating profit (EBIT) on the Wire business unit's very good results of the previous year.

Solar business unit

The Solar business unit also recorded substantial growth. Net sales amounted to CHF 43.9 million (previous year: CHF 28.3 million), while the operating profit (EBIT) was CHF 2.4 million (previous year: CHF -3.3 million). The downsizing of the thin-film business and its strict focus on repeat orders, together with the concentration of activities in the crystalline technology business at the York site in the US, led to highly positive results.

The satisfying result was driven in particular by the high level of new orders at the start of the year and a very strong order intake in the first quarter, particularly from Asia. As the half-year progressed, however, a sharp slowdown in the order intake became apparent. This can be attributed to the excess capacity that is becoming evident in the solar industry, as well as to further cutbacks in feed-in tariffs that have been announced, particularly in the two main markets for solar modules, Germany and Italy.

Since the start of the second quarter, these factors have caused market participants to exercise greater investment restraint, a development that directly affects Komax Solar as a supplier of equipment.

Medtech business unit

The Medtech business unit also recorded a very positive development, although it continues to labour under a competitive handicap vis-à-vis its foreign competitors due to the strong Swiss franc. After a difficult second half of 2010, in which it recorded a negative operating profit (EBIT), profitability improved sharply in the first half of 2011.

This was assisted by the segment's more efficient structure following the recent reorganization, as well as by an increased share of repeat orders as a proportion of the total order volume. Net sales came in at CHF 38.6 million (previous year: CHF 45.0 million), while the operating profit (EBIT) ran to CHF 1.8 million (previous year: CHF 0.8 million).

Outlook

The current economic environment is fraught with uncertainty. However, Komax is anticipating a very good result for the full 2011 financial year too.

The Wire business unit is expected to continue to benefit from robust and broad-based demand. For the 2011 financial year as a whole, we are expecting both net sales and the operating profit (EBIT) to be on a high level.

The commercial environment confronting the Solar business unit is becoming increasingly challenging. However, thanks to the healthy level of orders at the end of the first half of 2011, Komax is nonetheless expecting this segment to increase net sales and report a positive operating profit (EBIT) for the 2011 financial year.

From today's standpoint, the prerequisites for a successful business year for the Medtech business unit appear to be in place. Thanks to the clear focus on projects with follow-up potential, this segment is increasingly acquiring orders that have repeat character. Following a negative result in 2010, we are expecting Komax Medtech to report a positive operating profit (EBIT) for the 2011 financial year.

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