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DEUTZ presents first-half results

Friday, August 14th, 2009

Demand for DEUTZ engines and services in the second quarter of 2009 stabilised at a low level in what continued to be challenging economic conditions. The Company’s unit sales and revenue remained virtually unchanged on the first quarter of the year at approximately 30,000 engines and €220 million respectively. The operating loss incurred (EBIT before one-off items) fell sharply from €19.9 million in the first three months of 2009 to €3.5 million in the second quarter. This trend was primarily attributable to the MOVE programme launched at the end of 2008, which enabled DEUTZ AG to achieve cost savings of €19 million in the first quarter of 2009 and €43 million in the second quarter. However, the net loss after one-off items rose from €23.9 million in the first three months of 2009 to €38.7 million in the second quarter as a result of restructuring charges recognised for the ongoing reduction of its workforce as part of the MOVE programme.
DEUTZ generated unit sales of approximately 60,500 engines and revenue of €441 million in the first half of 2009. Compared with the first six months of 2008 – which had been DEUTZ’s strongest half-year of recent years – unit sales and revenue had therefore halved as a result of the sharp global economic downturn. Whereas the Company had reported an operating profit of €38.2 million for the first half of 2008, it incurred an operating loss of €23.4 million in the first six months of 2009. Its bottom line deteriorated from a net income after one-offf items of €30.3 million in the first half of 2008 to a net loss of 62.4 million in the corresponding period of 2009 owing to restructuring charges. DEUTZ reaped total cost savings of €62 million in the first half of 2009 from the early implementation of its MOVE programme.
DEUTZ AG does not expect to see a reversal of fortunes for 2009 as a whole but expects the level of new orders to stabilise, with unit sales declining by around 50 per cent year on year. DEUTZ hopes to have achieved total cost savings of approximately €100 million from its highly successful MOVE programme by the end of this year, although it does not expect these savings to fully compensate for the losses caused by economic conditions and is therefore expecting an operating loss for the year as a whole.
From 2010 the measures implemented as part of the MOVE programme will generate additonal, sustainable cost savings and significantly lower the Company’s break-even point. Dr Helmut Leube, chairman of the Board of Management: “Despite the enormous challenges that lie ahead, we remain confident that we are on the right track and will emerge stronger from this crisis.”
For further information visit: www.deutz.com

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