Record Vossloh Group earnings for 2003 / dividend increase to €1.30 proposed
2004 EBIT forecast reaffirmedDespite the still unpleasant overall economy and the restrictive investment policy of some Western European state railways, the Vossloh Group looks back at a favorable first half of 2004. H1 sales were stepped up by €16.1 million or around four percent from €391.1 million a year ago to €407.2 million. The Vossloh Switch Systems, Vossloh Locomotives and Vossloh Information Technologies business units were the driving force of this increase.
The 6-month group EBIT of €36.0 million compares with €49.1 million a year ago. The H1/2003 EBIT was, however, inflated by €14.5 million of tax-free gains from the disposal of the VAE stake, net after provisions for risks. Adjusted for these one-off factors, the like-for-like H1/2004 EBIT rose by €1.4 million in a year-on-year comparison. The analogously adjusted EBIT margin came to 8.8 percent, the year-earlier level.
The decrease in group earnings from €31.1 million to €19.3 million, too, is solely attributable to the one-time gains posted a year ago. Accordingly, H1/2004 earnings per share came to €1.32 (down from €2.23).
In H1/2004, the Rail Infrastructure division generated sales of €238.7 million (down from €240.1 million) and an EBIT of €40.0 million (down from €41.2 million), either figure thus being just insignificantly below the high year-earlier level.
Motive Power’s H1/2004 sales of €141.3 million clearly outnumbered the €126.9 million in the first six months of 2003, thanks to a generally more homogeneous output. This division posted a black EBIT of €0.8 million, up from the year-earlier red EBIT of €2.4 million.
At €27.0 million, six-month sales by Information Technologies were up by around 10 percent from the year-earlier €24.6 million. As budgeted, the H1 EBIT of €1.1 million generated by Information Technologies was below the 2003 level of €2.0 million due to the H1 sales structure.
“Following an encouraging uptrend in H1/2004, we are confident about the continued favorable development of business over the months ahead although some state and municipal customers of key significance to the rail industry are currently reluctant to invest,” emphasizes Burkhard Schuchmann, Vossloh AG’s CEO. As already announced in Q1/2004, he said, some major projects in various segments expected this year are being held over into subsequent periods. However, continued Schuchmann, additional orders have been secured in other sectors, meaning that from today's vantage point Vossloh plans to match the previous year's high sales figure of €920 million in 2004. Consequently, Vossloh would fall short of the target of €960 million budgeted for 2004 by a mere four percent.
“Thanks to a much upgraded product mix as well as additional cost-paring programs, however, we do expect to achieve the budgeted EBIT of €106 million for 2004. Since no one-off gains will be made this year and in view of the higher tax burden and an unforeseen decrease in sales, such an EBIT, up five percent from 2003, would be a highly commendable performance,” added Schuchmann.
Group earnings in 2004 would then rise by 2.5 percent to €56.9 million, equivalent to earnings per share of about €3.90. The return on capital employed (ROCE) should reach just under 16 percent, thus again exceeding the Group's 15-percent benchmark. “If the acquisitions being targeted are carried out during the current fiscal year, fiscal 2004 will still become another successful year in Vossloh's over 130 years of corporate history despite the adverse factors faced,” predicted the Vossloh CEO.
Werdohl, July 27, 2004
For more information contact:
Christiane Konrad, Vossloh AG,
phone (+49-2392) 52-249
The full semiannual report is published at
www.vossloh.com