Vossloh reaffirms much improved earnings for 2004
Group financing arrangements reconfigured to facilitate acquisitions / Keen interest shown by US investorsFor the first four months of fiscal 2004, the Vossloh Group has posted sales of €261.9 million, up 5 percent over the year-earlier €249.5 million. EBIT amounted to €21.4 million (down from €37.8 million). However, the year-earlier figure had included tax-free gains from the disposal of the stake in the Austrian switch manufacturer VAE as well as provisions for risks in the region of a net €14 million.
The slump in Group earnings from €26.4 million to €11.0 million is likewise due to the one-off gains accruing the year before. During the first 4 months of 2004, EpS dropped from €1.92 to €0.76. Due to a general policy of holding back expenditures, especially in Germany, there is some likelihood that the €960 million sales originally budgeted for all of 2004 may not be achieved. "However, thanks to the productivity enhancement measures initiated last year, from today's vantage point, the operating result should accelerate by almost 18 percent," emphasized Vossloh AG's CEO Burkhard Schuchmann, at today's annual stockholders' meeting in Düsseldorf.
Despite the nonrecurrence of the net gain of around €14 million booked for the last time in 2003, EBIT is targeted to grow by a further 4.6 percent to some €106 million while the EBIT margin is set to once again achieve 11 percent. Vossloh expects its Group earnings to advance 3.5 percent to €56.9 million—despite a corporate tax load ratio rising from 34.6 to about 37.5 percent. Earnings per dividend-carrying share are set to mount from €3.87 to €3.90 and ROCE, at just under 16 percent, will once more top the corporate benchmark of 15 percent.
Schuchmann stressed that the tracks were laid for ongoing growth: "We are confident of being able to carry out some very attractive acquisitions over the months ahead." In view of the planned external growth plans, Vossloh has in recent weeks reconfigured its corporate finances. As part of a US private placement scheme, the Group intends to raise very long-term (10- to 12-year) loans from US investors at a total €200 million and at presently still highly inviting interest rates. In a related move, the Group will repay a number of short-term bank loans and secure the funding of a number of takeovers shortly on the agenda.
"The remarkable thing about this placement is the fact that the US investors had offered to lend Vossloh an aggregate total of close to €1 billion. Even the final underwriting on the terms and conditions offered by Vossloh was based on more than double the original amount. The vast interest shown by the US capital market in investments in Vossloh AG reflects the strong confidence shown in our company," added Schuchmann.
Such interest has also prompted the Group to allow access to Vossloh stock to institutional investors requiring US tradability. With this in mind and together with Deutsche Bank, Vossloh is launching a Sponsored Level 1 ADR program to facilitate indirect tradability for Vossloh stock in the USA. Says Schuchmann, "This move will sidestep the highly elaborate approach of approval for New York Stock Exchange (NYSE) listing".
For more information contact:
Werner Andree, Vossloh AG, phone (+49-2392) 52407