Marel declares guarded optimism as orders and revenues climb
The Iceland-based company said the poultry sector was leading a sustained increase in market activity for its machinery as year-on-year revenues from core business jumped by more than 25 per cent to €265m for the six months ending 30 June. Consolidated operating profit climbed by around 50 per cent to €23m compared to H1 2009. However, the consolidated net results fell from €10.4m to €5.7m.
Marel added that on-off costs of €7.6m associated with a recovery plan for the pension fund of its subsidiary Stork were included in the results.
Its second quarter results showed similar trends shown for the half year, with revenues up 26 per cent to €136m. But its consolidated net result was just €0.1m compared to €17m in 2009.
Company CEO Theo Hoen said: “Our challenge now is to reinforce the company’s position as market leader and, at the same time, to increase profitability. The underlying demand in the food industry is rising and automation is increasing at a robust rate in developing countries such as China.”
He added that the benefits of continued investment in product development during the global recession were starting to be felt and that collaboration from the group’s different divisions had started to contribute to profitability.
“I feel that we are well on our way to creating a healthy and sustainable company that will play a major role in the protein industry for many years to come,” said the CEO.
Orders
The firm said its order book – lead by the poultry sector - has seen a “gradual increase” with contracts currently standing at almost €150m for the second quarter – compared to €126m in the same period last year.
Strong performance in the poultry segment had been fuelled in particular by a “significant number” of orders from the US for primary and secondary installations. Market share was also expanded in South America, West Europe and Asia in Q2.
Cheaper meat in Europe meant the region was again the most active segment for the company, while business had also improved in Australia. The fish sector remains a good prospect – particularly in the salmon and aquaculture segments.
Outlook
In a cautiously optimistic forecast, the company said it expected a gradual improvement in market conditions and that Marel would “claim its fair share of growth”.
It added that growth would vary from quarter to quarter due to order fluctuations, as it added that Q3 activity would likely be hit by a seasonal dip caused by the summer period.
