OREANDA-NEWS. There were no significant changes in the relevant market segments compared with the previous year. Market recessions had a negative impact, and weak sales led to an operating EBIT of CHF -5.4 million as against CHF -6.6 million in 2015. Although the loss was reduced year on year, the overall result clearly does not meet expectations
The actions taken within the transformation strategy, such as consolidating plants and launching new products, have already begun to bear fruit:
- Gross profit increased by 11.1% year on year despite weak sales. - The gross margin rose from 16.3% to 19.7%. - The cost-cutting programmes that were launched last year and that have already been implemented resulted in savings as intended. In the largest segment, Insulation, the gross margin increased in all product areas, confirming the benefits of the transformation process and sending out a positive signal for the future. In addition, the power generation market segment stabilised. Sales were weaker in the high-voltage motors and fire-resistant cables sectors. Both markets are heavily dependent on the crude oil price, which means a noticeable decline in orders from the oil- and gas industry. In the Insulation segment the operating EBIT increased from CHF -4.0 million to CHF 0.8 million. By contrast, the Composites segment posted disappointing results, with both sales and operating EBIT down on the previous year. This was primarily due to a lack of orders in the ballistics and aluminium smelter segments. The results for the first half of the year show that there is still a long way to go in improving the operating business. The transformation and focus on new growth segments such as electromobility and wind power, as well as the adjustment of capacity levels are not yet complete. As a consequence of the site closures towards the end of 2015, the number of positions was reduced by 13.5% compared with the previous year. As announced in early July 2016, further measures are planned to save CHF 18 million in costs from 2017 onwards. Savings of around CHF 4 million are already expected for the second half of 2016, while restructuring costs will amount to some CHF 8 million. The refinancing of the bond to be redeemed in October 2016 has been secured.