Rieter’s market share continues to be at the level of around 30 per cent.
The cumulative order intake recorded by Rieter Group in the first nine months of 2019 of CHF 524.5 million (2018: CHF 749.8 million) was down by 30 per cent compared to the prior-year period. In the third quarter of 2019, order intake was CHF 146.2 million (Q3 2018: CHF 238 million).
Order intake for major project from Egypt booked
On October 7, 2019, Rieter booked the order intake for the first six projects with Cotton and Textile Industries Holding Company, Cairo (Egypt) of around CHF 165 million. This amount is thus not included in the figures for the third quarter of 2019 and will positively affect the fourth quarter. The sales are anticipated to be realised in the 2020-21 financial years. The order includes deliveries of compact and ring spinning systems and it is part of a comprehensive modernisation programme for the Egyptian textile industry.
Market situation remains challenging
The demand for new machinery remained at a low level in the third quarter of 2019. The primary reasons are existing overcapacity in the spinning mills, the trade conflict between the USA and China, as well as political and economic uncertainties in other regions of importance to Rieter. Rieter’s market share continues to be at the level of around 30 per cent.
Real estate sale in Ingolstadt successfully completed
Rieter completed the real estate sale in Ingolstadt (Germany) to GERCHGROUP of Düsseldorf (Germany) on September 13, 2019. Rieter expects a non-recurring profit contribution from this transaction on a net profit level of around EUR 60 million.
The drop in order intake in the Business Group Machines and Systems compared to the first nine months of the prior year by around 41 per cent to CHF 255.8 million is affecting all regions, except for Pakistan and Latin America.
The Business Group Components recorded a drop in order intake of 16 per cent to CHF 172.9 million compared to the prior-year period for all regions, except for Turkey. This primarily concerns the business activities of SSM and Suessen as a consequence of the above-mentioned market situation. The wear and tear parts business continues at a normal level.
The Business Group After Sales recorded with CHF 95.8 million a decline in order intake by 14 per cent compared to the first nine months of the previous year. This affects all regions except for Turkey, North and South America. Primary reason is the lower volume in the machinery business (lower demand for installation services).
Outlook 2019
Rieter estimates significantly lower sales for the year 2019 as a whole compared to 2018, and expects a significant drop in the result from the ongoing business. EBIT and net profit are anticipated to be significantly above the levels of the previous year due to the non-recurring profit contribution from the sale of real estate in Ingolstadt (Germany). The cost-cutting measures introduced have been implemented to a great extent.
Rieter is the world’s leading supplier of systems for short-staple fibre spinning. Based in Winterthur (Switzerland), the company develops and manufactures machinery, systems and components used to convert natural and manmade fibres and their blends into yarns. Rieter is the only supplier worldwide to cover both spinning preparation processes and all four end spinning processes currently established on the market. Furthermore, Rieter is a leader in the field of precision winding machines. With 16 manufacturing locations in 10 countries, the company employs a global workforce of some 4,620, about 20 per cent of whom are based in Switzerland.