Rieter closed the first half of 2014 with significantly higher net profits of CHF4.3 mn or 2.7 per cent of sales, respectively.
The market environment in which Rieter operates was consistently favourable in the first half of 2014. Rieter received 655.5 million CHF of new orders in the first six months of 2014, which is lower than last years very good figure (711.4 million CHF), but substantially higher than in the second half of 2013. Sales rose by 9 per cent to 522.1 million CHF (478.1 million CHF in the first half of 2013). EBITDA in the period under review rose to 48.4 million CHF (34.3 million CHF in the first half of 2013). The operating result before interest and taxes (EBIT) amounted to 28.8 million CHF, an increase of 68 per cent (17.1 million CHF in the first half of 2013). Higher profitability at both Business Groups boosted the groups operating margin from 3.6 to 5.5 per cent of sales. Rieter closed the first half of 2014 with significantly higher net profits of 14.3 million CHF or 2.7 per cent of sales, respectively (5.0 million CHF or 1.0 per cent of sales in the first half of 2013). Rieter had established additional capacity in China and India in the context of its 2012-13 investment programme. This contributed substantially to the companys development in the first half of 2014.
The world market for staple fibre machinery and components for Rieter continued to develop favourably in the first half of 2014. At the same time regional variations in momentum persisted. Following the implementation of the 2012-13 investment programme, Rieter is in a strong position and took full advantage of the generally encouraging business environment.
In China, the market for staple fibre machinery was tight due to the credit situation for spinning mills and the high cost of raw materials. The market for viscose yarns, where Rieter supplies manufacturers with semi-automatic rotor spinning machines, also remained subdued. On the other hand, demand for ring spinning machines was good. Substantial parts of machines delivered in China were also produced locally. In order to supply the Chinese textile market, spinning mills have made major investments in facilities located in other Asian countries, such as Vietnam. In the period under review, Rieter secured substantial orders in these countries as well as in Turkey and the US.
In India, the market was slightly more dynamic than in the second half of 2013. However, conditions remained challenging, due especially to the currency situation and reluctance to invest ahead of the elections in spring.
Orders received amounted to 655.5 million CHF, 8 per cent lower than in the very good prior-year period (711.4 million CHF in the first half of 2013). However, order intake was 20 per cent higher than in the second half of 2013. Rieter booked the largest volume of orders in Turkey, followed by China, India, the US, Vietnam, Uzbekistan, Pakistan, Indonesia and Brazil. The global trend toward machinery in the upper quality segment with a high level of automation and performance continued in the first half of 2014. Systematic innovation and a strong global market position give Rieter a considerable competitive edge in this segment.
Total orders in hand as of 30 June 2014, stood at some 880 million CHF. The expansion in capacity will enable Rieter to translate these orders into further growth. The majority of machines ordered in the first half of the year will be delivered in 2015. Sales increased by 9 per cent to 522.1 million CHF in the reporting period (478.1 million CHF in the first half of 2013). Rieter booked most sales in Turkey, followed by China, India, Pakistan and the US. The decline in sales in China compared with the prior year period was due to weaker demand in the second half of 2013.
Compared to the first half of 2013, EBITDA grew by 14.1 million CHF to 48.4 million CHF, equivalent to 9.3 per cent of sales, compared to 7.2 per cen