KOBLENZ (dpa-AFX) - Automotive and industrial supplier Stabilus delivered a surprisingly resilient underlying performance in its second fiscal quarter. According to preliminary figures, while operating profit declined year-on-year, it exceeded market expectations by ten percent, the SDax-listed group unexpectedly announced in Koblenz on Wednesday evening. At the same time, a significant buildup of working capital, particularly toward the end of the quarter, substantially weighed on free cash flow. Management reaffirmed its full-year targets, a move welcomed by investors.

Stabilus shares rose five percent in Thursday trading, leading the SDax. However, the stock has lost approximately 13 percent of its value since the start of the year and nearly 23 percent over the past twelve months.

Jose M Asumendi of JPMorgan noted that a strong March enabled the company to beat expectations. Nevertheless, he pointed out that quarterly revenue is still declining, suggesting there are no clear signs of a turnaround yet.

Preliminary figures show that revenue for the three months ended March fell by nearly 10 percent year-on-year to approximately 305 million euros. Adjusted earnings before interest and taxes (EBIT) saw a similar decline, coming in at just over 34 million euros. Free cash flow plummeted from around 18 million to just over 4 million euros, which Stabilus attributed to an increase in receivables driven by high sales momentum. The company expects this to normalize as payments are received later in the fiscal year.

Stabilus has long been grappling with weaker demand from major automakers. Many manufacturers are struggling with a sharp decline in sales, partly due to sluggish demand in the critical Chinese market. Furthermore, U.S. tariff policies are weighing heavily on automotive groups.

To restore competitiveness, Stabilus launched a cost-cutting program in September. The initiative aims to streamline the organization, reduce personnel and operating costs, and optimize its footprint. The company plans to cut 450 positions worldwide, primarily in the EMEA region and the Americas.

For the current 2025/26 fiscal year (ending September), the management board led by CEO Michael Büchsner continues to target revenue between 1.1 billion and 1.3 billion euros, expecting sales to be flat year-on-year at best. The adjusted EBIT margin is projected to range between 10 and 12 percent. Additionally, management anticipates adjusted free cash flow of 80 million to 110 million euros.

Stabilus is scheduled to present its final second-quarter results on May 4./err/lew/stk