Key Points

  • Accumulated revenues reached EUR 83.8 million in 1H11 up 33.5% versus 1H10
  • Basic earnings per share were EUR 0.066 (0.043)
  • Accumulated order intake reached a record of EUR 111.1 in 1H11, +59.5% versus 1H10
  • Order book stands at EUR 89.7 million at the end of 1H11, +15% versus 1H10
  • Ports & Maritime Market Unit experienced a very strong performance in 1H11 accounting for one third of Group revenues

Dear reader,

The first half of 2011 has been very positive for the Group, with activities in our markets displaying strong overall performance. Despite recent volatility on the financial markets, we remain confident that Cavotec is well positioned to deliver strong results for FY11.

A good indicator of our overall strength is the continuing increase of our Order Book, which reached another record level of EUR 91.0 million in July. During the same month Order Intake amounted to EUR 15.0 million, an excellent achievement and a clear indication of our strong position in all four of our Market Units. I believe that in light of these figures, bined with our past performances, Cavotec is well poised to achieve and surpass the targets set at the beginning of the year, even in these times of economic uncertainty.

Our Ports & Maritime Market Unit recorded revenues for 1H11 of EUR 27.6 million, up 70.5% from EUR 16.2 million in 1H10 and accounting for 32.9% of total revenues for the period. This excellent performance is in line with our expectations for the industry based on the positive signs noted during Q1.

The Airports Market Unit, which accounts for 24.7% of total 1H11 revenues, at EUR 20.7 million, was up 81.4% from EUR 11.4 million in 1H10. Strong global growth in the sector, bined with robust performances in the Middle East and Far East were the primary drivers of this result.

Reporting 16.8% of total revenues for 1H11, our Mining & Tunnelling Market Unit also registered a strong recovery with revenues increasing 37.9% to EUR 14.1 million, pared to EUR 10.2 million for 1H10. The strength of this result is a product of sustained growth in the modities market and the increase in activity at our large mining OEMs such as Atlas Copco and Sandvik.

The General Industry Market Unit, with 25.6% of total revenues for the period, recorded a decrease of -14.2% over the 1H11 period with the result amounting to EUR 21.4 million, down from EUR 25.0 million in 1H10. This is mainly due to a generally softer 1H11 for the general industry market, while prospects for 2H11 are looking more positive.

One of the most significant recent developments was the acquisition of INET in the US. On August 15, the Cavotec Board of Directors unanimously approved the acquisition of INET, a leading manufacturer of ground support equipment (GSE) in the airports sector. The acquisition’s consideration includes the issue of 7.7 million shares at NZD 3.30 per share and an earn-out upon fulfillment of certain terms and conditions.

Established in 1967 and with revenues on yearly basis well over USD 25 million, INET is headquartered in Fullerton, California. The principal activities of the pany are the design, manufacturing, installation and support of stationary and mobile aircraft servicing equipment. Via their domestic and international sales and field support offices, INET supplies 50/60 -400 Hz power conversion, preconditioned air systems, and power generation for the global aviation industry.

The acquisition of INET marks an important step for our Airports Market Unit and the Group as a whole. Thanks to their already strong position in the USA we will be well positioned to focus on further improving our service and support to customers while simultaneously adding INET systems to our existing product offering in both the Airports and Ports & Maritime Market Units.

Another milestone for the Group was made in August 2011 as we filed our Information Memorandum and Notice of Meeting, inviting our shareholders to attend the Special Meeting to be held in Christchurch on 1 September and to vote on the reorganization, which will culminate in the re-listing on Sweden’s NASDAQ OMX stock exchange.

EARNINGS AND PROFITABILITY

Operating result amounted to EUR 6.0 million thanks to an increase of 33.5% in the revenues, which more than pensated the increase of employee benefit costs and operating expenses. Net financial items were EUR -0.7 million (vs. EUR 0.3 million in 1H10) with the decrease ing from less favourable exchange rate differences partially pensated by the lower effective interest rate. Profit before tax amounted to EUR 5.4 million (vs. EUR 3.9 million in 1H10) while profit for the period reached EUR 4.1 million (vs. EUR 2.8 million in 1H10).

OPERATING CASHFLOW AND INVESTMENTS

Operating cash flow was negative in 1H11 at EUR 1.1 million (vs. EUR -0.4 million in 1H10) reflecting higher seasonality and the increase in working capital due to the higher level of activity. Investment in property, plant and equipment was EUR 3.3 million.

NET FINANCIAL POSITION

The Group’s net financial position increased to EUR 29.0 million pared to the same period of the previous year (vs. EUR 25.3 million in 1H10). The 12 months rolling leverage ratio (Net Financial Position/EBITDA) decreased from 2.15 to 1.57 while the debt/equity ratio slightly worsened from 34% to 37%.

EMPLOYEES

In 1H11 many new faces joined the Group from all around the world, underlining not only our operational strength but also our diverse backgrounds. On June 30, 2011, the number of employees was 768, the total workforce increased by 79 since June 30, 2010 and with 49 since December 31, 2010.

There are many opportunities in the market for Cavotec to continue growing despite the ongoing global economic unrest. I am convinced that we have the right people, the right systems and the right mentality to make 2011 an outstanding success for the Group.

Yours sincerely,

Ottonel Popesco

Share
© Publicnow - 2011