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First Half 2003
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| 08/14/2003 |
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| First Half 2003 |
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CEAG Group: Positive semi-annual financials
- Significant improvement in income for both FMP and FPS business units
inspite of revenue decreases
- Successful cost management and realignment make themselves felt
- CEAG still plans to be back in the black for fiscal year 2003
Ostbevern/Bad Homburg, August 14, 2003 –CEAG AG, worldwide operating manufacturer of high-quality power supplies and chargers, succeeded in improving CEAG Group's income significantly in the first half year and returned to profit. Thanks to a consistently pursued cost management, the turnaround was accomplished in spite of considerable, mostly exchange rate-affected revenue losses. The strategic realignment and corresponding split-up into two independent business units also made themselves felt positively. CEAG still plans to be back in the black for fiscal year 2003 as a whole.
In the first six months of 2003, CEAG achieved a Group income before interest and tax (EBIT) of EUR 0.8 mill. after a loss of EUR 13.1 mill. in prior year's reporting period (without restructuring cost: minus EUR 3.1 mill.). The EBIT of the second quarter read EUR 0.3 mill. (2nd quarter 2002: without restructuring cost minus EUR 2.4 mill.). Financial income and taxes included, the Group achieved a balanced semi-annual result after a shortfall of EUR 8.7 mill. in the first half of 2002.
At EUR 78.0 mill., consolidated revenues in the first 6 months fell 22% short of the prior-year period (EUR 102.2 mill.). The CEAG Group's revenues for the second quarter came to EUR 37.9 mill. as opposed to EUR 50.9 in the same quarter last year. This development was driven by the hike in the value increase of the euro compared to the US dollar in which most of the CEAG sales are invoiced.
Net of currency effects, revenues decreased by 7%. The sluggish general economic environment and the SARS epidemic also crippled the business development. Nevertheless, SARS did not restrict production at CEAG's Chinese plants at any time.
Despite the clear decrease in revenues, CEAG significantly improved its operating result. Aside from the prior year's one-time restructuring costs, this is directly linked to measures launched in 2000 to optimize cost structures while increasing productivity at the same time. In addition, the strategic realignment, which lowered the break-even point considerably, has put CEAG in a position to operate profitably even in a difficult market environment.
Business unit development
Semi-annual revenues for the FMP business unit decreased by 23% from EUR 77.4 mill. to EUR 59.9 mill. (down 5% net of currency effects). Apart from continuing pressure on prices, this was caused by postponement of some new projects by customers. From January to June, FMP achieved an EBIT of EUR 1.4 mill. (down EUR 4.1 mill. of prior year's reporting period.
FRIWO Power Solutions (FPS) generated revenues of EUR 18.1 mill. (prior-year period: EUR 22.8 mill.) in the first six months of 2003. Almost 6 percentage points of the 21% decrease are attributable to currency effects. FPS was also negatively influenced by the reluctant consumerism, especially in Germany. This is because demand for FRIWO products is largely dependent on sales of consumer products such as set-top boxes and toys. Germany contributes some 50% to FPS revenues.
Sales
The CEAG Group sold 59.6 mill. FRIWO brand power supplies and chargers in the first six months of the current year (prior year: 59.4 mill. units). Sales in the second quarter (31.0 mill. units) increased by 9% to 28.6 mill. against the first three months of 2003.
Capital expenditure
Total capital expenditure for the CEAG Group amounted to EUR 4.5 million in the first half of the year (prior-year period EUR 3.1 mill.). EUR 3.7 million was invested in various areas such as extending capacity for switch mode technology at the FMP business unit in China, while EUR 0.8 mill. was channeled into the FPS business unit.
Outlook
EBIT improved significantly in the first half of the year despite lower revenues and the effects of currency fluctuations and SARS. Such effects will lead to a reduction in revenues for the year as a whole. However, the Management Board still expects the Group to be back in the black in fiscal year 2003.
Detailed semi-annual report now available under www.ceag-ag.com.
For more information please contact:
CEAG AG
Gudrun Richter
Investor Relations
Tel.: +49 2532 81-158
eMail: richter@friwo.de
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FRIWO