What Rieter Textile Systems is expecting until the end of 2012
At a meeting with financial analysts, Swiss Rieter Textile Systems communicated the company’s expectations for the rest of the year and concluded it will bring lower sales figures in the second half year and the operating profitability will settle around the break-even level, both facts resulting due to challenging market environment
The decrease in sales is estimated at slightly above 20 % due to the shift of machine orders into 2013, cancellations and lower component sales. That is also the given reason why Rieter expects the operating profitability (EBIT) in the second semester to follow the volume development and to show the effects of a less favourable product mix. Also the planned investment activity in growth projects and process improvements will further reduce the operating margin (EBIT margin) by around three percentage points.
Actually Rieter notes at now surprise, that the Chinese market is generally weaker because of raw material prices, however there is a motivation to look for automation, an upgrade in equipment and energy efficiency. In Turkey the government incentive programme has not triggered yet the expected investment. India has seen a pick-up in investment demand, with northern India showing keener interest than the southern states. Rieter Chairman Erwin Stoller is convinced that China and India will see an increase in demand for machinery and components and Rieter is able to fulfil this demand, also thanks to the timely execution of the initiated investment programme and Rieter will be ready to take advantage of these trends. The Indian marked is earmarked by a pick-up in order intake and China reflects a stable order intake, both confirming that Rieter’s product portfolio is attractive for customers. All in all, Rieter registers an increase of order intake in the third quarter compared to the average of the two previous quarters and mainly thanks to larger machinery orders the majority of these will be delivered in 2013.