Order intake in the first quarter of 2016 was negative at EUR-1.1m. This is due to the low level of new business (EUR12.8m), order cancellations and reductions (EUR-9.1m) the company stated as well as the effects of currency exchange rates on the order backlog.
Some markets, where KHD is well-positioned will see continued growth. This includes in particular India, where cement demand is expected to grow by 6.8 per cent per annum through 2020. Pricing for the projects that will be awarded in the near future will remain under pressure due an extremely high level of competition in all markets.
The adjusted order intake (EUR12.8m) is considerably lower than both the order intake in the first quarter of the previous year and budgeted order intake for the 1Q16. This disappointing start into 2016 is primarily due to ongoing customer delays in awarding new orders, KHD reported.
In the 1Q16 the capex segment generated orders with a total volume of EUR 3.7m (previous year EUR47.5m). Order intake in the plant services segment reached EUR9.1m. This was below the previous year figure of EUR10.9m, but close to the budgeted amount.
As a result of the unsatisfactory level of order intake volume, order backlog as of 31 March 2016 was at EUR148m. This shows a considerable decrease of EUR35.8m compared to the amount recorded on 31 December 2015. The current order backlog no longer ensures the full utilisation of existing capacities. Despite major improvements in order intake expected later in the year, capacity adjustments at individual subsidiaries of KHD Group are being carefully evaluated.
Profit before interest and taxes (EBIT) in an amount of EUR-8m is below the previous year’s figure (EUR-5.5m). Low revenue volume, unsatisfactory gross profit and the above mentioned special effects led to an EBIT margin of -23 per cent (previous year: -10.8 per cent).
Net finance income decreased to EUR2.1m (previous year: EUR2.7m), whilst finance expenses rose from EUR 0.1m to EUR0.3m. The financial result in total decreased to EUR1.8m (EUR2.5m).
Meanwhile, Mr Tao Xing was appointed as an additional member of the Management Board of KHD Humboldt Wedag International AG (hereafter also referred to as “KHD” or “Group”) effective 1 January 2016.