Heidelberg's Profits Feel Pressure

Heidelberg has announced a 15% fall in profits for the first six months to September 30 of its current 2003-2004 financial year.

Heidelberg has announced a 15% fall in profits for the first six months to September 30 of its current 2003-2004 financial year.

The operating result was 93 million Euro compared to the previous year's 36 Euro.

Recorded sales of 1.5 billion Euro compared to 1.9 billion Euro for the same period last year.

Order levels during the second quarter were better than for the months April to June, particularly in the sheetfed division said the company.

"The global reluctance to invest and the economic and structural problems facing our industry have not changed significantly in the first half of the current fiscal year," said Bernhard Schreier, Heidelberg's chief executive officer.

"The current economic climate does not allow concrete sales and profit forecasts for fiscal year 2003-2004.

We must wait and see over the coming weeks and months to what extent the positive development from the second quarter proves to be sustainable," he added.

Despite sales being only slightly up on the first quarter, Heidelberg was able to virtually halve the operating loss in the second quarter to 34 million Euro (previous quarter, 59 million Euro).

The cost-cutting measures introduced are already beginning to bite.

Personnel costs in the second quarter, for example, were seven percent down versus the first quarter.

"We will continue to drive forward our efficiency-enhancing and cost-cutting measures in order to achieve the planned improvements in results," stated Dr Herbert Meyer, chief financial officer.

As of September 30, 2003, Heidelberg had a workforce of some 23,700 worldwide (previous year - 25,000).

Overall, Heidelberg is looking to reduce staffing levels worldwide by around 3,200 over the period April 1, 2002 to March 31, 2004, some 400 jobs being cut in the second quarter of the current fiscal year alone.

Sheetfed fared much better in second quarter.

Sales climbed 70 million Euro Euro from 492 million Euro in the first three months of the fiscal year to 564 million Euro.

Incoming orders rose from 551 million Euro in the first quarter to 752 million Euro in the second.

Only the digital division returned figures that improved on the first half of last year.

Sales were improved on the figures for April to June, though levels were still low.

Orders received by web systems were well up on the first quarter, while post press recorded increases in both sales and incoming orders.

Incoming orders grew by 10 million Euro over the same period last year to 111 Euro million, with the operating result improving up 17 million Euro.

The operating result for sheetfed was down by seven million Euro at 130 million Euro.

As a result of the continuing depressed markets, most noticeably the USA and Germany, Heidelberg will continue to adapt with short-time working up to and including May 2004.

Heidelberg's German plants at Wiesloch, Amstetten and Brandenburg will be particularly affected.

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