Saurer Group reported that sales revenue decreased by 17.5% to RMB 3 816 million. Also, profit before tax dropped by 32.6% to RMB 381 million, says a recent press release.
Clement Woon, CEO, Saurer says, “The first six months of the year proved challenging for the group as we are seeing the delayed impact of the uncertainty resulting from the ongoing trade disputes. Investors are reluctant to invest and since business in our core markets, including China, India and Turkey, are reliant on financing, these factors have had a strong impact on Saurer. Global growth has also slowed down this year.”
Another factor that influences the textile industry, in particular, is ITMA. Being the world’s principal textile exhibition, this event has a profound effect on the market as customers delay orders in anticipation of the new products that manufacturers will launch at the exhibition, he added.
“At ITMA 2019, Saurer introduced a number of innovations, including its first air-spinning machine. With the addition of a draw frame to its pre-spinning line, the company is moving another step closer to becoming a complete solutions provider for the textile industry. Also supporting this aim is its new extensive range of laboratory equipment,” Woon says.
He also added, “While we received a very positive response at the exhibition, we cannot be complacent in the current environment. We will work diligently to ensure that Saurer is positioned optimally once the global market returns to previous levels.”
Key financial data
| in RMB 000 | HY 2018 | HY 2019 | Change YoY |
| Sales revenue | 4 627 086 | 3 815 659 | -17.5% |
| Profit before tax | 564 386 | 380 518 | -32.6% |
| Margin | 12.20% | 9.97% | -2.23 ppt |
| Net profit/(loss) | 409 822 | 352 138 | -14.1% |
| Attributable to equity holders in the company | 363 066 | 277 942 | -23.4% |
| Cash and cash equivalents at the end of the period | 575 913 | 1 139 408
|
97.8% |
| Weighted average return on equity | 15.22% | 5.86% | -9.36 ppt |
| Basic EPS (in yuan/share) | 0.1915 | 0.1466 | -23.4% |
| Diluted EPS (in yuan/share) | 0.1915 | 0.1466 | -23.4% |
| Weighted average number of shares | 1 895 412 995 | 1 895 412 995 |
Balance sheet
| in RMB 000 | 31 December 2018 | 30 June 2019 |
| Total current assets | 10 526 291 | 8 636 472 |
| Total non-current assets | 3 889 415 | 3 981 194 |
| Total assets | 14 415 706 | 12 617 666 |
| Total current liabilities | 5 315 587 | 5 055 915 |
| Total non-current liabilities | 3 112 344 | 1 530 076 |
| Total liabilities | 8 427 931 | 6 585 991 |
| Total equity attributable to equity holders of the company | 4 653 156 | 4 743 973
|
| Total equity | 5 987 775 | 6 031 675 |
| Total liabilities and equity | 14 415 706 | 12 617 666 |
Segment overview
| in RMB 000 | HY 2018 | HY 2019 | Change YoY |
| Saurer Spinning Solutions | 3 674 867 | 3 285 098 | -10.6% |
| Saurer Technologies | 952 178 | 530 432 | -44.3% |
Saurer Technologies experienced a significant decline of 44.3% in the first half of the year. Reasons for this include the exceptional boom in demand for glass fiber, carpet yarn and tire cord in 2017 and 2018 – the resulting saturation in the market has negatively influenced Saurer’s twisting business in 2019. Sales declined by 10.6% for the Spinning Solutions segment.
Regional overview
| in RMB 000 | HY 2018 | HY 2019 | Change YoY |
| China | 2 434 095 | 2 171 964 | -10.8% |
| India | 351 790 | 283 470 | -19.4% |
| Turkey | 424 865 | 112 910 | -73.4% |
| Asia (excl. China/India) | 692 197 | 795 516 | 14.9% |
| Americas | 352 056 | 236 202 | -32.9% |
| Europe/Africa/others (excl. Turkey) | 372 083 | 215 597 | -42.1% |
