Rieter explained their financial statement covering the first half of 2012. Yielding successful results in the first six-month period of 2011, the company had 40 percent decrease in orders in the same period of 2012. Performing order intake amounting to 404.1 million Swiss Francs (CHF) in the first half of 2012, they achieved increase compared to the second half of 2011. Sales of 487.3 million CHF in the reporting period were 9% lower than in the same period of the previous year.
Keeping on with continuous investment strategy for next periods, Rieter does not abandon from this policy although their profits and returns decrease. Rieter’s profit before interest and tax realised as 32 million CHF in the first half of 2012. It was claimed that not compromising the budget assigned to new investments resulted in reaching lower figures compared to the same period of previous year. It is emphasised that the net profit of the company that keeps growing with investments is 21.9 million CHF.
Underlying that demand decreased due to the effects of global economic crisis, the company’s executives reminded that orders from big markets also remained at low levels compared to previous years. They emphasised important developments occur with respect to the growth of company and said that, in spite of regional differences, both yarn market reached a certain level and they succeeded to receive orders from certain parts of the world.
Share of R&D Studies Increased
While the firm “lost blood” seriously after the sales realised as 840 million Francs in the first half of 2011, it was explained that extending a wider area geographically is one of their most important achievements in the first half of this year. The countries from which most orders are received are China, Turkey, Indonesia and Pakistan, and other Asian countries. It was stated that order intake in Indian market is very low yet. In terms of sales reservations, Turkey is in the first rank and China and other Asian countries communicated their demands.
Rieter that gives importance to research and development studies spent 20.9 Million Francs in the first six months and kept developing in this field as well. Spending around19 Million Francs in the same period of previous year, the company increased the share assigned to the field of research and development.
‘Czech’ Contribution to Spun Yarn Systems Business
Reiter has 4 yarn spinning systems in total. Orders received by Yarn Systems reached to 330.0 million CHF in the reporting period. The manufacturing facilities in the Czech Republic, which was announced last year, contributed significantly to this. Around 6 Million CHF of contribution demonstrates that the investments made recently started to yield returns. Creating a difference with their yarn investments, the company had successful editions in two important exhibitions in China and in Turkey in the first half of 2012. In these exhibitions, they were able to offer practical solutions to market needs especially with the works for increasing productivity and decreasing energy consumption. Rieter went back home with successful results from ITMA Asia particularly with E80 hosiery machine.
Thanks to the premium textile components business, Rieter continues to provide special solutions for short fiber spinning mills. The firm was on the decline in sales in this field either, compared to the same period of 2011, yet had a more positive course than the second half of 2011. While sales by premium textile components realised as 86.7 million CHF, this figure decreased by 23 percent compared to the same period of previous year.
Investment Program is Being Formed
The executives explained that demands for short fiber spinning machines will increase around 2.3 percent until 2030 and emphasized that conscious investments should be made in that sense. Stating that the demands from China and India will be in increase every period and Rieter will reach a growth of approximately 5 percent annually. It was also provided that the firm will carry out studies in premium segment especially for local markets in Asia in the following years. They consider increasing the capacities especially in China and India and will evaluate the rising demand on air-jet spinning systems. Investment amounting to around 90 Million CHF 2012 is planned for the end of 2012 and at the beginning of 2013.
Rieter will apply a decrease of 1 point in operating profit margin for accelerating investments and aims to derive operating profit margin at 7 percent at least, and 12 percent at least in successful years, within circle of demand.
