KROMI Logistik AG publishes final figures for the first nine months of fiscal year 2008/2009
Revenues down 3.7% based on final figures / EBIT after extraordinary factors totals EUR 102 thousand / Foreign income up to 26.1%
The development in revenues resulted in a downturn in the cost of materials to EUR 20,830 thousand (previous year: EUR 21,865 thousand) in the first nine months. As a result, the cost of materials ratio fell from 75.2% to 74.4%. Because of strategic HR investments, the group's personnel expenses increased from EUR 3,232 thousand to EUR 4,072 thousand. EBIT after extraordinary factors totaled EUR 102 thousand, compared to EUR 1,697 thousand in the same period of the previous year.
In particular the loan loss provision of EUR 931 thousand depressed results. This provision was formed with regard to the application for insolvency proceedings filed by a customer in the automotive supply sector in April 2009. KROMI Logistik AG is thus profitable despite this extraordinary factor and the continuing economic crisis during the 2008/2009 nine-month period. From the management's perspective, this clearly signals that the business model is very robust - even in difficult times. After adjustment for this item resulting from the customer's insolvency, EBIT for the first nine months was at EUR 1,033 thousand. Earnings before taxes (EBT) totaled EUR 206 thousand compared to EUR 1,792 thousand in the same period of the previous year. Consolidated earnings after taxes totaled EUR 130 thousand (previous year: EUR 1,246 thousand).
In the third quarter (January to March 2009), KROMI Logistik AG recorded revenues of EUR 7,779 thousand compared to EUR 10,613 thousand in the previous year. This corresponds to a decline of 26.7%. Including the loan loss provision of EUR 931 thousand, EBIT totaled EUR -836 thousand after EUR 268 thousand in the previous year.
This drop in revenues and earnings is almost exclusively due to a weak third quarter, as this period was marred by a strong reduction in order intake, in particular in the engineering and the automotive supply sectors. Both activities in Germany and on the relevant foreign markets were affected, with varied quality in development for the individual segments and customers. The company's broad scale mix of industries and products in the manufacturing sector has proved itself: in particular aviation, shipbuilding and new customers supported the company's business in the third quarter.
As things stand today, the Managing Board believes that this confirms that withdrawing the forecast for the fiscal year at an early stage in February 2009 was the right move to make. At that point in time, KROMI Logistik AG was no longer able to predict how revenues would develop over the coming months. Some customers had used the festive season to stop production for a longer period, at many companies the machines only started to run again in the second half of January. As a result, in mid-February 2009, KROMI Logistik did not have any indicator of how business would develop in the last two weeks of February and in March. In contrast to the company's hopes, there was no recovery in the last month of the quarter. KROMI Logistik could see that the high production capacity through to the end of 2008 meant that product stores were still well filled, and that these will have to be reduced even further in the coming months before production starts to get back to normal.
The company has reacted to the major changes which have taken place over just a brief period, and has put activities in place to secure its business against external influences.
For example, it has increased its sales activities, optimized inventories and tightened its credit control. At the same time, it has also insured part of its portfolio of receivables.
However, from the company's perspective, the economic crisis is also an opportunity:
KROMI Logistik AG reports continued strong demand for tool management outsourcing models.
"We are not happy with events in the third quarter. However, the fact that we have had very healthy accounts since going public is paying off," commented Uwe Pfeiffer, KROMI Logistik AG's CFO. "We believe that, together with a slowly emerging economic recovery, in particular a business model like ours, which is geared to increase efficiency for our customers, will rank among the more successful," he added.
The opportunities that arise for KROMI Logistik AG in periods of economic weakness mean that the Managing Board will thus consistently continue the strategy that it has commenced and will invest further in new customers and markets. For fiscal year 2008/2009, which ends on June 30, 2009, the management team is currently forecasting revenues to be lower than in the previous year. Taking the extraordinary charges resulting from a customer filing for insolvency in April into account, EBIT will be balanced. However, there is still not sufficient visibility to make a forecast for the current year as whole with regard to the longer-term developments in some manufacturing industries that KROMI Logistik supplies with precision tools.
KROMI Logistik AG
KROMI Logistik AG offers manufacturing companies end-to-end outsourcing for the supply of precision tools (tool management) and it focuses on machining tools for metalworking and plastics. The Company combines classical tool trading with a peripheral tool supply that includes output machines in the customer's production area and an IT-based tool management and controlling system. The objective of KROMI's business operations is to effectively optimize the supply of tools for its clients and to secure the availability of the appropriate tools at the right time and at the right place.
The company is already present at five locations in Germany and four abroad (Slovakia, Czech Republic, Brazil and Spain) and is active in six other European countries. To date, KROMI has primarily focused on customers in the engineering, shipbuilding and aerospace sectors as well as automotive suppliers. In fiscal year 2007/2008, the company recorded revenues of EUR 40.1 million, EBIT of EUR 3.4 million and consolidated net income of EUR 2.3 million. KROMI Logistik AG has its roots in Krollmann & Mittelstädt GmbH, now known as Tarpenring 11 Vermögensverwaltungs GmbH. It was spun off from this company on November 1, 2002 together with Krollmann & Mittelstädt Hamburg GmbH.
On the Internet at www.kromi.de