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Profit increase on previous year
The economic environment remained robust, with clients exhibiting a strong propensity to invest. A key driver for Mikron's business is the continuous development of modern fuel injection systems by the automotive supply industry. Furthermore, Mikron's highly developed machining and assembly solutions are equally in demand from businesses in the medical technology and pharmaceuticals industries, as well as other industries with a need for high unit numbers and strict requirements in terms of the precision and reliability of their products.
Exceptionally high order intake in June
As in the previous year, investment decisions on the part of clients were heavily concentrated in the first six months. In June in particular, both divisions saw gratifyingly high order volumes. Incoming orders of CHF 176.0 million for the first half of the year equated to 77 percent of the total volume for the previous year (CHF 228.7 million). This easily beat expectations. As in the prior year, the order backlog increased by around 10%. In terms of order intake, the Machining Technology division improved slightly upon the already good level of the prior year (+4.0 %). June more than made up for the subdued start to the current business year. The Assembly Technology division recorded a record volume of orders (+45.0 %). This follows a growth figure of 58.6 % for the prior year. While the opening quarter was characterized by orders that were expected to generate lower earnings, the second quarter saw the division book a good number of repeat orders. The performance of the Assembly Technology business in the US was unsatisfactory. Staffing changes and measures to improve sales and manufacturing output were therefore implemented.
Very high capacity utilization in some cases
Net sales of CHF 122.3 million represented a further improvement on an already good figure for the prior year. Both divisions performed in accordance with expectations. Capacity utilization – particularly at the Assembly Technology division's main production site in Boudry/Neuchâtel – was very high. This situation is likely to continue until the start of 2008.
Net earnings exceed previous year
On a practically unchanged volume of sales, the operating profit (EBIT) of CHF 4.0 million was on a par with the previous year's level. The objective of an improvement in profitability was not achieved in the first half of 2007. One reason was the unsatisfactory course of business at Assembly Technology's US production site, as well as individual client projects on the part of the division.
Net earnings rose by CHF 1.8 million versus the prior year to CHF 2.9 million. This was primarily attributable to the disappearance of losses from "discontinued operations" following their deconsolidation in mid-2006.
The current situation, as well as prospects for the next six months, is viewed as encouraging yet challenging. Top priority is being accorded to processing the high concentration of orders on hand at Assembly Technology. Business at the division's US production facility will probably not recover until the next financial year. For the second half of the year, the Mikron Group does not expect a repeat of the high order intake seen in the first half of the year. In terms of net sales, a higher volume is expected. Bearing in mind the fact that the processing of orders takes several months, together with the high concentration of orders in June, some of this will not be reflected in net sales until 2008. An improvement in operating profit (EBIT) has top priority – and this objective is within reach.
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