Sales revenue declines in the first half of 2019
Shanghai/Wattwil, 27 August 2019
Key developments
- Sales revenue decreased by 17.5% to RMB 3 816 million
- Profit before tax dropped by 32.6% to RMB 381 million
- Asia (excl. China/India) region grew by almost 15%
- Uzbekistan and Mexico performed well
Mr Clement Woon, Chief Executive Officer, 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, like 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.
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.
While we received 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 year | 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 |
Show table
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 |
Show table
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% |
Show table
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 fibre, carpet yarn and tire cord in 2017 and 2018 – the resulting oversaturation 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% |
Show table
Sales revenue in Saurer’s three largest markets dropped. In China, this meant a decline to RMB 2 171.9 million (-10.8%) while sales in India decreased to RMB 283.4 million (-19.4%). In Turkey revenue fell to RMB 112.9 million (-73.4%). The region Asia (excl. China/India) performed well with a growth in sales of 14.9%, amounting to RMB 795.5 million. Uzbekistan was a major contributor to this result. In the Americas region (-32.9%), performance was mixed, with Mexico seeing good growth while the USA experienced a downturn.
The full half-year financial statement in Chinese is published on our Investor Relations page under "Financial information" and on the website of the Shanghai Stock Exchange.
Investor relations
Daniel Zeng
Secretary to the Board
Saurer Intelligent Technology Co Ltd.
Shanghai, China
T +86 21 22262549
dlu-china-ir@saurer.com
Media relations
Corporate Communications
Saurer Group
Wattwil, Switzerland
media@saurer.com
Disclaimer
This document may contain forward-looking statements. Forward-looking statements reflect the views of the management of Saurer Intelligent Technology Co Ltd. as of the date of publication. The forward-looking statements may involve risks and uncertainties, including – but not confined to – technological advances, product demand and market acceptance, the effect of economic conditions, the impact of competitive products and pricing, foreign currency exchange rates, changes in legal requirements, political measures and other risks. All of these forward-looking statements are based on estimates and assumptions made by the Saurer management and are believed to be reasonable, but are inherently uncertain and difficult to predict. Actual results or experience could differ materially from the forward-looking statements. Saurer disclaims any intention or obligation to update these forward-looking statements. It should also be noted that past performance is not a guide to future performance. Investors must not rely on this information for investment decisions and are solely responsible for forming their own investment decisions.