KHD adjusts 2014 forecast, Germany

KHD Humboldt Wedag has adjusted its forecast for the 2014 financial year as its Capex segment has been strongly affected by “risks arising from the current economic and political developments,” according to a statement by the German equipment supplier.

In connection with the crisis in the Ukraine and the resulting uncertainties, KHD highlighted that a large order in Russia will “most likely no longer be considered as order intake for the current year.” This order was announced in April 2014 with an original volume of over EUR90m. However, the company has not yet been able to book this order as order intake.

As a result of this, the group now expects order intake for the 2014 financial year to be just under the 2013 order intake level, which amounted to EUR172.4m. This also means that KHD will not receive the forecasted down payments for this project and therefore operating cash flow for the 2014 financial year is now forecasted to be “significantly negative.”

The reported postponements in order intake as well as further delays in order execution are also having an impact on expected revenues. For the 2014 financial year, KHD is now forecasting a drop in revenue of up to 10 per cent compared to the previous year (EUR249.6m). However, KHD maintains its latest EBIT margin guidance for the 2014 financial year.

The company also noted that its Parts & Services segment is expected to perform better than originally planned.