KHD closes 2014 with EBIT advance

KHD Humboldt Wedag International AG (KHD) reported EBIT of EUR 1.1m in the 2014 financial year, despite slightly lower revenue.

The German equipment manufacture yesterday said its order intake for the year fell to EUR101.3m due to the “continued slow investment in the cement industry and the corresponding delays in awarding new orders.”

The drop in revenue of 3.8 per cent to EUR240.2m is connected with the lower order backlog at the beginning of 2014. However, its Parts & Services business developed well and contributed EUR59.2m to revenue. Gross profit margin improved from 11.8 to 13.4 per cent.

Despite costs related to increased R&D activities, EBIT was nearly stable at EUR1.1m (previous year: EUR1.2m). Group net profit for the year rose to EUR1.6m (previous year: EUR0.7m), resulting in earnings per share of EUR 0.02 (previous year: EUR0.01). This increase is mainly due to interest income from intercompany loans extended to AVIC during the reporting year totalling EUR100m.

As a result of focused market activity in the emerging economies, and provided that the political situation related to Russia eases, KHD expects significantly higher order intake for the 2015 financial year. However, due to the low order backlog going into 2015, revenue will be significantly below the level of the 2014 financial year. As the execution of projects with low margins continues, EBIT for the current year will likely come in negative.