KHD's 1H16 revenue amounted to EUR66.6m, considerably lower than the figure for the
previous year (EUR89.4m). Reasons for the decrease of 25.5 per cent are the relatively low order backlog at the beginning of the year, delays in project execution, reductions in order value and order intake that did not materialise in the 1H16.

The gross profit for the first half-year was EUR-2.1m (previous year: EUR-10.5m). Cost of sales include EUR3.8m of idle capacity costs due to under-utilisation of existing capacities (previous year: EUR2m). Because these costs are not directly associated with the revenues recognised, they were corrected when determining the adjusted gross profit. The adjusted gross profit for the 1H16 was EUR1.7m (previous year: EUR-8.5m). In comparison with the previous year, the adjusted gross profit is slightly positive, but it is still at an unsatisfactory level and continues to be characterised by projects won in a highly competitive environment with strong margin pressure. Significant contributions to revenue came primarily from projects in India, North America and Russia.

In addition, some individual large projects showed an increase in costs to complete, resulting
in a considerable increase in the estimated total costs. In contrast to the first six months of the financial year 2015, sales expenses increased by 29.7 per cent, from EUR4.8m to EUR6.2m. Due to the ongoing difficulties in the market environment, KHD consciously invested in the expansion of sales activities, which focus on strategically important projects in KHD’s core markets. These core markets traditionally
include the Iranian market as well.

Earnings before interest and taxes (EBIT) increased from EUR-28.5m in the previous year to a current amount of EUR -18.8m. The adjusted EBIT (after eliminating idle capacity costs) improved from EUR-26.5m to EUR-15m. The low sales volume combined with the unsatisfactory gross profit margin – particularly due to the distinct effects explained above – have resulted in a considerably negative EBIT margin of -28.3 per cent (previous year: -31.9 per cent) in the 1H16.

Net finance income decreased by EUR0.9m from EUR4.3m to EUR3.4m. The Group net result for the period was EUR-17.3m (previous year: EUR-25.8 m), which translates into diluted and basic earnings per share of EUR -0.35 (previous year: € -0.52).