German engine maker 201 Deutz Group said it will not meet its forecast for the current financial year.
A sluggish second quarter with “very low” new orders means revenue is expected to fall by around 20% compared with the forecasted 10% drop, according to a corporate statement.
“Consequently, the second half of 2015 will be significantly worse than the first half of the year,” the statement said.
“Given the low level of business, Deutz will only be just about break even in terms of EBIT this year. Until now, an EBIT margin of roughly 3% had been expected. Further measures to improve earnings are under review.
Furthermore, the current reluctance to invest on the part of end customers means that the inventories of a number of European customers that were built up last year in anticipation of the new emissions standards are being used up more slowly than predicted.”
Deutz said it will carry out further analysis of its situation and will not make any forecasts for 2016 at this point in time.
Deutz announced its financial results for the first half of 2015 in August. New orders, which totalled €670.7 million, were down by 10.2% on the figure of €746.8 million reported for the first half of 2014.
However, the level of new orders had risen during the year, with the total volume of €349.7 million in the second quarter of 2015 representing a year-on-year rise of 5.1% (Q2 2014: €332.6 million). This was also a quarter-on-quarter rise of 8.9% (Q1 2015: €321.0 million).
In the first six months of the year, unit sales fell by 21.2%, from 99,079 engines to 78,120 engines. Sales of 41,213 engines in the second quarter of 2015 were 11.7% higher than in the previous quarter but were 24.5% lower than in prior-year quarter (Q2 2014: 54,622 engines).
Revenue was in line with forecasts, falling by 11% year on year to €670.2 million compared with €753.4 million in the first half of 2014.
The revenue decline was attributed to the changes to emissions standards for engines under 130kW that came into force in the European Union on 1 October 2014 and to the resulting effects from the advance production of engines.
The Americas and Asia-Pacific regions achieved revenue growth, whereas the EMEA (Europe, Middle East and Africa) region saw a decline. In the second quarter of 2015, revenue stood at €352.1 million, which was a 10.7% increase on the previous quarter but a 14.3% decrease on the same period in 2014.
Despite the fall in revenue, Deutz noted that operating profit (EBIT before one-off items) remained level with the comparable prior-year period (H1 2014: € 20.1 million).
A sluggish second quarter with “very low” new orders means revenue is expected to fall by around 20% compared with the forecasted 10% drop, according to a corporate statement.
“Consequently, the second half of 2015 will be significantly worse than the first half of the year,” the statement said.
“Given the low level of business, Deutz will only be just about break even in terms of EBIT this year. Until now, an EBIT margin of roughly 3% had been expected. Further measures to improve earnings are under review.
Furthermore, the current reluctance to invest on the part of end customers means that the inventories of a number of European customers that were built up last year in anticipation of the new emissions standards are being used up more slowly than predicted.”
Deutz said it will carry out further analysis of its situation and will not make any forecasts for 2016 at this point in time.
Deutz announced its financial results for the first half of 2015 in August. New orders, which totalled €670.7 million, were down by 10.2% on the figure of €746.8 million reported for the first half of 2014.
However, the level of new orders had risen during the year, with the total volume of €349.7 million in the second quarter of 2015 representing a year-on-year rise of 5.1% (Q2 2014: €332.6 million). This was also a quarter-on-quarter rise of 8.9% (Q1 2015: €321.0 million).
In the first six months of the year, unit sales fell by 21.2%, from 99,079 engines to 78,120 engines. Sales of 41,213 engines in the second quarter of 2015 were 11.7% higher than in the previous quarter but were 24.5% lower than in prior-year quarter (Q2 2014: 54,622 engines).
Revenue was in line with forecasts, falling by 11% year on year to €670.2 million compared with €753.4 million in the first half of 2014.
The revenue decline was attributed to the changes to emissions standards for engines under 130kW that came into force in the European Union on 1 October 2014 and to the resulting effects from the advance production of engines.
The Americas and Asia-Pacific regions achieved revenue growth, whereas the EMEA (Europe, Middle East and Africa) region saw a decline. In the second quarter of 2015, revenue stood at €352.1 million, which was a 10.7% increase on the previous quarter but a 14.3% decrease on the same period in 2014.
Despite the fall in revenue, Deutz noted that operating profit (EBIT before one-off items) remained level with the comparable prior-year period (H1 2014: € 20.1 million).
