Vossloh coping with difficult situation rail industry

Lüdenscheid, Germany – “Very respectable” results expected for 2005 / Sharp sales gain planned for 2006.

Notwithstanding the still very difficult situation in the rail industry, the Vossloh Group will achieve the goals most recently targeted for fiscal 2005 and close the year with a very respectable result. Projections predict sales in the region of around €1 billion, up more than 8 percent over the prior-year €922.2 million.

Despite heavy one-off burdens, mostly in connection with the restructuring of the Kiel-based locomotive plant, despite expenditure cutbacks especially on the part of German Rail, and despite the dramatic surge in steel prices, it should be possible from today’s vantage point to end fiscal 2005 with an EBIT of around €90 million (down from €105.8 million in fiscal 2004), equivalent to an EBIT margin of 9 percent.

Group earnings are expected to total just short of €47 million (down from €57.2 million) and earnings per eligible share would then amount to about €3.20 (down from €3.91).

As to ROCE, this is likely to be just under 13 percent (down from 15.3) while the equity ratio is set to rise by 2 percentage points to around 34.3 percent. Especially due to the lower earnings, pretax ROE should reach 20.2 percent (down from 27.1 percent).

This year the average number of employees totaled 4,679 (up from 4,540), mainly because of the first-time inclusion of the Valencia-based acquisition, which also contrasts with the restructuring-related retrenchment at Vossloh Locomotives in Kiel.

Sharp gain in sales in fiscal 2006

For fiscal 2006, Vossloh is budgeting a leap in sales to around €1.14 billion, this figure just as all the other indicators including the acquired Pfleiderer Track Systems. Announced in the summer of 2005, the takeover of this worldwide leading supplier of innovative mainline and urban track systems for rail traffic is still subject to the approval of the cartel authorities.

In spite of the still adverse conditions in the rail industry, especially in Germany, and the high price of commodities, EBIT next year is budgeted to rebound to €106.6 million, well over the figure anticipated for 2005.

Group earnings are targeted at €53.0 million, earnings per eligible share consequently at around €3.60, with ROCE a little over 12 percent. An ROE exceeding 21 percent and an equity ratio just under 33 percent continue to be commendable.

For 2006, Vossloh expects an average workforce of 6,034 (up from 4,679), the surge resulting from the addition of Pfleiderer Track Systems and, especially, from the first-time inclusion of three new subsidiaries majority-held by Switch Systems in India.

Auteur: Redactie Infrasite

Bron: Vossloh AG