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PRESS RELEASE: SMT Scharf AG significantly increases revenues and earnings in 2019 thanks to strong business in China

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DGAP-News: SMT Scharf AG / Key word(s): Annual Results
SMT Scharf AG significantly increases revenues and earnings in 2019 thanks
to strong business in China

2020-03-30 / 12:00
The issuer is solely responsible for the content of this announcement.

*SMT Scharf AG significantly increases revenues and earnings in 2019 thanks
to strong business in China *

*- Consolidated revenue of EUR 75.4 million well above previous year*

*- Operating profit (EBIT) grows significantly to EUR 6.8 million *

*- Strong business in China delivers strong revenue and earnings surge in
Q4/2019 *

*- Progress of business in China in 2020 still dependent on China III
approval*

Hamm, March 30, 2020 - SMT Scharf AG (WKN 575198, ISIN DE0005751986), one of
the world's leading suppliers of customized transport solutions and
logistics systems for underground mining, achieved significant revenue and
earnings growth in the 2019 fiscal year, on the basis of final figures. This
growth particularly reflected a dynamic increase in revenue in China, where
business slowed much less than expected as a consequence of continuing
market distortions caused by the new regulation for engines (China III). SMT
Scharf increased its consolidated revenues by 6.5 % to EUR 75.4 million
during the year under review (2018: EUR 70.8 million). At the same time, the
company achieved an operating result (EBIT) of EUR 6.8 million (2018: EUR
5.3 million), which corresponds to a significant rise of 28.3 %. SMT Scharf
improved its consolidated net profit for the year by EUR 1.1 million
year-on-year to EUR 5.7 million (2018: EUR 4.6 million).

Hans Joachim Theiss, CEO of SMT Scharf AG, puts the 2019 business trend into
context: "As a niche specialty machinery manufacturer, we are well
positioned in the important mining markets to benefit from growth
opportunities and the continuing drive for modernisation among mine
operators. In 2019, we have again increased revenue and profitability in the
face of an increasingly complex market environment. Our strong business in
China gave us a strong boost, enabling us to exceed even our original
forecast targets."

From 2021, the new so-called China III regulation will be binding for mine
operators in China. In order to make full use of their capacities, some
companies have decided to use transport solutions with China II approval for
the time being. SMT Scharf thereby recorded unexpectedly strong revenue
growth in the final quarter of 2019. Consolidated revenue reached EUR 25.7
million in this period, up 8.4 % year-on-year (Q4 / 2018: EUR 23.7 million)
and making a significant contribution to the clearly positive revenue growth
in the full 2019 fiscal year.

In line with this, total operating revenue rose to EUR 74.8 million (2018:
EUR 71.0 million). Against a backdrop of a challenging and highly
competitive sector environment, SMT Scharf increased its revenues in its
business with new systems. New systems' revenue share reached 52.2 %, and as
in the previous year lay above the 50 percent mark (2018: 50.3 %). By
contrast, the share of spare parts and service business in relation to total
revenue stood at 46.6 %, down slightly on the previous year (2018: 49.7 %).
In addition, the remaining revenue share is attributable to other revenues
of the new Group subsidiary ser elektronik. SMT Scharf continues to generate
most of its consolidated revenue in its Coal segment, where it reported
revenue of EUR 60.6 million, corresponding to a revenue share of 80.4 %
(2018: 78.7 % or EUR 55.7 million). By contrast, the revenue share of the
Non-Coal segment decreased by 15.9 %, or by EUR 12.0 million, in both
relative and absolute terms (21.0 % and EUR 14.9 million respectively in
2018).

The SMT Scharf Group continued to realise most of its revenues abroad,
accounting for a 97 % share in 2019 (2018: 98 %). In this context, China
underscored its continued significant role as the most important market with
a revenue share of 41.5 %, or EUR 31.3 million (2018: 40.0 % or EUR 28.3
million). The local mining industry in China continues to report high demand
for modern mining equipment. Demand in the Chinese market is also being
driven by the acquisition of new machines, necessitated by the more
stringent China III regulations. Russia (CIS) remains an important target
market accounting for a 20.6 % revenue share, or EUR 15.5 million (2018:
22.0 % or EUR 15.6 million). Revenue generated in Germany grew to EUR 2.5
million or 3.3 % (2018: 2.1 % or EUR 1.5 million), reflecting the revenue
contribution made by ser elektronik, a newly acquired company based in
Germany.

The cost of materials ratio (in relation to total operating revenue)
decreased to 52.8 % compared to the previous year (2018: 58.6 %). The
personnel expense ratio (in relation to total operating revenue) amounted to
24.5 % and was up on the previous year's figure (2018: 21.4 %) due to the
higher headcount in Germany. Overall, the SMT Scharf Group generated a
significantly higher operating profit (EBIT) of EUR 6.8 million in the year
under review (2018: EUR 5.3 million). Accordingly, the EBIT margin (in
relation to total operating revenue) stood at 9.1 % (2018: 7.5 %), with the
higher revenue and improved cost of materials ratio contributing
significantly to this higher level. Correspondingly, earnings per share
amounted to EUR 1.20 (2018: EUR 1.01).

In the year under review, the SMT Scharf Group's new order intake amounted
to EUR 80.6 million (EUR 75.3 million in 2018), while the order book
position stood at EUR 24.9 million as of December 31, 2019 (December 31,
2018: EUR 19.7 million).

For the 2020 fiscal year, the Managing Board of SMT Scharf AG anticipates
consolidated revenue in a range between EUR 72 million and EUR 75 million,
and EBIT in a range between EUR 5.5 million and EUR 6.0 million. The
Managing Board made this Group forecast on the basis of the information
available on the date the report was published in March 2020, at which time
no specific economic impact on SMT Scharf's figures from the coronavirus
pandemic could be quantified. At the same time, the Managing Board believes
that increasing signs are emerging that the spread of the coronavirus could
have a significantly negative impact on economic growth in SMT Scharf's
target markets as a whole, and on the company's own business activities
during the remainder of 2020.

"We see the ongoing coronavirus pandemic as a significant factor for the
current fiscal year. We are not yet in a position to fully gauge the
consequences of this factor for our company. Consequently, it cannot be
ruled out that the spread of coronavirus will delay business activities in
China and worldwide. With a look to the Chinese market, we expect that the
ongoing approval process will place an additional burden on business there
in the first half of 2020, and we do not anticipate the related positive
effects on our business to emerge until the second half of 2020 at the
earliest. We can then probably start to deliver newly approved China III
machines," notes Theiss.

The complete 2019 Annual Report will be published during the course of today
within the Investor Relations area of www.smtscharf.de.

*Company profile*
The SMT Scharf Group develops, manufactures and services transportation
equipment for underground mining as well as for tunnel construction. The
main products include captivated railway systems that are deployed
worldwide, primarily in hard coal mines, as well as in mines for gold,
platinum and other metals. Such systems are required in order to transport
material and personnel with payloads of up to 48 tonnes and on gradients of
up to 30 degrees. In addition, SMT Scharf supplies the mining sector with
chairlifts. Since 2018, SMT Scharf's diverse portfolio has also included
rubber-tyred diesel and electric vehicles for mining and tunnelling,
including loaders, scissor lifts and underground trucks. As part of the
further diversification of the business, the product range has been
successfully expanded since 2019 to include electronic components and
control systems for mining and other industries. Overall, the SMT Scharf
Group is active with subsidiaries in eight countries, as well as commercial
agencies worldwide. SMT Scharf generates a large share of its revenue in
growing foreign markets such as China, Russia, Poland and South Africa. SMT
Scharf AG has been listed in the Prime Standard (Regulated Market) of the
Frankfurt Stock Exchange since 2007.

*Contact*
Investor Relations
cometis AG
Thorben Burbach
Tel: +49(0)611 - 205855-23
Fax: +49(0)611 - 205855-66
Email: burbach@cometis.de

2020-03-30 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
Language: English
Company: SMT Scharf AG
Römerstrasse 104
59075 Hamm
Germany
Phone: +49 2381 960-01
Fax: +49 2381 960-311
E-mail: info@smtscharf.com
Internet: www.smtscharf.com
ISIN: DE0005751986
WKN: 575198
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover,
Munich, Stuttgart, Tradegate Exchange
EQS News ID: 1010195

End of News DGAP News Service

1010195 2020-03-30



(END) Dow Jones Newswires

March 30, 2020 06:00 ET ( 10:00 GMT)
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