Bulten AB announced second quarter sales at SEK 781 million, a decrease of -3.5% on same period 2018. EBIT fell to SEK 21 million (2018 Q2: 57m) equating to an operating margin of 2.7% (2018 Q2: 7.1).
Adjusted for relocations costs in China, EBIT totalled SEK 27 million, equating to an adjusted operating margin of 3.4%. Earnings after tax amounted to SEK 14 million, compared with 40 million same quarter 2018. Order bookings totalled SEK 752 million, a decrease of -12% on same period last year.
Net sales for the first six months were SEK 1,591 million, a decrease of -4.3% against first half 2018. EBIT totalled SEK 79 million, down from SEK 124 million for first half 2018, and equating to an operating margin of 4.9%. Order bookings totalled SEK 1,485 million, a decrease of -9.1% on the same period last year.
Bulten had earlier issued a warning that earnings for the second quarter were negatively affected due to a lower production rate in order to adjust the stock level.
President and CEO, Anders Nyström, commented: “The second quarter saw a continuation of the decline on the car market which began in the second half of 2018, and the market situation is reflected in Bulten’s lower volumes. Net sales decreased by -3.5%. Earnings were affected negatively by a lower rate of production in order to balance inventory levels to demand, but also due to lower sales, primarily toward the end of the quarter. The lower production rate has brought the reduction in inventories according to plan, but also resulted in a lower utilisation of the production units’ capacity and thus under-absorption of fixed costs. The ambition of adapting inventory levels was previously communicated in connection with the Q1 report. The under-absorption had a negative impact on earnings of approximately SEK 25 million during the second quarter.”
“We are not satisfied with the development during the quarter, but the adjustment of production rate was necessary in the prevailing market climate. At present, demand remains lower than last year, and volumes related to new contracts have ramped up more slowly than anticipated. With this in mind, the production rate will remain lower at the start of Q3. A review of the company’s costs has been initiated for adaptation to the current market situation.”
Bulten has contracts in place worth just over half a billion SEK a year at full production in 2021. During the first half-year it also won several smaller contracts with a total annual value of approximately SEK 20 million, in addition to those worth around SEK 130 million already announced.
Having held senior management roles in leading automotive and fastener businesses, Phil joined Fastener + Fixing Magazine as editor in 2002. Convinced there is no substitute for ‘being there’, over 17 years of visits and interviews around the world means he has accumulated an extraordinary knowledge and perspective of the global fastener industry, reflected in his incisive and thought provoking reporting.