CEAG publishs the Third Quarter Report 2005
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| 11/09/2005 |
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| CEAG publishs the Third Quarter Report 2005 |
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CEAG Group Accelerates Growth in Third Quarter
Consolidated revenue up 36% by end of third quarter 2005Consolidated net profit shows clear improvement despite additional expenditureNew customers contribute more than 10% to revenue in the FMP business unit
Ostbevern, November 9, 2005
– In the third quarter of 2005, CEAG AG succeeded in further accelerating growth in unit sales and revenue. In the first nine months of the year, the results of operations of the manufacturer of high-quality FRIWO brand power supplies and chargers were burdened by additional expenditure yet saw a clear improvement year on year.
Unit Sales
The CEAG Group sold a total of 53.3 million power supplies and chargers in the third quarter of 2005 compared to 39.6 million units in the same quarter of the prior year. This corresponds to an increase of 34.6%. Unit sales therefore rose once again against the first quarter (40.5 million units) and the second quarter (46.5 million units). CEAG’s three Chinese plants were operating at full capacity. The Group’s unit sales rose 32.2% to 140.3 million units in the first nine months (prior-year period: 106.1 million units).
The FRIWO Mobile Power (FMP) business unit, which caters to the high-volume mobile telephone market, sold 125.9 million units in the first three quarters, compared to 97.3 million units in the same prior-year period (up 29.3%).
The FRIWO Power Solutions (FPS) business unit, which focuses on highly fragmented markets such as medical technology and household appliances and power tools, was able to increase unit sales to 14.4 million units in the first nine months, an increase of 63.9% when compared to the 8.8 million units sold in the same prior-year period.
Revenue and Earnings
The CEAG Group reported revenue of EUR 153.5 million for the nine months, a rise of 36.3% on the EUR 112.6 million generated in the same prior-year period. Revenue grew by 40.6% to EUR 59.3 million in the third quarter.
Results of operations were impaired by negative cost effects. These included the continuing high price of important raw materials, appreciation of the Chinese currency against the US dollar, wage increases in China as well as temporary interruptions to the energy supply to the Chinese plants. Some of the additional expenditure was passed on to CEAG customers in the form of price increases. Furthermore, a provision of EUR 0.8 million was recognized by the FPS business unit in the third quarter to cover a product recall. The Group nevertheless succeeded in generating earnings before interest and taxes (EBIT) of EUR 3.1 million in the period from January to September 2005, a clear improvement on the prior-year figure (EUR 2.0 million). Consolidated net profit for the first nine months grew from EUR 1.1 million to EUR 2.3 million.
Performance of the Business Units
In the period from January to September 2005, the FMP business unit saw its revenue increase by 37% to EUR 107.5 million, following EUR 78.5 million in the prior-year period. In addition to market-share gains by a regular customer in the mobile telephone market, this growth is also attributable to the acquisition of new customers in 2005. These new customers contributed more than 10% to revenue in the first nine months. FMP increased its EBIT in the first nine months from EUR 1.2 million to EUR 2.8 million.
At EUR 46.0 million in the period from January to September 2005, the FPS business unit increased revenue by 34.8% against the prior-year period (EUR 34.1 million). Due to the provision recognized, the nine-month EBIT came in EUR 0.3 million lower than in the same prior-year period (EUR 0.8 million).
Outlook for 2005
Given the continuing growth trend in the global mobile telephone market and the favorable prospects in the FPS business unit, the CEAG Group is confident that unit sales and revenue will continue to grow in the fourth quarter, its strongest quarter. However, strong demand could also lead to production bottlenecks yet the Group should be able to counteract these with extraordinary expenditure on overtime and air transportation, for example.
More information:
CEAG AG
Ms. Gudrun Richter
Investor Relations
Tel.: +49 – 2532 – 81 158
E-mail: richter@friwo.de
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