Homag Profits from Cost-Cutting Measures
November 14, 2011 | 5:53 pm UTC
Homag Sales Climb 11% in 2011

Homag Profits from Cost-Cutting MeasuresSCHOPFLOCH, GERMANY -- Homag Group AG reported third quarter sales of EUR 204.6 million ($279.5 million), a 19.6% increase over the same period in 2010.

Homag Group said it also saw its profitability improve in the third quarter of 2011, both compared to the prior year and compared to the first two quarters of 2011. The net profit for the period after non-controlling interests came to EUR 2.7 million($3.7 million) compared to EUR 0.3 ($505,000) for Q3 2010.

“Here we can see the impact of our cost cutting measures that we adopted and implemented in response to the poorer results for the first six months of 2011,” said Homag CEO Dr. Markus Flik. “These include a restrictive recruiting policy and clear targets to reduce other operating expenses.”

Last month, Homag announced plans to close its Friz and Torwegge manufacturing facilities and consoldiate their operations into existing plants.

Homag noted that operative EBITDA before employee participation expenses and before extraordinary expenses from restructuring measures increased in the third quarter of 2011 by 24.8% percent to EUR 17.1 million ($23.4 million).  , and leads to earnings per share of EUR 0.17 (prior year: EUR 0.02).

Homag anticipates 2012 sales revenue and net profit to be on par with 2011.

Flik said the outlook for 2012 is still dominated by substantial uncertainty at present. “The prospects for the global economy have dimmed and our customers have become somewhat more cautious. At the same time, we are still seeing promising inquiries underscoring the continued keen interest in our products.”

Homag is represented in the United States by Stiles Machinery Inc. of Grand Rapids, MI. The company operates as Homag Canada, with a national headquarters in Mississauga, ON.

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