Dutch technology company Stork has returned a mixed set of results for the third quarter of 2003. The group, which is split into 5 main businesses - Prints, Poultry & Food processing, Aerospace, Industrial Components and Technical Services - has experienced sluggish markets within most of its divisions, not least poultry and processing.
Orders received by the strategic activities in the 3rd quarter 2003 were 26 per cent higher than in the 3rd quarter 2002 (Q3 2003: € 459 million, Q3 2002: € 363 million). However, the net turnover of the strategic activities in the 3rd quarter 2003 was 5 per cent lower than in the 3rd quarter of 2002 at € 408 million, compared to € 430 million.
In addition, the group has been handing out redundancy notices to a significant portuion of its workforce. Approximately 80 per cent of the 900 job losses announced in 2002 have now been implemented, and final severance contracts have been agreed with 729 employees.
The total number of permanent employees at 30 September 2003 was 13,671. The figure at the end of 2002 was 16,146.
Within the Poultry & Food Processing division, business remains sluggish. The willingness of the poultry processing industry to make new investments remains below that of previous years and the market for convenience food systems is slow. These factors have affected the group's financial performance.
The company has been keen to put a positive spin on things. Despite the gloomy economic outlook, a number of long-term orders were received in the third quarter. One major order came from Aerospace Industries for the development and prototype production of the inflight opening doors for the Joint Strike Fighter.
The group also made a number of successful product introductions. For example, Stork Poultry & Food Processing introduced a revolutionary system for the hygienic deboning of breast fillets, a system that one the business an innovation award. Another group business, Stork Prints, achieved some success with the development of its Rotaform machine for label printing.
Taking into account the present economic conditions a selective investment policy is being followed. However, due partly to the completion of the new production facility for Glare panels in Papendrecht, investments in 2003 are expected to exceed the level of depreciation.
There has been some positive financial news. Liquidity increased significantly from €115 million to €161 million in the third quarter compared with the second quarter as a result of operational results and divestments of assets. Net debt was further reduced from €59 million to €14 million compared with the second quarter.
"We expect that the net result for the fourth quarter will be at the same level as in the preceding three quarters," said group chief executive Sjoerd Vollebregt. "We will pay particular attention to further increasing our commercial effectiveness and innovative capabilities.
Economic developments in 2004 are difficult to predict. The need to continue working relentlessly on further cost savings and capacity adjustments in line with the relevant market developments therefore remains undiminished."