The German-based processing machinery giant pin-pointed burgeoning demand from Asia, and China in particular, as the major factor in the significant increase in year-on year orders from €1.036bn in 2009 to €1.167bn for the three month period ending 30 June. This figure is the highest level since the outbreak of the financial and economic crisis, said GEA.
At €1.065bn, revenue in Q2 was up 13.5 per cent on Q1 2010 but 3.5 per cent below the prior-year quarter. The firm said that higher-than-expected restructuring costs had hit Q2 profits which fell 11 per cent to €28.8m from €32.4m in 2009.
Chinese demand
A company spokesman told FoodProductionDaily.com that it expected China, currently its third most important market behind Germany and the United States, to become the group’s most lucrative sector by the end of 2013.
“Demand for our beverage and food process technology in Asia, and in particular in China, is currently extremely encouraging,” added Jürg Oleas, CEO of GEA Group. “At the beginning of July, we recorded another major order worth over €30 million in the food segment from this region.”
He said that growth of orders was developing as the company had previously foreseen and said the company was confident it would hit its forecast in this area as long as the global economy did not slide back into recession.
“Provided that this positive trend is not slowed by fresh turbulence in the global economy, we should meet our 2010 revenue target of €4.4 billion,” said Oleas.
Restructuring
GEA said that €60.3m restructuring costs – mainly connected with its heat exchange division - had been higher than expected in the first half of 2010. Some 595 jobs had been cut since the end of Q2 2009 – with 474 of these shed since the start of the year. The efficiency drive would see the closure of some facilities although not a reduction in the number of production lines – as these would be transferred to other plants, said the spokesman. A further €60m worth of restructuring costs would be carried out in the second half of 2010.
Outlook
The firm said its outlook for the remainder of the year was good.
“We expect an improvement in the second half of the year, when revenue – with a time lag – will follow the upward trend in order intake,” said Oleas.