
Gränges, a leading global supplier of rolled aluminium products for heat exchanger applications and other niche markets, reported sales volume of 92.9 ktonnes (99.1) in the second quarter of 2019. Net sales dropped to SEK 3,188 million (3,443).
Adjusted operating profit stood at SEK 257 million (301), while adjusted operating profit per tonne amounted to 2.8 kSEK (3.0). Profit decreased to SEK 171 million (214) in the second quarter of 2019.
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Gränges’ CEO Johan Menckel said: “The softer market conditions that we experienced in the first quarter continued in the second quarter of 2019. Lower market demand resulted in a sales volume decline of 6 per cent to 92.9 ktonnes. The adjusted operating profit declined by SEK 44 million to SEK 257 million and included costs for the US expansion projects of SEK 16 million. Exchange rate fluctuations had a positive impact on adjusted operating profit of SEK 22 million during the quarter. The cash generation continued to be strong also in the second quarter. Cash flow before financing adjusted for expansion investments and acquisitions increased to SEK 249 million, which represents a cash conversion of 97 per cent.”
“During the second quarter market conditions were especially challenging in Europe and Asia, where the sales volume to automotive customers declined by 10 and 7 per cent respectively. This was driven by a continued significant slowdown of the light vehicle production in combination with further destocking in the supply chain. In Americas, the automotive sales volume was stable in the quarter. With regards to the HVAC & Other business, the market demand in Americas continued to develop positively in the quarter.”
In the first half of 2019, sales volume was 183.7 ktonnes (194.2). Net sales declined to SEK 6,297 million (6,514). The company’s adjusted operating profit was SEK 532 million (583), while adjusted operating profit per tonne amounted to 2.9 kSEK (3.0).
Profit dropped to SEK 355 million (381) in the first six months of 2019.
“Due to the continued soft market outlook in primarily Europe and Asia we are now implementing cost reduction measures to align the cost base to current market conditions. In Americas large efforts are currently being made to finalize the expansion projects in Huntingdon and Newport. Start of production is planned for August with the first commercial shipments expected in September. Sales volume will gradually be ramped up during the fourth quarter.”
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