Delticom warns on profit outlook in 3Q results
Delticom has reported revenues of 280.4 million euros in the first three quarters of 2012, down some 5.8 per cent compared with the previous year. The preliminary results show that pre-tax profits (EBIT) amounted to 17.5 million euros, which suggests this figure fell by around a third compared with last eyar. By comparison, in the first nine months of 2011 revenues increased by 15.8 per cent to 297.7 million euros and EBIT by 23.3 per cent to 28.2 million euros. As a result of the “challenging market environment” Delticom warned investors that it is scaling back its EBIT goal for the current financial year to 7 – 8 per cent.
Following a weak first half of the year, Delticom put the slowing figures down to the European tyre replacement market’s recent tendency to lag behind expectations: “After the summer tyre business had already been disappointing, the winter tyre season started much slower than last year,” company representatives wrote in their financial statement.
Broken down to the third quarter, the company reported revenues of 87.2 million euros compared with 99.4 million euros in the same period of 2011 (–12.3%). While e-commerce turnover fell 5.9 per cent in the quarter, the overall fall in revenues appears to have been mainly shouldered by the company’s wholesale division as quarterly revenues in this area decreased by 67.5 per cent to 3.4 million euros, resulting in nine-month 12 revenues coming down by 36.7 per cent to 11.7 million euros.
Earnings performance was similarly negatively affected. EBIT for the reporting period came down 37.9 per cent from 28.2 million to 17.5 million euros. EBIT margin was 6.2 per cent compared with 9.5 per cent in the comparable period in 2011. Meanwhile third quarter EBIT saw a decline of 55 per cent, from the prior year’s 9.5 million euros to 4.3 million euros.
Commenting on the outlook for the future, Delti’s financial statement suggested that there will not be any immediate change: “While last year’s winter tyre season benefitted from an early start, this year the winter tyre business has so far been relatively sluggish. Despite good demand for winter tyres in some European countries, management does not expect the company to exceed annual prior-year revenues anymore.”