Rieter reported that its order intake during January-June 2019 fell 26% from the year before to CHF 378.3 million, mainly because of low demand for new machinery. Its market share remained unchanged at the previous year’s level of around 30%.
The order backlog as of June 30th was CHF 295 million, as compared with CHF 325 million on December 31st, 2018.
The order intake by Business Group Machines & Systems dropped 34% to CHF 196.2 million. The factors that made customers reluctant to invest were, primarily, overcapacity of spinning mills, the trade conflict between the U.S. and China, and political and economic uncertainties in other regions of importance to Rieter. In addition, some customers waited to see the innovations presented at ITMA in Barcelona this June before making investment decisions.
Sales during the first half of 2019 declined by 19% to CHF 416.1 million, mainly attributable to lower demand for new machinery, which has prevailed since the fourth quarter of 2018.
By region, sales in Asia (excluding China, India and Turkey) fell 17% to CHF 165.4 million, along with those in China by 12% to CHF 72.6 million, Turkey by 58% to CHF 24.5 million, North and South Americas by 8% to CHF 54.8 million, Europe by 13% to CHF 23.1 million, and Africa by 68% to CHF 9.0 million. Sales increased in Vietnam and Pakistan, along with those in India by 11% to CHF 66.7 million.
The drastic decline in machinery sales resulted in operating losses (EBIT) of CHF 1.2 million, as compared with operating profits of CHF 14.1 million in the year before.
Net losses amounted to CHF 3.8 million, as compared with net profits of CHF 10.9 million during the first half year 2018.