March 9, 2010

Cost-cuts boost Andritz's Q4 profit

Andritz AG posted a 8.5% rise in fourth quarter net profit, reversing three consecutive quarters of declines, thanks to successful cost-cutting.

Andritz's fourth quarter net profit rose to EUR37.2 million (US$50.7 million) from EUR34.3 million (US$46.75 million) in the same period a year earlier as the impact of a leaner cost structure trickled down to the bottom line. Sales dropped 19% to EUR867.3 million (US$1.18 billion).

The full-year net profit fell 31% to EUR96.8 million (US$132 million) from EUR139.7 million (US$190.4 million) in 2008 as sales fell 11% year-on-year to EUR3.2 billion (US$4.36 billion) and restructuring expenses of EUR29 million (US$39.52 million) weighed on the bottom line.

The company expects sales this year to be flat or slightly above the level achieved in 2009, while the cost cuts and restructuring measures implemented last year should help generate higher profits for this year.

CEO Wolfgang Leitner said he is sticking to the previously-announced target margin on EDITA of 7% in 2010, up from 6% in 2009. He had expressed his confidence of reaching this ambitious target.

Leitner expects growth in 2010 to come from the hydropower projects business, but sees no substantial increase in investment activity in pulp and paper and metals, Andritz's two other major business areas.