Bekaert to Cut More Costs as Profits Tumble
by wireworld on 08/12/2012 - 05:19 pm
Tag: Press Releases
Belgian steel-wire manufacturer Bekaert said it would make further cost reductions on a global scale after its recurring operating profit in the first half of 2012 fell by around two thirds.
The collapse in earnings comes after the implosion of the solar panel market last year, which saw profitability for sawing wire products wiped out by overcapacity.
The company, which already announced in February that it would cut about 1,800 jobs in Belgium and China, said it was seeking additional annual savings of 100 million euros ($123 million). It said it would book the restructuring charges for the savings in 2012 and the first half of 2013.
Bekaert made a recurring operating profit of 85 million euros in the first half, down about two thirds compared to the same period last year, but slightly above the 82 million euros expected by six banks and brokerages polled by Reuters.
Bekaert shares have lost three-quarters of their value since an early 2011 peak, and the company said it had booked a 114 million euros in non-recurring items due to restructuring charges and asset impairments.
Bekaert, whose wire is also used to reinforce a quarter of the world's tyres, said that the automotive sector also faced slower demand, particularly in Europe.