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[May 2006]
SGL Carbon: Successful First Quarter 2006
Due to the favourable development of demand in all three business units, consolidated sales for SGL Carbon AG (Wiesbaden, Germany) increased by 11% to 267.3 million euro in Q1 2006, or 8% after adjusting for foreign currency changes. There was an above average increase in EBIT of 55% to 33.1 million euro. The main reasons for the growth in earnings were the sustained positive development at Carbon and Graphite, the substantial increase in income at Specialties and cost savings of approximately 5 million euro in the first quarter of 2006.
Net financing costs recorded a slight improvement in Q1 2006 to minus 12.3 million euro compared with minus 13.1 million euro in the same quarter of the previous year. This is a result of reduced net interest expenses due to the decrease in financial liabilities and lower interest expenses in connection with the antitrust proceedings, resulting from the earlier than scheduled payment of the remaining North American antitrust liabilities in 2005.
The proceeds from the capital increase of March 2006 were used to fund the first EU antitrust fine in April 2006. Consequently, the bank guarantee for this EU antitrust fine was cancelled. Therefore guarantee fees and interest accruals are no longer required. These measures benefit the net financing costs so that from the current perspective SGL expects a financial result of approximately minus 50 million euro in 2006.
During the reporting period, earnings before income taxes more than doubled from 8.2 million euro to 20.8 million euro. With a tax rate of 40%, net profit for the period more than tripled from 3.9 million euro to 12.4 million euro. With an average number of shares of 57.5 million euro, the earnings per share were 0.22 euro in Q1 2006 compared with 0.07 euro in Q1 2005.
As a result of the capital increase and the net profit for the period, equity as at 31 March 2006 increased by 99 million euro to 421 million euro, thus leading to an improvement in the equity ratio from 27.2% to 33.9%. The cash funding of the EU antitrust fine relating to graphite electrodes to the amount of around 69 million euro plus accumulated interest made in April 2006 will again lead to a shortening of the balance sheet in Q2 2006.
SGL said that Specialties sales increased by 22% to 72.3 million euro, currency adjusted by 19%, with all businesses contributing to the sales growth. In particular, demand from North America and from the Automotive and Mechanical Applications and Solar Energy customer sectors showed a favourable development. EBIT increased more than fivefold compared to the weak Q1 2005. Return on sales with 12.2% reached the company's target range of 10%–15% for the first time.
www.sglcarbon.de
ENDS