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Despite higher interest outgo SGL reduces 2014 loss

23 Mar '15

3 min read

Despite a higher interest outgo, cost saving programs has helped SGL Group reduce its losses in 2014 as against 2013 and it also expects that it will increasingly bear fruit in 2015.

According to a SGL Group press release, net loss reduced to €49.5 million in 2014 from a loss of €52.1 million in 2013, despite higher interest expenses.

In 2014 alone, SGL achieved cost savings totaling €88 million and savings of €157 million have been realised since the start of the SGL2015 program.

Accordingly, loss before taxes from continuing operations in 2014 fell significantly to €104.4 million compared to loss of €161.1 million in the previous year.

Subtracting income taxes, the net loss from discontinued operations, as well as non-controlling interests, also slipped by around 20 per cent year over year to €247.0 million in 2014.

“Almost half or €119.2 million of this loss was attributable to Hitco, which is currently in the process of being divested,” SGL explained.

SGL said despite a slight improvement in some businesses in the second half of the year, 2014 was impacted by the difficult business environment, mainly in the field of graphite electrodes.

Group sales slipped by 6 per cent to €1,335.6 million in 2014 as against €1,422.6 million in 2013, while recurring EBIT amounted to €2.7 million compared to €22.8 million last year.

EBIT margin decreased from 1.6 per cent to 0.2 per cent, while non-recurring charges in 2014 declined significantly to €51.2 million from €122.8 million.

Due to these significantly lower one-offs, Group EBIT after non-recurring charges improved by more than 50 per cent to a negative €48.5 million compared to also a negative €100.0 million in the previous year.

SGL expects that 2015 earnings will improve significantly compared to 2014 based on stable sales, with improvement coming from positive effects from the cost savings program.

SGL said the overall savings target, which was already increased from the original €150 million to more than €200 million in September 2014, has been raised yet again to €240 million.

“With the capital increase successfully completed in October 2014, the balance sheet was strengthened and the foundations laid for an accelerated strategic realignment,” the carbon company observed.

Total assets as of December 31, 2014, increased 5 per cent year over year to €2,170.3 million, due to higher liquidity and foreign exchange effects.

Equity attributable to the shareholders of the parent company amounted to €567.6 million down from €607.7 million as on December 31, 2013.

“This decline was mainly due to the negative Group result and the adjustment of discount rates for pension provision calculations,” it explained.

Jürgen Köhler, CEO of SGL Group said, “We have created a solid foundation for the planned return to sustainable profitable growth and we expect to see this in 2015.” (AR)

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