German printing press manufacturer Koenig & Bauer AG (KBA) won contracts worth €340.6m (NZ$699.176m) in the first quarter, 10.9% below the record figure for the corresponding period in 2005. But despite a weak start to the year, KBA stands by its end-of-quarter prognosis for 2006 of a single-digit increase in sales and a substantial improvement in pre-tax earnings compared to 2005.
KBA’s management is confident that higher margins for work in progress and new contracts, and the substantial reductions achieved in manufacturing costs and overheads, will work through to the bottom line in the course of the year.
However, since it is difficult to calculate the impact on the global economy of the current political climate in Iran and the Middle East, and of changes in the relative values of the euro, US dollar and yen, KBA president Albrecht Bolza-Schünemann says he is unwilling to quote any concrete figures for sales and earnings in 2006.
While new bookings for web and special presses jumped 21.2% following a string of orders for commercial and security presses and big newspaper presses, soft demand in January and February slowed the inflow of new orders for sheetfed presses 29.2% below 2005 (which was 40% up on 2004).
Far from signalling a downturn, the dip in sheetfed contracts proved to be a temporary blip that allowed the sheetfed offset division to consolidate strong prior-year growth before returning to business as usual in March, KBA says.
However, an order backlog up 11.2% up on the high prior-year figure, will keep KBA’s production plants busy until well into the second half of the year.
Lagging sales also impacted on earnings, leading to an operating loss and a net loss of €5.3m (NZ$10.8m) compared to 2005 figure of €6.8m (NZ$13.95m).
