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Draka Holding NV Draka expects a limited increase in operating result and a strong improvement in net income in the first half of 2008 despite currency impact
* Draka expects operating result to rise to around € 75 million in H1 2008 (H1 2007: € 70.5 million); adverse impact of currency movements of around 10%
* Net income expected to increase to approximately € 51 million (H1 2007: € 39.6 million), including net tax benefit of around € 6 million
* Operating working capital as a percentage of revenues expected to be lowered to 16-18% (H1 2007: 18.6%)
* Draka's YOFC joint venture in China extended by one year; negotiations opened on extension for further 19 years
Amsterdam, 11 June 2008 - This trading update for the first half of 2008 is issued by Draka Holding N.V., one of the world's leading manufacturers of low-voltage cable, OEM cable and communication cable, ahead of the publication of its half-year figures on Monday, 1 September 2008 (before start of trading).
For the first half of 2008, Draka expects an operating result of approximately € 75 million (H1 2007: € 70.5 million) and net income of approximately € 45 million (H1 2007: € 39.6 million), both excluding non-recurring items[1]. Including non-recurring items, net income will be around 30% higher, or around € 51 million. This result includes a non-recurring net tax benefit of approximately € 6 million. The provision for the closure of the plant in Vigo (Spain), which was announced earlier this year, is not included in this forecast and will be announced at the time of publication of the half-year figures.
The sound underlying performance is the product of sustained volume growth, operational improvements, cost-saving programmes and further improvements in the product mix. The volume growth will be driven by almost all of Draka's activities except for the Automotive & Aviation division (Industry & Specialty Group). Although the prices of raw materials (copper and polymers) are still volatile, the effect on margins is expected to be modest. On the other hand, adverse movements in certain currencies (especially the US dollar and sterling) relative to the euro are expected to have a 10% negative effect on Draka's operating result.
Cost-control programmes will again be a factor in the growth in results and are expected to contribute around € 5 million in the first six months of 2008. This saving is due entirely to the Stop, Swap and Share (Triple S) programme launched in 2006 at the Communications Group (Cable Solutions EMEA division).
[1] No non-recurring items were reported in the first half of 2007.
Board of Management Amsterdam, 11 June 2008
Pdf version of the press release
Pdf versie van het persbericht
NOTE FOR EDITORS: for more information, contact:
Draka Holding N.V. Michael Bosman - Director Investor Relations +31 20 568 9805
2008 financial calendar (provisional)
Monday, 1 Publication of 2008 half-year September 2008 figures (before start of trading)
Thursday, 13 November 2008 Publication of trading update for second half of 2008 (before start of trading)
Company profile Draka Holding N.V. ('Draka') is the holding company of a number of operating companies which engage worldwide in the development, production and sale of cable and cable systems. As from 2008, Draka's activities are divided into three Groups: Energy & Infrastructure, Industry & Specialty and Communications.
Within these three Groups, the activities have been split up into divisions. Energy & Infrastructure consists of the divisions Europe, Australasia and Greater China; Industry & Specialty consists of the Automotive & Aviation, Elevator Products, Cableteq USA and Industrial divisions, while the Communications Group is divided in the divisions Cable Solutions Americas, Cable Solutions EMEA, Optical Fiber and Mobile Networks.
Draka has 68 operating companies in 30 countries throughout Europe, North and South America, Asia and Australia. The Company has a flat, decentralised organisational structure with short lines of communication. The divisions enjoy a large measure of autonomy and are responsible for their revenue and profits. Worldwide the Draka companies have some 9,550 employees. The head office of Draka Holding N.V. is established in Amsterdam. In 2007, Draka generated revenue of € 2.8 billion and a result attributable to shareholders of € 93.0 million.
Draka Holding N.V. ordinary shares and subordinated convertible bonds are listed on Euronext Amsterdam. The Company was included in the Next150 index in 2001 and the AMX-index (Amsterdam Midkap index) since 4 March 2008. Options on Draka shares have also been traded on the Euronext Amsterdam Derivative Markets since 8 July 2002.
