Glaston Interim Report 1 January - 30 June 2008

Finland's Glaston Technologies has released on 14 August 2008 its interim report for the period of January 1 to June 30, 2008.

Highlights include:

- In January-June, orders received totalled EUR 115.1 (124.9) million.

- Glaston's order book on 30 June 2008 was EUR 98.9 (116.2) million.

- In January-June, the Group's net sales grew by 10% to EUR 135.7 (123.7) million. In the second quarter, net sales totalled EUR 72.6 (65.6) million.

- Operating profit in January-June excluding non-recurring items was EUR 5.4 (5.5) million, i.e. 4.0 (4.4)% of net sales. Operating profit in the second quarter was EUR 3.8 (3.8) million, i.e. 5.2 (5.8)% of net sales. *)

- Return on capital employed (ROCE) was 8.3 (3.3)%.

- Earnings per share in January-June were EUR 0.05 (0.00).

- Glaston expects net sales and operating profit for the whole year to be at the previous year's level.

*) 1-6/2007 non-recurring items EUR -7.3 million; 4-6/2007: EUR -7.3 million.

President & CEO Mika Seitovirta:

"The architectural glass segment and the strongly developing solar energy market form the foundation for our growth. In the first half of the year, the architectural glass market continued to grow. The solar energy market also continued to be active, but customers' decision-making times have lengthened significantly. As a result, orders received were below the level of the previous year, which was a record high. Glaston's growth was strongest in the Middle East and South America. The North American market was the weakest.

Net sales grew in line with long term financial targets and operating profit including non-recurring items improved in the second quarter and during the entire review period. During the early part of the year, the profitability of the Heat Treatment and Software Solutions business areas was good. Measures to improve the profitability of the Pre-Processing business area were forcefully continued by the business area's new management.

The Group's result was again significantly burdened by the strongly loss-making result of Heat Treatment's Tamglass Glass Processing Ltd., which operates in Finland. The operating result was EUR -2.9 (0.1) million during the first six months of the year.

We expect Glaston's net sales and operating profit for the whole year to be at the previous year's level."


Public construction continued to be strong. Residential construction developed very unevenly, with big differences between areas.

The downturn in the North American market continued. Demand grew strongly in South America and the Middle East. The solar energy market developed positively worldwide.

Demand for Glaston's One-Stop-Partner concept continued to be good.


The market situation of the Pre-Processing business area remained good, but with big regional differences. Demand in North America weakened significantly as a consequence of the construction industry crisis. The market for stone processing machines and tools was particularly weak. The South American and Chinese markets continued their growth. Sales in the EMEA area (Western, Central and Eastern Europe, Africa and the Middle East) were at the previous year's level, with the Italian, Central and Eastern Europe markets being particularly active.

During the second quarter, a slight fall off was perceptible in the business area's market, which impacted on orders received. At the end the first half of the year, orders received totalled EUR 33.8 (37.0) million. The order book at the end of the review period stood at EUR 21.9 (25.9) million.

In order to enhance its market position, Pre-Processing's sales organisation was strengthened. A new sales director for South America assumed his post at the beginning of the year, and the sales organisation in the EMEA area was restructured during the second quarter.

Measures to improve profitability continued in the review period. To balance increased raw material costs, measures were initiated to increase production efficiency and reduce production costs. In addition, special measures were initiated to reduce personnel costs.

In product development, investments were directed to product integration and particularly to solutions that serve the growing architectural and solar energy markets. At the industry's leading fair, Glasstec, to be held in October, the business area will present for the first time a machine combination in which Pre-Processing's machines have been integrated and operate together utilising Albat+Wirsam software.

Heat Treatment

The Heat Treatment business area's market situation remained strong in the EMEA area and in South America. The market in North America weakened further. The solar energy market developed positively and demand was high.

To strengthen Heat Treatment's market position, measures continued to increase production of its machines in China. Utilising the technology of machines manufactured in North America in the Group's other units was accelerated. The Group's global procurement activity was reorganised and measures were initiated to achieve cost savings.

Profit for the review period was EUR 76.9 (79.3) million. The profitability of the core business, i.e. safety glass machines, was good. At the end of the first half of the year, Heat Treatment's order book was EUR 71.0 (90.3) million. Order book development was strongly influenced by weaker demand in North America and by One-Stop-Partner orders booked in the second quarter of the previous year, which were at a record high. Orders received by the Heat Treatment business area stood at EUR 75.8 (87.9) million on 30 June 2008. Most of the orders came from the EMEA area.

The focus of product development was on projects producing solar energy. During the review period, a machine line for producing solar energy glass, CSP (Concentrated Solar Power), was completed. Operation of the new line has more than exceeded the production targets set for it. Products based on PV (photovoltaic) technology have also been developed and they will be presented at industry trade fairs during autumn 2008.

Software Solutions

The Software Solutions business area developed positively during the first half of the year. The good development of sales that began in 2007 continued and new orders booked in the second quarter exceeded set targets. Significant orders have been received in both the glass and window sectors. In addition to these, Software Solutions will contribute its software to One-Stop-Partner projects initiated in the Middle East during the review period.

The Software Solutions business area's net sales during the period under review were EUR 13.7 million (consolidated in Glaston Group as of 1 June 2007; 7-12/2007: EUR 14.7 million) and in the second quarter EUR 6.4 million. The order book on 30 June 2008 was EUR 6.0 million (31.12.2007: EUR 6.2 million).

Click on the link bellow to read the entire release.

600450 Glaston Interim Report 1 January - 30 June 2008
Date: 20 August 2008
Source: Kyro

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