Pilkington Profit Gains on Cost Cuts, Debt Reduction

Pilkington Plc, the world's biggest maker of car windshields, said fiscal first-half profit gained 31 percent after it reduced costs, cut debt and paid less in one-time charges.

Net income in the six months through September advanced to 51 million pounds ($94 million), or 4 pence a share, from 39 million pounds, or 3.1 pence, a year earlier, the St. Helens, northwest England-based company said in a statement. Sales fell 6 percent to 1.32 billion pounds.

Pilkington shed about 1,000 jobs last year as part of a three-step plan to cut borrowings and build cash, helping to reduce net debt by one-fifth in the past 12 months. That's helped counter the effects of sluggish demand, currency changes and higher oil prices, the company said today.

``Pilkington's extensive restructuring of recent years has led to significantly improved operational efficiency, as demonstrated by the improving trend of results,'' Chairman Nigel Rudd, 57, said in the statement. ``The demand outlook is becoming somewhat more positive.''

Shares of Pilkington, a member of the FTSE 100 index of leading U.K. stocks until December 1996, have declined 6.3 percent this year. That's reduced the market value of the 180-year-old glassmaker to 1.15 billion pounds.

Debt Reduction, Tax

Pilkington cut its net debt to 621 million pounds, helping to reduce interest payments by 4 million pounds. The company also paid 2 million pounds less tax, while one-time charges declined by 8 million pounds, to 1 million pounds.

Pilkington competes with companies including Cie. de Saint- Gobain SA, Europe's biggest distributor of building materials, and Asahi Glass Co., Japan's largest glassmaker.

The U.K. business supplied glass for Berlin's new Reichstag building, finished in 1999, as well as the European Court of Human Rights in Strasbourg, France.

Pilkington operates in a total of 24 countries. It has expanded into China, with four plants that supply glass for cars built by manufacturers such as Toyota Motor Corp., Asia's biggest automaker, and Volkswagen AG, Europe's biggest.

600450 Pilkington Profit Gains on Cost Cuts, Debt Reduction glassonweb.com
Date: 4 November 2004
Source: Bloomberg.com

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