7/8/2011 11:12:00 AM
NEWS BRIEFS
Weaker Fastener Demand Forces Vossloh To Cut Forecast

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Shares of rail engineering firm Vossloh AG dropped more than 10% after the group cut its full-year forecast on weaker-than-expected sales in China, Russia and Europe, Dow Jones reports.
 

Rail fastener orders in Russia have been delayed due to technical problems, while in Asia “significantly delayed” orders for Chinese high-speed railway lines weighed on growth projections. Vossloh is in the midst of building a rail fastener plant in Russia.


“Vossloh… expects 2011 sales to only reach up to EUR 1.25 billion, from a previous estimate of EUR 1.4 billion,” writes Philipp Grontzki. “Earnings before interest and taxes will be in the range of EUR120 million to EUR 130 million, it said, down from the previous estimate of more than EUR 160 million.”
 

Vossloh also withdrew its sales and EBIT forecasts for 2012, although it still expects both numbers to rise “considerably.” Previous estimates placed sales at EUR 1.5 billion and EBIT in excess of  EUR 170 million.
 

“It appears that Vossloh thinks that the China project delays are just temporary,”  UBS analyst Sven Weier told Dow Jones. “We disagree and think the China weakness is structural. We think that in addition to project delays of existing projects the number of new projects is likely to be cut.”
 

For fiscal 2010 Vossloh Fastening Systems sales surged 38.3% to €369.4 million in 2010, making the division “a key factor” in organic growth throughout the group. 

 

Vossloh has been fitting its fasteners to the new Beijing–Shanghai line. In August 2010, Vossloh Fastening Systems was awarded another “mega-contract” to provide fasteners for the Lanzhou–Urumqi line in northwest China.

 

The Vossloh Group reports all-time sales and EBIT highs for fiscal 2010. “Driven especially by further expansion of business in rail fasteners,” sales grew 15.1% to €1.35 billion, including organic growth of 7.9%. EBIT rose 10.3% to €152.1 million.

Group earnings in 2010 climbed 10.9 percent to €97.5 million; earnings per share (EpS) increased to €7.32. ©2011 GlobalFastenerNews.com