Declining Demand and Acquisition Costs Impact Surteco’s Earnings
Surteco, the German holding company for surface technology, has adjusted its full-year guidance due to a third-quarter loss and expenses associated with acquiring Omnova operations earlier this year. The company now expects earnings before interest and taxes to range between 5 million euros and 15 million euros, compared to the previous forecast of EUR20 million to EUR30 million.
Furthermore, sales for the full year are projected to fall significantly below the original forecast of EUR920 million to EUR950 million.
Third-Quarter Results Highlight the Impact
During the third quarter, Surteco reported a net loss of EUR13.3 million, a considerable decline from the net profit of EUR27.4 million achieved during the same period last year. However, sales saw a 7% increase, amounting to EUR637.3 million, primarily driven by the acquisition of Omnova’s laminates and coated fabrics operations.
Despite the sales growth, EBIT experienced a substantial decrease of 90% on-year, reaching EUR4.1 million.
Surteco’s revised guidance reflects the challenges faced by the company due to weakened demand and the costs associated with the acquisition of Omnova operations. While sales have shown promising growth, mitigating factors have impacted profitability. Moving forward, Surteco will need to carefully navigate these challenges to achieve sustainable success in the market.