TenCate Trading Update relating to the second quarter and first half of 2010
In advance of the publication of the half-year figures on Thursday, 26 August 2010 and on the basis of provisional results, TenCate announces that its operating result (EBIT) amounts to approximately € 27 million in the second quarter of 2010 (second quarter of 2009: € 11.1 million).
The operating result for the first six months of 2010 doubled to an amount of approximately € 33 million. Taking incidental items into account, net profit too doubled in the first half year to approximately € 19 million.
Corporate revenues for the first six months of 2010 amounted to approximately € 450 million (+5%).
The Geosynthetics & Grass sector showed strong growth (+17%).
Sales declined by 10% in the Advanced Textiles & Composites sector as a result of reduced demand for TenCate Defender™ M and TenCate Gen2™ for the US Army. This was due to a modification to the camouflage print (MultiCam pattern). Conversely, the successful market launch of the protective fabric TenCate Tecasafe™ Plus in the US industrial market resulted in a sharp increase in the sales of this product in the first half year.
In the second half of the year sales in particular of TenCate Defender™ M will again recover their old level.
The Geosynthetics & Grass sector recorded a significant improvement in its result. The decrease in costs in business operations across the entire sector is reflected in this. In the synthetic turf operations, the commercial policy was amended in combination with the implementation of efficiency measures. This had a highly positive effect.
The Other Activities sector also showed a favourable picture. TenCate Enbi recorded a strong growth in profits, partly as a result of the cost measures taken at the end of 2009 and positive market trends. Xennia Technology made good progress in commercial developments.
The bank covenant net debt / EBITDA (debt ratio) remained clearly under the maximum agreed value (3.0) in the first half year.
Performance in the second half of 2010
The improvement in the results will continue in the second half of 2010 and there will be positive developments in the Advanced Textiles & Composites sector, which will underpin the growth in profits.
Sales of protective fabrics to the US Army will recover.
The expectation is that also sales of aerospace composites will gradually begin to recover in the second half.
The armour composites market in the US presents a more positive picture than that for the first six months, based on the present project portfolio. New programmes, like that for the Eurocopter, will gradually begin to contribute to sales in the future.
The outlook in both the aviation market and the armour market in respect of composites is thus positive.
Royal Ten Cate
Almelo, The Netherlands, Thursday, 22 July 2010