‘In Q1 2012, we experienced a continuation of the difficult market conditions that have impacted on the construction sector and our main markets since Q3 2011. The trend has adversely impacted on DLH’s turnover and gross profits. Against this backdrop, it has not been possible to maintain the same profitability as in first quarter of 2011. We continue to reduce our costs and the decision to sell the American hardwood operation means that we can devote all our efforts to strengthening our European business and Global Sales,’ says CEO Kent Arentoft.
• Accumulated turnover for the first quarter amounted to DKK 657 million against DKK 715 million for the same period last year;
• The lower turnover impacted on profitability for the quarter:
o EBITDA was DKK 7 million against DKK 20 million last year.
o EBIT was DKK 2 million against DKK 14 million last year.
o EBIT margin fell from 1.9% to 0.3%.
• Steps to relocate the administrative functions to Hong Kong continue, which will reduce overhead costs in the second half of 2012.
• Outlook
On 8 March 2012 DLH announced that the group expected a turnover and EBIT margin on a par with 2011, corresponding to a turnover of almost DKK 2.8 billion and an EBIT of DKK 54 million after the warehouse-based US company, Inter-Continental Hardwoods Inc. had been classified as a discontinued operation.
In Q1, DLH has maintained its turnover in its Global Sales markets while European markets continue to be under pressure. As there continues to be significant general economic uncertainty in DLH’s key European markets, it is not expected that market conditions will improve in the second half year. Consequently DLH expects a turnover in the level of DKK 2.6-2.7 billion for the full year.
Global Sales business (back-to-back) is expected to increase its share of total turnover. Combined with a strongly competitive European market with price pressure this means that average gross margin will be lower than last year. The group, therefore, expects to realize an EBIT margin in the level of zero per cent for the full year.
Any impact on earnings as a consequence of the divestment of assets held for sale is not included in the above expectations.
The Supervisory Board has today approved the interim report for the period 1 January to 31 March, 2012.
For further information about this announcement, please contact President/CEO Kent Arentoft on tel: +45 4350 0101.
