Federal-Mogul Corporation (NASDAQ: FDML), based in Southfield, Michigan, USA, has announced Q1 2013 results with sales of $1.7 billion, 2% lower than Q1 2012. The result was attributed to lower European light vehicle and reduced global commercial vehicle production.
Operational EBITDA in Q1 2013 was $141 million or 8.3% of sales, down from $165 million or 9.5% of sales in Q1 2012. When compared to the fourth quarter 2012, the company had 8% higher sales and stronger operational EBITDA as a result of incremental volumes, cost reductions and restructuring actions.
The company recorded $8 million in restructuring charges during Q1 2013 related to its ongoing restructuring programs. Further restructuring actions are underway, potentially resulting in approximately $80 million in restructuring charges and related payments for 2013.
“We are coming out of a fourth quarter 2012 earnings trough with improved operating performance in the first quarter 2013. We now have the majority of our operations running at a more balanced load and we have further opportunities through restructuring plans. Our Q1 operating results show the benefit of our strong drive for operating efficiency, in spite of continued European headwinds,” stated Rainer Jueckstock, co-CEO Federal-Mogul and CEO Powertrain Segment.
“We are continuing to make business decisions to align our commercial and operational strategies for better profitability,” stated Michael Broderick, co-CEO Federal-Mogul and CEO Vehicle Components Segment. “While growth remains a priority, we will also reinforce and differentiate Federal-Mogul brands with strong service and delivery performance, supported by effective marketing programs and commercial strategies to reinforce our premium position.”
The company, as previously announced, divested its Sintertech business, consisting of three manufacturing plants in France, during the first quarter 2013. The transaction resulted in a cash outflow of $42 million which contributed to the loss from discontinued operations of $53 million during the quarter.
In 2012, the Sintertech business contributed negative Operational EBITDA of $13 million and a net loss of $21 million to Federal-Mogul results. This divestiture, stated Federal-Mogul, eliminates a substantial non-core business from the company’s portfolio and positively impacts reported operating performance.