GKN (LON:GKN) has reported increased profit and sales across the group, with sales up 16% to £3,459 million in the first half of 2012, compared to £2,988 million in the same period 2011. Operating profit for the group in the first six months of 2012 increased 31% to £293 million, compared to £224 million in 2011.
“GKN has continued to make good progress both in terms of financial performance and implementing our strategy to build a global market-leading business. First half trading has seen sales increases and margin progression for each of our four Divisions and our new acquisitions, Stromag and Getrag Driveline Products, are performing well,” stated Nigel Stein, Chief Executive GKN plc.
“We expect 2012 to be another good year of progress for GKN and, in addition, we look forward to welcoming our new acquisition, Volvo Aero, into GKN when the transaction completes in the next few months,” he added.
GKN Powder Metallurgy
The GKN Powder Metallurgy division is one of the world’s largest manufacturer of sintered components and comprises of GKN Sinter Metals and Hoeganaes.
GKN Powder Metallurgy sales in the first half of 2012 were £465 million (2011: £435 million), an increase of 7%. The negative impact of currency translation was £10 million. Organic sales increased by £40 million (+9%). Hoeganaes increased the number of tons of powder shipped by 8%. GKN Sinter Metals increased sales in all regions, benefiting from strong automotive production in North America and new business wins entering production. Organic sales for GKN Sinter Metals increased by 13% in North America and 3% in Europe. Strong growth was also achieved in India, Brazil and China.
Overall, GKN Powder Metallurgy reported a trading profit of £47 million (2011: £39 million). The negative impact of currency translation was £1 million. The divisional trading margin was 10.1% (2011: 9.0%). Return on average invested capital was 18.2% (2011: 15.7%), reflecting the improvement in profitability. At 31 December 2011, return on average invested capital was 16.7%.
Increasing trends in industrial and automotive markets to improve fuel efficiency and reduce emissions continue to drive the demand for products made by powder metallurgy, state GKN. During the period, around £80 million (annualised sales) of new programme business was awarded.
Posted by: Paul Whittaker, Editor ipmd.net, [email protected]