An interim management statement issued by GKN plc reports a positive third quarter 2011 with a sales increase of 11%, compared with same period last year.
The company stated that market conditions have been broadly as expected at the time of GKN’s Half Year Results announcement in August, with performance remaining strong through the seasonally weaker third quarter and order books supporting further progress in the fourth quarter.
The statement confirms that the Hoeganaes Gallatin plant returned to normal operations in September, although it reports that pre-incident levels of output and profitability are currently planned for January 2012 when customer demand is fully restored. Remedial plant activities and external powder supply were extended from the original plan and the one-off charge to profits has now been finalised at £34 million, of which the remaining £11 million was charged in the third quarter. Insurance recovery discussions are underway.
Group sales in the three months ended 30 September totalled £1,483 million, an 11% increase over the comparable period in 2010. Third quarter trading profit increased by 13% to £113 million, before the £11 million one-off charge relating to Gallatin and the trading margin was 7.6%. The Group’s profit before taxation (before Gallatin) was £100 million.
Powder Metallurgy (excluding Gallatin)
The Powder Metallurgy division’s third quarter sales increased 10% compared to last year, to £210 million (2010: £191 million). Trading profit was £16 million (2010: £15 million), at a margin of 7.6%, excluding £11 million of one-off charges associated with Gallatin.
Within Powder Metallurgy, Sinter Metals’ third quarter sales grew 16% compared with last year supported by strength in all regions. Trading margin was 8.4% compared to 6.5% in the prior year. Hoeganaes’ third quarter sales fell 9% following the Gallatin temporary plant closure and the business made a small profit in the period.
The company reported that macroeconomic uncertainty has increased in recent months although no significant deterioration has been experienced in GKN’s order books.
The Automotive, Driveline and Sinter Metals sectors are expected to continue to deliver similar levels of underlying improvement over 2010 to that achieved in the third quarter, with trading in Hoeganaes continuing to improve.
Edited by: Paul Whittaker, Editor ipmd.net, [email protected]