- Group revenue rises to over EUR 75 million
- Operating profit (EBIT) improves significantly to above EUR 6 million
- Contrary to expectations, strong Q4 business in China
SMT Scharf AG (WKN 575198, ISIN DE0005751986), one of the world’s leading providers of customised transport solutions and logistics systems for underground mining, has on the basis of preliminary figures exceeded both its FY 2019 forecast that was adjusted downwards during the course of the year as well as its original FY 2019 forecast.
SMT Scharf grew its consolidated revenue to more than EUR 75 million in 2019 compared to EUR 70.8 million in the previous year. The reason for this is that the dynamic revenue trend in China has weakened much less than expected due to ongoing market distortions caused by the new regulation for engines (China III). As a consequence, the company successfully processed further orders from China in the fourth quarter of 2019. Moreover, SMT Scharf significantly increased its operating result (EBIT) to more than EUR 6 million (2018: EUR 5.3 million). SMT Scharf had most recently forecast consolidated revenue of EUR 65 million to EUR 67 million (originally EUR 72 million to EUR 75 million) for FY 2019, with EBIT in a range between EUR 4.5 million and EUR 5.0 million (originally EUR 5.5 million to EUR 6.0 million).
Hans Joachim Theiss, CEO of SMT Scharf AG, comments on the business situation in China: “Due to the new so-called China III regulation, mining companies in China are faced with the challenge of replacing their machines due to the new approval regulations, in order to avoid possible fines. These new approval regulations will be mandatory for mining companies from 2021. In order to make full use of their capacities, some companies have decided to use transport solutions with China II approval for the time being. This played into our hands in the final quarter – and gave our sales revenue and profitability a strong boost, which was unexpected in these circumstances.”
SMT Scharf believes that the ongoing approval issues in China will continue to affect its business during the first half of the year. The company sees the spread of coronavirus as a further possible influence in this context, which could not only lead to a further slowdown in business in China and but also exert an overall impact on SMT Scharf’s business activities. Given its full order books, SMT Scharf is meanwhile focusing on leveraging attractive growth opportunities in China. Positive effects on business are not expected until the second half of 2020 at the earliest, when delivery of the newly approved China III machines can likely commence.
The complete report for the 2019 financial year will be published on March 27, 2020, when it will be available for download on the company’s website www.smtscharf.com in the “Investor Relations” area.
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