UPDATE 1-Sulzer warns on lower 2013 profit, plans sale of Metco

Tue Jul 23, 2013 3:25am EDT

Related News

Related Topics

* Sulzer mulls sale of Metco division

* Net profit falls 23 pct in first half

* Warns on lower full-year profitability

* Shares fall 12 pct (Adds detail, shares, analyst)

ZURICH, July 23 (Reuters) - Swiss machinery manufacturer Sulzer said on Tuesday it expected lower full-year profits after its first-half result took a hit from low volumes and high restructuring costs.

Shares in the company fell 12 percent to 146.5 Swiss francs by 0710 GMT, having risen 9 percent so far this month.

The 179-year-old firm posted a 23 percent fall in first-half net profit, after its wastewater business was hit by higher costs and lower volumes, and demand slowed for electromechanical services in the United Kingdom and Australia.

Lower profits are forecast for the full year, though slight growth in order intake and sales is expected, Sulzer said.

Measures to cut costs and boost sales will continue into the second half of the year, the firm said.

"While Sulzer's order intake showed a recovery from recent low levels, sales and profitability were slightly disappointing," said Martin Schwab, an analyst at J. Safra Sarasin.

The company said it was planning to sell its Sulzer Metco division, mainly active in the automotive and aviation industries, to concentrate on oil and gas, power and water markets, areas where the firm sees more promising growth.

The sale would generate additional funds for targeted acquisitions and further investments aimed at organic growth, Sulzer said. (Reporting by Alice Baghdjian; Editing by David Holmes)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.