Positive first half year results for Deutz Group

The Deutz Group has significantly increased its revenue and sales figures in the first six months of 2008 compared with the same period last year, a statement from the company said.

In the first half (H1) of this year revenue rose by +15,0 % to € 825,5 million compared to the first half of 2007 when the figure was € 717,7 million.

The growth follows strong performance in Europe and continued growth in Asia, according to the statement from Deutz.

Unit sales rose by +10,5 % to 148687 engines in the first half of 2008, (H1 2007, 134619).

The statement added, "Improvement in revenue was one of the main reasons why earnings before interest and tax (EBIT) rose by +7,9% to € 43,6 million in the first half of 2008."

Net income after income tax amounted to € 30,3 million, which was an improvement of +14,3% compared to the first half of 2007 when the figure was € 26,5 million.

The level of new orders in the first half of 2008 remained high despite falling slightly short of the figure reported for the first half of 2007, Deutz said.

The company won new orders worth € 829,1 million during the reporting period. In the first half of 2007 orders totalled € 834,4 million.

Deutz expects unit sales for 2008 as a whole to remain in line with last year's high figure. Building on its improved product mix, the company aims to generate revenue growth of around +5 %.

"Although the growth in new orders slowed overall in the second quarter of 2008 as a result of the deteriorating economic outlook, the service business reported by both segments performed well, growing by approximately +10%," Deutz said.

Helmut Leube, chairman of the management board of Deutz AG said, "On the whole we can look back on an encouraging first half of 2008 in which we continued to raise our revenue and unit sales despite growing signs of an economic slowdown."

Allowing for its lower revenue forecast and the rising cost of materials, the company now expects to report an EBIT margin of around 6%.

Dr Leube said, "Deutz is on the right track, and we are clear about our strategic objectives. However, despite the cost savings and productivity improvements we have achieved, we are unable to keep pace with our rapidly falling unit sales, the consequent decline in revenue and the spiralling cost of raw materials in what is a deteriorating market environment."

The EBIT forecast for 2008 as a whole still includes research and development costs of €80 million for future projects. Deutz expects to report a net income in line with last year's figure, the company statement said.