“Incoming orders did not match the record-high figure from the previous fiscal year,” the Winterthur-based company said. Operating and net income showed some improvement, but are still not yet at the levels Burckhardt has targeted in its mid-range plan.”
Consolidated order intake amounted to 607.3 million francs, 7.8% below the figure for the previous fiscal year, which was the highest ever recorded in the history of Burckhardt. Net income in fiscal 2019 rose by 23.8% to 39.9 million Swiss francs, or 6.3% of sales.
Targeting stable margins in FY2020
Nonetheless, for full year sales Burckhardt targets of more than 650 million Swiss francs ($676 million), despite the current global uncertainties.
“From today’s perspective, the company expects stable profit margins for the 2020 financial year,” it said, noting; “The longer-term effects of the global coronavirus situation on Burckhardt’s business cannot be estimated at this time.”
The gross profit margin at the System Division increased to 11%, up from 8.1% in fiscal 2018, despite some 10 million Swiss Francs in cost overruns from the Burckhardt’s LNGM business.
Gross profit at the Service Division, meanwhile, was up just 1.7% -- well below the prior-year gross margin of 47.0%. The company notes in its earnings statement this is primarily because the gross margin at Arkos Field Services is much lower than the average margin of the Group’s other services operations. So, excluding acquisition activity, the gross profit margin of the Services business stood at 47.8%.
Net loss amid Arkos acquisition, investment in China
The net financial position in fiscal-2019 amounted to a loss of 91.7 million francs, up from the loss of 49.4 million francs in the previous year.
This figure reflects an increase in net working capital, the acquisition of the remaining 60% interest in Arkos Field Services and the fixed investment at the new factory in Shenyang in the northeast Chinese province of Liaoning.
“Construction of the new factory in Shenyang, China, is well on track despite an interrupt of six weeks because of the coronavirus outbreak,” Burckhardt Compression underlined, so “the new factory will be able to commence operations in autumn 2020, as planned.”