Invensys upbeat despite profits fall
UK- based engineering group Invensys today posted a 39% fall in half-year profits, but insisted a shake-up had given it “a real sense of operational momentum”.
The London-based firm said operating profits in the six months to September 30 dropped to £63m (€89.9m) from £103m (€147m) previously, while sales fell to £1.5bn (€2.1bn) from £2.04bn (€2.9bn).
Invensys said the falls were due mainly to disposals of businesses and an adverse currency impact of £66m (€94.2m) driven by weakness in the US dollar and the euro.
However, it said the results for the second quarter and first half were in line with expectations.
Chief executive Rick Haythornthwaite said orders in key areas were rising, led by a 49% increase in major accounts in the second quarter in its process systems division – which makes computer software and hardware for manufacturers - reflecting the benefits of the group’s greater operational stability.
“We now have a real sense of operational momentum and most of our leading indicators are on track,” he said. “Our expectations for an improving year-on-year trend in the second half remain unchanged.”
Invensys has gone through a restructuring and disposal process that has left it with businesses including process systems, Eurotherm, APV, Rail Systems, Climate Controls and Appliance Controls.
It supplies equipment and computer software to the oil and gas, power and utilities, chemicals, rail, food and drinks, healthcare and data communications industries among others.
Customers include Shell, BP, Bayer, China Light and Power, EDF Energy, Kraft, Danone, Arla Foods, SABMiller, Schering-Plough, Pilkington Glass, Corus, Network Rail and Bombardier.
The group employs 39,000 people in 60 countries including a plant in Magherafelt.
The group said the longer-term prospects for its rail division remained positive and its APV division, which supplies food, drugs and chemical manufacturers, should see increased profitability continuing through the second half.
Eurotherm saw a 6% rise in second quarter operating profits to £4m (€5.7m), but process systems – which normally performs better in the second half – saw second-quarter sales fall 3% at constant exchange rates.
