Bulten's earnings for the second quarter negatively affected by approximately SEK 25 million due to lower production rate to adjust inventory levels
In connection with the ongoing compilation of Bultens AB (publ) report for the second quarter, it is obvious that the company's results deviate negatively from previous earnings levels. This is a consequence of declining demand, especially during the latter part of the quarter, and the balancing of Bulten's inventories against demand, which is expected to affect the earnings for the second quarter by approximately SEK 25 million. Bulten releases its complete report for the second quarter on July 10, 2019.
During the second quarter, the decline in the light vehicle market, which began in the last six months of 2018, continued, and the market situation was reflected in Bulten's volumes. The earnings have been negatively affected by lower volumes, but also by a lower production rate in order to balance inventory levels against demand. This has resulted in a lower capital tied up, but at the same time a lower utilization of the production units' capacity and thus an under-absorption in the operations. The lower production rate is expected to affect earnings negatively by approximately SEK 25 million in the second quarter. The ambition to adjust inventory levels was communicated in connection with the interim report for the first quarter.
“We are not satisfied with the development during the quarter, but the production adjustment has been necessary in the current market situation. At present, demand is still somewhat weaker than in the previous year and the ramp-up of the new contracted volumes has been more prolonged. Given these conditions, the production rate will continue to be lower at the beginning of the third quarter, but not to the same extent as during the second quarter.
As previously announced, Bulten has received contracts at an annual value of just over half a billion SEK at full production rate in 2021 and we have a continued strong position. During the first six months, we have also taken several smaller contracts, with a total annual value that amounts to SEK 20 million”, says Anders Nyström, President and CEO of Bulten.
For further information:
As previously announced, a full report for the second quarter will be released on July 10 at 08:30 am CET. In connection with this, Bulten will hold a telephone conference at 11:00 am CET and the report will then be presented by Anders Nyström, President and CEO and by Helena Wennerström, Executive Vice President and CFO.
Anders Nyström, President and CEO
tel: 031-734 59 00
This information is information that Bulten AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:30 CET on July 4, 2019.
Bulten is one of the leading suppliers of fasteners to the international automotive industry. The company’s product range includes everything from customer-specific standard products to customized special fasteners. The company also provides technical development, line-feeding, logistics, material and production expertise. Bulten offers a Full Service Provider concept or parts thereof. The company was founded in 1873, has some 1,400 employees in eight countries and head office in Gothenburg. The share (BULTEN) is listed on Nasdaq Stockholm. More information can be found at www.bulten.com.