DESMI reported acceptable result for 2013
The just held Annual General Meeting at DESMI adopted the 2013 Annual Report. Even though competition is fierce the Annual Report shows handsome gains for several key figures.
At the Annual General Meeting on March 24, 2014, the Management presented an annual report showing a result after tax of DKK 34.6 million based on a turnover of DKK 801.8 million. When comparing with 2012 turnover has increased by 12%, operating profit by 42%, and the annual result by 46%.
Although the result does not measure up to the 2013 budget, the result achieved has been created in a very competitive market where turnover has increased and revenues have been maintained. Based on this the result is regarded as acceptable.
The Annual Report also shows that the order book amounts to DKK 516 million, of which DKK 387 million relate to the core business – sale of pumps, oil spill response equipment and solutions within these areas. The order book related to the core business has increased by DKK 107 million compared to 2012 which presents a satisfactory basis for 2014.
“In many ways 2013 was a challenging year for DESMI. So when - in spite of this - we have succeeded in obtaining a positive development in turnover and result, we find that our Group Result is acceptable, even though the targets were not met”, says Group CEO Henrik Sørensen and continues: “We have witnessed a tentative upturn of the global economies, but at the beginning of the year expectations were, however, a more positive development than what has been seen. The exchange rate development of Japanese Yen has given our Japanese competitors an advantage and momentum which have been skillfully and focused ex-ploited in the market. At the same time the exchange rate development of the Chinese Renminbi has increased the cost base for production in China, which is now one of our primary places of production, compared to practically all other production countries. All this combined with generally good capacity at pump manufacturers have resulted in extremely fierce competition within this area. Internally we were delayed in starting up our new bronze foundry in China with the result that the foreseen production volume was not reached before the end of the year with the implication that we did not get any positive impact on profit from this activity. We have continued moving our pump production from Denmark to China, and the factory in Denmark is gradually becoming a pure distribution centre with assembly facilities and a centre for building customized systems and solutions. In China the component factory has been moved from Suzhou to Xuancheng where a new component facility has been established in connection with the foundry. Bearing these challenges in mind we therefore – with an adjusted portion of pride – present an Annual Report showing positive development in many essential key figures”.
“The co-operation with the companies of UltraAqua and AP Møller-Maersk concerning the development of ballast water treat-ment systems via the joint company of DESMI Ocean Guard A/S has continued during 2013 with investments in development and operation although the political agreements related to the ratification of the IMO regulation are not in place. For this reason the marketing efforts have been kept at a low level in 2013. It is, however, our opinion that DESMI Ocean Guard A/S has developed into a very competitive product and in the long run we look forward to the political clarification and to further developing this activity”.
Henrik Sørensen continues: “Market focus, continued globalization and closeness to customers are essential elements in our growth strategy – elements which have been strengthened during 2013. We have strengthened the sales management of the Utility segment, we are represented in most of the world, and in 2013 we also established further sales offices in India and Tanzania, and more initiatives are ongoing to strengthen our activities in Africa and the Middle East. After achieving 100% ownership of the company of DESMI AFTI Inc. in Buffalo, USA, at the beginning of 2014, we carry through a merger of our US production facilities and a focused market persuasion in North America which will include all DESMI’s sales segments.
Based on favourable order books, initiatives carried through in 2013, and the existing plans for further development, we believe in continued growth and new records in 2014,” concludes Henrik Sørensen.