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• Johnson Electric reports results for the half year ended 30 September 2019

Kamis, 07 November 2019 10:22:00

Johnson Electric reports results for the half year ended 30 September 2019

Highlights of 2019/20 Half-Year Results
Group sales US$1,565 million -- down 7% compared to first half of the prior financial year.  Excluding the impact of foreign exchange rate changes, sales decreased by 4%
Gross profit US$357 million or 22.8% of sales (compared to US$398 million or 23.8% of sales in prior half year)
Net profit attributable to shareholders increased by 16% to US$162 million or 18.44 US cents per share on a fully diluted basis
Underlying net profit, excluding the net impact of significant non-cash and divested items, decreased by 16% to US$106 million
Free cash inflow from operations US$83 million (compared to an outflow of US$3 million in prior half year)
Total debt to capital ratio of 16% and cash reserves of US$232 million as of 30 September 2019
Interim dividend 17 HK cents per share (2.18 US cents per share) with a scrip dividend alternative

HONG KONG, - 6 November 2019 - Johnson Electric Holdings Limited ("Johnson Electric"), a global leader in electric motors and motion subsystems, today announced its results for the six months ended 30 September 2019.
 
Total Group sales for the first half of FY19/20 totalled US$1,565 million, a decrease of 7% over the first half of the prior financial year. Excluding the impact of foreign exchange rate changes, underlying sales decreased by 4%. Net profit attributable to shareholders increased by 16% to US$162 million or 18.44 US cents per share on a fully diluted basis. Underlying net profit, after adjusting for the effects of a number of significant non-cash and divested items, decreased by 16% to US$106 million.
 
Global manufacturing is experiencing its sharpest and most geographically widespread downturn since 2012. In this challenging operating environment, Johnson Electric is continuing to make positive progress across a range of key strategic initiatives aimed at further strengthening its competitive position and its ability to adapt to what have become increasingly unstable and unpredictable conditions for global trade.
 
Overview of Financial Results
 
The Automotive Products Group ("APG"), which accounted for 79% of total Group sales, reported a 1% decrease in sales on a constant currency basis compared to the first half of the prior year. The strongest business unit performances came from Engine and Transmission Management, Actuation Systems and Stackpole International, which each benefited from a number of new programme launches and sustained demand for advanced technology solutions that help to reduce emissions and enable electrification.
 
APG's modest decline in sales revenue should be set against a sharp contraction in automotive industry production volumes during the period under review. Global light vehicle production declined by 6%, with all major geographic regions experiencing falls in output. Most significant was the 13% decline in the China market, which has been the industry's largest source of demand growth for the past two decades.

The current slowdown in the overall Chinese economy includes the effect of escalating trade tensions with the United States which has increased uncertainty and weakened consumer confidence. Subdued macroeconomic activity has had a similar effect on the car industry in Europe where production decreased by 4%. Even in North America, which has been a comparative bright spot in terms of jobs growth and consumer spending for much of 2019, light vehicle production declined by 2%.
 
The Industry Products Group ("IPG"), which contributed 21% of total Group sales, recorded a 14% decline in sales in constant currency terms in the first half. A combination of factors contributed to this disappointing performance. These included depressed demand across a number of end markets due to the US-China trade dispute and some customer-specific programme delays or cancellations.

The division has continued to deliver growth in several product applications, such as ventilation, vital signs monitoring and semiconductor equipment; and the evolution of its product mix towards higher value-adding technology has maintained gross margins. Nonetheless, it is proving difficult to make progress against the downturn in global manufacturing activity for IPG in the near term.
 
Gross profit decreased by 10% to US$357 million -- which as a percentage of sales represented a decline from 23.8% to 22.8%. The year-on-year decrease in margins reflected the combination of lower sales volumes, increased depreciation and pricing pressure. However, comparing the second half of FY18/19 to the first half of FY19/20, gross profit margins improved by 0.8%. The beginnings of this turnaround in the trajectory of the Group's gross margin is primarily due to reduced material costs and lower direct labour expenses. (*).

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Highlights of 2018/19 Half-Year Results

 

Group sales US$1,678 million -- up 9% compared to first half of the prior financial year. Exclu