HOCHDORF Holding Ltd

2018 half-year results

Announcement according to SIX adhoc publication article 53 KR

Hochdorf (pta006/30.08.2018/07:00) - The HOCHDORF Group achieved a net sales revenue of CHF 281.6 million in the first half of 2018 (previous year CHF 302.4 million, -6.9%). Various temporary and exceptional effects impacted upon the half-yearly results. These include high initial costs and delays on the new spray drying Tower and a lack of sales in China, which also had a substantial negative impact on the Pharmalys Laboratories SA results; the sale of HOCHDORF Baltic Milk UAB also affected the result. The group-wide EBITDA fell to CHF 13.1 million (previous year CHF 21.7 million) and the EBIT to CHF 2.9 million (previous year CHF 15.8 million). HOCHDORF is expecting a very strong second half year, but will not fully succeed in balancing the negative effects of the first half year and is therefore revising the forecast slightly down.

In the first half of the year the HOCHDORF Group processed 365.3 million kg of milk, whey, cream and butter milk (liquid quantity) (previous year 377.6 million kg; -3.2%). The main reason for the slight fall was the continued reduction in milk quantities from the plant in Lithuania and its sale at the end of May 2018. Due to a streamlining of the product portfolio the product volume sold fell by -25.5% to 83,374 tonnes (previous year 111,948 tonnes). Net sales revenue fell by comparison by just -6.9% to CHF 281.6 million (previous year CHF 302.4 million).

Growth in expenditure to invest in the future
The gross profit rose slightly compared to the previous year to CHF 82.0 million (previous year 79.3 million). Significantly higher operating costs resulted in an EBITDA of CHF 13.1 million (previous year CHF 21.7 million). High amortisations on tangible assets (CHF 6.6 million; +18.2% compared to previous year) and the value adjustments in shareholdings (CHF 2.8 million; previous year CHF 0) result in an EBIT of CHF 2.9 million (previous year 15.8 million). This results in a loss of CHF -2.2. million attributable to the shareholders.

Analysis of additional operating costs shows that this is only partly due to pure cost increases, such as energy. A larger proportion of the increased costs relates to strategy implementation and is seen as an investment in the future. For instance, additional personnel were employed when the new plants went live or investments were made in potential markets or customer acquisitions in Baby Care and Cereals & Ingredients.