Shares of Oerlikon (OC) rose today after the company announced that it is conducting a comprehensive review of its operational and strategic actions in response to weak demand that has negatively impacted its third-quarter results. The review, aimed at enhancing the company’s resilience, comes as Oerlikon reported a 16% decrease in sales for the third quarter compared to the same period last year. The company cited lower demand in its polymer-processing division and currency headwinds as the primary causes for the decline in sales.
Increase in Oerlikon Shares
As a result of this news, Oerlikon shares saw a 5.43% increase at CHF3.73 as of 1205 GMT on Thursday.
Decline in Sales and Earnings
Oerlikon reported third-quarter sales of 623 million Swiss francs ($686.2 million), reflecting a significant decline of 16% from the previous year. Furthermore, operational earnings before interest, taxes, depreciation, and amortization (Ebitda) saw a 23% decrease to CHF98 million. The company’s operational Ebitda margin also dropped to 15.7% from 17.2%, mainly due to lower sales volume, higher input costs, and currency impacts.
Order Intake Decreases
The group’s order intake for the third quarter amounted to CHF567 million, a discouraging 26% decline compared to the same period last year.
Despite the challenging circumstances, Oerlikon maintains its sales guidance, expecting a mid-single-digit percentage decline. Additionally, the company projects an operational Ebitda margin of 15.5%.
Market Analyst’s Perspective
According to Baader Helvea analyst Michael Roost, Oerlikon’s overall financial performance remains solid despite the pressure faced by its polymer-processing division.