During the 1st half of the 2009 business year, the Silicon Sensor Group continued to face crisis - induced instability and market distortions. Some customers whose sales over the period dropped by more than 60% temporarily froze all agreed deliveries. It was only due to cost cutting steps taken by the Board of Directors as early as the end of 2008 that a dramatic drop in sales, approx. 36% or €7.5 mn, to €13.12 mn compared with the same period last year (June 30, 2008: €20.6 mn) merely caused a moderately negative operating result (EBIT) of €0.82 mn (June 30, 2008: €3.95 mn). It is a cause of deep regret that the economic situation in the 2nd quarter of the year led to over 50 enforced redundancies, which in turn caused a once-only rise in wage costs for the 2nd and 3rd business quarters as staff in question could not be put on short time during very long periods of notice.
Even though more negative effects from the slump were felt in Q2 2009, first signals of a slow recovery are coming in from customers. It is assumed in this connection that the Group’s economic situation will not improve during the current quarter but rather toward the end of Q3. Now as before, the liquidity reserve is thought to be sufficient for successfully implementing the business model. Whether or not 2009 will end with a positive operating result depends essentially on the dates chosen by major customers for demanding the resumption of deliveries. Confidence in economic improvement is inspired by a rapidly growing number of new development projects and customers’ announcements that deliveries will be requested toward the end of Q3. At the same time, a large project for supplying steering angle sensors has eventually started at MPD in Dresden. Presently, some 40,000 units are being manufactured per month, with an upward trend. In August, a major automaker placed the first order for almost two million sensors to be delivered per year in eight model series. Shipment is to start in the second half of 2011; estimated product life is 5 years. The deal was secured against strong competition, and the Group’s strategic reorientation and the commitment of major shareholders are now bearing fruit, with even more projects being negotiated at this time.
Net earnings per share were €-0.23 for the first half of the year, as compared with €0.68 for the same period last year.
Trends in back orders confirm an expected slow bottoming out, with orders on hand throughout the Group dropping only slightly by 2.7% to €12,16 mn (June 30, 2009) compared with Q1 (March 31, 2009: €12.5 mn). Numbers of staff were reduced from 322 as of June 30, 2008 to 300 at the end of the first half year.
The complete midyear report will be published August 27, 2009. For more information visit our website at: http://www.silicon-sensor.com or call +49 30 639923-710
Silicon Sensor International AG
Board of Directors
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