Deutz lowers financial outlook

10 November 2014

German-based engine manufacturer Deutz has lowered its yearly financial outlook, citing a “general slowdown in the economy”.

While the company’s year-to-date results showed it improved revenue performance with figures for January to September standing at €1.17 billion against €1.04 billion for the same period last year, its order book has decreased.

For the third quarter of 2014, its orders were €330 million – 8% down on last year, with year-to-date orders totalling €1.07 billion. This was down by 10.5% compared with last year’s figures.

According to the company, the greater revenues achieved in the third quarter were partly attributed to emissions standards for engines under 130kW changing in October.

This generated additional engine production, which contributed to an 11% revenue rise for the quarter, to €424.5 million. Its revenues increased 12.9% year-to-date.

Engine sales for the year-to-date were 134,699, which represented a rise of 15.1%. The company’s operating cash flow has also risen this year, up to €86.9 million, compared with €61.7 million for the same period last year.

The company also said a “difficult market” in the Chinese construction equipment sector meant it would be reviewing its joint venture with Volvo for the Deutz Engine (China) company.

Dr Helmut Leube, chairman of the board of management, said, “Until this reassessment is complete, we will put on hold the implementation work and thus the bulk of the capital expenditure.

“Nevertheless, we continue to have every faith in the Chinese market's long-term potential and aim to satisfy local demand from Volvo and other target customers using local Chinese production operations in future.”

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