Exchange rate boost for Deutz

Business performance in the first quarter of 2015 for engine manufacturer Deutz was said to be in line with its expectations, although it said there had been a decline in unit sales and revenue as a result of the effects of advance production of engines in the same period a year ago.

In its interim report for the first quarter of 2015, German-based Deutz said new orders received by the group during the reporting period totalled €321.0 million, which was down by 22.5% year-on-year. In the first quarter of 2014, it was €414.2 million.

It said the first quarter had been the strongest of the four quarters last year because of the high demand for engines ahead of the latest EU exhaust emissions requirements.

In the first quarter of 2015, new orders surpassed the figure for the fourth quarter of 2014 – €302.2 million – by 6.2%.

Unit sales fell by 17.0%, from 44,457 engines in the first three months of last year to 36,907 engines in the same period this year. The final quarter of 2014 also saw Deutz selling more engines – 41,304.

It said its revenue amounted to €318.1 million, down by 7.2% on the €342.7 million reported a year ago.

The Americas and Asia-Pacific regions achieved revenue growth, whereas the EMEA (Europe, Middle East and Africa) region saw a decline.

Deutz said it registered increases in the stationary equipment segment and the service business, but decreases in mobile machinery and agricultural machinery.

Revenue had amounted to €352.3 million in the fourth quarter of 2014, it said, adding that despite the reduction in revenue, there had been a five-fold rise in EBIT (earnings before interest and taxes), which climbed from €1.9 million to €10.1 million – an EBIT margin of 3.2%.

The company said the increase in the margin was largely a result of the positive impact from changes in exchange rates, plus growth in revenue from the service business and lower production costs and warranty costs.

Net income for the first three months of this year amounted to €7.7 million, which was up by €8.3 million compared with the same period in 2014, when there was a net loss of €0.6 million.

Deutz recently unveiled its new series of engines, which claim to meet proposed Stage V emissions standards.