PSI Increases Sales by 13 Percent in the First Nine Months
by Hans Diederichs
PSI Group improved sales in the first nine months of 2019 by just under 13 % to 159.7 million euros (30 Sept. 2018: 141.6 million euros) through organic growth in the two segments and 5.5 million euros sales from the acquisition in the energy sector. The EBIT increased by 5 % to 10.5 million euros (30 Sept. 2018: 10.0 million euros), the group net result increased by 4 % to 7.1 million euros (30 Sept. 2018: 6.9 million euros) despite poorer financial results as a consequence of the application of IFRS 16. New orders were increased by 3 % to 182 million euros. The 176 million euros of the previous year's period included 11.4 million euros in major orders from the public transport sector. The order book volume on 30 Sept. 2019 was, at 156 million euros slightly below the figure for the previous year (30 Sept. 2018: 159 million euros).
Sales in Production Management (raw materials, metal, industry, logistics) was, at 78.7 million euros, 8 % above the value for the previous year in the first nine months (30 Sept. 2018: 72.6 million euros). The EBIT improved by 7 % to 7.0 million euros (30 Sept. 2018: 6.6 million euros). With good business in America and China, metals business continues to manage to keep new orders, sales and earnings more or less constant despite the steel crisis. Automotive, industrial and logistics were able to increase sales by 15 % and earnings by 32 %. The third quarter was burdened by investments in Mines&Roads, which is concentrating more on low-risk indirect business with integration partners and on emission-reducing traffic solutions in Europe.
In Russia PSI expects incoming orders of around 15 million euros from the gas networks, logistics networks, metals industry (tubular steel) and electricity grid businesses.
The number of employees in the group increased as of 30 Sept. 2019 to 1,981 (30 Sept. 2018: 1,775) as a result of new hires and the acquisition of the BTC smart grid business. Cash flow from operating activities decreased to 1.8 million euros (30 Sept. 2018: 7.2 million euros) as a result of seasonally rising working capital, the purchase price payment for the business acquired and the integration costs. Liquidity decreased accordingly to 30.8 million euros (30 Sept. 2018: 35.5 million euros).
PSI continues to record strong demand, particularly for control technology for electricity and gas networks as well as in the logistics and automotive sectors, and therefore expects further increases in the high-margin license, maintenance, upgrade and cloud business in the coming quarters. Despite the gloomy economic forecasts in Germany and the integration burden, the PSI Management Board continues to expect sales growth of 10 % to 220 million euros and an increase in the operating result of close to 17 million euros for 2019.
Source and photo: PSI Group