Third quarter figures show KBA has turned the corner on profitability, with half a billion Euros of work in hand and the prospect of a dividend for shareholders. Best-selling web presses such as the Commander CT and Cortina have contributed to what the company says is a “pretty impressive” result.

Pre-tax profits were 15.3 million Euros, with the order intake up 46.7 per cent and sales up five per cent on last year.

KBA says the upturn in demand for presses that first became evident in March continued mid-year, but has been weaker than in other engineering sectors. Global volume is still well below the pre-crisis levels of September 2008, largely due to shifts in the media marketplace and structural changes in the printing industry. 

So the surge in orders booked by German press manufacturer in the nine months to October is, by its own estimation,  “pretty impressive”.

Group order intake jumped by 46.7 per cent to 1,001.2 million Euros, with KBA expanding its market share in newspaper presses, sheetfed and some niche applications. Group sales rose by 4.7 per cent  to 772.1 million Euros.

Higher revenues in the third quarter, in conjunction with cost savings from an ongoing consolidation programme, resulted in a pre-tax profit of 15.3 million Euros. Earnings before taxes for the full nine months improved from 2009’s 37.8 million Euros in 2009 to a 6.7 million Euros loss.

The net loss of 9.2 million Euros was also “much better” than the prior-year loss of 39 million Euros.

Major contracts for newspaper presses and buoyant demand for niche products sent the volume of new orders for web and special presses soaring by 73.6 per cent to 539.2 million Euros.

Although slack demand last year for big, multi-unit installations continued to weigh on sales, the web and special press division posted a modest gain of 1.8 per cent to 426.1 million Euros. The influx in orders for big newspaper presses booked in the third quarter will not be reflected in sales until next year. 

The group order backlog at the end of September was worth 564.1 million Euros, a 26.3 per cent gain on the prior-year figure. The backlog of orders for web and special presses climbed to 355.9 million Euros, raising the level of plant utilisation in this division, too. 

At the end of September there were 6,437 employees on the group’s payroll, 658 fewer than at the same time last year. Since the financial crisis broke in summer 2008, KBA has shed around 1700 jobs. Even so, to maintain the high standard of technological skills necessary in the international printing press market KBA took on 419 apprentices and interns at the beginning of the new academic year, raising its training level from 5.8 per cent to 6.5 per cent.

Exports have grown to an exceptional 87.8 per cent: Group sales from the rest of Europe (30.3 per cent) are well below pre-crisis levels, but those from Asia and the Pacific account for 26.8 per cent, largely thanks to brisk demand from China.

In the third-quarter report KBA president Helge Hansen reaffirmed goals for 2010: “I am confident that the scheduled rise in fourth-quarter sales will enable us to boost the year-end total by around seven per cent to achieve our goal of 1.1 billion-plus Euros,” he says.

“On current readings, our pre-tax profit will also be appreciably higher than in 2009. If this is confirmed at the end of December, we shall consider paying a dividend again after a two-year hiatus.” 

KBA is still pursuing its goal of engaging in a new, high-potential field of operation alongside its core business of press technology. Says Hansen: “Unfortunately this is taking far longer than I originally expected and predicted. Not every project that at first glance appeared promising and relatively quick to implement could withstand closer scrutiny.”