Sales growth higher than expected - earnings risks have increased - Management Board therefore cuts earnings forecast for 2015
Karlsruhe, 6. November 2015.
Based on the current figures for the third quarter of 2015, init innovation in traffic systems AG (ISIN DE 0005759807) remains on track to achieve its full-year revenue target of between EUR 104 and 110 million, though has to cut its earnings forecasts.
With a quarterly revenue of EUR 26.1 million (previous year EUR 25.7 million), the positive revenue trend continued. Over the first nine months, init group has thus been able to achieve revenue growth of 5.2 per cent with revenue of EUR 73.2 million (previous year: EUR 69.6 million).
As a result of exchange rate volatility – in particular the collapse of the Canadian dollar – expenses incurred for activities in the Asian market, partly lower margins as well as higher personnel costs meant operating earnings before interest and taxes (EBIT) came in at only EUR 2.4m in the third quarter (Q3 2014: EUR 3.7m). For the first nine months, this means EBIT has fallen compared to the previous year to EUR 6.1m (2014: EUR 10.1m). Overall net profit recorded as at 30 September 2015 around EUR 4.0m (Q1-Q3 2014: EUR 6.8m). This corresponds to earnings per share of EUR 0.40 (Q1-Q3 2014: EUR 0.68).
This has meant that the risks for earnings performance for the full-year have sharply increased. Taking all factors into account, the Management Board must therefore assume that the previous estimate for an operating result (EBIT) for 2015 of between EUR 17 and 19 million will no longer be achieved. Based on currently available data, EBIT in the order of EUR 10-12 million appears to be the most likely value. The actual development may still change however, because the fourth quarter is traditionally the strongest in terms of revenues and earnings for init, and the assumptions on which the forecast was based could prove to be incorrect in retrospect.
The Managing Board considers the target for incoming orders of EUR 112m in 2015 still achievable (30/09/2015: EUR 56.4m, previous year: EUR 55.6m). However, this depends on whether the larger tenders are decided in init’s favour this year and whether the resulting orders are placed by the end of the year. The longer-term growth trend in the market for init solutions remains intact. Across the globe, a range of tenders for public transport infrastructure measures and telematics and ticketing systems are underway or planned, although competition here is increasingly a matter of price.
As a leading international provider of appropriate solutions for buses and trains, init is well equipped to benefit from the growing demand for ticketing and integrated transport control systems in North America and Europe as well as emerging opportunities for sustainable growth in the Asian market.
The report for the first nine months of the 2015 financial year will be published on 11 November 2015.
