São Paulo – From January to June this year, Randon had its worse half-year of the decade, according to the company’s Investor Relations director Astor Milton Schmitt, on disclosing the results this Thursday (9th). Randon saw its total gross revenues and consolidated net profit plummet by 20% and 91%, respectively. Despite the international crisis, exports were the company’s best-performing area, with a 10.7% increase in revenues (domestic currency) and a 3.7% decline in US dollars.
Randon controls ten different enterprises in the vehicles and implements, auto parts, and financial services industries, and does business with the Arab countries. “The company remains confident that its traditional international markets – Nafta, South and Central America – will remain strong and keep on performing more resiliently than the domestic market,” according to the company’s report. In the Arab world, Randon does CKD assembly in Algeria and has a Fras-le office in the United Arab Emirates.
The company posted export revenues of 235.4 million reals from January to June, equivalent to US$ 125.3 million. “In the foreign market, sales will remain as strong as they were in the first half,” said Schmitt of the period which has begun. In the second quarter, exports were up 21.8% in Brazilian reals and remained stable in dollars, at US$ 71.1 million. Region-wise, 37% of sales went to the Nafta, 33% to the Mercosur and Chile, 11% to Africa, 10% to South and Central America, and 2% to Europe.
Randon posted total gross revenues of 2.49 billion reals in the first half, and a consolidated net profit of 14 million reals. Domestic sales were down 35.2% at 343 million reals, the gross margin was down 4.6 percentage points to 21.2%, and the net margin was down 6.7 percentage points to 0.9%. The company’s consolidated Ebitda was down 57.6% to 133.6 million reals, with a 15.4% margin, down 7.1 percentage points.
Weak demand and non-production of railway wagons were among the main factors to the decline in performance, leading to factory idleness, impacting on productivity, reducing the scale and the spreading out of costs, according to Randon. “Responding to these market trends, the company had scheduled halts in trailer manufacturing, suppressed working shifts in some of its auto parts companies, and adjusted the availability of labour force,” according to the report.
In semi-trailers, the company kept its stock-up levels high due to changes “for the better” in its funding system, provided by the Brazilian Development Bank (BNDES). However, this caused some clients to delay their purchases to wait for better conditions, causing stock-up levels to rise. The company promised, though, that levels should decrease until the end of the year.
By the way, Randon is expecting improvements in business in the second half. “Yes, we have had the worst half of the decade, we had to make huge sacrifices, but the worst has clearly passed,” said Schmitt. According to him, there have been signs of recovery in July already, and the second half will be much better. “We started 2012 with our foot on the brake, but we will start 2013 with our foot on the throttle,” said the International Relations director. He claims that demand is already going up again, driven by improvement of the economy and perspectives of progress in agribusiness, with estimates of a better crop. “It has already begun to happen,” he said.
*Translated by Gabriel Pomerancblum
