Kapsch TrafficCom focusing on projects in the second half of fiscal year 2012/13.
- Revenues and earnings disappointing in first half of 2012/13 owing to delays with major projects
- Projects recently won will only be reflected in figures in second half-year
- Balance sheet figures reveal strong financial base after project completion in Poland
- Reorientation of Kapsch TrafficCom Group for growth in ITS market completed
|2012/13 H1: 1 April – 30 September 2012||2012/13 H1||+/- %||2011/12 H1|
|Revenues (in EUR million)||203.4||-27%||278.8|
|EBIT (in EUR million)||-6.2||-||40.1|
|Profit for the period (in EUR million)||-7.0||-||22.4|
|Earnings per share (in EUR)||-0.85||-||1.36|
Vienna, 22 November 2012 – Kapsch TrafficCom AG (ISIN AT000KAPSCH9) listed on the Prime Market of the Vienna Stock Exchange has reported on a complex first half-year in 2012/13. Delays in implementing and rolling out large projects had a negative impact on revenues and earnings, while the main balance sheet figures since the first quarter again demonstrate the solid financial foundations underpinning the activities of the Kapsch TrafficCom Group. Moreover, Kapsch TrafficCom managed to win some significant new contracts in the reporting period.
Revenues of the Kapsch TrafficCom Group came in at EUR 203.4 million, 27.1% below the corresponding figure in the previous year of EUR 278.8 million. The previous year was marked by outstanding revenues following the implementation of major projects, but the implementation projects recently won have yet to be reflected in the figures for the reporting period. The projects in South Africa and Poland have not yet generated the expected levels of operation revenue, while the sale of on-board units only registered the expected growth in the second quarter.
The lower revenues made it more difficult to cover costs completely. Coming in at EUR -6.2 million, EBIT was negative in the first half of 2012/13 following EUR 40.1 million in the same period in the previous year, though a substantial improvement was achieved from the first to the second quarter based on the higher volume of sold on-board units and the greater contribution made by the operation project in Poland.
The nationwide electronic toll collection system in Poland has been in operation for more than a year, and extensions have already been ordered. However, the revenues for Kapsch TrafficCom have fallen short of expectations. In South Africa the launch of the electronic toll collection system for multi-lane free-flow traffic in the province of Gauteng was delayed shortly before its roll-out at the end of April due to a legal action filed against the road operator; consequently there is no operation revenue to offset costs for the time being. At the end of October a decision was made to continue the system roll-out process, and Kapsch TrafficCom is optimistic about the latest developments in this project.
Kapsch TrafficCom enjoyed some strategic successes in the second quarter on the U.S. market: at the end of July and for the first time in this region the company was chosen to supply an entire system in Texas, comprising a toll collection system, an intelligent transportation system and a network communications system. Just one month later, Kapsch TrafficCom was awarded another contract, this time for an incident detection system in a tunnel in Houston.
In Brazil – one of the fastest growing markets in the ITS industry – Kapsch TrafficCom won its first contract for the delivery of on-board units. And at the end of August the company won another contract for a toll collection system in Sydney, Australia.
The contracts won in recent months have demonstrated the growing convergence of the market for intelligent transportation systems (ITS). The Executive Board sees this as confirmation of the recently adopted strategy and the new corporate structure implemented from early October. This enables greater importance to be attached to select ITS applications, over and above toll collection. The Kapsch TrafficCom Group now has a globally uniform organizational structure with coordinated standards, processes and interfaces. This will underpin the continuation of growth.
Revenues and earnings.
Both of the implementation projects in the segment Road Solution Projects (RSP) in Poland and South Africa were associated with high revenues in the first six months of the previous fiscal year. The newly launched projects were unable to compensate for this in the reporting period, and so revenues posted a decline of 59.2% from EUR 122.9 million to EUR 50.2 million. This was insufficient to provide full coverage for costs, and therefore EBIT in the segment RSP came in at EUR -15.7 million.
In the segment Services, System Extensions, Components Sales (SEC), revenues dropped by 5.6% from EUR 153.2 million in the previous year to EUR 144.7 million. The operation project in Poland made a significant contribution to revenues. However, the suspension of the project launch in South Africa and the – now completed – contract negotiations with individual agencies of the E-ZPass Group meant that the volume of sold on-board units fell short of expectations in the reporting period. The number of sold units in the first six months of fiscal 2012/13 was 4.0 million, compared to 5.7 million in the previous year. The competitive pricing for this contract, which has now resulted in common global margins in the U.S.A. as well, also had an impact on earnings. The decline in EBIT from EUR 32.4 million in the previous year to EUR 9.1 million mainly reflects the reduced sales of on-board units and the low or even absent contributions from the projects in Poland and in South Africa.
Financial position and cash flows.
The main balance sheet figures were significantly improved in the first half of the 2012/13 fiscal year by the completion of the implementation project in Poland and the associated payment. Total assets fell from EUR 557.7 million to EUR 481.5 million compared to the reporting date of 31 March 2012. This was caused by the reduction of trade receivables under assets, while on the equity and liabilities side of the balance sheet, mainly through the decline in current financial liabilities. Equity capital dropped to almost the same extent, thus bumping the equity capital ratio up marginally from 45.9% to 46.2%.
These developments triggered an increase in the free cash flow compared to the first half-year of fiscal 2011/12, from EUR -44.9 million to EUR 78.7 million. At EUR 16.3 million, net debt remains at a very low level, while net current assets and capital employed were lowered substantially. Cash and cash equivalents at the end of the half-year amounted to EUR 67.7 million. These significant changes demonstrate that Kapsch TrafficCom has a solid balance sheet structure – also in view of future projects.
The current order book and the successes achieved will also be reflected in the earnings of the Kapsch TrafficCom Group in the second half of 2012/13. The major project in Belarus was launched in September as planned. In addition to this, the coming months will be marked by further developments in South Africa and by participation in tenders. Kapsch TrafficCom is currently working on a bid for a toll collection system tender in Hungary.
Kapsch TrafficCom is a provider of high-performance intelligent transportation systems (ITS) in the application fields of toll collection, urban access management and traffic safety and security. Kapsch TrafficCom covers the entire value creation chain of its customers as a one-stop shop by providing products and components as well as subsystems as open market products, by integrating them into turnkey systems or by developing end-to-end solutions, including services for the technical and commercial operations of systems. Within its current core business of electronic toll collection (ETC), Kapsch TrafficCom designs, builds and operates ETC systems, in particular for multi-lane free-flow traffic. With 280 references in 41 countries on all five continents and with almost 70 million on-board units delivered and about 18,000 lanes equipped, Kapsch TrafficCom has positioned itself among the internationally recognized suppliers of electronic toll collection worldwide. Kapsch TrafficCom is headquartered in Vienna, Austria, and has subsidiaries and representative offices in 30 countries.