Sawing wire cut into Bekaert profits
Belgium's Bekaert reported that results for its 2012 fiscal year were hampered by overcapacity in most markets and that an overall slowdown in global demand led to fierce competition and persistent price and margin pressure.
A press release said that one of the harshest markets for Bekaert was the sawing wire business, which it began exiting in December 2011. The company incurred a total of 202 million euros in non-recurring costs, of which 117 million euros were related directly to the restructuring and impairments in the sawing wire activities. it said. The steps taken to "rightsize the respective activities with the new business reality substantially affected Bekaert's financial performance for the year," it said.
"Notwithstanding this difficult economic and business climate, Bekaert managed to achieve stable sales volumes and a solid cash flow from operating activities, and significantly reduced its net debt position," the release said. It noted that gross profit fell from 651 million euros to 479 million euros, although the company continued to make a significant invest in R&D (69 million euros) and capital expenditures (127 million euros) while reducing net debt (from 856 million euros to 700 million euros).
Sawing wire had enjoyed strong demand when the solar industry was thriving, but when that business slumped, so did demand for the sawing wire, which was used to slice crystalline silicon-based solar cells.