Glaston Corp.’s orders received dropped from $52.7 million* in the second quarter of 2019 (April through June) to $28.4 million in the second quarter of 2020. That’s according to the company’s half-year January-June 2020 financial report. Net sales also saw a drop from $69.2 million in the second quarter of 2019 to $57.9 million during the same period in 2020.
A comparison of the first half of 2020 (January through June) with the pro forma financial information from the first half of 2019 shows a similar trend. The unaudited pro forma financial information presented in the interim report is presented as if the acquisition of Bystronic glass, which occurred in April 2019, would have already been completed on January 1, 2019.
The pro forma orders received for the first half of 2019 totaled $106.4 million compared to $82.4 million in the first half of 2020. The pro forma net sales for the first half of 2019 totaled $121.8 million compared to $113.6 million in the first half of 2020.
“The spread of the COVID-19 pandemic accelerated in the Western countries at the beginning of the second quarter, severely impacting all areas of society and businesses. To Glaston, this was evident in the significant decrease in orders across all businesses, and several orders expected in the second quarter were postponed due to market uncertainty. Although far from recovering, it seems we have passed the steepest decline, and the majority of second-quarter orders were, in fact, received in June. Although we have been impacted by the pandemic, and will continue to be so throughout the year, our continuous customer dialogue reassures me that several of the projects discussed earlier will ramp up once the situation has settled to some extent. No orders in the order book have been cancelled,” says acting CEO Sasu Koivumäki. “Throughout the pandemic, Glaston has been able to deliver all projects according to schedule. However, at the beginning of the quarter, a number of customers, mainly from the U.S., postponed project deliveries and installations due to the economic uncertainty and restrictions caused by the pandemic. These postponements have had a negative impact on our second-quarter net sales. Our services sales were strongly impacted by travel restrictions, the containment measures of various countries and by the decreased or no production activity in customer operations … Although decreasing, our net sales remained at a reasonable level at $57.9 million, compared to the peaking second quarter of 2019. Profitability was impacted by lower sales volumes and sales mix, but still held up rather well, thanks to clearly lower fixed costs from organizational streamlining and temporary lay-offs as well as lower than usual marketing and travelling costs. Also cost synergies from the Bystronic glass integration were clearly higher than a year ago at the start of the integration.”
Glaston Corp. estimates that comparable earnings before interest, taxes and amortization (EBITA) for 2020 will decline from the 2019 level. The company’s current assessment is that the market will recover gradually and that third- and fourth-quarter orders will improve from the second quarter but stay below the previous year’s levels. The lower-than-2019 order intake and slower-than-normal volume in the services business impacts the development of net sales and earnings in 2020. The uncertainty surrounding the assessment remains, and the situation might change quickly depending on the development of the COVID-19 pandemic and the general economic climate.
*The financial information was converted from Euros to U.S. dollars on August 6, 2020.