Bodycote has reported revenue of £299.8 million in the half year to 30 June 2015, a 4.0% decrease from the £312.3 million reported in the half year to 30 June 2014.
‘The group’s performance was resilient in the first half, with business improvements mitigating the sharp cutback in oil and gas activities,’ said Stephen Harris, group chief executive. ‘No upturn is anticipated in the second half in oil and gas and general industrial demand is expected to remain soft. However, the second half will benefit from the early results of restructuring and further progress in aerospace and automotive together with continued growth from the group’s specialist technologies. The goard is confident that management’s continued focus on business improvement will generate good returns throughout the cycle.’
The company experienced a very strong first quarter in the energy sector, driven by some large shipments from the hot isostatic pressing product fabrication (HIP PF) business, but the effect of the substantial slow-down in the oil and gas market was felt in the second quarter. This resulted in a significant decline in demand for heat treatment and surface technology services. The impact was lessened by robust subsea revenues in HIP PF and a stable situation in the industrial gas turbine and power generation markets. In total, revenue in the energy sectors was down 13.6% (at constant exchange rates) compared to the first six months of 2014. Revenues for the AGI business were £171.0 million in the first half of 2015, compared with £178.8 million in 2014, a decrease of 4.4%.
Due to the marked economic decline in Brazil and any pickup in opportunities in oil and gas markets in the region looking quite distant, Bodycote decided to close business in Brazil with an exceptional charge of £11.0 million taken at the half year. In addition to the exit from Brazil, an additional £8.9 million restructuring charge was taken to reduce fixed costs and to rightsize operations elsewhere in the Group. The cash cost of all restructuring actions is expected to be £12 million.
This story uses material from Bodycote, with editorial changes made by Materials Today. The views expressed in this article do not necessarily represent those of Elsevier.