Profit takes a battering at Phoenix-Mecano
The components company Phoenix-Mecano reported that its first half net profit has plunged by 64 per cent to SFr7.5 million ($5.01 million).
The firm said in a statement on Monday that increased competition, adverse foreign exchange developments and higher taxes were to blame for the fall.
Sales fell by 15 per cent in the first six months to SFr254 million, while new orders dropped by eight per cent to SFr263 million.
No signs of recovery
Commenting on the outlook, Phoenix-Mecano said there were no signs of market recovery over the short term but it still expected sales in the coming months to partly reverse the decline of the first half.
The company said that current market weakness would in the medium term reduce overcapacities and lead to improved market prospects for the group.
The rising pressure on costs experienced by ourS customers opens up increased potential to supply assemblies and subsystems in addition to single components, the statements added.
Phoenix-Mecano, which was established in 1975 in Zurich, has traditionally taken over companies as a way of smoothing its entry into new segments of the components market.
Between 1985 and 1992, it spent more than SFr100 million on acquisitions.
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