Delticom sees red in first 9 months of 2014

While climatic conditions affected sales at Delticom in the three months to 30 September, it was its 2013-acquired Tirendo operation that wreaked havoc on the bottom line.

Warm weather equalled lukewarm sales for Delticom in the third quarter of the current financial year. The German online tyre retailer comments that the quarter coincides typically coincides with the transition between summer tyre and winter tyre business, however this year the summer tyre business tailed off without winter picking up; according to initial estimates by trade associations in Delticom’s home and most important market, year-on-year five per cent fewer summer tyres were sold in Germany in the third quarter, while one-third winter tyres were sold than in the same period of last year. The same was observed in other markets where motorists change over from summer to winter tyres.

Due to these conditions, revenues in the third quarter of the year were down 9.1 per cent year-on-year to €88.1 million. Revenues for the nine months to 30 September were €314.1 million, an increase of 1.6 per cent on the same period of 2013. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the nine-month period came in at €8.0 million, 33.3 per cent lower than a year earlier and equating to an EBITDA margin of 2.5 per cent (9M 2013: 3.9 per cent). Delticom says group EBITDA declined by a third largely because of the negative result contribution from Tirendo in the first nine months of the year.

Net income for the first nine months of the year totalled €-0.9 million after €6.2 million the previous year. This negative performance was primarily attributable to Tirendo’s accumulated losses after tax of €-9.8 million in the first nine months of the year. Delticom says further job cuts will be made at Tirendo before the end of the year.

Delticom’s 31-page report on its January to September 2014 financial performance can be read in our company profiles and reports section.