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Glassmaker’s trading shattered by downturn

Post Time:May 25,2009Classify:Company NewsView:303

PILKINGTON owner Nippon Sheet Glass (NSG) yesterday made clear the difficult trading conditions it faces with a gloomy set of annual results.

The Tokyo-based company announced losses of £191m in the year to March 31, compared with £243m profits in the previous year.

It expects to nearly double those losses in the current financial year as sales – which fell by 15% in the year to March 31 – are expected to slump again by a further 22%.

It has already announced a £170m restructuring programme that aims to make the company profitable again from 2011.

Earlier this month, it announced it was to close a float line in St Helens, with the loss of 76 jobs, while a second line at its Greengate site in the town will not reopen until at least next April despite a £22m refurbishment last year. Pilkington now employs fewer than 1,400 people across its five sites in the area.

Globally, NSG is reducing its staff levels by 15% – about 6,700 people – by March, 2010, with two-thirds of the cuts already made.

Although the changes are designed to position the company in the medium term, the group remains pessimistic about its markets in the coming months.

In a statement to the Japanese stock exchange yesterday, NSG said: “For the year as a whole, markets held up relatively well during the first six months, and then deteriorated quickly from the third quarter.

“Economic activity has remained at subdued levels during the final quarter as central banks and governments have attempted to stimulate demand through interest rate reductions and public spending initiatives.

“Although the rate of market deterioration appears to be slowing, the group does not anticipate a significant recovery in the near-term.”

Sales in its building products division fell 14% (£370m), because of “increasingly challenging market conditions.”

In its automotive division, sales fell 18% to £440m, with part of its European operations struggling during the second half of the year “where it was not possible to reduce capacity and costs quickly enough to match the lower sales”.

NSG’s net debt position increased slightly in the last year, to £2.2bn after reducing this figure by £1.25bn in the previous two years. It spent more than £130m in interest payments.

It said it can operate within its existing financial facilities and it expects to be able to renew its future borrowing requirements on “acceptable terms”.

Source: ldpbusiness.co.ukAuthor: shangyi

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