Hexagon Composites Reports 20% Revenue Growth for Low-Pressure Cylinders in Second Quarter

Hexagon Composites says operating results for the second quarter were positively impacted by a 20% growth in revenue for the Low-Pressure Cylinders segment.

In the second quarter of 2016, Hexagon Composites generated NOK 315.6 (413.9) million in operating income and made an operating profit before depreciation (EBITDA) of NOK 37.0 (37.4) million. Operating profit (EBIT) was NOK 19.7 (23.2) million and profit/loss before tax came to NOK 18.4 (-11.7) million. 

Operating results in the second quarter were impacted positively by a 20% growth in revenues within the Low-Pressure Cylinders segment versus the same period last year. However weak sales volumes within High-Pressure Cylinders continue to hamper overall profitability for the group. The realized cost initiatives executed towards the end of 2015 are proving effective in countering the above volume reductions. 

The first half of 2016 provided an operating income of NOK 607.2 (815.5) million and had an operating profit before depreciation (EBITDA) of NOK 55.6 (90.2) million. The operating profit (EBIT) was NOK 22.9 (62.7) million and profit before tax was NOK 15.8 (41.6) million.

Key developments:

  • Strong performance in low-pressure cylinders. 
  • Profitability impacted by soft heavy-duty truck sales. 
  • Mobile Pipeline sales have improved versus first quarter but still relatively low order intake for deliveries later in the year is healthy. 
  • Announced joint merger of Heavy- and Medium-Duty CNG Automotive Products with Agility Fuel Systems to form Agility Fuel Solutions with closing targeted for October 1, 2016. 
  • Repaid all outstanding bank loans in the quarter. 
  • Announced joint venture agreement with Siddha Gas Technik in India to pursue opportunities in India's natural gas market. 

Other important events in the half-year reported previously

  • The group received NOK 667 million from a private placement of new shares and entered a strategic cooperation agreement with Mitsui & Co., Ltd. 
  • Awarded extension of long-term agreement with New Flyer Industries for the North American transit bus market. 
  • Acquisition of 67% of a Brazilian entity to pursue fuel systems opportunities for transit buses and heavy-duty trucks in South America and Africa. 
  • Awarded a significant Mobile Pipeline order for distribution of biomethane in the UK. 
  • Commenced a business viability study of a proposed joint venture with Mitsui & Co., and Toray Industries, to manufacture and sell high-pressure cylinders for hydrogen vehicles in Japan.