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Home 9 News 9 November 10, 2020 SMT Scharf AG applies impairment charges and adjusts FY 2020 revenue and earnings forecasts

November 10, 2020 SMT Scharf AG applies impairment charges and adjusts FY 2020 revenue and earnings forecasts


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SMT Scharf AG applies impairment charges and adjusts FY 2020 revenue and earnings forecasts

Hamm, November 10, 2020 – SMT Scharf AG (WKN 575198, ISIN DE0005751986) has applied impairment charges in a total amount of EUR 6.6 million as of the third quarter of 2020. As part of the ongoing restructuring process at the Canadian subsidiary RDH Mining Equipment Ltd., which has been rendered more difficult by coronavirus, inventories were also reviewed and, in some cases, classified as impaired in terms of their value. The revaluation leads to an impairment charge of EUR 5.1 million. In addition, against the backdrop of the COVID-19 pandemic, SMT Scharf is correcting intangible assets for the Group by EUR 1.5 million, thereby adjusting them to reflect the company’s current situation. With the consistent restructuring of RDH Mining, SMT Scharf aims to create a healthy foundation for the subsidiary’s future growth, and in order to develop a sustainable business with rubber-tyred vehicles for underground mining.

At the same time, the impairment charges have the consequence that the operating result (EBIT) based on preliminary figures for the first nine months of 2020 is clearly negative at EUR -7.2 million (9M/2019: EUR 3.2 million). Given this one-off effect, the Managing Board has revised its earnings forecast and now expects EBIT for 2020 as a whole to lie in the range between EUR -6.0 million and EUR -6.5 million. In April, against the backdrop of the COVID-19 pandemic, the Managing Board adjusted the forecast it issued at the time it published the 2019 results, and last expected EBIT to lie in a range between EUR -1.4 million and EUR 1.6 million.

Moreover, the economic impact of the COVID-19 pandemic is significantly affecting the SMT Scharf Group’s business activities in the global mining equipment market, which is clearly slowing demand for new equipment as well as for service and maintenance. Furthermore, the approval of the new China-III machines by the regulatory authorities in China continues to be delayed, so that a start cannot be made with the execution of existing orders. Given this, SMT Scharf has corrected its forecast for consolidated revenue to lie between EUR 48 million and EUR 50 million for the 2020 fiscal year. The company had previously expected revenue in a range between EUR 55 million and EUR 57 million.

Company profile
The SMT Scharf Group develops, manufactures and services transportation equipment for underground mining as well as for tunnel construction. Its main products include captivated railway systems that are deployed worldwide, primarily in hard coal mines, as well as in mines for gold, platinum and other metals. Such systems are required in order to transport material and personnel with payloads of up to 48 tonnes and on gradients of up to 30 degrees. In addition, SMT Scharf supplies the mining sector with chairlifts. Since 2018, SMT Scharf’s diverse portfolio has also included rubber-wheeled diesel and electric vehicles for mining and tunnelling, including loaders, scissor lifts and underground trucks. As part of the further diversification of the business, the product range has been successfully expanded since 2019 to include electronic components and control systems for mining and other industries. Overall, the SMT Scharf Group is active with subsidiaries in eight countries, as well as commercial agencies worldwide. SMT Scharf generates a large share of its revenue in growing foreign markets such as China, Russia, Poland and South Africa. SMT Scharf AG has been listed in the Prime Standard (Regulated Market) of the Frankfurt Stock Exchange since 2007.

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