Bulten has revealed earnings for the third quarter of this year have been negatively affected by the company’s ongoing restructuring programme in Germany and lower rate of production.
Bulten announced the restructuring programme of its German unit in August, which includes cutting 50 jobs. Trade negotiations are ongoing and are planned to be completed before the end of the year.
From 2020, the restructuring is expected to result in an annual saving of SEK 25 million, while costs of this process are predicted to amount to SEK 20 million and will be charged to the third quarter of this year.
Bulten has also attributed its earnings slump to the continued downturn in the vehicle markets, with a weaker demand reflected in the company’s volumes. This has resulted in a lower production rate and greater under-absorption than was communicated in the second quarter of 2019, and is expected to affect the company’s earnings by around SEK 20 million in the third quarter.
Bulten predicts the lower demand will continue to affect production rates going into the fourth quarter, citing volume reductions from customers at short notice providing a counter effect of the company’s initiated measures for inventory reduction. Bulten said adjustments to demand in purchasing and production capacity are ongoing.
While Bulten has received contracts worth an annual value of SEK half a billion in 2021, the upgrading of new contracts has been slower than previously planned but is still expected to gradually compensate for the predicted general decline in the coming quarters.