Icelandic processing equipment firm Marel has made a “difficult decision” to reduce its global workforce by 5 percent to improve operational performance.
Despite preliminary and unaudited financial results for the second-quarter 2022 showing a new record in terms of orders received as well as increased revenue, Marel said its operational performance is “below expectations,” resulting in a preliminary EBIT margin of 6.3 percent in the quarter versus Q2 2021’s 11.8 percent.
“In light of continued supply chain disruption and inflation at high levels leading to slower ramp up of revenues than originally planned, Marel is taking firm actions to improve operational performance towards the year-end 2023 targets,” it said.
The move to lower costs through a headcount reduction will result in an annualized cost saving of EUR 20 million (USD 20.5 million) with a one-off cost of around EUR 10 million (USD 10.2 million), Marel estimates.
It said the healthy status of its order book price increases will support a gradual ramp-up in revenues and operational performance in the second-half of 2022.
According to the statement, demand from the poultry and fish industries is “on a strong run rate,” while the outlook for meat is softer and will impact the industry mix.
The group received EUR 472 million (USD 483.1 million) worth of new orders in the second-quarter and achieved revenues of EUR 397 million (USD 406.3 million), compared to Q2 2021’s EUR 371 million (USD 379.7 million) and EUR 328 million (USD 335.7 million), respectively.
The company's April 2022 acquisition of Sabetha, Kansas, U.S.A-headquartered Wenger Manufacturing, a provider of processing solutions to the pet food, plant-based protein, and aquafeed sectors, contributed EUR 17 million (USD 17.4 million) to orders received and EUR 12 million (USD 12.3 million) to revenues.
Marel's record-high preliminary order book of EUR 775 million (USD 793.1 million) – up from March 2022’s EUR 619 million (USD 633.5 million) and June 2021’s EUR 499 million (USD 510.7 million), includes the acquired order book from Wenger and Sleegers - acquired in April 2022 - of EUR 81 million (USD 82.9 million).
Marel will release its Q2 2022 financial statement after market closing of both Nasdaq Iceland and Euronext Amsterdam on 27 July, 2022.
