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POOR FIRST HALF FOR PIAGGIO

Piaggio’s woes worsened as 2014 progressed, according to its half-yearly financial results.

Consolidated sales revenue for the period fell by 6.3 per cent to £497.3m. Operating profit dropped by 11.3 per cent to £40.4m. Net profit was down by 34 per cent to £13m. Bottom-line decline was exaggerated by a £1.4m non-recurring expense incurred from early redemption of a bond set to mature in 2016. Net debt was reduced by a marginal 0.7 per cent to £373.4m.

Decreasing revenue was due to ongoing negative foreign exchange translation, with depreciation of the Indian rupee, the Vietnamese dong, the Indonesian rupee and the US dollar against the euro, allied to falling sales volume. In the first six months of 2014, overall Piaggio Group shipments to dealers worldwide shrank by 6.7 per cent to 278,500 units (comprising motorcycles, scooters and three-wheeled light commercial vehicles).

In the powered two-wheeler sector, the company reported that its domestic European market saw a significant slowdown in first-quarter recovery. Year-on-year volume for January-June rose by four per cent, compared with 13 per cent in the January-March quarter. This reflected positive motorcycle performance, flat scooter sales and a downturn in the 50cc market.

The Asia-Pacific region was mixed. While Piaggio’s Indonesian market grew, it also suffered sharp demand downturns in Vietnam and Thailand. So was North America, where it posted overall growth of 3.2 per cent but a two per cent fall in scooter sales.

 

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