PILKINGTON owner Nippon Sheet Glass (NSG) has reported a much-improved climate for its products, despite a steep 35% decline in like-for-like sales.
The glassmaker has been particularly badly hit by the global slumps in the building and automotive sectors. But the Tokyo-based firm says it is now seeing stabilisation in its key markets and is forecasting a return to profitability in 2011.
NSG lost £70.5m in the first quarter, to June 30, on sales of £918m, compared with a £64m profit the year before.
In a statement to the Tokyo stock exchange, NSG said: “The result in the quarter is, as expected, significantly down on the first quarter of the previous year when market conditions were considerably more favourable.
“The current quarter has seen the operating result stabilise and the group now anticipates a steady improvement in profitability as the group’s previously announced restructuring initiatives take effect and economic conditions recover.”
It has undergone a £170m restructuring in order to save costs, and 5,600 jobs have already gone, with another 1,100 still to be cut by March.
Local sites have been hit, with more than 170 jobs lost.
There have been 90 redundancies at Pilkington’s European Technical Centre in Lathom, near Ormskirk, a float line in St Helens closed with 76 people made redundant, and 11 jobs went when the Automotive Value Added operation, also in St Helens, shut. Pilkington now employs fewer than 1,300 people across its five sites in the area, just one-fifth of the workforce employed in 1992.
In May, NSG made clear the difficult trading conditions it faces with a gloomy set of annual results.
It announced losses of £191m in the year to March 31, compared with £243m profits in the previous year.
It forecast that it expects to nearly double those losses in the current financial year as sales – which fell by 15% in the year to March 31 – are expected to slump again by a further 22%.
However, the effects of the car scrappage scheme across Europe – which has been credited with stimulating new car sales in several countries – is beginning to help NSG’s sales.
NSG said: “In Europe, market conditions remained challenging with the demand for flat glass being approximately 20% below the first quarter of the previous year.
“Vehicle sales showed signs of improvement boosted by government incentives to purchase new cars, and year-on-year increases were recorded in Germany, France and Italy.
“The European automotive replacement market continued to prove resilient to declines in general economic activity.”
