Cologne, Germany-based Deutz Ag last week reported third-quarter 2007 revenue of €383.0 million (about U.S. $561.3 million), from €292.2 million (U.S. $428.3) a year ago. Revenue for the first nine months was €1.1 billion (U.S. $1.6 billion) from € 817.5 million (U.S. $1.2 billion) for the first nine months of 2006.
Net income on continuing operations in the first nine months of 2007 exceeded €35.6 million (about U.S. $52.2 million), an increase of 36 percent. Including the net income of €107.6 million (U.S. $157.7 million) generated by discontinued operations (Deutz Power Systems), the Deutz Group earned net income of €143.2 million (U.S. $209.9 million) in the first nine months of 2007.
The disposal of Deutz Power Systems (gas engines and diesel engines business for decentralized power generation) was successfully completed on Sept. 30, generating a pre-tax gain of €132 million (about U.S. $193.5 million). The company also launched the Chinese joint venture Deutz (Dalian) Engine Co. Ltd. on Aug. 1. Deutz invested €58 million (U.S. $85 million) in this company in return for 50 percent of its shares.
The management board of Deutz AG is confident that the company's strong performance throughout the year to date will continue in the final quarter.
“We expect to sell between 280,000 and 290,000 engines in 2007 as a whole,” said Helmut Meyer, CEO of Deutz AG. “This will enable us to raise the revenue generated by our continuing core operations — Compact Engines and Deutz Customized Solutions — by between 25 and 30 percent on the €1.2 billion (U.S. $1.7 billion) achieved in 2006.”
Operating profit for 2007 is expected to reach the high double-digit millions following an operating profit of €67 million for the continuing operations in 2006. Including the start-up losses incurred by Deutz Dalian, the EBIT margin will be around 6 percent.
