Steico says increased competition hits results

Wood-fibre insulation and I-joist manufacturer Steico has reported reduced profits on the back of increased competition and a poorer economic climate for its products.

Profits before interest and tax were €7.2m for the first nine months (2010: €8.1m), while sales increased 13.9% to €110.7m (2010: €97.2m).

“Competitive pressures in the industry as a result of general increases in capacity and the entry of new competitors have increased significantly and are affecting sales prices,” Steico said.

Furthermore, settlement of the insurance claim following a fire at the Czarnkow factory in December 2010 has still not been finalised, dampening results in the third quarter.

However, Steico reported “stable” demand for its products and during the third quarter burdens from commissioning of new facilities were reduced.

Steico has reviewed its 2011 profits forecast and now expects sales to be about €140-150m, with earnings before interest and tax of €7.4-8.5m.