Ursensollen, Germany – Grammer, the automotive interior components and passenger seating manufacturer, has prematurely extended tranche C of its €235m syndicated loan agreement, concluded in August 2020, until 10 February 2025, citing the challenging economic environment.
As a condition of the loan, German development bank KfW Bankengruppe – which is involved in tranche C as a direct lender – required that Grammer suspends dividend payments. This suspension will continue until 2025.
Based on preliminary figures, Grammer’s earnings performance in the second quarter of 2022 remained significantly below the previous year's level. Accordingly, EBIT and operating EBIT are expected to be between minus €10m and minus €15m, down from €5.2m and €11.4m respectively in the 2021 quarter.
The preliminary group revenue in the current quarter of about €505m is significantly above the previous year's €468.8 m, largely in line with the company’s forecast.
The company has faced significantly higher costs for materials, logistics and energy, as well as ongoing bottlenecks in procurement markets. It cites these, as well as new coronavirus lockdowns in China, as the main reasons for the dip in earnings.
Despite the weaker than expected first half, the executive board is currently working to the full-year forecast it published in the company’s annual report. But the company concedes that the ongoing war in Ukraine, rising energy and material prices, and possible future coronavirus lockdowns in China or other countries, could have a negative impact on the forecast.
Grammer also concedes that its full-year forecast depends significantly on the extent to which its customers can agree to inflation-related price increases.
The interim report for the first half of 2022 will be published on 11 August 2022.