Activity in the Marine segment was particularly positive because of a high level of activity in Korea. Demand for shipping tonnage has meant full order books for the company’s newbuilding customers in China and Korea, while European yards had another good year, especially in German, Poland and Croatia, in part because of their ability to achieve shorter delivery times for new ships. Marine Maintenance also performed well as the higher level of shipping activity has increased demand for product, especially antifoulings.
However, the company said earnings in both Newbuilding and Maintenance have not risen at the same rate as volumes and have therefore not lived up to expectations.
The Protective segment in the North American market also performed well, while in China, bridges and other infrastructure projects also contributed to growth. Europe and parts of the Middle East also performed well. For the first time the Protective segment sold more liters of paint than Marine Maintenance—traditionally the largest segment. Sales rose by 23% in total.
The container market grew strongly in the first hald of 2005, but then slowed, affecting volumes in the last six months of the year.
The Yacht segment showed encouraging growth, especially in Southern and Northern Europe.
Expansion of the Decorative segment in the Middle East continued with the opening of more premium retail outlets, while in China several important contracts have consolidated Hempel’s presence in the growing property market.
Due to rising raw material prices in 2005, which put earnings under pressure, the company’s profits did not keep pace with its growing sales. Operating profit was up 4.7% to €44.7 million from €42.7 million. Net profit was €29.8 million, down from €30 million for the same period last year.