Netstal-Maschinen AG said its 2005 sales fell 11.6 percent, to 314.8 million Swiss francs ($259 million), as the injection press maker was hurt by the slowdown in its important optical disc market. Customers faced higher resin prices and energy costs.
The company's fiscal year ended Sept. 30. The NÃ¤fels-based company also said orders dropped 11.4 percent, to 317.1 million francs ($261 million).
Despite the lower numbers for sales and orders, Netstal managed to become more profitable in 2005. Profit hit SF 25.1 million ($21 million) for 2005, a 2.9 percent increase from 2004. The company benefited from ongoing moves to reduce costs and boost quality.
Netstal delivered an 8 percent profit margin to its parent, Munich, Germany-based Mannesmann Plastics Machinery GmbH.
Netstal said its business to Asia fell slightly in 2005. Sales increased to North and South America.
The global optical disc market is soft, thanks to overcapacity in DVDs and CDs, and the advent of new technologies for storing digital information and listening to music. Much higher polycarbonate prices also hurt. Netstal said the greatest decline came from recordable discs and from the Asian region. But company officials said they believe Netstal's e-Jet and Discjet products picked up market share.
For PET preform machines, Netstal said deliveries increased in Asia and North and South America, but went down in Europe. But officials noted that larger-cavitation machines - Netstal offers up to 192-cavity systems - caused the number of preform presses to decline slightly from the 2004 level.
Netstal said business remained solid for its SynErgy presses. The company also picked up sales from the new all-electric Elion, through orders from medical and pharmaceutical customers.
Looking ahead, Bernhard Merki, president and chief executive officer, said he thinks high energy and resin prices will continue to keep a lid on machinery spending this year. But Netstal is working to expand market share in key segments, he said.
Netstal continues to invest 5 percent of its sales in research and development, totaling SF 15.6 million ($13 million) in 2005. The company spent another SF 7.1 million ($5.8 million) on building and equipment.