- Email: [email protected]
Funding KickStarts African pump programme
June 2005
Pump Industry Analyst
NEWS
INCREASED Q1 BOOKINGS, BACKLOG FOR FLOWSERVE First quarter 2005 consolidated bookings at Flowserve Corp increased 9% to US$686 million on a year ago, while backlog increased 3% to US$884 million. “With these increased bookings, we are being more selective in purchase orders we are taking. Bottom line, we are continuing to see significant operational improvement across all three divisions,” said interim-CEO Kevin Sheehan. However Sheehan cautioned that any positive effects would continue to be reduced by the significant costs of Sarbanes-Oxley compliance, including professional fees arising from Flowserve’s internal financial processes, the 2004 audit of both financial statements and internal controls, the restatement and related financial compliance work. “For the first quarter of 2005, we expect these costs to offset the anticipated improvement from increased bookings when final results of operations are determined. For 2005, we expect these full year costs to exceed US$30 million, which we view as an investment in the company’s future,” Sheehan said. Consolidated debt increased approximately US$16 million at the end of the first quarter primarily as a result of payment of full year 2004 incentive awards, pension fund contributions and increased professional service fees. “We still expect to pay down debt in 2005,” said chief financial officer Mark Blinn. The company plans to file its 2004 Form 10-K report during the third quarter of 2005. As previously announced, the company is restating annual financial results for 2000 through 2003 and quarterly results for the first quarter of
16
2004. Flowserve continues to expect that the cumulative net reduction in net income, which is still being determined in amount and type, for the periods being restated should be less than US$20 million.
ORDER BOOST FOR KSB KSB Group order intake increased by 16.7% during the first four months of 2005, while KSB AG order intake showed a 9.2% gain. Sales revenues also showed strong growth with group sales up 11.3% and KSB AG revenues up 3.9%. In particular the Asia/Pacific companies posted a 55% increase in orders. Speaking at KSB AG’s Annual General Meeting in Frankenthal, Germany, the chairman of the board of management, Josef Gerstner, cautioned that the “dynamic growth revealed by these figures has to be seen in perspective.” Gerstner pointed out that the group’s strong order growth is also associated with a number of major orders and that this scale of growth cannot be expected in the months to come. Nevertheless, against a background of sales revenue development and the structural measures initiated for 2005, KSB is assuming that there will be a marked improvement in earnings this year. The AGM was chaired for the first time by Peter Schubert as new chairman of the KSB Supervisory Board.
DESMI EXPANDS INTO CHINA Denmark’s Desmi has opened a pump manufacturing facility in Suzhou, near Shanghai, China. The plant will initially manufacture centrifugal pumps but parts and other group products will be added
at a later stage. The centrifugal pumps will be sold mainly in the Chinese market. The factory will also produce pumps for the shipbuilding nations in the region. By the end of this year, Desmi is expecting to employ 30–50 people at the facility. Long term, Desmi plans to undertake parallel production for this part of the world at the new Chinese facility.
FUNDING KICKSTARTS AFRICAN PUMP PROGRAMME KickStart, a social enterprise that creates and markets pumps to help end poverty in developing countries, has secured US$3 million in funding from the John Deere Foundation over the next three years. Under a three-year, US$16 million plan, KickStart will expand into six new countries, helping 80 000 African families - approximately 400 000 people - to raise their standard of living by introducing small, inexpensive irrigation pumps and other money making equipment. Founded in 1991 as ApproTEC, KickStart has helped more than 36 000 poor families in East Africa to date. According to KickStart, on average, farmers who buy KickStart’s foot-operated irrigation pumps multiply their income ten-fold as they move from subsistence to firstlevel commercial farming by growing high value fruits and vegetables. “It is fitting for John Deere, with a long history of advancing agriculture, to align with KickStart in Africa, where access to water for farming is particularly challenging,” said Robert Lane, chairman and chief executive officer at Deere & Co. For more information on Kickstart, visit www.kickstart.org.
Editor Roisin Reidy Elsevier Advanced Technology PO Box 150 Kidlington Oxford OX5 1AS United Kingdom Tel: +44 (0)1865 843695 Fax: +44 (0)1865 843971 E-mail: [email protected] Web: www.worldpumps.com Permissions may be sought directly from Elsevier Rights & Permissions Department, PO Box 800, Oxford OX5 1DX, UK; phone: (+44) 1865 843830, fax: (+44) 1865 853333, e-mail: permissions @elsevier.com. You may also contact Rights & Permissions directly through Elsevier’s home page (http://www.elsevier.com), selecting first ‘Customer Support’, then ‘General Information’, then Permissions Query Form’. In the USA, users may clear permissions and make payments through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; phone: (978) 7508400, fax: (978) 7504744, and in the UK through the Copyright Licensing Agency Rapid Clearance Service (CLARCS), 90 Tottenham Court Road, London W1P 0LP, UK; phone: (+44) 207 436 5931; fax: (+44) 207 436 3986. Other countries may have a local reprographic rights agency for payments. Derivative Works Subscribers may reproduce tables of contents or prepare lists of articles including abstracts for internal circulation within their institutions. Permission of the publisher is required for resale or distribution outside the institution. Permission of the publisher is required for all other derivative works, including compilations and translations. Electronic Storage or Usage Permission of the publisher is required to store or use electronically any material contained in this journal, including any article or part of an article. Contact the publisher at the address indicated. Except as outlined above, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the publisher. Address permissions requests to: Elsevier Rights & Permissions Department, at the mail, fax and e-mail addresses noted above. Notice No responsibility is assumed by the Publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Because of rapid advances in the medical sciences, in particular, independent verification of diagnoses and drug dosages should be made. Although all advertising material is expected to conform to ethical (medical) standards, inclusion in this publication does not constitute a guarantee or endorsement of the quality or value of such product or of the claims made of it by its manufacturer.
02167 Printed by Mayfield Press (Oxford) Limited, UK.
Pump Industry Analyst
NEWS
INCREASED Q1 BOOKINGS, BACKLOG FOR FLOWSERVE First quarter 2005 consolidated bookings at Flowserve Corp increased 9% to US$686 million on a year ago, while backlog increased 3% to US$884 million. “With these increased bookings, we are being more selective in purchase orders we are taking. Bottom line, we are continuing to see significant operational improvement across all three divisions,” said interim-CEO Kevin Sheehan. However Sheehan cautioned that any positive effects would continue to be reduced by the significant costs of Sarbanes-Oxley compliance, including professional fees arising from Flowserve’s internal financial processes, the 2004 audit of both financial statements and internal controls, the restatement and related financial compliance work. “For the first quarter of 2005, we expect these costs to offset the anticipated improvement from increased bookings when final results of operations are determined. For 2005, we expect these full year costs to exceed US$30 million, which we view as an investment in the company’s future,” Sheehan said. Consolidated debt increased approximately US$16 million at the end of the first quarter primarily as a result of payment of full year 2004 incentive awards, pension fund contributions and increased professional service fees. “We still expect to pay down debt in 2005,” said chief financial officer Mark Blinn. The company plans to file its 2004 Form 10-K report during the third quarter of 2005. As previously announced, the company is restating annual financial results for 2000 through 2003 and quarterly results for the first quarter of
16
2004. Flowserve continues to expect that the cumulative net reduction in net income, which is still being determined in amount and type, for the periods being restated should be less than US$20 million.
ORDER BOOST FOR KSB KSB Group order intake increased by 16.7% during the first four months of 2005, while KSB AG order intake showed a 9.2% gain. Sales revenues also showed strong growth with group sales up 11.3% and KSB AG revenues up 3.9%. In particular the Asia/Pacific companies posted a 55% increase in orders. Speaking at KSB AG’s Annual General Meeting in Frankenthal, Germany, the chairman of the board of management, Josef Gerstner, cautioned that the “dynamic growth revealed by these figures has to be seen in perspective.” Gerstner pointed out that the group’s strong order growth is also associated with a number of major orders and that this scale of growth cannot be expected in the months to come. Nevertheless, against a background of sales revenue development and the structural measures initiated for 2005, KSB is assuming that there will be a marked improvement in earnings this year. The AGM was chaired for the first time by Peter Schubert as new chairman of the KSB Supervisory Board.
DESMI EXPANDS INTO CHINA Denmark’s Desmi has opened a pump manufacturing facility in Suzhou, near Shanghai, China. The plant will initially manufacture centrifugal pumps but parts and other group products will be added
at a later stage. The centrifugal pumps will be sold mainly in the Chinese market. The factory will also produce pumps for the shipbuilding nations in the region. By the end of this year, Desmi is expecting to employ 30–50 people at the facility. Long term, Desmi plans to undertake parallel production for this part of the world at the new Chinese facility.
FUNDING KICKSTARTS AFRICAN PUMP PROGRAMME KickStart, a social enterprise that creates and markets pumps to help end poverty in developing countries, has secured US$3 million in funding from the John Deere Foundation over the next three years. Under a three-year, US$16 million plan, KickStart will expand into six new countries, helping 80 000 African families - approximately 400 000 people - to raise their standard of living by introducing small, inexpensive irrigation pumps and other money making equipment. Founded in 1991 as ApproTEC, KickStart has helped more than 36 000 poor families in East Africa to date. According to KickStart, on average, farmers who buy KickStart’s foot-operated irrigation pumps multiply their income ten-fold as they move from subsistence to firstlevel commercial farming by growing high value fruits and vegetables. “It is fitting for John Deere, with a long history of advancing agriculture, to align with KickStart in Africa, where access to water for farming is particularly challenging,” said Robert Lane, chairman and chief executive officer at Deere & Co. For more information on Kickstart, visit www.kickstart.org.
Editor Roisin Reidy Elsevier Advanced Technology PO Box 150 Kidlington Oxford OX5 1AS United Kingdom Tel: +44 (0)1865 843695 Fax: +44 (0)1865 843971 E-mail: [email protected] Web: www.worldpumps.com Permissions may be sought directly from Elsevier Rights & Permissions Department, PO Box 800, Oxford OX5 1DX, UK; phone: (+44) 1865 843830, fax: (+44) 1865 853333, e-mail: permissions @elsevier.com. You may also contact Rights & Permissions directly through Elsevier’s home page (http://www.elsevier.com), selecting first ‘Customer Support’, then ‘General Information’, then Permissions Query Form’. In the USA, users may clear permissions and make payments through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; phone: (978) 7508400, fax: (978) 7504744, and in the UK through the Copyright Licensing Agency Rapid Clearance Service (CLARCS), 90 Tottenham Court Road, London W1P 0LP, UK; phone: (+44) 207 436 5931; fax: (+44) 207 436 3986. Other countries may have a local reprographic rights agency for payments. Derivative Works Subscribers may reproduce tables of contents or prepare lists of articles including abstracts for internal circulation within their institutions. Permission of the publisher is required for resale or distribution outside the institution. Permission of the publisher is required for all other derivative works, including compilations and translations. Electronic Storage or Usage Permission of the publisher is required to store or use electronically any material contained in this journal, including any article or part of an article. Contact the publisher at the address indicated. Except as outlined above, no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the publisher. Address permissions requests to: Elsevier Rights & Permissions Department, at the mail, fax and e-mail addresses noted above. Notice No responsibility is assumed by the Publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Because of rapid advances in the medical sciences, in particular, independent verification of diagnoses and drug dosages should be made. Although all advertising material is expected to conform to ethical (medical) standards, inclusion in this publication does not constitute a guarantee or endorsement of the quality or value of such product or of the claims made of it by its manufacturer.
02167 Printed by Mayfield Press (Oxford) Limited, UK.