SWEDEN: Refrigeration wholesaler Beijer Ref has reported a 32% increase in net sales for the second quarter of 2018, its strongest quarter so far.
Sales in the second quarter reached SEK3,510m (€340m), compared to SEK2,657m (€257m) in the same quarter in 2017. The profit for the period totalled SEK255m (€24.6m), a 65% increase on the same period last year.
The latest figures follow on from record sales and profits in the first quarter of this year, which saw an 18% net sales increase and a 61% rise in operating profit.
According to Beijer Ref CEO Per Bertland all European regions are seeing strong organic growth in excess of 20%.
“We are now seeing the F-gas regulation having a more and more of an impact on the European markets. This was particularly noticeable this quarter in the Nordic and Eastern European regions,” he commented. The group’s biggest region, Southern Europe, also performed strongly.
“The ongoing regulation of F-gases and the time-specific phase-out programme benefit us. The fact that we have a large, eco-friendly offering for our customers during the actual transition phase means that we are well-positioned to meet the increasing demand in the market. We acted early here and made sure that we can offer our customers reliable deliveries.” said Per Bertland.
“Another factor that is having a positive impact on the profit is price increases in certain refrigerants that took place because of the imbalance between supply and demand, which was caused by the F-gas regulation.”
The company’s OEM activities are also said to be growing, with production of eco-friendly technology based primarily on “natural” refrigerants reported to be running at full capacity.
There are also plans to transfer this technology to Asia Pacific, where Beijer Ref also has production plants in Sydney, Australia and in Wuxi, China.
“We have a carefully considered plan describing how we will transfer our European knowledge in order to increase production in Asia Pacific, a process that is already under way. The same applies for South Africa, where we have production facilities in Johannesburg and Cape Town,” said Per Bertland.
The acquisitions of Heatcraft Australia Pty Ltd and French HVAC distributor GH2C already this year may not be the last. While he admits that these acquisitions have increased the group’s borrowings, Per Bertland has indicated that its strategy of acquiring additional companies in refrigeration, HVAC and OEM is still firmly in place.
“The acquisitions, combined with price rises of refrigerants, have resulted in a slight increase in tied-up capital. Despite this, the return on operating capital has increased from 14 to 16%,” Per Bertland said.
Beijer Ref has also confirmed the completion of the formation of its UK and Ireland joint venture with Mitsubishi Heavy Industries Air Conditioning Europe.
The new company, 3D Plus, sees Beijer Ref as the majority owner with a 67% holding.
Under the stewardship of Martin Richards, 3D Plus is operating from a head office in Slough with regional offices planned across the UK and Ireland.