The Metall Zug company, manufacturers of household appliances sold under the V-Zug brand, has issued a profit warning on account of unusually high IT costs and for soil rehabilitation at its city location.
In all, this could mean its pre-tax operating results for the year 2019 being adversely affected to the tune of CHF 14 million. In a statement issued on Friday, the company said it was only expecting to be able to break even after the first six months’ trading this year, compared with an operational result of CHF 36.4 million in the first six months of 2018.
The stock exchange reacted quickly to the company’s announcement, its shares falling in value by 11.7 per cent on Friday, closing at 5 pm at CHF 2,110, compared with CHF 2,390 the previous day.
As to the matter of soil rehabilitation, examinations were made as to whether there were any hazardous materials evident on land earmarked for the construction of new buildings on its Zug site with a number of areas found to have been contaminated by chlorinated hydrocarbons and heavy metals. This should be able to be put right prior to building starts but, as mentioned, the clearing-up operation is expected to lead to unforeseen costs of CHF 14 million.
Furthermore, the introduction of SAP software at the company has also led to increased costs and loss of revenue as customers’ orders were not able to be processed properly over a period of five months.
In addition to manufacturing household appliances, the Metall Zug company, which employs a staff of 5,000 in all, is active in the infection control, wire processing, life science, medical device and property sectors.