World News

KBA, the German packaging printing press manufacturer, is set to record a financial loss for 2008 due to continued weak product demand and an extraordinary outlay for capacity adjustment.

In the UK, sales orders have been particularly hit hard by the depreciation of sterling against the euro in the past year. KBA (UK) managing director Christian Knapp said that while the Drupa order book had been maintained the firm would not meet sales targets.

"We're feeling the effects of the recession as customers are postponing investments in new equipment. But, our support services are busier than ever as firms make do with and repair existing machines," he said.

Knapp said, however, that compared to other printing sectors packaging "wasn't doing so badly" because orders were "well along the investment process".

"It is a very challenging time," he admitted.

KBA anticipates total annual sales of around €1.5bn (£1.19bn), a drop of 6% from its €1.6bn forecast. Instead of repeating 2007's pre-tax profit of €63.2m, the firm is set to record a loss.

The firm said earnings on the back of deals at the Drupa trade show, which took place in June, had failed to live up to initial expectations. Funding for orders, particularly in the sheet-fed sector, has not yet been finalised.

Nonethless, sales of web and special presses are expected to exceed the firm's targets.

KBA's adjustment to weakened demand will include "human resource measures" in its Germany, Austria and the Czech Republic.

KBA will release further information in its quarterly financial report on 14 November.