COLOGNE (dpa-AFX) - Engine manufacturer Deutz closed 2023 with record sales and operating profit. However, the weakening economy is now causing the company problems - the order backlog has shrunk significantly. The company is cautious about the current year. The further rise in interest rates has led to a certain reluctance to invest, the SDax-listed engine manufacturer announced on Tuesday. Therefore, a recession during the course of the year cannot be completely ruled out.

The shares came under pressure on the stock market around midday. After a positive trend in the first few hours, they fell by 17 percent to a two-month low at lunchtime. In the meantime, Xetra trading was interrupted due to the strong price pressure. Most recently, the loss amounted to almost eight percent to 5.38 euros.

While there is very high demand for infrastructure projects in the USA, business in Europe is more difficult, especially with smaller construction machines, said CEO Sebastian Schulte in a conference call. If interest rates are cut in the summer, this could also boost demand in the more critical areas. The company has already been waiting for a recovery in China for two years.

For 2024, the company expects revenue of 1.9 to 2.1 billion euros. In the best-case scenario, the engine manufacturer expects turnover to remain at the previous year's level. Analysts expect a figure at the upper end of the forecast range. Adjusted for special effects, earnings before interest and taxes (EBIT) are expected to amount to 5.0 to 6.5 percent of sales. In the previous year, the drive manufacturer achieved 5.7 percent, an increase of 1.1 percentage points.

The forecasts no longer include the boat motor subsidiary Torqeedo, which was sold to the Japanese supplier Yamaha Motor. The deal is expected to be completed after Easter, said Schulte. Torqeedo, which specializes in electric boat motors, had recently weighed on Deutz's figures.

Analyst Stefan Augustin from Warburg Research spoke of a cautious outlook. The mean value of the 160,000 to 180,000 engines forecast for this year represents a decline of nine percent. One dealer described the margin targets for 2024 in particular as very poor. There was also the risk that Deutz might have to lower prices. Customers had apparently asked for discounts.

In 2023, turnover grew by just under eight percent year-on-year to around 2.1 billion euros, as the engine manufacturer announced. Operating profit also increased by a good third to 120.4 million euros thanks to savings. If Torqeedo is excluded, the adjusted result rose by just under 39 percent to 143.6 million euros.

At the bottom line, Deutz earned 81.9 million euros, just over two percent more than in the previous year. This was also due to higher financing costs and a slight increase in taxes. A dividend of 17 cents per share is to be paid out for the year. That would be two cents more than in the previous year.

Deutz manufactures combustion engines for construction and agricultural machinery, such as forklift trucks, tractors, excavators and lifting platforms. A few years ago, it took over the electric motor specialist Torqeedo. The figures now published show that the Torqeedo business was highly loss-making. According to its own figures, Deutz employs around 5300 people, around 3000 of them in Koln /mne/nas/jha/