DÜSSELDORF (dpa-AFX) - Plant manufacturer Gea is continuing its run, posting surprisingly good operating earnings in the second quarter. Group CEO Stefan Klebert confirmed annual targets on Thursday. In a video conference, he expressed extreme satisfaction with the latest developments in Gea's business. He also sees the Group "fully on track" to achieve its medium-term targets by 2026. However, Thursday's news was unable to halt the recent downturn in the share price. Above all, the order situation caused concern on the market.

The share, which is listed in the MDax mid-cap index, was down just under 1.7 percent around midday. The recovery since the interim low at the beginning of July has now been almost completely wiped out, with the share price falling without interruption since the beginning of August. In the current year, the share price has fallen by almost five percent. However, Gea had also performed strongly on the stock exchange in the second half of 2022.

Experts spoke of solid quarterly results, but raised concerns about order intake - which had been slightly down year-on-year at 1.38 billion euros in the three months to the end of June. Strong growth in the liquids and powders and food and pharmaceuticals segments was offset by lower orders in the dairy and heating and cooling systems businesses. The Separation and Row Technologies segment also received significantly fewer orders; here the Group sells important process engineering components such as separators, decanters, homogenizers, valves and pumps.

The current concerns of investors on the stock exchange now related to a potential weakness in orders in the second half of the year, explained Akash Gupta of US bank JPMorgan.

Gea's Klebert, on the other hand, exuded confidence in a conference call and spoke of a normalization in order intake after the strong previous quarters. Although the economic environment has clouded over in the meantime and the Group is no longer expected to grow as strongly as last year, there is no reason for concern. Klebert referred to the Group's stable business model: "Mankind will always need food, beverages and pharmaceuticals," he stressed. "On balance, things will continue well."

In the second quarter, Group sales reportedly rose by just under six percent to 1.34 billion euros compared to the same period last year. All business units contributed to this, and price increases also had a positive effect, it said.

Earnings before interest, taxes, depreciation and amortization (Ebitda) and restructuring charges improved even more significantly by a good 14 percent to 191.5 million euros. The Group thus exceeded analysts' expectations. The negative outlier here was the business with machines for food and pharmaceutical manufacturers, where low margins in the new machine business had a negative impact. Klebert, however, spoke of a special effect. Below the line, Gea earned 97.8 million euros across the Group. A year earlier, the figure was 76.7 million.

After a good start to the year, Gea had already raised the bar for the year in May. The Management Board now continues to expect organic growth of more than eight percent for 2023 - last quarter, organic growth was 9.4 percent. The operating margin is also expected to improve somewhat further. Adjusted operating profit should reach the upper end of the range of 730 to 790 million euros, which would be an increase of eleven percent in the best case. In 2022, Gea had increased this key figure by 14 percent to 712 million euros thanks to a good order situation.

Meanwhile, Gea has to look for a successor following the sudden death of its Chief Financial Officer Marcus Ketter. Until the decision on the personnel matter is made, Group CEO Klebert and Management Board member Johannes Giloth will now be responsible for financial issues on the Management Board, as Gea announced at the beginning of the week./tav/ngu/jha/