Engineering firm Titan Europe has issued a profits warning after being hit by reduced demand in China and an earthquake closing its Italian factory.
The steel wheel manufacturer – which has been the subject of a takeover approach from Titan International – said profits were expected to be “materially below” current market expectations.
The company has seen the first half of the year hit by external factors – not least the earthquake in northern Italy in May, which meant having to close a plant which accounts for about £50 million of sales, or ten per cent of group revenue.
It has also seen a fall in demand as a result of depressed trading conditions in construction equipment manufacture in China.
Kidderminster-based Titan said in a trading update: “An additional effect is caused by the significant weakening of the euro which suggests that our sterling consolidated trading profit will be materially below current market expectations although, if this was to continue, there would also be a positive effect on the overall sterling consolidated net debt position of the company.”
Limited production began again at Titan’s Italian plant – Finale Emilia – on July 16, but the firm has suffered a loss of business.
The group said it could not “realistically anticipate that there will be no volume loss in the short term”.
The firm said depressed trading conditions in construction equipment manufacture in China had “greatly reduced” the company’s sales values into the region.
