Component maker Tesma International has reported net income for the third quarter of 2004 of $US12.3 million, down from $15.9 million in Q3 2003.
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However, nine-month net income to September 30 was up to $63.2 million from 53.5 million the previous year.
First quarter sales were $ 323.5 million, up from $254.3 million a year ago. Nine month sales rose to $1,025.3 million from $800.5 million.
Approximately $17 million, or a quarter of the third quarter growth, was the result of higher sales on the strengthening of the Canadian dollar and euro relative to the US dollar, $33 million was attributable to the acquisition of Davis Industries and the balance of $19 million represented organic growth.
“All of these factors contributed to the 30% increase in our North American content per vehicle in the quarter to $56 from $43 in the same period last year. Our European content increased 6% to €19 in the quarter largely due to increased volumes and additional launches of Tesma Fuel Technologies programs,” the company said in a statement.
Tesma said profitability levels during the third quarter were severely affected by rising steel prices which drove up the cost of sales over $7 million as it was unable to pass the additional costs on to its customers.
The company estimated the impact on its gross margin of these additional steel costs at 2.5% in the quarter (a 1.3% reduction year-to- date) and said that, as a result, its income before taxes in the quarter decreased 6% to $20.3 million from $21.5 million in the same period a year ago.
