Hanse predicts boat sales slump

by IBI Magazine on 15 Jan 2009 As Belgian yacht builder ETAP officially announced its insolvency in the wake of parent company Dehler's insolvency announcement before Christmas, HanseYachts, one of Germany's leading yacht builders, predicted that the global recession would trigger a slump in sales as customers postpone plans to buy boats.

HanseYachts Chief financial officer Udo Potthast said, 'We don't think that the crisis will be over in half a year. It will be a longer process.'

HanseYachts fired 110 employees in the second half of 2008 and about 70 of its remaining 500 staff are working shorter hours to compensate for a drop in orders. The world economy will shrink for the first time in almost 50 years this year, according to the Institute of International Finance.

In Germany, the world's largest exporter, the government has proposed stimulus measures to cushion the economy against recession, including paying half of employers' social insurance contributions for short-shift workers to discourage job cuts.

HanseYachts is using the shorter week to try to and hold its workforce together. The boatbuilder may take advantage of the government proposal to extend the current six months of truncated hours, Potthast said, adding that there are no plans to reduce the workforce further.

HanseYachts' shares declined 86 per cent last year as Germany, Europe's largest economy, fell into the worst recession in at least 12 years. The company, which went public in March 2007, has a market value of £21.1m.

Yacht builders throughout Europe have been hurt because of lower demand for more expensive leisure activities such as sailing.

Beneteau last month said it expects a 'pause' in profit growth as customers rein in spending on its yachts. The company also said temporary lay-offs affecting a total of 3,500 workers would begin this month.

Poncin Yachts, the French maker of Catana catamarans, was forced to seek bankruptcy protection last year after failing to reach an accord with its creditors and as demand for its Harmony sailboats slumped in countries such as Spain.

Rodriguez Group, the maker of Mangusta and Leopard motor-driven yachts, also reported plunging sales last year and has been struggling to get rid of its stock of second-hand craft.

UK marine electronics manufacturer Raymarine says that like-for-like sales in 2008 are expected to be down by around 13 per cent compared to the previous year due to the current economic climate. In October 2008, Raymarine's share price plunged by more than 70 per cent to an all-time low of 13.50p after the company warned that full-year sales were expected to be substantially lower than originally forecast. This was followed by the announcement of impending job cuts at the group's UK facility.

Raymarine has also revealed that it has now reached agreement with its banks to extend its credit facilities until March 31, 2010, and discussions are continuing with regard to a further extension.