(Corrects story published May 7 to show that Tornos venture doesn’t represent shift of European production to China.)
Tornos Holding AG (TOHN) fell to the lowest in more than nine years after the Swiss maker of machines for precision components said customers are postponing orders, aggravating its loss.
Tornos dropped as much as 6.7 percent to 4.02 Swiss francs, the lowest intraday price since December 2003. New orders fell 32 percent in the first quarter to 43.8 million francs ($46.6 million), according to a statement today by the Moutier-based company, whose products help in the manufacturing of Swiss watches, aircraft screws and medical devices.
“Tornos is feeling the full impact of the sluggish European tool-machinery market,” Fabian Haecki, an analyst at Bank Vontobel, said in a report. He advised investors to “stay on the sidelines” as an order recovery is unlikely in the short term while Tornos is expected to announce a share sale.
The company said today that it’s setting up a venture in China with the owner of local producer Xi’an Kitamura Machine Works Co. that will broaden its client base in Asia. Tornos will end an alliance with Japanese machine toolmaker Tsugami Corp. (6101) next year as products made through that partnership are only for the European market, it said.
“The new alliance with XKNC is a ray of hope,” Vontobel’s Haecki said.
The first-quarter net loss widened to 7 million francs from 1.2 million francs a year earlier, the Swiss company said. Tornos will probably report a full-year adjusted net loss of 3.4 million euros, according to the average of two analyst estimates compiled by Bloomberg.
Tornos was 6 percent lower at 4.05 francs as of 11:25 a.m. in Zurich. More than 16,000 shares were traded, almost double the average daily trading volume of the past three months. The stock has declined 56 percent in the past 12 months.
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