Brembo Still in Trouble, Prepares Dividend Cut to Cope with the Crisis

Italian brake systems manufacturer Brembo is also experiencing difficult times due to the economic turmoil so it will propose to shareholders a 19.6 percent slash to the dividend. The company's net profit recorded a drop of 38 percent last year, Autonews informs today.

Overall, the financial year 2008 was divided, just like in the case of worldwide automakers, into two opposed parts. First of all, there was the first half of the year, aka the non-crisis period, which brought a growth of 24.4 percent.

Then there was the second half of 2008, in particular the fourth quarter, the global economic turmoil affected almost every single Brembo market segment "causing a sizeable decline of passenger cars and commercial vehicles demand". The company recorded a sales growth during the second half of the year of 8.3 percent corroborated with an organic growth of -3.1 percent.

"Brembo reacted to the market slowdown emerged late in September by implementing extraordinary measures to control costs and working capital and curtailed or postponed some investment plans in order to limited the impact of the negative business cycle on margins and financial position," Brembo said in a press statement.

More specifically, commercial vehicle and passenger cars applications were up 8.3 and 15.9 percent respectively, "thanks to an excellent performance in the first half of the year, partially compensated by the slowdown in the second half," as Brembo explained.

"Brembo order book is weak and the company will continue to adopt all the extraordinary measures needed to align production to demand. Brembo will also continue with all actions to reduce costs, inventory and investments and to ensure customers honor payment terms," it concluded.