First-quarter operating profits at International hardwood and panels distributor DLH fell to DKr2m from DKr14m a year ago.
In an interim report, DLH said its sales fell to DKr657m (2011 Q1: DKr715m). It blamed a continuation of difficult market conditions impacting the construction sector and the company’s main markets since the third quarter of last year.
“We continue to reduce our costs and the decision to sell the American hardwood operation means that we can devote all our efforts to strengthening our European business and global sales, said DLH CEO Kent Arentoft.
DLH is also relocating its administrative functions to Hong Kong, which will reduce overhead costs in the second half of 2012.
France, DLH’s largest market, experienced political uncertainty due to the presidential election. The company’s French business turnover dipped by 20%, primarily due to a fall in log trading from Africa and in French hardwood exports.
The introduction of sheet materials into DLH’s western European business in 2011 led to growth and the product now accounts for 5% of the region’s turnover.
Southern European turnover, mainly Spain and Portugal, fell by 40%.
“It is not expected that market conditions will improve in the second half of the year,” it added.
