There is still limited visibility on the performance of the Group’s activities in the coming months, due to uncertainties linked to macroeconomic developments, in a context where it is difficult to foresee reductions in inflation and interest rates, which are still higher than expected long-term amounts.
As far as KOS is concerned, further consolidation of saturation levels is expected due to the gradual recovery in regions not yet at full capacity and in start-up facilities. Due to the inflationary dynamics experienced over the past three years, which especially affected the cost of specialised healthcare personnel, a further adjustment of tariffs will be necessary to ensure full recovery of margins. Providing that there are no facts and circumstances that make the context more difficult than it currently is, KOS’s full year operating results should be significantly better than the previous year.
As regards the automotive market in which Sogefi operates, there is still limited visibility on market developments in 2024 due to the uncertainties about how the macroeconomic and geopolitical situations will evolve. S&P Global (IHS) predicts that, after the growth recorded in 2023, global car production may drop by 2%, with Europe down by 5.3% and modest growth in China, NAFTA and India. As far as raw material and energy prices are concerned, the first half of 2024 confirms a certain degree of stability, already seen in the second part of 2023, but they are still exposed to volatility risks exacerbated by geo-political tensions. Inflationary tensions on labour costs also persist in some geographical areas. In this scenario, the Group constantly monitors trends in the various geographic areas, seeking fair agreements on sales prices with all customers.
Based on a more conservative forecast for the automotive market than the S&P Global estimates, and with specific regard to Europe, Sogefi expects its low single-digit revenue to decrease in 2024, but confirms its expectation that operating profitability, excluding non-recurring expense and extraordinary events that are not yet foreseeable, will be higher than in 2023.
As regards the management of financial assets, despite the positive performance of the financial markets in the first half of the year, in view of the uncertainties related to the macroeconomic and financial context, conditions of high volatility are expected to persist in the second half of the year.
Therefore, despite the prudent management approach adopted, reductions in the value of the financial instruments held cannot be ruled out, especially for private equity and hedge funds, after the brilliant performances of the first half of the year.
SOURCE: 2024 Half year report
