Heidenheim, Germany, 23 November 2010 -- Preliminary results indicate that Voith Hydro Inc. did not conform to applicable accounting rules. Essentially, revenues from multiyear projects were not appropriately accounted on an accrual basis.
Voith stopped the practices immediately and launched an in-depth review of the matter. The management team of Voith Hydro Inc. responsible for the affected financial years has been immediately relieved of its duties pending the outcome of the ongoing review. Once the audit is complete, Voith will decide on further measures where required.
Based upon information available at this time, Voith believes that the practices did not affect the customers of Voith Hydro Inc. The potential financial implications, as quantified to date, will be limited. The effect on the consolidated operational result of the Voith Group is less than USD 1.5 million for fiscal year 2009 according to the current state of the review. The financial statements will be corrected retroactively where required.
The company has named Kevin Frank to take over the management at Voith Hydro Inc. Frank was most recently senior vice president of the Fabric and Roll Systems business of Voith Paper North America.
The U.S. hydroelectric power market is a key market for Voith Hydro, and Voith intends to expand its presence in this market in the future. The employees of Voith Hydro Inc. in York, Pennsylvania, have contributed significantly to the development of this market in the past and will continue to enjoy the full confidence of the company.
Voith sets industry standards in the paper, energy, mobility, and service markets. Founded in 1867, and with a workforce of 39,000 employees, sales worth EUR 5.1 billion, and 280 locations worldwide, Voith is one of Europe’s largest family-owned businesses.