Pre-tax profits of €10m generated in the second half of the year brought the first quarter losses of €18.8m, recorded at the end of March, down to €8.8m but were not enough to bring 2013 in line with the €6.7m pre-tax profits achieved at the same point last year.

Delivering the company’s interim results KBA chief executive Claus Bolza-Schünemann said that he expected the trend in reduction of pre-tax losses to continue, predicting a return to pre-tax profit this year, similar to those achieved in 2012.

KBA’s interim report shows order intake across the group contracted by 23.3% to €444.6m (2012: €579.3m).

Sheetfed orders totaled €161m in the second quarter, boosted by trade fairs in China and Turkey, but half year figures were 19.3% down on 2012 at €293.8m. Sales for the division showed a modest 1.6% increase to €246.8m.

Meanwhile new orders in the web and special presses division were down 30% year-on-year to €150.8m, while sales for the first half of the year were down 26% on the same period in 2012, to €255.4m.

Bolza-Schünemann said the figures mirrored a "slump in economic momentum" caused by numerous factors, including the ongoing Euro-zone crisis, the realignment of Chinese policy and instability across the Middle East and Latin America.

He said that the demand for web presses was declining faster than expected and pointed at the continued scaling back of KBA’s web division and further expansion of its digital printing and packaging activities.

He added: "Along with the capacity adjustments already carried out and those still necessary, management is considering which business model could make the web press business more profitable in the longer term, even at a significantly reduced volume."

Given market trends in the web press sector, Bolza-Schünemann said that further consolidation was "indispensible" and that potential workforce reductions would be negotiated.

KBA’s acquisition of Italian press manufacturer Flexotecnica is set for completion in September and Bolza-Schünemann said its performance over the next three months would play a crucial role in helping the business match sales of €1.3bn achieved in 2012.

He warned that a single-digit percentage decline on 2012 sales could not be ruled out.