KBA director of marketing and corporate communications Klaus Schmidt said the decision had been made to keep earnings within the company, and he was hopeful this would only be in place for one year.

The firm made a net loss of 20m (30m) for the year to 31 December 2003, compared to a net profit in 2002 of 18.6m. Sales fell 9% on 2002's record level to 819m.

It said it expected to return to profitability this year and that a 16% increase in orders showed the market was improving for the first time in four years.

The web division was the cause of the losses with a slump in sales, and 30m charge from the closure of two plants at Wrzburg and Frankenthal (PrintWeek 6 June 2003).

Web and special presses made a loss of 44.4m, a reversal of a 19.4m profit in 2002. Sales fell 16% to 408m.

This year the firm will cut 200 jobs with the closure of its Berlin plant, which was announced last year. This follows 337 redundancies last year, which reduced headcount to 7,054.

Schmidt said that although web orders had improved in the first two months of this year, the division was still being hit by the weakness of the dollar and the general economic instability.

"Decisions are still being postponed and it remains to be seen whether there will be a change in attitude," he said.

Sheetfed offset had an operating profit of 13.2m, on stable sales of 410.5m.

It hoped its Drupa launches would improve sheetfed sales in the second half of the year.