20.10.2011

Konecranes - orders up, profit down

Finnish-based crane and reach stacker manufacturer Konecranes has reported its third quarter results which show a strong pick up in order take but lower profits.

Revenues for the nine months to the end of September were up 20 percent to just under €1.3 billion, while pre-tax profits slipped nine percent to €60.1 million.
Order intake improved by almost 35 percent though to €1.42 billion, leaving an order book and the end of the period of €1.04 billion – 52 percent up on the same time last year.

For the quarter revenues were €451 million, 14.6 percent higher than the same quarter last year, while pre-tax profits slipped almost 20 percent to €26.3 million. Order intake in the same period was €458.5 million, 23 percent up on the third quarter 2010.

The company says forecasting continues to be challenging and that it has started to see signs of weakening demand but the level of new inquiries is still reasonably strong. For 2011 as a whole it forecasts operating profits - excluding possible restructuring costs - to be close to that of last year although on higher sales.

Chief executive Pekka Lundmark said: “I am obviously not satisfied with our third quarter as a whole, and the main concern is lower-than-planned operating profit in Service. We have invested a lot in growth - system and technology development, service network expansion and training - in order to be able to deliver higher value services and higher volumes. These are all good investments, but now when the realised growth is lagging behind expectations we are reconsidering certain parts of our plan. We will initiate actions in the fourth quarter to lower fixed costs in the Service business, especially in Europe.”

“On balance, there is a lot of positive news in the quarter as well. Our total order intake is 23 percent higher than a year ago and I am satisfied with the margin level in these orders. In general, our equipment business is progressing according to plan and the strong order book in that business gives us visibility and some time to adjust should the recent negative trend in the world economy continue.”