29.10.2017

Hiab progress continues

Cargotec, owner of Hiab and Kalmar has published its third quarter results with another positive quarter for Hiab.

Looking at the nine months to the end of September Hiab revenues were three percent higher than last year at €804 million, with year to date order intake 13 percent higher at €827 million. Operating profits for the nine months were €117.2 million, an increase of 10 percent on last year.

Moving on to the third quarter, sales were €252 million, up one percent on the same quarter last year. Order intake though jumped 18 percent to €260 million, leaving the order book 13 percent higher than this time last year at €293 million. Operating profits for the quarter were two percent higher at €33.6 million.

Kalmar had a less positive quarter with year to date sales dropping six percent to €1.2 billion and operating profit on the other hand were up six percent to €88.5 million. In the third quarter revenues were 14 percent lower at €377 million, order intake dropped 10 percent to €351 million, leaving the order book at €877 million. Operating profit improved seven percent to €29.3 million,

Cargotec as a whole, which also includes MacGregor, reported an eight percent fall in revenues for the nine months to just below €2.4 billion. Pre-tax profit for the period was seven percent lower at €144.2 million.

Chief executive Mika Vehviläinen said: “We made good progress in many areas, but sales were a disappointment. The services growth is especially important for us and together with software business it already accounts for one third of our total sales. Hiab's orders received grew strongly in Europe. For the first time in three years MacGregor's orders received increased and there are positive signals in the merchant ship markets.”

“Our sales in the third quarter were disappointing compared to our expectations, affecting our operating profit negatively. The sales decline came from low MacGregor delivery volumes, timing of the deliveries in Kalmar projects, as well as supply chain challenges in Hiab and Kalmar's mobile equipment.”

“In Hiab, we were able to complete an interesting acquisition in developing markets. Argos is one of the leading manufacturers of loader cranes in Brazil, and with the acquisition we will expand our operations in the market as well. The construction activity is estimated to remain on a good level in our main markets, supporting Hiab's prospects also going forward.”

“In Kalmar, the orders received did not reach our expectations especially in the project business. However, the good development of container throughput continued in the third quarter, and the service sales, which are crucial for our strategy, grew eight percent in Kalmar. Furthermore, we took important steps in the commercialisation of our digital collaboration platform XVELA.”

“Cash flow from operating activities was strong during the third quarter. With a good cash flow we are able to invest in research and development, growth, as well as mergers and acquisitions.”

Vertikal Comment

Another good quarter for Hiab, which is set to have one of its best years in a long time and certainly the best in many years. With strong order book 2017 will almost certainly be a record year for the company. As the company continues its progress a good portion of the additional revenues are clearly flowing through to the bottom line.

Kalmar appears to be struggling again, although the underlying business remains sound and as long as the current restricting does not go overboard it should bounce back in 2018. The company still needs to sort out the MacGregor business which has been a challenge for some time.

As long as Cargotec is not tempted to meddle with the team at Hiab, the company is well on the way to gaining real momentum as the European market recovers- perfect timing.