25.04.2019

Higher sales lower profits for Hiab

Hiab has reported strong first quarter order intake and sales, at the same time operating profit declined. Sister company Kalmar had a more positive quarter.

Hiab revenues for the quarter were 14 percent higher at €316 million, with an 11 percent increase in order intake, leaving the order book/backlog four percent higher at €483 million. Higher sales and orders were driven by improvements in both Europe and the Americas and the addition of Effer which completed in the second half of last year. Operating profit during the period was seven percent lower at €33.4 million, due mainly to manufacturing
issues caused by supply chain issues.

Crane and reachstacker manufacturer Kalmar posted an eight percent rise in revenues to €401 million, with an operating profit of €31.2 million – up 12 percent on the same period last year. Order intake improved 19 percent to €516 million, leaving an order book 11 percent higher at €1.13 billion.
Cargotec as a whole, which also includes MacGregor marine products, saw revenues rise 11 percent to €856 million, while operating profits declined eight percent to €42.8 million.

Cargotec chief executive Mika Vehviläinen said: “The demand for Cargotec's load handling solutions continued to be strong during the first quarter of 2019. Orders received grew in total by 18 percent compared to the comparison period, and the growth was evenly spread between all of our business areas. Sales developed favourably as well, increasing by 11 percent.”

“Our comparable operating profit remained at the comparison period's level. Kalmar's profitability improvement was driven by higher sales. Sales also grew at Hiab, but challenges in the supply chain led to a decline in the operating profit compared to the first quarter of 2018. We continued our efforts to solve these issues and believe that Hiab's performance will improve during the second half. Despite the increase in MacGregor's orders received, the market situation remains difficult. Nevertheless, MacGregor's comparable operating profit remained positive.”

“The development in our service and software business was good during the first quarter. Service sales grew by five percent and software sales by 18 percent. During the quarter, we strengthened our software offering by acquiring the US based Cetus Labs, which offers a cloud based Octopi terminal operating system for small container and mixed cargo terminals. With the addition of Octopi to its software portfolio, Navis is better positioned to support thousands of smaller terminals around the world that are eager to modernise their terminal operations yet lack the technology infrastructure or technical expertise required to support a full scale Navis N4 TOS deployment. Service and software sales constituted around one third of our sales. Our target is to increase the annual sales of our service and software business to €1.5 billion.

Vertikal Comment

In terms of sales both companies that we cover performed well, showing stronger markets and in Hiab’s the addition of the Effer business. Hiab saw profits slip in several quarters last year, including the full year, One assumes that it will sort out its production issues by mid year and pick up a little of the lost margins in the second half, especially given that it has a strong order book to drive it. With Kalmar it must be remembered that its profit rise is partly due to coming from a low level.