29.07.2020

Lower sales higher profits for Konecranes

Industrial overhead and marine crane and reachstacker manufacturer Konecranes has published its first half results.

In the first six months to the end of June the company reported a five percent fall in total sales to €1.55 billion. Order intake in the period however dropped 21.1 percent to €1.32 billion. Surprisingly pre-tax profit increased by 26.6 percent to €58 million. Net debt at the end of June was up 15 percent to €2.3 billion.

In the second quarter sales fell 11.3 percent to €705 million, with order intake plummeting by 29 percent to €581.5 million. Pre-tax profits though were 51.8 percent higher at€42.4 million.

Chief executive, Rob Smith, said: “Konecranes reported strong second quarter results under extraordinary circumstances thanks to excellent teamwork and a performance focus throughout the company. Real time supply and demand balancing and cost flexing, enabled by our digital telemetry capabilities, as well as progressing our strategic initiatives delivered results in the quarter. With this performance, Konecranes is well positioned for the challenges to come as we continue to deal with the volatility and impact in our markets due to the Covid-19 virus.”

“The second quarter ended in a markedly different environment versus where it started. In April, many European countries and North America - our strongest regions - were in the midst of extensive physical restrictions and lockdowns due to the Covid-19 pandemic. Through the quarter the situation improved, as many countries were able to begin to ease their restrictions. In June, order intake in all our three business areas started to recover thanks to the improving overall market conditions, albeit with significant regional fluctuations.”

"Throughout the crisis, our focus has been on the safety of our employees and on supporting the mission critical operations of our customers. Our second quarter sales were clearly impacted by the Covid-19 pandemic. Many of our customers limited access to their premises, affecting our ability to perform onsite service operations and deliver and install new equipment, resulting in an 11 percent net sales decrease versus a year ago, including MHE-Demag. Despite the market uncertainty we have not seen cancellations of significant orders in any of our business areas.”

“Looking ahead, we will continue to drive efficiency improvements throughout the company. We have reached an agreement with employee representatives and unions on discontinuance of reach stacker production at our Montceau-les-Mines site in France. We are also identifying opportunities for business process efficiency improvement within our admin and group functions. The Covid-19 pandemic has accelerated the need to examine all facets of our business to ensure our cost base is aligned with the reduced and uncertain demand environment.”

Vertikal Comment

This is an exceptionally positive set of numbers from Konecranes, given the current environment. And it is good to hear that order intake has picked up in June.