28.04.2023

Profits soar at Hiab and Kalmar

Cargotec, the parent company of Hiab loader cranes and Kalmar marine lifting equipment has reported a strong increase in revenues and profits for the first quarter.

Hiab revenues increased 27 percent to €432 million, although order intake slumped 21 percent to €380 million, leaving the order book five percent lower at €1.12 billion. Operating profits though increased 41 percent to €61.4 million.

Kalmar posted revenues of €485 million, up 31 percent on the same quarter last year, it also saw order intake softening , falling six percent to €471 million, leaving the order book three percent lower at €1.43 billion. Operating profits tripled to €62.8 million.

Cargotec as a whole, which also includes MacGregor, reported revenues of €1.07 billion, up 26 percent on the year. Pre-tax profit more than tripled to €95.7 million, while net debt was cut by 31 percent to €393 million.

Cargotec chief executive Casimir Lindholm said: “The first quarter provided a strong start to the year and a solid base for me to enter as Cargotec’s new CEO. Despite a seven percent decrease in orders received, demand remained at a good level. Service orders continued to grow significantly and increased by 18 percent. Stemming from our solid order book, our sales increased 26 percent driven by our core businesses Kalmar and Hiab, we also reached a record high comparable operating profit and a comparable operating profit margin of 10.5 percent.”
In Hiab, underlying demand drivers remained at a good level. Orders received declined from the comparison period, which was partly due to large orders received in the first quarter of 2022. Order intake was also affected by inflation, high interest rates, and extended truck lead times. Bottlenecks in truck chassis supply also limited Hiab’s sales growth. However, the operational execution was strong and Hiab’s sales grew 27 percent and operating profit by 29 percent.”

“In Kalmar, demand was steady. We saw some delays in purchase decisions in larger projects whereas demand for services and eco portfolio solutions remained strong. Sales growth was supported by successful supply chain management despite persisting tightness and volatility of the component availability. Service sales increased, driven by improved spare parts capture rates. Kalmar’s comparable operating profit margin improved to a record level of 13 percent, driven by higher sales, improved management of supply chain and lower losses related to heavy cranes business.”

Vertikal Comment

Another strong quarter for both Hiab and Kalmar, Cargotec, barring any unforeseen catastrophes, this trend is likely to continue throughout 2023. Cargotec is banking on this being the case, as it looks to float Kalmar on the stock market and shift from being a conglomerate to a financial holding/investment company.

A key test will be how the order intake looks for the current quarter, the two companies do not have sufficient backlogs to ignore substantial reductions in order intake. Having said that a great start to the year.