Strong first half for Hiab & Kalmar

Hiab, Kalmar and MacGregor owner Cargotec has reported a strong first half in terms of sales, while order intake dropped sharply - back to more normal levels.

Hiab revenues for the six months to the end of June increased 23% to €917 million, although order intake dropped 25% to €755 million, which is more in line with historical trends. The order book at the end of the period was just over €1 billion, down 15% on last year. Operating profits jumped 35% to €141.2 million.

In the second quarter revenues improved 20% to €485 million, while order intake slipped 28% to €375 million. Operating profit was €81.5 million, up 30% on the same period last year.

Year to date revenues came in at just over €1 billion, up 30% on the first half of 2022, but order intake dropped 15% to €908 million, leaving the order book 10% lower at €1.28 million. However, operating profit almost quadrupled to €141.2 million.

Moving on to the second quarter sales increased 29% to €552 million, with orders falling 23% to €437 million. Operating profit for the quarter increased six fold to €78.4 million.

Cargotec as a whole – which also includes MacGregor - achieved year to date revenues of €2.27 billion, up 26% on the year, while pre-tax profits tripled to €236.7 million.

Chief executive Casimir Lindhol said: “Record high financial performance continued, potential separation of Kalmar and Hiab progressing as planned. The eventful second quarter was the first one for me as chief executive, the orders received are back to pre-covid levels, declining from the all time high comparison period which included large non-recurring orders. However, our order book is clearly above the historical average level. Our sales increased 25 percent and in comparable operating profit we again reached a new record level of €158 million and a 13.2 percent margin, driven by higher deliveries and successful management of inflationary pressures and costs. Strategically important service businesses and eco portfolio sales continued to grow.”

“In Hiab, underlying demand drivers remained at a good level, but orders received declined from the record high comparison period, which was boosted by pre-buying ahead of pricing increases. Order intake was also affected by inflation, high interest rates, and extended truck lead times. Hiab’s order book is at a strong level and due to robust operational execution, Hiab’s sales grew by 20 percent to €485 million. Hiab’s comparable operating profit increased by 31 percent to €81 million stemming from higher sales, effective management of inflationary pressures and controlling costs.”

In Kalmar, there was some slowness in customer decision making and orders are back at pre-covid level. The decision process for larger project orders slowed down, while service orders remained stable. Kalmar’s sales increased 29 percent to €552 million as we are delivering from the strong order book. Sales growth was supported by improved efficiency in supply chain management despite persisting volatility of the component availability. Kalmar’s comparable operating profit margin improved to a record level of 14.2 percent, supported by higher sales, deliveries of semi-finished products, successful management of inflationary pressures and component availability, and lower losses related to heavy cranes business.”

“On 27 April, we announced our plan to investigate and initiate a process to potentially separate our core businesses Kalmar and Hiab into two world leading standalone companies. The planning of the potential partial demerger is intended to be carried out during 2023 and the potential separate listing of Kalmar on Nasdaq Helsinki would, if carried out, take place in 2024.”

Vertikal Comment

Another solid result from Hiab and Kalmar but the order intake is one to watch, although the order book remains above six month sales numbers, which may in part be down to customers and dealers having previously placed orders on spec or for inventory, due to the long lead times. It might well be a good thing for the order book to slip back to more normal levels - one to look out for in the third and fourth quarters.

All in all, another very good result just when the company needs it - leading up to floating the two companies on the stock market.