19.09.2008

Cargotec issues profit warning

Cargotec, owner of Hiab has reduced the full year profitability guidance that it gave investors in July when it said that it expected full year 2008 operating margin to be between 7.3 percent and eight percent. The company now expects that this year’s margins will fall below the 2007 level of 7.3 percent.

The company says that order intake has continued at a strong pace at Kalmar and MacGregor, but that a weakened market situation in Europe and the USA has resulted in a lower order intake at Hiab, mainly in construction related customer segments.

The fall in orders for Hiab will negatively affect the utilisation rate of the company’s factories and profitability in the second half of the year. Hiab's profitability during the rest of the year will also be weakened by a slower and more expensive than expected start-up of the component factory in Narva, Estonia.

Kalmar's and MacGregor's full year operating margins are still expected to improve from last year. Due to the delivery schedules, the improvement will be largely in the fourth quarter.

Kalmar will also book a €5 million provision related to cost overruns in ship-to-shore crane orders received in year 2006 and 2007.

As a result of the fall in Profitability, Cargotec says that it will initiate restructuring measures mainly in mature markets. The measures are likely to includes the lay off of around 700 people.

The measures are aimed at improving Hiab's and Kalmar's profitability and to adjust production capacity at Hiab to the prevailing market situation.