Cargotec's January-June 2014 interim report: Orders grew but operating profit was burdened by project cost overruns in Kalmar
CARGOTEC CORPORATION, INTERIM REPORT, 18 JULY 2014 AT NOON (EEST)
Cargotec's January-June 2014 interim report: Orders grew but operating profit was burdened by project cost overruns in Kalmar
April-June 2014 in brief
- Orders received increased 19 percent and totalled EUR 993 (833) million.
- Order book amounted to EUR 2,285 (31 Dec 2013: 1,980) million at the end of the period.
- Sales declined 4 percent to EUR 804 (836) million.
- Operating profit excluding restructuring costs was EUR 4.7 (37.5) million, representing 0.6 (4.5) percent of sales, including EUR 39 (10) million in project cost overruns in Kalmar.
- Operating profit was EUR -6.0 (32.9) million, representing -0.7 (3.9) percent of sales.
- Cash flow from operations before financial items and taxes totalled EUR 24.4 (-12.4) million.
- Net income for the period amounted to EUR -9.3 (21.9) million.
- Earnings per share was EUR -0.15 (0.36).
January-June 2013 in brief
- Orders received increased 14 percent and totalled EUR 1,856 (1,624) million.
- Sales grew 3 percent to EUR 1,555 (1,515) million.
- Operating profit excluding restructuring costs was EUR 29.3 (52.5) million, representing 1.9 (3.5) percent of sales.
- Operating profit was EUR 17.8 (46.1) million, representing 1.1 (3.0) percent of sales.
- Cash flow from operations before financial items and taxes totalled EUR 56.9 (8.8) million.
- Net income for the period amounted to EUR 3.6 (28.4) million.
- Earnings per share was EUR 0.05 (0.46).
Outlook for 2014 unchanged
Cargotec's 2014 sales are expected to grow from 2013. Operating profit excluding restructuring costs for 2014 is expected to improve from 2013.
Cargotec's key figures
| MEUR | Q2/14 | Q2/13 | Change | Q1-Q2/14 | Q1-Q2/13 | Change | 2013 |
| Orders received | 993 | 833 | 19% | 1,856 | 1,624 | 14% | 3,307 |
| Order book, end of period | 2,285 | 2,147 | 6% | 2,285 | 2,147 | 6% | 1,980 |
| Sales | 804 | 836 | -4% | 1,555 | 1,515 | 3% | 3,181 |
| Operating profit excluding restructuring costs | 4.7 | 37.5 | -87% | 29.3 | 52.5 | -44% | 126.5 |
| Operating profit excluding restructuring costs, % | 0.6 | 4.5 | 1.9 | 3.5 | 4.0 | ||
| Operating profit/loss | -6.0 | 32.9 | -118% | 17.8 | 46.1 | -61% | 92.5 |
| Operating profit/loss, % | -0.7 | 3.9 | 1.1 | 3.0 | 2.9 | ||
| Income before taxes | -12.9 | 29.6 | 5.4 | 40.4 | 78.7 | ||
| Cash flow from operations | 24.4 | -12.4 | 56.9 | 8.8 | 180.9 | ||
| Net income for the period | -9.3 | 21.9 | 3.6 | 28.4 | 55.4 | ||
| Earnings per share, EUR | -0.15 | 0.36 | 0.05 | 0.46 | 0.89 | ||
| Net debt, end of period | 847 | 567 | 847 | 567 | 578 | ||
| Gearing, % | 71.9 | 48.9 | 71.9 | 48.9 | 46.7 | ||
| Personnel, end of period | 10,879 | 10,302 | 10,879 | 10,302 | 10,610 |
Financials include project cost overruns in Kalmar
Cargotec's President and CEO Mika Vehviläinen:
Market activity remained brisk, with our orders for the second quarter growing in all business areas. Both Kalmar and Hiab had strong order intake compared to the previous quarters. In MacGregor, recent acquisitions supported the growth in orders compared to the comparison period.
Due to a previously announced cost overrun in Kalmar projects, operating profit for the second quarter was unsatisfactory. As expected, MacGregor and Hiab saw positive profit development.
The EUR 40 million profit improvement programme currently being implemented in both Kalmar and Hiab is proceeding as planned, and is actually ahead of schedule in Hiab. Unfortunately, due to project cost overruns, the effects of the programme are yet to make a visible impact on Kalmar's operating profit. We are continuing our determined efforts to see this programme through.
We have decided to reverse earlier plans to separately list MacGregor business. We focus on delivering profitable growth within the new MacGregor as part of the overall Cargotec portfolio.
Press conference for analysts and media
A press conference for analysts and media, combined with a live international telephone conference, will be arranged on the publishing day at 1:30 p.m. EEST at Cargotec's head office, Porkkalankatu 5, Helsinki. The event will be held in English. The report will be presented by President and CEO Mika Vehviläinen and Executive Vice President, CFO Eeva Sipilä. The presentation material will be available at www.cargotec.com by 1:30 p.m. EEST.
The telephone conference, during which questions may be presented, can be accessed using the following numbers ten minutes before the beginning of the event with access code Cargotec/945648:
FI: +358 9 2313 9202
SE: +46 8 5052 0114
UK: +44 207 1620 177
US: +1 334 323 6203
The event can also be viewed as a live webcast at www.cargotec.com. An on-demand version of the conference will be published at Cargotec's website later during the day.
A replay of the conference call will be available until midnight 20 July 2014 in the following numbers: US callers +1 954 334 0342, non-US callers +44 20 7031 4064, access code 945648.
For further information, please contact:
Eeva Sipilä, Executive Vice President and CFO, tel. +358 20 777 4104
Paula Liimatta, Director, Investor Relations, tel. +358 20 777 4084
Cargotec shapes the cargo handling industry for the benefit of its customers and shareholders. Cargotec's business areas MacGregor, Kalmar and Hiab are recognised leaders in cargo and load handling solutions around the world. Their global network is positioned close to customers and offers extensive services that ensure a continuous, reliable and sustainable performance according to customers' needs. Cargotec's sales totalled approximately EUR 3.2 billion and it employs approximately 11,000 people. Cargotec's class B shares are quoted on NASDAQ OMX Helsinki under symbol CGCBV. www.cargotec.com