Cargotec's January-June 2014 Interim Report

By Joseph R. Fonseca July 19, 2014

Cargotec's January-June 2014 interim report show that 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).

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 President and CEO Mika Vehviläinen said, "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."