KCI Konecranes has seen its orders decline in the wake of the 11 September attacks on the USA, prompting it to describe future prospects as uncertain.
‘Overall, the business climate, especially after September 11th, has worsened,’ said chief executive Stig Gustavson.
Publishing its results for the third quarter of 2001, the company said: ‘Lifting equipment markets continued at a low level during Q3. Terrorist acts in USA caused a marked decline in September.’ Looking ahead to year-end results, the company added: ‘The order backlog is good, but market outlook for both Standard and Special Cranes is uncertain.’ The good news for Konecranes, however, was that its sales and profits continue to rise, although slightly below analysts’ expectations.
Total sales for January to September were Euro 536.8m, a rise of 13.2% on the same period last year. Sales grew in all business areas and in all markets areas, the company reported. Special Cranes recorded the highest sales growth (+30.2%) and Standard Lifting Equipment the lowest (+3.4%). Sales growth was strongest within region Asia Pacific (+59.4%).
Group operating income was Euro 33.7m, an increase of 92% on the Euro 17.5m of a year ago. EBITA was Euro 36.8m, compared to Euro 20.5m last year.
Total orders received were down 9.6%, however, to Euro 537.5m. The order intake in Maintenance Services grew by 10.3%, but Standard Lifting Equipment orders fell 8.1%. Orders received during Q3 in Special Cranes doubled compared to Q2, but were 58.5 % lower compared to the record level of Q3/2000.
Commenting on the result, Stig Gustavson said: ‘During the last few years the group has undergone profound changes. These changes have produced a group with lean operations, modern products and an increasing proportion of recurring service earnings. Group finances are strong, and leverage low. The group is well positioned to face tough markets ahead.
‘We have trimmed our production machinery, closed factories in the US, France and Germany, and concentrated core competencies at a few sites. Production scale effects together with lower break-even points increase our flexibility. Outsourcing of low-value-added production is increasing.
‘We have new top class product ranges in both Standard Lifting Equipment and Special Cranes Business Areas. The new standard lifter, the CXT and its siblings have already lifted Standard Lifting Equipment margins to record levels. 50% of our Standard Lifting clients now order the new line. By year-end, that number is expected to reach 80%. The new products will allow us to continue trimming our production.
‘In Special Cranes, the newest leg complementing the harbour and shipyard crane range, the BoxHunter ship-to-shore container crane was launched for commercial orders during Q3/01. With its new product range this Business Area is well positioned for continuing its long term growth.
‘Maintenance Services is the stabilising factor among our Business Areas. With its steady growth we see services taking a bigger relative share of group sales, adding to earnings growth and increasing return on total capital employed.
Today, we concentrate on increasing the value content of our service agreement base. Margins development is positive, and average top line growth is strong.
Group finances are in good shape. Already at a comfortably low level, the gearing is decreasing. In financial terms, the group has ample room for manoeuvre.
Overall, the business climate, especially after September 11th, has worsened. Market outlook calls for caution in forward looking statements. However, our flexible lean operations, strong finances, modern products and a good order book enable us to face challenges with confidence.’
