Cargotec reports mixed financial picture

For Cargotec Group in the first nine months of 2016, profitability continued to improve in Hiab, there were no big project orders for Kalmar, although its long-term market potential is still strong, and the challenging market situation continues at MacGregor.

Sales for the Cargotec group in the third quarter of 2016 at €854 million (US$ 947 million) were down 8 per cent on the €928 million ($1,029 million) for the same period a year earlier.

Sales in services were €210 million ($233 million), down from €216 million ($239 million) in the third quarter of 2015, but up to 25 % of the total group sales from 23 % in the same period a year earlier.

Operating profit for the quarter was €56.2 million ($62 million) or 6.6 % of sales.

For the first nine months of 2016 sales were down 6 % at €2,581 million ($2,862 million) from €2,753 million ($3,053 million) for the same period in 2015.

Mika Vehviläinen, Cargotec CEO, commented on the performance by division as follows: "Hiab's strong development continued during the third quarter and profitability improved compared to the previous year. Hiab's core business orders were at a good level, but we did not receive any big defence industry orders as we did during the comparison period.

"Kalmar's result was also satisfactory; however, the pace of customer decision making has slowed down, which could be seen in declining order numbers. Kalmar's long-term market potential is still strong: bigger ship sizes and the need to develop ports and make operations more effective require investments in port technology and automation. The number of potential projects is still large, but customers are delaying their investment decisions.

"The challenging market situation continued in MacGregor. The global merchant ship market is facing overcapacity and new ship orders are at an exceptionally low level. Industry consolidation, alliances and possible new ship routes create uncertainty in the industry. We are continuing with our measures to lower the MacGregor cost level."

For the full year Cargotec forecasts sales to be the same as 2015 (€3,729 million ($4,136 million) or slightly below. Operating profit is expected to improve, the company said.