Konecranes operating profit €37m in Q3

Konecranes president and CEO Pekka Lundmark was “pleased” with third quarter results following the Finnish company’s latest interim finance report.

“Although not yet at the goal, we are pleased with our results in third quarter,” he said. “Service business is improving its performance and achieving the goal of prioritising profitability over growth this year. Our maintenance contract base has developed well, which is a stabilising element amid an uncertain economic environment.”

Order intake was €458.0 million (compared to €458.5 in the same period last year), down 0.1 percent; service was up 15.6 percent and equipment down 4.0 percent. The order book was worth €1,085.1 million (€1,040.1) at the end of September, 4.3 percent higher than a year ago and 3.4 percent lower than at the end of June 2012.
Sales were €529.8 million (450.9), up 17.5 percent; service was also up to the tune of 11.6 percent, while equipment was healthy, up 23.1 percent. Operating profit was €37.0 million (26.0), 7.0 percent of sales (5.8).

Macroeconomic uncertainties have increased and there are more signs of a weakening global demand due to the continuing crisis within the Eurozone and slower economic growth in some emerging markets. This is taking its toll on new inquiries.

Lundmark added: “Equipment business is coping well with the challenging environment where fragmented market, overcapacity in the crane industry in some parts of the world and somewhat softening demand are all putting pressure on the sales margins.

“The development in different parts of the world is uneven. Our strongest performer this year has been North America along with certain emerging markets, such as the ASEAN [Association of Southeastern Asian Nations] countries. Western Europe, China and India are all experiencing weaker demand. Our funnel of new opportunities is still reasonably good, but the lack of structural reforms to tackle various economic problems in the world may negatively affect our market.”