27.10.2016

Strong quarter from Hiab

Hiab has reported a strong third quarter in terms of both revenues and profits, while sister company Kalmar slipped back in terms of profitability.

Hiab revenues for the nine months to the end of September were €779 million, 15 percent up on the same period last year. Order intake though improved just two percent, resulting in an order book at the end of the period of €258 million, 14 percent lower than a year ago. Operating profit for the period was over 55 percent higher at €106 million.

Looking at the third quarter, revenues were up nine percent to €250 million, although order intake dropped eight percent compared to last year. Operating profit was up 33 percent at €32.9 million.

Kalmar reported year to date sales up two percent to 1.22 billion, but order intake at €1.28 billion was six percent down on the year. Operating profits were also down at 83.7 million 10 percent lower than last year.

The third quarter saw revenues rise six percent to €436 million, while order intake slumped 16 percent to €389 million leaving the order book three percent lower at €922 million. Operating profits were €27.5 million down 23 percent on last year.

The third division of Cargotec, Mac Gregor, has had a disastrous period, with year to date revenues dropping 34 percent to €580 and operating profits halving to €15.2 million. Cargotec group revenues year to date were €2.58 billion, six percent down on the year, while pre-tax profits improved almost four percent to 154.9 million. Net debt was cut almost 15 percent to €581 million.

Chief executive Mika Vehviläinen said: 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.”

"Our strategic focus areas are services, digitalisation and leadership development. In services we see tremendous business potential that we need to grasp with increased determination. We have increased our efforts in this area; for example, Hiab opened a spare parts web shop in September, MacGregor strengthened its spare parts delivery cooperation relationships in Asia, and Kalmar has initiated new measures to speed up the growth in services. In terms of digitalisation, we are developing Cargotec IoT Cloud-based solutions with our customers regarding, for example, automation effectiveness and proactive maintenance. Our internal leadership development programme is expanding to the next phase now that the first 200 leaders have completed the intensive training programme.”

“We are focusing our efforts on projects that improve competitiveness, the cost efficiency of products and digitalisation. Additionally, we are investing in global systems and procedures that in future enable higher efficiency in operational activities as well as in support functions.”

Vertikal Comment

This is a very good result from Hiab, which continues to make progress regaining its position in what is generally a buoyant market. The third quarter showed some softening, but this more related to comparison with a strong order intake last year than anything else. The way the company is going at the moment it could seriously challenge Palfinger in the loader crane market and perhaps even regain its market leadership in the next year or two?

All told a very positive set of numbers from Hiab.