FLSmidth 2Q dented by Libyan unrest

FLSmidth 2Q dented by Libyan unrest
Published: 19 August 2011

FLSmidth kept its full-year guidance unchanged when reporting a surprise drop in second-quarter profit, hit by unrest in North Africa.

Earnings before interest and tax (EBIT) fell 15 per cent to DKK404m (US$78m) in April-June.
FLSmidth said unrest in North Africa had put a dampener on investment in the region, hitting its Cement division’s orders in the first half.

"For the same reason, the progress of ongoing projects in Egypt, Tunisia and Libya is delayed," it said.
Revenues in FLSmidth’s Cement division fell 20 percent in the first six months of 2011 from the same period last year, while its Minerals division revenues grew 17 percent.

"In Cement, revenues are lower because of delayed projects in North Africa," Chief Executive Lars Huno Rasmussen told Reuters.

Rasmussen said the problems in North Africa were particularly in Libya and the company’s operations were back to full strength in Egypt and Tunisia after unrest there.

"But in Libya we do not know when we can come back, and we had some big projects under way there," Rasmussen said.

The level of cement activity remains high in a number of emerging markets in South America, Africa and Asia, but India is seeing signs of a temporary slowdown in growth, FLSmidth said.

The company stood by its earlier view that the cement plant market in 2011 would equal about 65Mta of new contracted cement kiln capacity worldwide exclusive of China.

It said that high metals prices continue to have a positive impact on mining companies’ investment plans.

"In 2011, increasing investments in the minerals industry is still expected compared to 2010 despite the current uncertainty regarding global growth," FLSmidth said.

"A high level of activity is expected particularly in crushing, grinding and materials handling, notably in the coal, copper and iron ore segments," it said.