FLSmidth raised its full-year forecasts as orders picked up in the third quarter after a weak first half and and positive growth in the Indian economy provides a boost for cement plant sales.
According to a statement by the company, new contracted cement kiln capacity in 2009 is expected to total 40-50Mta globally exclusive of China (previous projection 25-50Mta)
FLSmidth & Co now expects a consolidated revenue in 2009 of DKK 22-23bn (previous projection DKK 20-23bn) and a satisfactory EBIT ratio of 8.5-9%
FLSmidth said its cyclical cement and minerals industry customers remained cautious on capital expenditure, but the order intake in the third quarter rose 45 per cent from the second to DKK3.62bn. This figure remained sharply down from a year earlier.
FLSmidth’s earnings before interest and tax fell to DKK475m in July-September from DKK583m a year earlier.
"Our market outlook still remains weak, though there have been signs of improvement in the last quarter," Chief Executive Jorgen Huno Rasmussen said in a conference call.
"It is primarily in (the Cement division) that we have been positively surprised," Rasmussen told Reuters. "One of our biggest markets, India, has come faster out of the crisis than we had expected."
"India has had positive growth of over six per cent, and our cement customers have a lot to look at," Rasmussen said. "They want to continue developing their capacity, and since we have a very strong position in India, we will get a nice share of that."