FLSmidth 3Q order intake increases 16%

FLSmidth 3Q order intake increases 16%
Published: 13 November 2015

FLSmidth reported that its overall order intake increased 16 per cent to DKK5151m in the third quarter of 2015. Meanwhile the order backlog decreased 16 per cent to DKK16,666m.

Revenue fell by seven to DKK4609m while EBITA was down by 27 per cent to DKK 358m. Net profit amounted to DKK -84m (3Q14: DKK 215m)

The Danish equipment supplier highlighted that reported numbers in 3Q were impacted by strategic changes: Bulk material handling activities to be divested - reported as discontinued activities and Cement O&M projects integrated into the Cement Division.

Cement division
FLSmidth reported a "largely unchanged" market situation for Cement during the third quarter. On a global scale, capacity utilisation rates remain low and new larger orders for tender remain few in number, it said.

Nevertheless, the Cement division received an order worth EUR57m, from Pakistan cement producer DG Khan Cement Co for an 8500tpd greenfield plant. With the booking so far of two larger orders so far this year, the company expects to see a higher order intake for Cement than last year. However, it cautioned that a "real recovery of the cement industry remains ahead of us and competition is tough with both prices and conditions under pressure."

Order intake in 3Q15 fell 16 per cent YoY to DKK680m. Adjusted for currency effects, the order intake fell by 19 per cent.

Revenue was down 19 per cent to DKK792m, despite positive currency effects of five per cent. EBITA amounted to DKK2m, significantly lower than the DK56m recorded in the comparative period of 2014. FLSmidth attributed the negative margin development is a result of the execution of projects taken in a less favourable completitive environment and the fact that the O&M contracts with customers based in oil exporting countries are negatively impacted by lower oil prices.

Guidance for 2015
The guidance for 2015 is technically adjusted to reflect the reclassification of bulk material handling as discontinued activities.

It is expected that revenue will be DKK19-20bn (versus previous guidance of DKK19-21bn) and that the EBITA margin will be 7.5-8.5 per cent (previously 7-8 per cent). Return on capital employed is expected to be 10-12 per cent (previously 9-11 per cent)