Sandvik Plans to Sell Mining Systems Unit

By Dominic Chopping

STOCKHOLM--Swedish engineering company Sandvik AB (SAND.SK) said Thursday it plans to sell its Mining Systems unit and focus more on its core mining equipment and aftermarket operations.

Sandvik, which makes tools for customers in the mining, construction and energy sectors, said it will post a 1 billion Swedish kronor ($119 million) charge in the third quarter from the divestment, relating to project writedowns and other cost and impairment provisions within the unit.

Mining Systems is a separate unit within Sandvik Mining and designs and engineers material handling systems for the mining industry. It had annual sales of SEK6.3 billion in 2014, representing 7% of Sandvik Group invoicing and employs 1,300 people.

In the last few years, Sandvik's profitability has been hit by low demand in the mining sector, and the company said in its second-quarter earnings that mining demand had declined further in Europe and Asia, although it did see some relative strength in North America. Cost saving measures have so far done little to lift margins.

The company is currently awaiting the November arrival of its newly appointed chief executive, after the previous boss stepped down in August.

-Write to Dominic Chopping at [e-mail]; Twitter: @WSJNordics

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(END) Dow Jones Newswires

October 01, 2015 08:35 ET (12:35 GMT)

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