Sandvik Profit Falls on Lower Mining Demand and Adverse Forex

    By Clemens Bomsdorf 
 

COPENHAGEN--Swedish engineering group Sandvik AB (SAND.SK) Friday posted a 33% fall in second-quarter net profit as lower demand from the mining industry, production rates, adverse currency effects and non-recurring charges all weighed.

 
    MAIN FACTS: 

-Net profit attributable to shareholders was SEK1.86 billion, versus SEK2.78 billion last year, beating analyst's expectations of SEK1.77 billion.

-Production rates were maintained at the level of sales in order to further reduce inventories.

-"Most of Sandvik's major market segments remained stable. However, the low investment levels from miners continues to be noticeable for this part of our business," Chief Executive Olof Faxander said in a statement.

-Sandvik keeps its 2013 capex forecast of around SEK5 billion.

-Given currency rates, stock levels and metal prices at the end of June, it is estimated that 3Q operating profit will be negatively affected by about SEK125 million.

-Earnings were negatively impacted by almost SEK600 million due to a strong SEK, negative metal price effects and nonrecurring items

-Revenue was SEK23.04 billion, from SEK25.94 billion a year ago and higher than the SEK22.97 billion that was the average forecast in a FactSet survey of 16 analysts.

-Ebit was SEK2.96 billion, compared with SEK4.21 billion a year ago and SEK3.13 forecasted by analysts.

-Order intake was SEK20.72 billion, down 21% from last year's SEK26.19 billion.

-Mining unit order intake fell 30% to SEK6.65 billion from SEK10.32 at fixed exchange rates.

-Shares closed Thursday at SEK84.60, valuing the company at SEK106.12 billion.

Write to Clemens Bomsdorf at [e-mail]

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