Sandvik Profit Lifted by Currency Gains, Cost Cuts

By Christina Zander

STOCKHOLM--Swedish engineering company Sandvik AB (SAND.SK) said Friday that second-quarter profit was lifted by currency gains and its group-wide cost saving program.

Sandvik, which makes tools for customers in the mining, construction and energy sectors, said net profit in the three months ended June 30 was 1.72 billion Swedish kronor ($200 million), up from SEK1.54 billion in the same period last year. Analysts polled by FactSet expected SEK1.78 billion.

In the last few years, Sandvik's profitability has been hit by low demand in the mining sector, and the company said that although overall business activity in Europe remained largely stable in the second quarter, it still saw a decline within its Sandvik Mining and Sandvik Construction businesses. This was in contrast to North America, where these business areas were relatively stronger.

Demand in Asia declined for all business areas except Sandvik Venture, the company said. Order intake during the second quarter was SEK22.74 billion, up from SEK21.19 billion a year ago.

Revenue in the quarter was SEK23.40 billion, up from SEK22.05 billion. Operating profit was SEK2.90 billion, up from SEK2.56 billion.

Shares closed at SEK93.95 Thursday.

-Write to Christina Zander at [e-mail]

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