Sandvik Third-Quarter Net Profit Falls; Company Warns on Nickel Price

By Christina Zander

STOCKHOLM--Swedish engineering company Sandvik (SAND.SK) Monday reported a lower net profit for its third quarter than in the same period last year as administrative and selling expenses increased, partly due to exchange rate changes and acquisitions.

The company also warned the recent fall in price of nickel is expected to adversely affect earnings in the fourth quarter by close to SEK50 million if the conditions noted in October persist.

Net profit for the July to September period was 1.46 billion Swedish krona ($0.2 billion), down from SEK1.63 billion the same period last year.

Demand from mining customers for equipment, rock tools, services and spare parts was stable compared with the preceding quarter, while order intake declined for mining systems due to normal fluctuations in orders, the company said.

"Activity levels in the aerospace industry and the oil and gas sector remained high, while the mining and construction industries were stable at a low level," the company said.

Sandvik said overall business conditions remained relatively unchanged, compared with the second quarter, and that demand remained favorable in North America, improved in Africa, but deteriorated in Europe.

Sales increased to SEK22.59 billion in the third quarter, up from SEK20.42 billion last year.

Operating profit fell to SEK2.46 billion, from SEK2.53 billion in the same period last year.

Shares closed at SEK80.85 Friday.

Write to Christina Zander at [e-mail]

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