Swedish high-technology engineering and
steelmaking group Sandvik has issued its financial results for the first quarter of 2013, stating that global demand for Sandvik's products displayed a mixed trend during the first quarter. Some segments showed signs of an improvement in demand, most notably the oil/gas sector and construction, while business conditions in the aerospace and process industries remained favorable. The mining industry weakened further.
"Demand in the first quarter showed some signs of improvement for parts of Sandvik's customer segments, compared with the weaker level noted in the second half of 2012. Order intake increased sequentially to SEK 22.3 billion, thereby exceeding invoiced sales, which amounted to SEK 22.1 billion. Sandvik's business areas generally reported stable or slightly improved market conditions, apart from Sandvik Mining, which continued to be affected by weaker demand and uncertainty from the mining industry. Therefore, we continue to carefully manage production rates, workforce and investment levels," said Sandvik president and CEO Olof Faxander.
"Inventories were reduced by SEK 400 million, marking the third consecutive quarter in which the production rate was maintained below sales. The lower production levels, combined with significant adverse currency effects and nonrecurring charges, negatively impacted first quarter earnings. This was particularly evident for Sandvik Machining Solutions. Adjusted operating profit totaled
SEK 2.7 billion, or 12.2 percent of invoiced sales."
According to the financial results, Sandvik's net profit for the given period was SEK 1.48 billion ($225.55 million), decreasing 41 percent compared with a net profit of SEK 2.51 billion in the first quarter of 2012. Order intake in the first quarter of 2013 declined by 18 percent year on year to SEK 22.34 billion ($3.41 billion).