SMS posts reduced order intake for 2016, expects higher order intake as from 2018

Wednesday, 21 June 2017 14:02:09 (GMT+3)   |   Istanbul
       

Germany-based plantmaker SMS Group has announced that in 2016 its order intake declined by 2.54 percent to €2.68 billion, while the company's sales amounted to €3.05 billion, down 7.85 percent, both compared to the previous year.
 
In 2016, SMS Group generated orders for metallurgical plant and machinery construction totaling €2.43 billion, falling by 1.6 percent year on year.
  
Burkhard Dahmen, chairman of the managing board of SMS Group, stated that the company’s customers’ problems from global overcapacities have eased a little and, due to individual protectionist measures, both capacity utilization and price levels have increased over-proportionally in some countries. As a result, SMS is receiving new project inquiries from producers there, especially in the area of rolling special steels and high-strength grades, Mr. Dahmen added. He went on to say that overall plant utilization globally has only increased moderately and this is why sustained profits are not yet possible in all regions. 
 
According to the SMS chairman, ongoing political uncertainty in Russia and Ukraine - important sales markets for the company - is also damaging business; on the other hand, things look brighter in Iran. After the recent presidential election and continued gradual opening of the country, SMS sees opportunities in the foreseeable future for participation in the modernization and rebuilding of the country’s steel industry. Just recently, the company signed preliminary contracts with Iranian customers for five plant projects. Their realization depends on long-term loans from banks to the Iranian metal producing industry.
 
Meanwhile, SMS expects the slight upturn in demand to translate into higher order intake as from 2018. This positive outlook is based above all on the higher prices for steel products. SMS also stated that its customers are increasingly reactivating shelved investments in revamps and upgrades of their existing plants.