Finnish mining and metal
manufacturing equipment provider
Outotec has issued its financial results for the first quarter of the current year. The operating profit of
Outotec decreased to €8.7 million, down 72.5 percent year on year, while its sales revenues decreased by 32 percent to €343.9 million compared to the same quarter of the previous year. Meanwhile,
Outotec's order intake was €210.3 million in the given quarter, falling 57 percent year on year.
Outotec stated that the main reasons for the reduced sales in the first quarter of 2014 were the weak order intake in 2013, and devaluation of emerging market currencies. Profitability was weak due to reduced sales and high fixed costs in relation to sales.
According to
Outotec, based on several market institutes' estimates, metals demand is expected to grow on average by two to five percent per year until 2020. In the short-term, however, metal price pressures are expected to continue due to sluggish demand and high stock levels. Uncertainty in relation to China's metals demand growth is the main contributor for the current metals demand uncertainty as the country uses some 40-60 percent of total metals production. Political instability and changes in local tax regulations are expected to impact investments in several emerging countries. Due to these reasons, the mining and metals industries' capital expenditure spending is expected to contract further in 2014, though there are some early signs that the market may have reached the bottom.