Hoganas reports strong growth, with Asia leading the way

An interim report from Swedish iron powder producer Hoganas AB suggests that the Powder Metallurgy (PM) industry is bouncing back from a difficult 2009.

CEO Alrik Danielsson commented on first quarter 2010 earnings “The Asian and South American markets remained strong in the first quarter. Sales volumes in China and India reached all-time-high level. Demand conditions in 2010 are uncertain, primarily in terms of Europe. We are especially pleased that we have been able to retain a sharp cost focus throughout the sales recovery of the past six months. This is also reflected in our income improvement in the first quarter.”

“Our research and development initiatives paid off in the quarter with results including a successful collaboration in laser surface coating for ship repairs. This opens new markets for our surface coating powders, and demonstrates the know-how Hoganas has accumulated in the laser surface coating segment.”

First quarter 2010 (compared to corresponding period of previous year) results show net sales of MSEK 1,548 (916) in the quarter, up 69% year on year. Sales volumes were 93% higher. Demand continued to improve on all markets and sales volumes in Asia and South America more than doubled.

Operating income was MSEK 282 (-111) and income after tax was MSEK 207 (-90). Volume increases and positive effects of cost savings had a positive effect on income.

Commenting on the outlook, Danielsson stated “The Asian and South American markets are strong, and a gradual improvement, although at an uncertain rate, is expected in North America. However, the assessment is that the underlying demand in Europe remains weak.”

The Hoganas statement reflects comments received from a number of metal powder producers that they are experiencing an unprecedented surge in demand from the PM industry, particularly in Asia.

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