Sweden’s Höganäs AB has reported strong second quarter sales. CEO Alrik Danielsson commented in an interim report that the company continues to return solid growth and high profitability.
Danielsson indicated that the second quarter was characterised by negative volume trends in Asia as a result of the Japan disaster, although this was mitigated by unforeseen deliveries to Hoeganaes Corporation (GKN) following disruption to production at Hoeganaes’s Gallatin plant in the US. It was stated that one-off deliveries of approximately 10,000 tons of finished and semi-finished products were made to them in the quarter.
Excluding these additional deliveries, total sales volumes were in line with the previous year.
It was also stated in the interim report that the operating margin improved compared to the first quarter 2011, although it was even better in the corresponding period of the previous year as the company benefitted from a significantly weaker Swedish Krona at that time.
Second quarter 2011 data (compared to corresponding period of previous year)
Net sales were MSEK 1,869 (1,783) in the quarter, up 5% year on year. Sales volumes were 8% higher. Demand conditions were better than in the corresponding period of the previous year in both Europe and America, while demand was weaker in Asia, largely because of the consequences of the tsunami.
Höganäs stated that the outlook largely remains unchanged on the assessment made in the first quarter report. The market is expected to remain strong in Asia and South America. The downturn in Asia in the second quarter is expected to be temporary. A gradual recovery is expected in North America, while European market conditions remain difficult to assess, even if the prospects for the export industry remain positive in the short term.