Sandvik AB’s most profitable business area, Sandvik Machining Solutions which includes product areas such as Sandvik Hard Materials, Diamond Innovations, Wolfram, Sandvik Process Systems and Dormer, recorded a 5% gain in invoiced sales in the first quarter of 2014 to SEK 7.4 billion.
Sandvik Materials Technologies, a leading producer of advanced stainless steels, special alloys, titanium and other high-performance materials including high alloy powders and HIPed products, also recorded gains in the quarter with sales increasing by 3% to SEK 3.547 billion.
The business climate for most sectors excluding mining remained strong in the quarter in Europe and North America but remained mixed and challenging in Asia and South America, stated Sandvik. Total group invoiced sales for the quarter amounted to SEK 20.8 billion. Operating profit totalled SEK 2.5 billion, or 11.9% of invoiced sales.
“The process to close a total of seven units has begun under our initiative to optimize our global supply chain and manufacturing footprint. Currency effects negatively impacted first-quarter earnings by 200 million SEK while rising metal prices, nickel in particular, contributed positively,” stated Sandvik’s President and CEO Olof Faxander.
“The negative effects of the downturn in the mining industry and the current weak performance of Sandvik Construction are largely being offset by the improving conditions for and enhanced performance of Sandvik Machining Solutions, Sandvik Materials Technology and Sandvik Venture,” added Faxander. In April Sandvik Machining Solutions closed a tools production unit Piacenza, Italy, and an insert production unit in Featherstone, UK.