Sweden’s Sandvik AB has announced the results for its third quarter and the first nine months of 2017. According to the company, it has seen good overall growth for the quarter, with order intake increasing across all business areas. Group-wide revenues increased by 12% compared to Q3 2016, with operating profit rising by 28% compared to Q3 2016.
Sandvik Materials Technology saw order intake increase 9% to 3,045 million SEK (Q3 2016: 2,851 million SEK) and achieved an organic revenue increase of 3%. According to the company’s report, business momentum for all segments was strongest in Asia, which reported 14% growth. North America reported growth of 12%, while Europe saw sales growth of 9%.
Despite steady growth, Sandvik Materials Technology has reported an operating loss of -57 million SEK. According to the company, this was primarily due to a negative mix in deliveries, lower profitability in the more standardised tubular business and an adverse impact from changed metal prices, as well as normal seasonal weakness. Changing metal prices reportedly had an adverse impact of -64 million SEK on operating profit. Changing exchange rates were also a factor, having a negative impact of -2% on order intake and revenues across Sandvik Group.
“Order growth in the third quarter was buoyant at 13%,” stated Björn Rosengren, President and CEO of Sandvik. “Large orders were received by Sandvik Mining and Rock Technology and Sandvik Materials Technology at a total value of 500 million SEK.”
“While the third quarter is seasonally weak for Sandvik Materials Technology, I am nevertheless disappointed with the business area’s performance,” he continued. “We are working hard to implement the cost initiatives announced earlier that are aimed at gradually restoring profitability from early next year. For the Sandvik Group in general, I am pleased with the performance.”
According to Rosengren, performance was supported by “organic growth and previously implemented efficiency measures. This more than offset the adverse impact from changes in exchange rates as well as the weak performance of Sandvik Materials Technology.”