Sales slip for Sandvik Construction

Sandvik Construction’s sales for the second quarter of 2014 were down -3% on a year ago to SEK 2.28 billion (US$ 335 million). Operating profits came in at SEK 51 million (US$ 7.5 million), a drop of -64% on last year, for a margin of just 2.3%.

The company said market conditions were similar with the first quarter of the year, but lower than the end of 2013. It added that low sales and production volumes and changes in interest rates also had an impact on profitability. However, the company noted that its revenues were up +18% on the first quarter of the year, which it said reflected increased deliveries ahead of the Northern hemisphere summer.

Compared to a year ago the division’s sales were up by a third in South America, which was attributed to high activity levels in Brazil, and up marginally in Africa and the Middle East. However, there were falls in sales in other regions of the world, including a -6% drop in Europe, which represents 40% of Sandvik Construction’s revenues.

The company’s order intake over the quarter was SEK 2.03 billion (US$ 295 million), a -16% decline on the second quarter of 2013. The order intake was down in all regions of the world compared to last year, except South America.

Overall, the Sandvik Group’s sales were down -6% in the second quarter compared to the same period last year, at SEK 21.2 billion (US$3.2 billion). Net profits were down -17% to SEK 1.54 billion (US$ 225 million).