Sandvik sees sales and profits drop

Sandvik Mining and Construction reported 2009 sales of SEK 32,6 billion (€ 3,2 billion), down -23% on the SEK 38,6 billion (€ 3,8 billion) recorded in 2008. Pre-tax profits fell -91% to SEK 466 million (€ 46 million), down from SEK 4,9 billion (€ 495 million) 12 months ago.

Despite the weak annual figures, the company recorded a +6% increase in orders in the fourth quarter from SEK 8,2 billion (€ 817 million) 12 months ago to SEK 9 billion (€ 895 million) in 2009.

A statement from the company said that demand from the construction industry remained weak, while in the mining industry, signs of an initial increase in activity were more visible in the fourth quarter than in earlier periods.

The aftermarket business improved gradually and, in the latter part of the fourth quarter, order intake for new equipment and complete systems improved gradually, but from a very low level.

President and CEO of Sandvik Group, Lars Pettersson said, "Government stimulus packages have not yet had any material effect on order intake.

"2009 placed considerable demands on Sandvik to rapidly adjust to a significantly deteriorated market climate. Demand declined by approximately -30% and we reduced the rate of production by -40%," he said.

"With the extensive adaptations implemented during 2009 to the organisation, capacity and costs, we are well positioned to improve earnings through higher sales volumes and production rates in 2010 and beyond," confirmed Mr Pettersson.