‘Solid’ profits for Atlas Copco

Atlas Copco is claiming “solid profitability” and record cash flow in tough market conditions, in its interim report on the fourth quarter and full-year summary of 2015.

The company’s products include compressors, vacuum solutions and air treatment systems, construction and mining equipment, power tools and assembly systems.

Its industrial technique division reported fourth quarter revenues of SEK3.81 billion (€410.96 million) which showed an increase of 10% over the figure of SEK3.47 billion (€374.34 million) in the same period of 2014. Full-year revenues for the division showed a rise of 27% over 2014.

For the group as a whole, Atlas Copco said orders had decreased 2% in the fourth quarter of 2015, to SEK23.85 billion (€2.57 billion) compared to SEK24.38 billion (€2.63 billion) a year earlier. The full-year figure for 2015 was SEK100.24 billion (€10.80 billion) – a rise of 7% over the 2014 figure of SEK93.87 billion (€10.13 billion).

Profit before tax was up in the fourth quarter over the previous year, at SEK4.64 billion (€500.49 million) compared to SEK4.43 billion (€477.74 million). The full-year 2015 figure for profit before tax was SEK18.82 billion (€2.03 billion), up from SEK16.09 billion (€1.73 billion) in 2014.

However, the company has made a tax provision of SEK2.80 billion (€301.91 million) following a European Commission decision on Belgium’s tax rulings. It said that this was a result of an announcement on 11 January, 2016, when the European Commission revealed its decision that Belgian tax rulings granted to multinationals with regard to “excess profit” should be considered as illegal state aid and that unpaid taxes should be returned to the Belgian state. Atlas Copco said it had received such tax rulings since 2010.

It said that its service business remained robust in all business areas and that moderate growth had been achieved. Demand for Atlas Copco’s equipment, however, decreased in total. The demand from some customer segments, for example automotive and electronics, remained healthy, while other segments continued to be weak. These included mining, construction, and oil and gas.

Order volumes increased for industrial assembly solutions as well as for vacuum equipment, while they decreased for mining and construction equipment and for compressors.

Geographically, Atlas Copco said Europe was robust and a moderate year-on-year order growth was achieved in the region. Order volumes also grew in India, but they were lower in many other markets, including China, Brazil, Australia and the US, it said.