Cargotec ends 2009 on positive note
By Euan Youdale08 February 2010
Sales dropped 24% during Cargotec's 2009 financial year, which was marked by job cuts, factory reorganisation and company restructuring.
Sales stood at €2.6 billion (US$3.6 billion) for the group, compared to €3.4 billion ($4.8 billion) in 2008.
The fourth quarter ended on a more positive note, however, with operating profit, excluding restructuring costs, standing at €31.7 million ($44.2 million), compared to €35.9 million ($50 million) in 2008. This represented 4.7 % of sales, up from 3.9 % in the same quarter the previous year. Sales were €669 million ($933 million), up from €924 million ($1.3 billion), in the last quarter.
Breaking down the results, sales at the Hiab knuckle boom crane division in 2009 were €568 million ($795 million), a 37 % decrease on the previous year. Sales were on a low level all year, reflecting the general weakness in the load handling equipment market, said Hiab. Fourth quarter sales were €152 million ($213 million), compared to €216 million ($302 million) in the same quarter of 2008.
In the port crane sector Kalmar, sales in 2009 were €1.0 billion ($1.4 billion) compared to €1.5 billion ($2.1 billion) in 2008, marking a 34% decline. Fourth quarter sales were €213 million ($298 million), compared to €413 million in the same period of 2008 ($578 million).
In contrast, ship crane division MacGregor's sales were €1.0 billion ($1.4 billion) compared to €985 million ($1.4 billion) in 2008, showing a 2% increase. This growth was the result of a strong order intake in previous years and project deliveries, said Cargotec. Fourth quarter sales were €305 million ($427 million), up from €298 million ($417 million) in the same period of the previous year.
Across the group, orders received during the period were €1.8 billion ($2.6 billion) down from €3.8 billion ($5.3 billion) in the previous year. The order book was €2.1 billion ($3 billion) at the end of the financial period, amounting to a 30% decline.
Operating profit, excluding restructuring costs, was €61.3 million ($85.8 million), compared to €192.8 million ($269.7 million), representing 2.4 % of sales. Overall operating profit was €300,000 ($420,000) including €61.1 million ($85.3 million) in restructuring costs.
During the year, Cargotec merged Hiab and Kalmar to create a new business area, Industrial and Terminal. It began operating at the beginning of October, although financial reporting continued as before until the end of 2009.
A range of restructuring strategies saw Cargotec's personnel drop by 2,220 from the end of 2008, to 9,606 by the end of 2009. This was mostly felt in Sweden and Cargotec's home country of Finland.
Despite the downturn, Cargotec made the decision to proceed with a new multi-assembly unit (MAU) in Stargard Szczecinski, northern Poland, aimed at improving its global supply capabilities. Production began in rented premises at the end of the third quarter of 2009 and will be relocated to Cargotec's own premises in the country during the second quarter of 2010. This investment cost €19.1 million ($26.7 million) in 2009.
"There were many positives in 2009 despite the difficult market situation. Thanks to successful deliveries of marine cargo handling equipment we achieved an excellent result in the marine business. Our cash flow strengthened throughout the year. I am satisfied with the €32 million underlying operating profit we reached in the fourth quarter. With restructuring costs remaining smaller than anticipated in the same period, our full year operating profit turned positive," said Mikael Mäkinen, Cargotec president and CEO.
Cargotec 2010 sales are forecast to remain at 2009 levels, while operating profit is expected to exceed €100 million ($137 million).