Cargotec reports a strong 2008 but a declining 2009

By Euan Youdale03 February 2009

Sales grew 13% at Cargotec last year to €3.399 billion (US$4.361 billion), according to the company's 2008 financial review.

Sales for services also grew to €871 ($1.118 billion), representing 26% of all sales, up from 25% in 2007.

Orders received totalled €3.769 billion ($4.835 billion), compared to €4.106 billion ($5.268 billion) in 2007. Notably, orders received in the fourth quarter amounted to €633 million ($812 million), down from €1.214 billion ($1.557 billion) in the previous final quarter.

Operating profit was €173.7 million ($222.8 million), compared to € 203.1 million ($260.6 million) in the previous year, with €16.8 million ($21.5 million) attributable to the fourth quarter. It includes €19 million ($24 million) of costs from the restructuring program announced in September. In 2007 fourth quarter operating profit was €46.3 million ($59.4 million).

Net income for the period was €120.8 million ($154.9 million), compared to €138.4 million ($177.5 million) in 2007. Earnings per share were €1.91 ($2.5), from €2.17 ($2.8) last year with €0.14 attributable to the fourth quarter, down from €0.45 in the previous fourth quarter.

The company said it was difficult to forecast demand across its divisions but said, "The preconditions for sales growth exist in services and MacGregor. Sales of Hiab and Kalmar are expected to decline from 2008. Significant restructuring measures, costing €35 million ($45 million), were decided on during 2008 to create a new supply platform and improve profitability in Cargotec. Focus is on the rapid implementation of these measures. Approximately €16 million ($21 million) of these costs remain for 2009."

Mikael Mäkinen Cargotec president and CEO added that the speed of economic deterioration in Europe had not been anticipated. "This meant that our profitability suffered in the second half of 2008. Obviously, the unexpected problems in Kalmar were a disappointment. Despite these short-term issues we continue our actions to improve our efficiency and global footprint to build a stronger and more competitive Cargotec."

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