Dockside demand helps Cargotec growth

Cargotec's 2011 second quarter sales grew 25%, compared to the same period last year, totalling €795 million (US$1.2 billion). January to June half year sales grew 31%, totalling €1.6 billion ($2.3 billion).

Improved demand in Industrial & Terminal and Marine segments, boosted growth in sales compared to last year, said the company. EMEA (Europe, Middle East, Africa) was the biggest market area. EMEA's share of consolidated sales represented 42%, against Asia-Pacific's 39% and the Americas' 19% share.

The service business saw growth in all market areas due to improved capacity utilisation rates, added the company. The order book grew 20% from the year-end, totalling €819 million ($1.2 billion) at the end of June.

Operating profit for the second quarter increased from the previous period to €54 million ($78 million), representing 6.8% of sales. Comparative figures for 2010 include €1.6 million ($2.3 million) in restructuring costs.

Segment breakdown

Looking at individual segments, the load handling equipment market developed positively in the first half of the year, said a company spokesman. "Truck sales grew in the main market areas, with brisk activity in many customer segments. Demand for loader cranes, truck mounted forklifts and tail lifts in particular grew rapidly. Recovery remained weak in construction-related customer segments in United States."

There was renewed demand for port container handling equipment. "During the first half of the year, demand for rubber-tyred gantries in particular was strong on the back of improved activity of larger projects. In addition, there was positive development in demand for other equipment used in ports," added the spokesman.

Demand for marine cargo handling equipment remained at a healthy level, said Cargotec, driven by the large number of bulk vessels ordered last year. In the first half of this year, however, bulk vessel orders decreased. "Orders for other ship types are recovering gradually, which will be seen in improved activity in marine cargo handling equipment with a lag. Larger ship sizes increase the need for marine cargo handling equipment per vessel," commented the spokesman.

Acquisitions

At the end of January, Cargotec announced the acquisition of US-based terminal operating systems provider Navis. The transaction value was about $190 million. In December 2010, Cargotec become a majority shareholder in Kalmar (Malaysia) Sdn. Bhd. by increasing its ownership in the company from 50 to 69.9%.

In November 2010, Cargotec acquired the assets of a Swedish installation and service company, Hallberg-Ivarsson Hydraulik & Påbyggnad AB, located in Gothenburg. The company specialises in installation and services for on-road load handling equipment and heavy vehicles.

In March 2011, Cargotec signed a long-term frame agreement with Siemens Wind Power A/S, for custom-made Hiab cranes that will be used for the service and maintenance of wind turbines. During the first quarter, Cargotec received orders for more than 100 medium size units.

Looking ahead, Cargotec's 2011 sales are forecast to grow some 20%. "Sales growth and significant efficiency improvement measures executed during the past years, support profitability, but there is cost pressure on the markets," said the spokesman. Cargotec's 2011 operating profit margin is forecast to be about 7%.