Mixed results for Metso Minerals
By Becca Wilkins04 February 2009
Metso's Mining and Construction Technology division has recorded +5% growth in its fourth quarter net sales to € 717 million (US$ 923 million) compared to € 683 million (US$ 878 million) during the same period in 2007. Meanwhile operating profits in the fourth quarter have declined by -7% to € 91 million (US$ 117 million) from € 99 million (US$ 127 million) last year.
For the full year, net sales for the division grew by +11% to € 2,6 billion (US$ 3,3 billion) compared to the € 2,3 billion (US$ 3 billion) recorded in the same period in 2007. The company saw its full year operating profit increase by +12% to € 358 million (US$ 461 million) from € 319 million (US$ 410 million) in 2007.
Metso said strong volume growth and the favourable development of the services business improved profitability in the division. However, in the fourth quarter profitability weakened because of a slowdown in net sales growth, while fixed costs continued to increase.
Demand for Mining and Construction Technology products was "excellent" until September last year, when customers in both industries began scaling back their investments, said the company statement.
The demand for mining and construction products increased "substantially" in Asia-Pacific but decreased in the US and in Northern Europe.
Meanwhile, Metso Corporation recorded a -3% decrease in net sales during the fourth quarter to € 1,8 billion (US$ 2,3 billion) compared to € 1,9 billion (US$ 2,4 billion) during same period last year.
The company saw a +6% growth in its fourth quarter operating profit to €190 million (US$ 244 million) compared to € 180 million (US$ 231 million) during the same period in 2007.
For the full year Metso saw +2% growth in its net sales to € 6,4 billion (US$ 8,2 billion) from € 6,3 billion (US$ 8,1 billion) in the same quarter in 2007 and operating profits were up by +10% to € 637 million (US$ 820 million) from last year's fourth quarter period figure of € 580 million (US$ 746 million).
Jorma Eloranta, president and CEO of Metso Corporation said he was satisfied with the 2008 full year results and persistent work to improve results is paying dividends. However, he added 2009 will be demanding for Metso because of the market situation.
"This in turn will mean decline of net sales and operating profit. We estimate that our 2009 net sales will, nevertheless, exceed € 5 billion (US$ 6 billion) and our profitability will be satisfactory."
The company has already started to take actions to adjust its operations for an extended period of weak demand and this will include cutting more jobs from its workforce.