Orders up at Atlas Copco

Second quarter results from Atlas Copco showed an increased order intake, while revenues and operating profit were down.

The Swedish-based company reported that year-on-year, orders received in the second quarter of 2014 increased 11% to SEK23.45 billion (€2.55 billion), which it said was supported by an improved demand from the manufacturing industry and acquired businesses.

The organic order growth was 1%, it said. Revenues reached SEK23.35 billion (€2.54 billion) and the operating profit was SEK4.34 billion (€471.95 million) compared to SEK4.53 billion (€492.63 million) a year earlier.

The company said the overall demand for its equipment improved over the previous quarter. The order intake increased for industrial compressors, and for industrial tools and assembly systems, while it was stable for construction and mining equipment.

Compared to the previous year, order volumes increased for industrial tools and assembly systems, and decreased slightly for compressors as well as for construction and mining equipment.

It added that UK-based Edwards, the newly-acquired vacuum solutions business, had a strong quarter.

Atlas Copco said its orders received in the first six months of 2014 increased by 9% to SEK46.10 billion (€5.01 billion), up from SEK42.14 billion (€4.58 billion) last year. Revenues were SEK44.77 billion (€4.87 billion) – SEK42.07 billion (€4.57 billion) last year. Operating profit decreased by 7% to SEK8.10 billion (€880.80 million) compared with SEK8.69 billion (€994.98 million) last year.

Profit before tax was SEK7.78 billion (€846.02 million) – SEK8.32 billion (€904.66 million) last year – corresponding to a margin of 17.4%, down from 19.8% last year. Profit for the period totalled SEK5.96 billion (€648.00 million) compared with SEK6.16 billion (€669.75 million) a year earlier.

Operating cash flow before acquisitions, divestments and dividends totalled SEK4.87 billion (€529.48 million), compared with SEK4.93 billion (€536.00 million) last year.

Ronnie Leten, president and CEO of the Atlas Copco Group, said, “It is encouraging to see a positive demand development from the manufacturing industry, and that the order intake for mining equipment has stabilised.

“The margin improved compared to the first quarter, partly thanks to further efficiency measures.”

During the second quarter a new regional distribution centre was opened in Shanghai, China, which will be the hub for logistics activities in the Asian region. “Our service business continued to grow and more customers in more locations now benefit from our broad service offering,” said Leten.