Sandvik sees increased demand

By Helen Wright19 July 2011

Sandvik's mining and construction division reported a +30% increase in second quarter revenues to SEK 9,8 billion (€ 1,1 billion) while operating profit grew to by SEK 100 million (€ 10,8 million) year-on-year to SEK 1,4 billion (€ 152 million) amid increasing demand for equipment.

The company reported a +35% year-on-year increase in orders during the second quarter to SEK 11,7 billion (€ 1,3 billion) - a figure that exceeds revenues by nearly SEK 2 billion (€ 217 million). Sandvik said this lag was caused by extended delivery times for some key components resulting in longer lead times in production.

The company said demand from the construction industry had improved year-on-year, but weakened slightly in comparison to the first quarter of 2011, driven by reduced demand in Asia and a levelling off of demand in European and North American markets.

Offsetting this, Sandvik noted strong improvements in construction equipment demand from South America, Africa and Europe. In South America, Sandvik mining and construction secured a SEK 1,2 billion (€ 130 million) project order for a material handling system, while the mining business secured a number of large aftermarket contracts in Australia.

Sandvik also said that while its order intake from in Japan had declined temporarily as a result of the natural disaster in March, demand had recovered toward the end of the quarter and was nearly back up to normal levels.

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