Tough first quarter for Cargotec

Cargotec's first quarter results for 2009 show its Hiab loader cranes division has been increasingly hit by the drop in construction and new truck sales. The group's other divisions, Kalmar and MacGregor, have also seen a tough three months.

Hiab's share of group orders received, totalling €456 million (US$ 594 million), was €138 million ($180 million), down from €228 million ($297 million) in the first quarter of 2008. A majority of those were small individual orders, which is typical of its operations, said the company.

The division's sales declined from €230 million ($299 million) to €153 million ($199 million), attributable to the low order intake in the final quarter of 2008.

There are also plans to reduce production in addition to last year's restructuring measures, in which manufacturing at the Salo facility in Finland was stopped and the number of Hiab personnel decreased by 308. A further 196 jobs were cut at Kalmar.

Production at the Meppel facility in the Netherlands will be closed during 2009, resulting in up to 100 job losses. "The plan is aligned with earlier announced actions to consolidate crane manufacturing and to adjust Hiab's production capacity in Europe," explained the company.

The Kalmar division has also experienced an uncomfortable quarter with sales reaching €224 million ($292 million), down from €490 million ($638 million) during the same period last year. One of the reasons was lower usage rates of container handling equipment resulting in reduced replacement investments.

Kalmar's sales totalled €306 million ($398 million), compared to €322 million ($419 million) in the previous comparable quarter. On a positive note, delivery volumes were healthy, thanks to the high order book at the beginning of the year.

Of total orders received in the first quarter, MacGregor accounted for €96 million ($124 million) down from €439 million ($571 million). "The drop in orders received reflected the exceptional shipbuilding boom strongly slowing down," said the company. The division's sales were favourable, totalling €218 ($285 million), up from €177 million, ($230 million) in the first quarter 2008. "Sales growth is a result of strong order intake in previous years," said the company.

Group plans for a multi-assembly unit (MAU) in Stargard Szczecinski in Northern Poland are now underway. Land purchase is being finalised, while production is due to start in rented premises in the same region during 2009. Production in the new plant is set to start in the second quarter of 2010. The company's One Company strategy also continues: Hiab and Kalmar sales and services networks will be combined in Europe, Middle-East and Africa (EMEA) during 2009.

"Our performance in the first quarter was in line with our expectations. Delivery volumes were still rather healthy, but order intake weakened clearly compared to the record-high level during the comparison period 2008. Cost savings from the restructuring measures initiated were not yet visible in the result, but we are on the right track and the results will start to show later this year," said Mikael Mäkinen, Cargotec president and CEO.