Continued soft market and unfavourable currency development will tax fourth quarter 2013 result expectations. EBIT margin improving from the beginning of the year as cost cutting progresses on plan.
According to the preliminary figures, Konecranes’ third quarter 2013 order intake was approximately EUR 413 million, down 10 percent year-on-year. Approximately one-half or almost 5 percentage points of the order intake decline was explained by negative currency changes. Sales were approximately EUR 503 million and operating profit excluding restructuring costs approximately EUR 32 million. The operating margin excluding restructuring costs was approximately 6.4 percent.
Both the cost base and the operating margin developed as expected in the third quarter of 2013. Group’s efficiency improvement program to lower the annual cost base by EUR 30 million by the end of 2014 is proceeding as planned.
Konecranes expects the positive margin development to continue and fourth quarter 2013 operating profit to improve from the previous year. However, due to the weaker than expected order intake and unfavourable currency development in the third quarter, Konecranes no longer expects to meet the earlier financial guidance for 2013.
The new financial guidance is:
“Based on the order book and the near-term demand outlook, the year 2013 sales are expected to be slightly lower than in 2012. We expect the fourth quarter 2013 operating profit excluding restructuring costs to improve from the previous year. However, we expect the full-year 2013 operating profit excluding restructuring costs to be lower than in 2012.”
The previous financial guidance was:
“Based on the order book and the near-term demand outlook, the year 2013 sales are expected to be stable or slightly higher than in 2012. We expect the 2013 operating profit excluding restructuring costs to be approximately on the same level as in 2012.”
The preliminary third quarter 2013 figures incorporate restructuring costs of approximately EUR 24 million (EUR 5 million cash-based and EUR 19 million non cash-based) related to the cost reduction program announced July 24, 2013.