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Issue #590 | Perishables | Mediterranean | Middle East | Africa Trade

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2014 Media Kit
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Strong orders lift Cargotec turnaround hopes

By: | at 06:18 AM | Breakbulk & Projects  

* Q4 order intake 985 mln euros vs 807 mln in poll

* Q4 core EBIT 39 mln euros vs 42 mln in poll

* Shares rise 9.6 pct (Recasts with order intake, adds analyst comment and share reaction)

HELSINKI - Finnish cargo handling equipment maker Cargotec reported a stronger-than-expected order intake in the fourth quarter, boosting hopes its troubled marine business was turning a corner.

Cargotec’s shares rose 9.6 percent by 1115 GMT on Tuesday after the company said quarterly orders rose 34 percent from a year earlier to 985 million euros ($1.33 billion), clearly beating the average forecast of 807 million euros in a Reuters poll.

“It will not show in this year’s results, but the view for 2015 is clearly better now,” said Pekka Spolander, analyst at Pohjola Markets, referring to Cargotec’s marine business called MacGregor.

MacGregor, which makes hatch covers and cranes for ships and generated a fourth of the 2013 group sales, has been struggling with a slow recovery in merchant ship deliveries.

Cargotec had previously planned to spin off MacGregor in the first half of 2014, but decided in October to delay the move. The company has instead been making acquisitions to expand the business, making a spin-off appear less likely.

“I wouldn’t be surprised if they decide to stick to the business,” Spolander said.

The strong orders appeared to outweigh concerns over the company’s quarterly adjusted operating profit, which fell 3 percent from a year earlier to 39 million euros, missing the market’s average forecast of 42 million euros. Its annual dividend proposal also fell short of market expectations. ($1 = 0.7397 euros)