Suppliers Metso, Sandvik still hurting from slowdown
Despite emerging signs of recovery in the mining industry, Nordic suppliers Metso and Sandvik continue to post weak results caused mainly by a slump in global demand.
Finland-based mining technology supplier Metso said Thursday that third quarter mining and construction orders fell 19%.
In the face of what the firm called a "volatile" market environment, Metso said it would increase planned costs cuts to $138 million (100 million euros) by the end of 2015, as it is also dealing with slow markets for its pulp, paper and power business.
The program, said Metso's President and CEO Matti Kähkönen, is designed to improve the company's cost structure and operational efficiency.
That would involve restructuring operations and cutting jobs at its metal recycling plant in Dusseldorf, Germany.
Interim results for Swedish equipment and tool manufacturer Sandvik (STO:SAND) were a bit more upbeat. The firm said Thursday a sharp fall in demand from a retrenching mining industry was showing signs of levelling out. Yet it still pushed the Sandviken-based supplier to a bigger than expected fall in third-quarter earnings.
Sandvik's net profit for the third quarter was $256.14 million, 22% less than the same quarter last year. Order intake in the period amounted to $3.2 billion, a 2% drop from last year’s Q3.
The 151-year-old company has dropped 14% this year, making it one of the worst performers of 2013 so far on the Stoxx 600 Industrial Goods and Services Index.
Today’s results did not come as a surprise for anyone in the industry, especially after world's biggest maker of mining and construction gear Caterpillar (NYSE:CAT) once again cut its full-year revenue outlook yesterday, predicting a further decline in mining-related sales in 2014.