Cargotec double operating profits amid pricing pressures

Cargotec’s interim results for the first half of 2011 show the firm doubled its operating profits for the period backed by a strong sales performance, despite a smaller order book.

Q2 sales increased by 25% year on year from €638m to €795m bringing the first half sales figure to €1.558bn, up 31% on the €1.193bn in sales for the first half of 2010.

According to Cargotec, rapid growth in demand for loader cranes and rubber-tyred gantry cranes led an overall revival in demand for port container handling equipment and materials handling trucks, with the marine segment buoyed by high numbers of bulk vessel orders requiring support equipment.

The firm’s posted first half operating profits of €104.6m for 2011 were more than double its operating profits in the first half of 2010, partially due to €1.6m spent last year on restructuring, as well as construction of its production plant in Stargard Szczecinski, Polandia.

Cargotec’s operating profit margin for Q2 improved 1% on Q2 2010 to 6.8%, resulting in a first half increase of 2.5% to 6.7% compared to the same period in 2010.

Order intake grew 4% from €732m in Q2 2010 to €761m in Q2 2011, meaning a 19% increase from €1.33bn in the first half of 2010 to €1.58bn for the first half of 2011.

However the firm’s order book was 5% lower than at the end of the same period in 2010, at €2.3bn compared with €2.4bn in 2010.

Cargotec president and CEO Mikael Mäkinen commented: “Second quarter order intake shows that market activity has remained favourable. 25% sales growth and improved operating profit margin together with order intake support our view on the full year performance.”

With the recovery underway in the marine, industrial and terminal sectors, Cargotec is expecting sales growth of 20% for the year and an operating profit margin increase to 7% despite market pricing pressures.

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