INTERVIEW: Sandvik Tooling Orders Strong, Says CEO
01 February 2012 - 10:00PM
Dow Jones News
Engineering company Sandvik AB (SAND.SK) has seen continued
strong demand for its tooling unit during January, Chief Executive
Olof Faxander told Dow Jones Newswires Wednesday.
"Tooling order intake during the first weeks of January has
continued the trend we saw in the fourth quarter. The first few
weeks of this year, the market situation has been positive," he
said.
Sandvik's tooling unit's order intake increased by 21%
year-on-year in the fourth quarter to end-December. However, group
total order intake was down 7% and earnings were hit by SEK1.6
billion ($237 million) in charges related to the company's ongoing
restructuring and job cuts.
Net profit in the quarter fell sharply to SEK731 million, from
SEK2.1 billion a year earlier. Operating profit dropped to SEK1.6
billion, from SEK3.1 billion a year earlier, although when adjusted
for the charges, operating profit totaled SEK3.2 billion.
"The underlying result was very strong," Faxander said, adding
that only minor restructuring charges will be booked in the coming
quarters.
Faxander, who joined Sandvik from Swedish steel maker SSAB
(SSAB-A.SK) last year, said he expects savings from the reduced
costs to start to show gradually during 2012.
Sandvik's materials technology unit, for which the firm has
launched a new strategy and replaced management, continued to
struggle, with a 19% drop in order intake year-on year. Faxander
said his main focus in the short- and middle-term is to lift its
results.
"But in the middle- to long-run we can consider structural
alternatives--which could mean a number of things, such as changing
our ownership," he said.
At 0954GMT, Sandvik shares traded 4.3% lower at SEK96.15.
-By Katarina Gustafsson, Dow Jones Newswires +46-8-5451-3097;
katarina.gustafsson@dowjones.com
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