By Christina Zander
STOCKHOLM--Sandvik AB (SAND.SK) Chief Executive Olof Faxander
said Thursday the impact of lower oil prices on the company's
business is "difficult to asses," but he is prepared to cut costs
if order volumes fall.
The company, which makes tools for the mining, construction and
energy sectors, has seen a higher level of caution among customers
in the energy segment, Mr. Faxander said in reference to the
company's fourth-quarter earnings.
The oil and gas industry accounts for about 8% of Sandvik's
total sales.
"Lower investments in the oil and gas sector would naturally
have a negative effect on Sandvik," Mr. Faxander said in a
conference call.
He said customers in the energy sector haven't canceled any
orders yet, but Sandvik's Varel Energy Services unit has already
started to cut costs because of lower demand in the wake of lower
oil prices.
Sandvik reported Thursday a fourth-quarter net profit of 1.50
billion Swedish kronor ($183 million), up from SEK46 million in the
same period a year earlier. Sales rose to SEK23.39 billion from
SEK21.77 billion. Operating profit rose to SEK2.62 billion from
SEK590 million.
Shares closed at SEK79.95 Wednesday.
Write to Christina Zander at christina.zander@wsj.com
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