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Epiroc has released its Q3 interim report, please find below the highlights as detailed by the company together with the comments from the CEO. A full copy of the report is available from the link at the bottom of the comments.
• Orders received increased 17% to MSEK 14 360 (12 322), supported by strong organic growth and acquisitions. The organic increase was 9%.
• Adding back the removal of the Russian order book in Q3 2022 of MSEK 1 002, the organic growth was flat.
• Revenues increased 17% to MSEK 14 997 (12 802), organic increase of 7%.
• Operating profit increased 12% to MSEK 3 260 (2 900), including items affecting comparability of MSEK -12 (-164).*
• Operating margin was 21.7% (22.7), and the adjusted operating margin was 21.8% (23.9).
• Basic earnings per share were SEK 1.85 (1.86).
• Operating cash flow was MSEK 1 889 (1 814).
CEO comments
High demand in mining
The order intake increased 17% to MSEK 14 360 (12 322). The demand and activity level remained high within mining, and several large mining equipment orders were won. It was a particularly strong demand for automation and connectivity solutions. Construction customers, on the other hand, were more tentative. As anticipated, the demand in the third quarter was seasonally weaker than in the previous quarter. In the near term, we expect that the underlying mining demand, both for equipment and aftermarket, will remain at a high level. Demand from construction customers is expected to be soft.
Strong revenues
Revenues increased 17% to MSEK 14 997 (12 802), driven both by acquisitions and the organic development. The operating profit, EBIT, increased 12% to MSEK 3 260 (2 900). The adjusted operating margin decreased to 21.8% (23.9). While it was supported by currency, investments in R&D and marketing impacted negatively, as did product mix. The dilution from acquisitions was -1.0 percentage points on the Group operating margin.
Cash flow
Operating cash flow increased to MSEK 1 889 (1 814), supported by higher operating profit. The working capital is still at a high level. We are taking measures to optimize and reduce inventories and expect that ratios will gradually improve.
Partnership is the new leadership
In the quarter, we won our largest-ever order, MSEK 700, to provide Kamoa Copper in Democratic Republic of the Congo with underground equipment. After several years with local presence and highly skilled and committed service technicians on site, the collaboration between Epiroc and Kamoa Copper has deepened into a real productivity and sustainability partnership. It is especially exciting to contribute to the success of the Kamoa-Kakula Copper Mining Complex, as it is projected to be among the world’s lowest greenhouse gas-emitting copper mines per unit of metal produced. The ordered machines have several advanced features, such as Epiroc’s telematics system, which allows for intelligent monitoring of machine performance and productivity in real-time.
Safety on the top of the agenda
With more advanced technology – namely automation, digitalization, and electrification – it is more likely that Epiroc will also perform the service on the equipment. This drives both revenues and profit. The increasing number of service technicians in the field comes with a great responsibility. We must make sure all our employees always act with safety in mind. Several actions have been taken to reduce injuries and we have a positive trend in the development of our safety indicators. That said, I am very sad to share that we have lost an employee in a fatal accident in the quarter. Safety is our top priority and it is crucial that all Epiroc employees come home safe and sound after the working day. To everyone reading this; please, never compromise on safety.
Helena Hedblom, President and CEO
For more information: https://news.cision.com/epiroc/r/epiroc-interim-report-q3-2023,c3864250
