FLSmidth releases 1H14 Interim Report

FLSmidth has reviewed and approved the company’s Interim Report for the six months to 30 June 2014.

Highlights

• Guidance unchanged.
• Significant improvement in margins.
• Order intake declined due to lack of large orders, whereas unannounced orders were stable.
• Positive operating cash flow.
• Net working capital and revenue developed broadly as expected.

Financial results: 2Q14 (compared to 2Q13)

• Order intake decreased 17% to DKK4643 million.
• Order backlog decreased 20% to DKK21 713 million.
• Revenue decreased 19% to DKK5577 million.
• EBITA increased 52% to DKK472 million, corresponding to an EBITA margin of 8.5%.
• EBIT increased 76% to DKK381 million, corresponding to an EBIT margin of 6.8%.
• The profit increased 67% to DKK237 million.
• Cash flow from operating activities amounted to DKK224 million.

Market trends

Commenting on the results, FLSmidth stated:

“Prospects for the global economy suggest that a more firm upturn is underway albeit with significant regional differences. Developing countries have by and large recovered from the financial crisis and most of the acceleration in global growth is expected to come from high-income countries.

“Short-term, the improvement in many high-income countries alone will be insufficient to generate a substantial increase in business activity. As an example, cement plant utilisation rates are increasing across Europe as growth is recovering. However, as utilisation rates are coming from relatively low levels, a short-term pick-up is insufficient to reach the typical threshold for large capital investments.

“Therefore, even if global growth in cement consumption outside of China is expected to accelerate slowly, no rapid lift in investments on a global scale should be expected, but rather slightly improved situation with good local or regional opportunities. In summary, the activity level for cement in 2014 is expected to be slightly higher or similar to 2013, and a real recovery is not expected to commence until 2015, depending on overall global economic growth and business sentiment.”

Outlook

“The demand for cement and minerals will continue to grow, reflecting growing global wealth, a growing global population, and societal changes in the developing countries where the growing middle class is boosting demand for infrastructure and consumer goods. Thus, the longer-term outlook remains encouraging for both cement and minerals.”

The full report can be accessed on FLSmidth's website.

Adapted from press release by Katie Woodward

Read the article online at: https://www.worldcement.com/europe-cis/13082014/flsmidth-1h14-results-186/