FLSmidth affirms 2012 outlook

FLSmidth has affirmed its outlook for full-year 2012 as a strong order intake in 1Q confirms growth expectations and positive outlook.

For the first three months of 2012, FLSmidth’s order intake increased 29% to DKK6421m and revenue increased 17% to DKK5145m. EBITDA rose 10% to DKK 469m. The profit for the period increased 39% to DKK 241m

In terms of its cement division, the company said 1Q12 saw a very strong order intake of DKK 1,415m representing an increase of 169% compared to 1Q11 (1Q11: DKK527m) and a sequential increase of 27% (4Q11: DKK 1114m). “In general, proposal activity is high and the project hotlist is encouraging, although competition remains fierce,” the group said in a statement.

It highlighted that the Indian cement market remains subdued as a consequence of high inflation, high interest rates as well as slow political decision making and postponed infrastructure investments. “However, based on discussions with customers and actual inquiries received, investments in new cement capacity in India could possibly rebound in the second half of 2012,” FLSmidth noted.

Cement revenuew declined 25% to DKK 859m in 1Q12 due to lower order intake in previous years. EBITA declined 23% to DKK93m as expected by the group, equivalent to an increased EBITA margin of 10.8%.

Both revenue and order intake is expected to be slightly increasing in 2012. The EBITA margin is expected to decrease as the order backlog is running out of high margin orders taken in pre-crisis years (2011: 11.3%).

Overall, for full year 2012, FLSmidth still expects consolidated revenue of DKK24-26bn exclusive of acquisitions (2011: DKK 22bn), an EBITA margin of minimum 10% (2011: 10.9%) and an EBIT margin of 9-10% (2011: 9.9%).