FLSmidth reported a 19 per cent increase in order intake for 1Q16 to DKK5.281bn (US$797m), mainly due to the receipt of a large order in a quarter which is usually quiet. Revenue fell by 20 per cent in January with the recovery in February and March unable to offset the drop. Total revenues for the quarter reached DKK3.758bn, down from DKK4.683bn a year ago. The revenue shortfall impacted on operational leverage, which led to an EBITA margin of 6.5 per cent (down from 8.5 per cent in 1Q15) despite divisional gross margins holding up. EBITA fell from DKK400m in 1Q15 to DKK246m in 1Q16.

In the Cement division, revenues reached DKK562m, some 41 per cent lower YoY, following an order intake of DKK2.082bn, up 375 per cent from DKK438m recorded in 1Q15. FLSmidth attributes the lower revenues to timing and a lower backlog at the start of the year. EBITDA fell 132 per cent from DKK54m to -DKK17m.

The company reported an unchanged market for new cement capacity with global overcapacity persisting. Regional opportunities remain, particularly in parts of Africa, Asia, the Middle East and areas of the USA. The Indian market continues to be slow but signs of optimism were noted.

In terms of orders, FLSmidth attributes its strong order intake mainly to the EUR200m supply contract for a greenfield cement plant in Algeria. In addition, upgrades in the US are also bringing in revenues.