FLSmidth reports positive overall results

FLSmidth released its annual report on Wednesday and reported a five per cent order increase to DKK19.17bn (US$3.15bn) in 2017, driven by stronger offtake in the minerals division in 2H17 and by total service activities, but revenue declined one per cent to DKK18bn.

Full-year EBITA advanced 18 per cent YoY to DKK1.515bn from DKK1.289bn in 2016, while the corresponding EBITA margin rose from 7.1 to 8.4 per cent. 

"2017 probably marked the trough of the business cycle, and based on our good positioning and strong life-cycle solutions, we expect our business to start growing again in the coming years. Our order intake increased and the momentum in the mining industry continues in 2018, while cement market conditions are expected to remain unchanged," commented Group CEO, Thomas Schulz.

Divisional performance
Comparing the company's sales to the mining industry with those to the cement industry, FLSmidth reports that 46 per cent of its business revenue came from cement and 54 per cent from minerals. However, revenues related to the cement business declined 12 per cent to DKK 2.3bn while mining revenues contracted nine per cent to DKK2.7bn.

Nevertheless, the year started on a positive note for FLSmidth’s Cement division with several larger orders, but the market for new cement capacity lost some momentum in the third quarter. However, the year also saw the first OK™ mill start in Indonesia and FLSmidth received the order for a 12,000tpd cement plant in Algeria. The company also inaugurated a new office in Kathmandu, Nepal.

In terms of the company’s four operating divisions, Cement accounted for 21 per cent of group revenues, Minerals 14 per cent, while Customer Services and Product Companies accounted for 36 and 29 per cent, respectively.

Customer Services saw order intake increase six per cent to DKK6.967bn, while revenues advanced four per cent to DKK6.832bn. EBIT increased 28 per cent to DKK830m. A similar positive performance was noted for the Product Companies division, which saw order intake grow by six per cent to DKK5.623bn and revenues by 11 per cent to DK5.564bn. EBIT advanced by 17 per cent to DKK538m. For Minerals the order intake increased 17 per cent to DKK3.134bn but revenues fell 19 per cent to DKK2.586bn. EBIT stood at a loss of DKK163m. The order intake of the Cement division slipped by one per cent to DKK4.546bn and revenues fell by five per cent to DKK4.077bn. The division reported a EBIT loss of DKK111m.