FLSmidth reports 71% order increase in 3Q18

FLSmidth has released its interim 3Q18 report and recorded a 71 per cent order increase to DKK7.164bn (US$1.102bn), on the back of two large cement plant orders in Central America at a combined value of DKK1.9bn. This brought the order backlog to DKK17.2bn, the highest level in three years.

"It makes us proud each time a customer selects us to deliver and install mission critical equipment or grants FLSmidth an important service contract to enhance productivity. At the same time, our strong order intake paves the way for advances in both revenue and earnings in the coming years," said Thomas Schulz, group CEO.

Revenue in the third quarter was up six per cent YoY at DKK4.3bn, compared to DKK4.1bn of the year-ago period. EBITA advanced four per cent from DKK336m to DKK350m, due to the higher revenue. However, the EBITA margin fell slightly to 8.1 per cent from 8.2 per cent as a result of increased costs related to digitalisation and efficiency improvements.

Cement division
Due to the large plant orders, the order intake for the cement sector increased 159 per cent YoY to DKK3.858bn in the 3Q18. Revenue also advanced 11 per cent to DKK2.083bn, compared to 1.843bn in the 3Q17. However, EBITA fell 48 per cent to DKK41m from DKK79m, with the EBITA margin decreasing to two per cent from 4.3 per cent.

"The short-term outlook for large cement projects remains stable, subdued, and pricing pressure is ongoing. Consequently, action has been taken to improve efficiency and profitability in Cement, and notice has been given to more than 100 people, globally, during the second half of 2018. The expected EBITA improvement in 2019 is approximately DKK80m (everything else being equal). FLSmidth will continue to invest in white spots, digitalisation and standardisation," said the company in its interim report.