FLSmidth sees strong 1Q22 revenue growth

FLSmidth has reported strong revenue growth in the first quarter of 2022, driven by a high order backlog. Organic group revenue advanced by 23 per cent YoY over the three-month period. Including currency effects, revenue was up 27 per cent to DKK4706m (US$669.65m), primarily due to a 56 per cent increase in capital revenue. Group EBITA improved by 59 per cent to DKK302m, while the group EBITA margin increased from 5.1 to 6.4 per cent. 
 
According to the company, much of the revenue growth was driven by mining, which saw a 30 per cent organic revenue uptick in the 1Q22 on the back of not only the higher backlog but also improved market conditions, partly offset by the negative impact of the Russia-Ukraine conflict. Meanwhile, cement revenue advanced by 10 per cent and cement EBITA continued the positive trend seen in the 4Q21. Cement EBITA for the 1Q22 came in at DKK53m with the EBITA margin increasing to 3.6 per cent, compared to -1.7 per cent in the 1Q21. 
 
Group order intake increased 35 per cent organically, driven by both mining and cement. Capital orders were up 59 per cent while service orders grew by 26 per cent. The mining order intake improved by 38 per cent while the cement order intake was up 28 per cent organically. 
 
Despite the war in Ukraine, FLSmidth has maintained its guidance for 2022 with revenue of DKK5.5-6bn in the cement business, giving a group revenue of DKK17.5-19bn. The cement EBITA margin for 2022 is estimated at 1-2 per cent, giving a group EBITA margin of 6-7 per cent. However, “Guidance for 2022 is subject to increased uncertainty due to the pandemic, global supply chain situation and geopolitical turmoil,” warns the company.