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Sandvik Mining reports positive 4Q15 results

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World Coal,

Sandvik Mining reported strong 4Q15 invoicing, despite uncertainty in the mining market. Invoiced sales rose 3% on the back of good growth in order intake for equipment during 1H15. Operating profit, however, was down 6% at SEK749 million.

“Positive development for mining equipment was reported in the fourth quarter – mainly in loading and hauling, as well as underground drill rigs – supporting total order intake [of SEK4.8 billion],” the company said.

Africa and the Middle East provided Sandvik Mining with its largest market, growing 2% and accounting for 28% – or SEK1.4 billion – of order intake in 4Q15. The largest growth in order intake was recorded in South America, however – up 39% y/y to SEK733 million. Order intake in Australia was also up slightly – by 1% to SEK736 million, while order intake was down in Europe (2%), North America (11%) and Asia (20%).

The quarter also saw Lars Engström appointed as President of Sandvik Mining, replacing Scot Smith, one of a series of new appointments to the company’s Group Executive Management following the arrival of Björn Rosengren as President and CEO of Sandvik Group in November.

Over the full year, Sandvik Mining reported growth in all of its key indicators: order intake, invoiced sales and operating profit. Order intake stood at SEK21.2 billion – up 1%; invoiced sales were SEK22.4 billion – up 1%; and operating profit of SEK2.6 billion – up 4%.

Meanwhile, adjusted operating profit – which takes out non-recurring charges of SEK86 million in 4Q15 and SEK626 million in 1Q15 – was up 33% at SEK3.3 billion.

Despite this, the company remained cautious: “The year 2015 was eventful, characterised by increasingly challenging market environment but also progress in our efforts to structurally improve operations,” said Rosengren. “Uncertainty persisted in the mining segment; however, order intake remained largely stable year-over-year, hampered by slightly softer demand in the aftermarket business.”

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