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Sandvik operating profit down 7% in 3Q15

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World Coal,

Swedish engineering group, Sandvik, recorded a 3Q15 operating profit of SEK2.33 billion – 7% down on the SEK2.49 billion operating profit made in 3Q15, according to the company’s quarterly report. Order intake dropped 8% to SEK19.73 billion as all business areas reported weaker y/y order intake.

Invoicing dropped 6% to SEK20.91 billion with only Sandvik Mining reporting growth on the back of deliveries on the solid order intake for equipment during the first six months of 2015,” said Sandvik’s acting President and CEO, Mats Backman, who will be replaced in the CEO role by Björn Rosengren on 1 November.

Sandvik Mining reported invoiced sales up 7% at SEK5.12 billion compared to SEK5.12 billion over the same period in 2014. Operating profit jumped 32% to SEK847 million from SEK640 million in 2014.

However, despite the strong results, the company was cautious on its outlook: “While invoicing was strong in the quarter, the underground mining market was characterized by increased uncertainty,” its said. “The underlying market for equipment remained largely stable, although uncertainty regarding demand increased during the period. Slight softening of customer activity for conusmables, rock tools, in the aftermarket business was noted.

Sandvik Mining recently announced that it was putting its Mining Systems business, which focuses on the design, engineering and assembly of material handling systems, up for sale. “The market for Mining Systems […] remains weak as customers continue to postpone project and consequently price pressures remained tangible. No large orders were received in the third quarter and both order intake and invoicing declined by double digits y/y.”

Overall, the company reported operating profit of SEK6.5 billion over the first nine months of they year, 14% down on the SEK7.52 billion recorded last year. Cash flow was SEK3.95 billion in the quarter and SEK9.39 billion for the nine months to September.

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