FLSmidth's says strong momentum in service activities continued into Q1

In its Interim report for 1 January-31 March 2017, 7451 FLSmidth says it had the highest quarterly order intake from total service activities since 2012; an increase in revenue and earnings as expected, and a further reduction in net interest bearing debt and financial gearing.

However, it points out that mining companies still holding back on capital investments but intensifying dialogue on future projects, while the company’s guidance for 2017 is unchanged. It is still expected that revenue will be DKK 17-19 billion (approximately €2.3 billion-€2.55 billion)) and that the EBITA margin will be 7-9%.

“The growing momentum in the global economy is filtering through to FLSmidth's service business, while demand for equipment and projects remains largely unaffected,” says Thomas Schulz, group CEO.

“Based on our extensive knowledge from projects, products, and services, we continue to improve our competitive edge and assist our customers in their pursuit of enhanced productivity,"

“It was important that we delivered a substantial progress based on our corrective actions program. The solid momentum underpinning our service activities has continued into 2017 in both mining and cement and it is proof of a strong performance delivered by the organisation.”

Order intake increased 5% (DKK 5.561 billion from DKK 5.281 billion (€747.5 million from €709.9 million) and revenue was up 16% (DKK 4.371 billion from DKK 3.758 billion (€597.5 million from €505 million)).

Customer services and product companies were supported by the strong momentum in the after-market, and order intake from total service activities grew 23%.

While order intake in minerals increased significantly, cement fell short of the record-high order intake in Q1 2016, despite three large orders received in the quarter.

Profit rose to DKK 161 million (€21.64 million) from DKK 73 (€9.8 million) in Q1 2017, an increase of 121%.