Epiroc orders up by 16% in 2018

Sweden-based 8798 Epiroc received orders worth SEK39,400m (€3,783m) in full-year 2018, up by 16% on the SEK33,831m (€3,248m) total for the previous year.

The company says it achieved "strong growth in both top and bottom line" in the first year it has operated as Epiroc.

Epiroc's parent company 385 Atlas Copco announced in 2017 that its business would be split into two from 1st Janaury 2018. Atlas Copco now focuses solely on industrial customers while Epiroc caters for customers involved in mining, infrastructure and natural resources. The split is said to ensure that both Atlas Copco and Epiroc have the best growth opportunities in their respective market segments.

Epiroc president and CEO Per Lindberg said the company had a strong finish to 2018, with orders received in Q4 (October to December) up 17% to SEK9,468m from SEK 8,058m in Q4 2017.

Operating profit increased by 25% year-on-year from SEK5,930m (Q4 2017) to SEK7,385m (Q4 2018).

"The customer demand for our equipment, services and tools remained at a good level during the quarter," said Lindberg. "In mining we continue to see that the majority of the equipment orders are for expansion, including also some orders for greenfield projects. The demand remained robust in infrastructure. Our aftermarket business was supported by the high activity among our customers and achieved strong growth.

"The mineral prices did not change materially during the quarter and our customers seem reasonably confident about the future. While we expect the demand to continue to remain at the current level in the near-term, there are uncertainties related to the development of the economic cycle and global trade tensions."

Epiroc has set a target of growing at least 8% per year on average over a business cycle. Lindberg said the company grew well beyond thisin Q4 and in 2018, but added that it needs to continuously make acquisitions to secure long-term growth as well as access to new technologies, markets and geographies.

In October 2018 Epiroc took a 34% stake in US-based ASI Mining, whose products include on-board hardware and software that converts vehicles to autonomous operation.

Epiroc has also reached agreements to acquire Canadian drilling tool maker Fordia, South African underground rock reinforcement company New Concept Mining and Estonia-based mining equipment distributor Sautec.

Lindberg commented on the acquisitions: "This will strengthen our position in exploration, rock reinforcement and service, and add some SEK1.2bn in annual revenues."