Epiroc still on record high, despite “weak” construction demand

From left: A hydraulic cutter, magnet and breaker, each attached to an excavator, are some of Epiroc’s hydraulic attachment tools.   From left: A hydraulic cutter, magnet and breaker, each attached to an excavator, are some of Epiroc’s hydraulic attachment tools. (PHOTO: Epiroc)

Epiroc has published its 2023 financial results, reporting an 11% rise in its total orders for the year and a massive 21% increase in revenues, amounting to SEK60.3 billion (US$5.78 billion).

In the fourth quarter of 2023 the company’s order intake and revenues were buoyed by high activity in the mining sector. The sector contributed several large orders to Epiroc’s balance sheets, with a single deal for digital solutions bringing in SEK250 million (US$23.9 million) alone.

Helena Hedblom, Epiroc’s President and CEO, said: “In the fourth quarter, the order intake increased to SEK14.38 billion (SEK13.7 billion in 2021), corresponding to an organic growth of 7%.

“Within mining, the activity levels were high, and we won several large orders. One of them is a multi-year order for digital solutions, which will strengthen safety and productivity at Codelco’s El Teniente copper mine in Chile.

“The total order value is SEK250 million (US$23.9 million), whereof SEK50 million (US$4.79 million) was booked in the quarter.”

She added: “It is encouraging to see that the demand for our automation and digitalization offering is strong.”

However, the company’s earnings from the construction sector were slightly less encouraging.

The company indicated that its hydraulic attachments business had been negatively impacted in last year’s fourth quarter. 

Its Tools & Attachments division saw a 6% drop in organic orders received that saw it bring in just SEK2.82 billion (US$271.1 million) in the last quarter of 2023, with its revenues for the period also down by 4% to SEK2.98 billion (US$286.2 million).

Compared to the fourth quarter of 2022, its EBIT operating profit for the division also dropped, owing in part to the planned closure of its excavator attachments tools manufacturing site in Esse, Germany, which involves restructuring costs of SEK158 million (US$15.15 million). 

Epiroc to close key attachments production plant in Germany Move to “improve competitiveness” and efficiency will affect 130 European workers

However, Epiroc did make several gains when came to construction equipment and services. Last quarter the manufacturer announced its acquisition of Stanley Black & Decker subsidiary Stanley Infrastructure - a deal that will see the company add roughly SEK 4.7 billion (US$450 million) in revenues, further strengthening its North American construction business. 

Helena said the move “is an example of how we seize opportunities in challenging market environments to build our position for the future”.

“Together, we will be a stronger supplier of hydraulic and infrastructure attachments, especially in the large and important US market, and can capitalize on a long-term global growth trend in deconstruction and recycling.”

Epiroc also acquired South Africa-based Weco Propriety, a specialist in component wear parts for equipment, in bid to expand its spare parts in the “growing” African market.  

Commenting on the company’s overall 2023 performance, Helena said: “2023 was a year defined by major achievements .Overall, the order intake increased 11% to SEK59.33 million (US$5.69 billion), supported by a strong mining business, while demand from construction customers was weak.”

She added: “To conclude 2023, I would like to express my gratitude to everyone at Epiroc. Your skills and hard work have led to another successful year.

“Onwards, we will continue to deliver on our strategy to provide our customers with the best solutions to strengthen their safety and productivity, reduce their emissions, and ultimately improve their results. On that note, I want to say thank you to all customers and investors who have placed their trust in Epiroc. We will do our utmost to make 2024 an even better year.”

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