Q2 sales up 28% for Metso
By Leila Steed27 July 2022
Metso Outotec has published its second quarter financial results for 2022, reporting a 28% rise in sales up to €1.29 billion (US$1.3 billion).
Year on year, the company reported an 18% increase in orders, which brought in €1.61 billion ($1.65 billion) - up €250 million ($253 million) from the second quarter of 2021.
Pekka Vauramo, Metso’s President and CEO, said: “Our orders increased 11% year-on-year in constant currencies, thanks to the strong activity and demand in the mining markets as well as our strong position and Planet Positive product offering.
“Orders received in the Minerals segment grew 40% in constant currencies, with strong growth in both equipment and services orders. Orders in the Aggregates segment were flat year-on-year, despite softening of the European markets, and the Metals segment reported somewhat low order intake due to the timing of customers’ investments.”
Pekka added: “Our sales growth of 21% in constant currencies was supported by the backlog built during the previous quarters, and both equipment and services reported double-digit growth rates.
Despite the generally “healthy underlying results”, the pressure from the increasing cost of raw materials, components, logistics and energy “is most visible in our consumables business,” said Pekka, “where the mitigation actions continue”.
Although the manufacturer is currently predicting the strong activity in the mining sector to continue in the second half of 2022, its expectations for the “flat” aggregates market in Europe are less positive, with the sector expected to decline slightly over the coming months.
Pekka said: “Following the expected softening of the overall economy due to inflation and the continuing war in Europe, we are slightly cautious regarding the activity in the aggregates market in Europe in particular.”
Metso is one of countless firms to have publicly condemned the invasion of Ukraine and has spent the past several months withdrawing its services from Russia - something that has so far cost the company a considerable sum.
“The negative impact of the wind down in the Group’s order backlog at the end of June is approximately €380 million [$385 million],” it said, adding that it has not counted any revenue from customers or contracts that are subject to European sanctions, and that it “is not taking new orders for deliveries to Russia”.
Detailing its business operations in the country, for which it had a first quarter order backlog totalling €479 million [$485 million], Metso said it “made deliveries worth €67 million [$67.8 million] to non-sanctioned Russian customers” during the second quarter of this year. However, in early July it decided “to make a provision totalling €150 million [$152 million], including wind-down and restructuring costs, which is expected to cover the remaining exposure in Russia”.
Remaining positive, Pekka said: “While volatility is likely to continue in the global economy and in our key markets, I’m confident that we are well-placed to continue delivering on our strategy, including the review of the Metals segment, as part of the continuous development of our portfolio.”