Sweden’s Epiroc says demand for mining equipment remains high
STOCKHOLM, Jan 31 (Reuters) – Swedish mining equipment maker Epiroc (EPIRa.ST) said on Tuesday that it expected demand to remain at a high level in the near term while reporting a fourth-quarter operating profit in line with forecasts.
Operating profit for the October-December period rose to 3.24 billion Swedish kronor ($309.63 million) from 2.59 billion kroner a year earlier, in line with the 3.25 billion kroner expected by analysts polled by Refinitiv.
Order intake rose 18% to SEK 13.71 billion but fell 4% when excluding acquisitions, which JP Morgan called “disappointing”.
“Demand remained high in the fourth quarter. As I said, large equipment orders are often lumpy and we did not receive as many large orders as in previous quarters,” says Epiroc CEO Helena Hedblom in a statement.
Pareto Securities analyst Anders Rosslund said that the higher order intake was not as good as it might initially seem.
“Epiroc acquired more companies that boosted order intake, but for its equipment unit, order intake was actually down 10% organically,” he said, calling Eprioc’s outlook for continued high demand “bullish.”
Although the mining industry is grappling with the rise in inflation, they have also benefited from rising commodity prices, although these are now stabilizing.
Analysts have suggested that softening metal prices could prompt miners to cut back on investment, squeezing orders from producers such as Epiroc in the coming quarters.
Epiroc proposed a 2022 dividend of SEK 3.40 per share, up from SEK 3.00 a year earlier and again in line with the SEK 3.40 seen by analysts.
Reporting by Marie Mannes, additional reporting by Marta Frackowiak, editing by Terje Solsvik, Kirsten Donovan
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