Cement weighs on FLSmidth outlook

Staff reporter

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FLSmidth CEO Mikko Keto

FLSmidth CEO Mikko Keto says the group expects a “relatively stable mining market” to continue to offset deteriorating conditions in its cement business in the remainder of 2023, and has maintained its recent firmer full-year guidance.

The Danish manufacturer said earlier this month it expected to post full-year revenue of 24 billion Danish kronor (DKK), or about US$3.5 billion, with the mining business contributing DKK17b (US$2.48b) and cement DKK6b (US$880 million). The latter would weigh down the group’s full-year 5.5-6.5% EBITA margin (mining at 10-11%).

Group revenue in H1 2023 was DKK12.41b versus DKK9.73b last year. EBITDA was DKK737m compared with DKK770m in the same period in 2022.

Keto said mining’s improved 10.8% June-quarter EBITA margin was achieved on 23% higher revenue (versus the same period in 2022), “driven by service”.

“Our mining business has seen good revenue growth and continued improvement in underlying profitability in a relatively stable mining market,” he said.

“This has primarily been driven by strong execution in the service business coupled with a better-than-expected progression of the Mining Technologies [former thyssenkrupp mining business] integration.

“This positive development was offset by delays in some customers’ larger investment decisions, mainly in the products business.

“While our cement business remains on target for the full year, its short- to mid-term market outlook has deteriorated.”

Cement business orders declined 33% yoy in Q2.

Mining order intake increased by 6% yoy.

Copenhagen-listed FLSmidth’s share price is down more than 10% over the past month, capitalising the company at about DKK16.4 billion (US$2.4 billion).


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