FLSmidth boss positive despite weaker quarter

Staff reporter

Equipment market soft despite recent increases in copper and gold prices

Denmark’s FLSmidth has maintained its 2024 full-year financial guidance despite double-digit falls in first-quarter mining and cement division revenues and a softer mining market.

The company, which is in the midst of exiting cement to focus on its mining equipment and service business, said Q1 mining revenue dipped 14% year-on-year to DKK3.581 billion while cement dropped 24% yoy to DKK1.208 billion.

Cement EBITA came in at DKK57 million, down 16% yoy, while mining EBITA gained 35% yoy to DKK370 million.

Group order intake decreased by 7% yoy.

Mining services, double the size of the products business, saw a 11% yoy fall in Q1 revenue to DKK2.4 billion.

FLSmidth said the mining service revenue decline was primarily due to lower spare parts and consumables sales “driven by timing of order execution” plus the group’s ongoing exit from “basic labour services”.

“Products revenue decreased by 21% due to continued de-risking of the order backlog and timing of backlog execution.

“Looking further into 2024, the service market is expected to remain stable and active, and we continue to see a steady inflow of customer service enquiries from miners aimed at improving their operating performance through continued investments in productivity and sustainability solutions.

“The products market is inherently more volatile, and demand currently remains soft, albeit with a prevailing demand for products offering high-efficiency and sustainability solutions.”

FLSmidth CEO Mikko Keto said separation of the company’s mining and cement businesses was progressing according to plan.

“The market dynamics in the mining industry remain unchanged compared to prior quarter,” he said.

“Consequently, we continue to see a stable and healthy service market, whereas the products market – despite the recent increases in key commodity prices such as copper and gold – remains softer due to persisting hesitation by some customers on larger investment decisions as well as continued permitting issues in many countries.

“The good start to the year makes us confident that we can achieve both our ambitions for 2024 as well as our long-term targets.”

Full-year revenue targets remain DKK16-17 billion for mining and DKK4-4.5 billion for cement, with adjusted EBITA margins at 11.5-12.5% and 5.5-6.5%, respectively, for the year.


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