Kennametal sales up, mining steady

US tooling and industrial materials manufacturer Kennametal has maintained its full-year US$2.05- $2.1 billion revenue projection after reporting Q2 sales of $497m, up 2% year-on-year.

The company said the key aerospace, transportation and earthworks end-markets saw double-digit yoy growth in the face of currency headwinds.

Operating income of $35m , 7.1% of sales, compared with $48m (9.8%) in the prior year quarter, with the decrease said to be primarily due to higher raw material costs (circa-$23m), wages and general inflation.

“Our second quarter fiscal 2023 results reflect strong organic sales growth and cash flow generation,” Kennametal CEO Christopher Rossi said.

“We are encouraged by the resiliency of our end markets and our expectations for the full year remain largely the same. While each quarter can present challenges in this environment, we are confident in our commercial and operational excellence initiatives driving long-term growth and profitability.”

Kennametal’s dominant metal cutting tools business generated $289m of Q2 sales; infrastructure (including earthworks), $198m. Earthworks accounted for 11% of total Q2 sales.

The company said earthworks market activity was “strong in all regions driven mainly by underground mining”.

Its group growth roadmap identifies mining and energy as underserved markets with expansion upside and Kennametal says it sees “global opportunities with large energy and mining multinationals”.

The company is forecasting Q3 sales of $520-540m with a c$20m currency headwind versus Q3 2022 from US dollar strength. Pricing gains are expected to “substantially cover raw material costs of $23m, higher wages and general inflation compared to the prior year quarter”.


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