FLSmidth expects to crystalise a loss of circa-US$145 million from its sale of non-core mining activities by the end of this year after reaching agreement with Germany’s Koch Solutions on the purchase of some of the assets for an undisclosed price.
The parties had agreed on a “positive enterprise value”, FLSmidth said.
The Copenhagen-listed company said last October post its $318 million acquisition of Germany’s thyssenKrupp Mining (TK Mining) that it would sell or wind down “risky and unprofitable” material handling system, continuous surface miner, oil extraction and other non-standard product lines, grouped under non-core business.
FLSmidth said its non-core order backlog had shrunk from about DKK3.6 billion at the end of Q3 2022 to DKK2.1b (US$305 million) at the end of March this year through “execution, re-scoping and contract terminations”.
It now expected to realise the smaller than expected segment-exit loss (versus about $175m projected earlier) from a speedier divestment.
“Koch Solutions will acquire a mix of intellectual property, order backlog, employees and facilities from FLSmidth’s non-core activities segment,” FLSmidth said.
The Koch sale involved port/terminal equipment, stockyard systems, pipe conveyors and various continuous surface mining equipment with orders worth about $58 milllion.
The transaction would not impact FLSmidth’s FY23 financial guidance, the company said.