KCI Konecranes president and chief executive officer Stig Gustavson has assured his shareholders that the company’s 1999 results will at least match 1998, despite recording a 43% fall in net income and 6% fall in sales during the first four months of the year.
Total sales for the Finnish company were FIM 1,023m ($180m) and income before tax was FIM 43.3m ($7.6m).
“The first tertial is not in itself an indicator for year-end results,” Gustavson said. He added that the outlook was stable for the special cranes division and good for maintenance services and standard lifting equipment.
The results were hit by a collapse in demand for special cranes, particularly in Asia. Income from special cranes fell 29% to FIM 260M ($46m) in the first four months of 1999 from FIM 368m ($65m) for the same tertial last year. Sales in maintenance services rose nearly 4% to FIM 471m ($83m), while sales of standard lifting equipment rose 6% to FIM 387m ($68m) and margins improved.
Perhaps more significantly, orders received were up 11% in maintenance services during the period, up 14% in standard lifting equipment, but down 58% in special cranes. Gustavson said that large swings in fortunes were typical for the special cranes business, and the fact that the group as a whole could absorb the decline in one division showed the strength and flexibility of the company.
Maintenance services remains a key growth area. The number of cranes under service contract was 159,600 as of 2 June when the results were released, up 6.2% on the end of 1998 and 24% year-on-year.
Also in June KCI Konecranes announced that the plant services division of its Konecranes Nordic Co subsidiary had acquired Imatran Käämityöliike Oy, an electrical motor repair and rewind company based in Imatra in eastern Finland.
