KCI Konecranes has reported a strong improvement in profitability in 2001, but a downturn in orders received.
The company made a 51% increase in net profits for 2001 to Euro 35.3m, and a 7.6% rise in sales to Euro 756.3m. Pre-tax profit was up 54% to Euro 52.4m. The corresponding profit margin was 6.9% compared to 4.8% in 2000. However, orders fell 11% on the previous year’s record figure.
A significant part of the improvement in profitability was attributed to the introduction of the new wire rope hoist platform which is sold variously as the Konecranes CXT, the Verlinde VT1 and the SWF Nova. This hoist family is cheaper to produce than predecessor families. Further financial improvement is promised with the introduction this year of bigger units in the range.
While total new orders fell in 2001 for the first time in many years – down 11.2% to Euro 679m – president and CEO Stig Gustavson said that he believed the company would return to growth this year. Maintenance Services and Standard Lifting Equipment segments saw sales fall in the immediate aftermath of the 11 September terrorist attacks in the USA, but this effect began to wear off in January 2002.
Growth in sales and profits in 2001 was recorded in all geographical areas except the Americas, which fell slightly. Sales growth was strongest in Asia-Pacific and Nordic and Eastern Europe. Most of the growth was organic as there were no major acquisitions in 2001.
The Standard Lifting Equipment division recorded sales of Euro 245m, down 3.4% on 2000’s figure. The fall was attributed to US subsidiary R&M discontinuing production of hoists described as ‘out of date’. Low cost production of the new hoist platform helped the division’s profits rise 30% to Euro 29.2m. Operating income margin increased from 8.9% in 2000 to 11.9%. Orders received fell nearly 11% to Euro 229m. Corrected for discontinued products the orders decline was 5.5%.
Special Cranes sales were up 20% to Euro 227m. Operating profit in this division rose 24% to Euro 17.1m. Orders received fell 26% to Euro 209m, but only because of a single Euro 75m order received in 2000 – that one-off contract excluded, orders remained steady. In mid 2001 Konecranes launched a ship-to-shore container crane, the BoxHunter. Soon after market introduction three orders for six cranes were booked. Special Cranes’ growth is expected to continue in 2002, but at a more moderate level.
Maintenance Services sales rose 7% to Euro 365.2m. Operating profit rose 13% to to Euro 24.1m, with margins rising slightly from 6.2% of sales to 6.6%. The new harbour crane maintenance business unit, KCI Koneports, formed in 2000 by combining the existing harbour crane maintenance activities with the acquired Noell Konecranes and Caillard port activities, secured sales of Euro 60m.
It was a quite year for acquisisitons, by Konecranes’ standards. In November Konecranes acquired a business in the USA that specialises in crane electric drives and modernisations, with annual sales of about Euro 3m. However, Konecranes said that its acquisitions policy was still alive and difficult market conditions would only throw up more acquisition opportunities.
