Swedish stainless steel producer Sandvik group reported a 38pc fall in operating profits in Q2 to SEK2,858mn ($314.6mn) driven by a steep decline in revenue and order intake due to the pandemic.
Sandvik’s chief executive officer, Stefan Widing said that the company faced its biggest drop in orders amid declines in the automotive and aerospace sectors. Mining activity was also affected by mine closures.
In the second quarter, the company posted revenue of SEK20.2bn ($2.2bn), a decline of 20pc over the prior-year period. EBITDA stood at SEK 3.4bn ($368mn), down by 66pc over Q2 2019.
Sandvik Mining and Rock Technology
Orders dropped by 10pc to $1bn, with a majority of them for underground mining tools from Australia, the Middle East, and South Africa.
Sandvik Machining Tools
Order intake declined by 35pc to $750mn driven by the plummeting production in the automotive and aerospace sectors across Europe and North America. Chinese imports rose marginally in Q2. Revenue dropped 32pc to $798mn.
Sandvik Materials Technology
Order intake dropped by a third to $257mn. The company noted an operating loss of $9mn. A large order for nuclear housing material was booked from China leading to positive year-on-year growth for the company’s Asia division. Tube products suffered due to weak oil and gas markets. Demand for heating materials and heating systems also saw a decline.
In the past year, Sandvik divested 70pc of its Varel division and used these proceeds to acquire Newtrax in Canada, Thermaltek, Melin Tool and Summerill Tube in the US and Quimmico Centro Technologies in Mexico to strengthen its hold in the North American market for its core products.
(SEK = $0.11)