Profit turnaround at Sandvik Construction

Sandvik Construction saw operating profit rise +78% in the first quarter of the year to SEK 213 million (US$ 31.7 million), which the company attributed to higher production volumes and greater production efficiency. Sales were up +18% compared to the same period last year to SEK 2.45 billion (US$ 365 million), however Sandvik said the increase at fixed exchange rates, for comparable machines was 11%.

Sandvik Construction was established at the end of last year, as the company split-out its mining and construction equipment divisions into two separate businesses. "The new organisation has required Sandvik Construction to gradually modify certain work methods, adjust the product range to better meet the needs of customers, introduce new sales channels and restructure the production organisation," said the company in a statement.

It is also the first full quarter that Chinese crusher manufacturer Shanbao was included in the figures, having been acquired in November last year. "A programme aimed at focussing the product offering and enhancing efficiency and profitability was initiated for Shanbao, since the company has been negatively affected by the constraints of the Chinese construction industry," said Sandvik.

Sandvik Construction's order intake for the first quarter was up +6% to SEK 2.62 billion (US$ 390 million), but the company said that on a like-for-like basis it was level with the4 first quarter of 2011. The company said it saw a particular improvement in North And South America over the quarter, with +22% and +29% increases respectively. In Asia meanwhile, order intake fell -35%, while it was roughly flat in Europe and Australia.