Konecranes has seen a 26.2% rise in its third quarter order intake, which hit EUR713.7 million (USD828 million).
President and CEO Rob Smith says Konecranes delivered an impressively resilient result in Q3. “We worked hard to mitigate the impact of global component availability issues and reported an adjusted EBITA margin of 10% - our second-highest Q3 profitability ever. Thanks to our record-high order book and the continued strong commitment and performance across our whole organisation, I am confident in our plans in place to deliver the sales and adjusted EBITA margin growth we expect for full-year 2021.”
He notes that overall market sentiment continued to be good in Q3 and similar to the previous quarter, although COVID-19-related market volatility is not over. Year-on-year, Konecranes’ Q3 order intake grew 25.1% in comparable currencies, reflecting the impact on last year’s Q3 of the COVID-19 pandemic and resulting lockdowns. “Once again, we saw good order intake in our short-cycle products,” he adds.
Component availability, customer delays and other supply chain constraints continued to affect sales in Q3, with a quarterly impact of approximately EUR60 million (USD70 million). As a result, Q3 sales increased only marginally year-on-year.
Smith says the strong year-to-date order intake and sales delays resulted in the order book breaking a new record at the end of September.
He reports that Service order intake improved by 16.8% year-on-year in comparable currencies, and orders grew in all three regions. Industrial Equipment’s external order intake grew by 32.1% in comparable currencies. Net sales continued to be impacted by customer delays and supply chain constraints. In Port Solutions, activity remained high, but after three straight quarters of exceptionally strong cumulative orders, the lumpy nature of Konecranes’ project business and timing of customers’ decision-making led to lower Q3 orders in comparison to the previous quarters.
As far as projections go, Smith expects net sales to increase in full-year 2021 compared to 2020 and full-year adjusted EBITA margin to improve from 2020. “As for the component availability issues, customer delays and other supply chain constraints, we expect them to continue in Q4 and into 2022.”
“Our announced merger with Cargotec is progressing well – merger control filings and integration planning teams are making good headway. In August, Konecranes and Cargotec received an unconditional approval for the planned merger from the State Administration for Market Regulation, the competition authority in China. Over the summer, several competition authorities, including the European Commission, the UK Competition and Markets Authority (CMA) and the US Department of Justice opened phase II reviews of the merger. The dialogue and cooperation with all relevant competition authorities continues to be good, and Konecranes and Cargotec are actively working on addressing concerns raised by some competition authorities and considering ways to mitigate some of these concerns,” he says, anticipating that the merger will be completed by the end of H1 2022. The merger is being questioned in Australia.
Until all merger closing conditions are met and the deal is completed, both companies continue to operate fully separately and independently.