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Konecranes satisfied with 2010 results

Thursday, 10 Feb 2011 ( #500 ) - Hyvinkää, Finland
News Story
Demand for Konecranes’ products and services increased in 2010 and the company’s performance was boosted by an excellent fourth quarter.

Konecranes CEO Pekka Lundmark says the company "has every reason to be satisfied" with its 2010 financial result. "Our operating margin, before restructuring costs, actually increased from 7.1 to 7.4%, which is an achievement that our team should be particularly proud of in a year of declining sales."

Lundmark adds that the company’s variable costs like in-house manufacturing and material procurement expenses "developed well" and helped increase its sales margin, despite the price erosion that took place in smaller and more standard equipment.

"The market conditions affecting our industry took a positive turn in the second half of 2010, after some 1.5 years of very low demand among our most important customer segments. This improvement was driven by gradually improving capacity utilisation rates in our key markets," Lundmark says.

Recovery remains fragile as many of Konecranes’ customers continue to be cautious about investing in new equipment, but "excellent fourth-quarter orders" boosted the company’s total equipment orders in 2010. Demand for services was strengthened in 2010 and recovery was strong in emerging markets and North America.

"The weak point continued to be equipment demand in the large markets of Western Europe," Lundmark says.

However, Lundmark says Konecranes will increase its development spending this year. It is one of the "most important pieces of [the company’s] strategy".

"We have several important new products and services in the pipeline, some of which will hit the market this year," he adds.

For 2010, Konecranes received orders worth EUR1.536 billion (USD2.094 billion), which is 13.9% higher than 2009’s EUR1.349 billion (USD1.839 billion). Konecranes’ total sales for 2010 were EUR1.564 billion (USD2.132 billion), 7.5% lower than the previous year’s EUR1.671 billion (USD2.278 billion).

During the fourth quarter of 2010, Konecranes’ sales grew 9.5% from EUR469.5 million (USD640.2 million) compared to the corresponding period in 2009 (EUR428.9 million/USD584.8 million). The order intake was EUR477.7 million (USD651.4 million), 32.3% higher than 2009’s EUR361.1 million (USD492.4 million).

Separately, Konecranes approached Demag Cranes AG to discuss a potential merger of the two companies on 8 September 2010. The company says Demag Cranes’ management is not interested in discussing a merger and, as such, Konecranes is no longer pursuing it.
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