Konecranes’ port solutions takes a deep dive in Q1

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Konecranes reveals a significant year-on-year drop in order intake for its port solutions business segment against record-high comparison period.

Konecranes has reported business figures for the first quarter of 2024, revealing a 51% year-on-year decrease in order intake for its port solutions business segment.

The decrease was reported in Americas, EMEA and APAC, with the order intake totaling EUR 248 million.

Speaking on its Q1 earnings call  Konecranes President and CEO Anders Svensson said that the comparable period was an all-time-high quarter for port order intake for the company, characterised by very strong orders, including one worth EUR 150 million.

“If we look at the current year, we got early order intake in Q4 for something that we expected to happen in Q1 actually, which boosted our Q4 numbers for last year, but had a negative effect for our Q1 numbers this year,” Svensson said.

“What we see is that the funnel is equally strong, but in this quarter we didn’t have any orders that we would define as medium or large project order intakes.”

The company said that sales execution in the business segment continued to improve, growing 10.2% year-on-year in comparable currencies. Comparable EBITA margin improved to 7.1%, mainly due to higher sales volumes. Konecranes’ port solutions ended the quarter with an orderbook value of over EUR 1.6 billion. The company also added that it has received an R&D subsidy of EUR 2.1 million during the quarter.

Overall, the company’s order intake in the first quarter was EUR 909.1 million (1,289.6), down by 29.5 percent year-on-year. The order book stood at EUR 3,046.4 million (3,281.4) at the end of March, -7.2 percent down year-on-year.

Industrial equipment’s external orders decreased 29.7% in comparable currencies against a strong comparison period. Sequentially, external orders increased 10.8%, and external sales decreased by 7.6% year-on-year.

The company’s industrial service and equipment branch is undergoing an optimization program, which has resulted in EUR 3.8 million of restructuring costs, mainly related to headcount reduction in India. As a result, Konecranes updated its restructuring cost estimate to EUR 40-50 million from the earlier EUR 30-40 million.  So far, the company has booked approximately EUR 40 million of restructuring costs.

The company’s service business segment had a strong quarter, having reported order intake increase of 3.7% and sales increase of 5.1% year-on-year.

“Konecranes had a good Q1. Group order intake remained healthy, and our delivery capability continued on a good level. Profitability improved year-on-year, and we posted a record-high Q1 comparable EBITA margin – 11.1%. Performance was particularly strong in service. Our orderbook totaled EUR 3.0 billion at the end of March, 6.8% lower than a year ago on a comparable currency basis,” Svensson said.

“Delivery capability continued at the same good level as in previous quarters. Group sales exceeded EUR 913 million and were 2.5% higher versus a year ago on a comparable currency basis. Our Q1 sales were negatively affected by the strikes in the Finnish ports, the delay impact being some EUR 15-20 million, mainly in industrial equipment.

“As for the outlook, we expect the demand environment within our industrial customers to remain healthy. Regarding our port customers, container throughput continues to be on a high level, and long-term prospects related to container handling remain good. Our Port Solutions sales pipeline includes a good mix of projects of all sizes. Quarterly order intake fluctuation is normal for the business, as the booking of orders depends on the timing of customer decision-making.”

The company expects the net sales and comparable EBITA margin to remain on the same level or to increase in 2024 compared to 2023.

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