Engcon reports ‘stable profitability’

Krister Blomgren says the continued high activity in the Americas is pleasing to witness. (Photo: Engcon)

While the last three months of 2022 saw the company’s order intake decline by 29% SEK553 million (US$51.1 million), its net sales increased to SEK541 million ($51.9 million).

This is up 46% on the  SEK370 million ($35.5 million) the company brought in for the same period in 2021 - with operating profits also up 57% on the previous year to SEK 121 million ($11.6 million).

Overall this resulted in a fourth quarter profit rise of 20%, to SEK 90 million ($8.6 million), up from SEK75 million ($7.1 million) in the fourth quarter of 2021.

Krister Blomgren, Engcon’s CEO, said: ”We end a historic year in which the company took the step of entering the stock market with our strongest ever quarter in terms of sales. Operating profit and profitability exceeded our financial targets and a strong order book provides security for the quarter ahead.

Commenting on Engcon’s past twelve months of business, Krister said: “The year began with a larger price hike to compensate for increased supplier prices combined with component shortages, long lead times and the outbreak of war in Ukraine. Considerable pre-ordering and bunkering effects as a consequence of price hikes and long lead times resulted in a large proportion of orders being brought forward in the fourth quarter of 2021 and the first quarter of 2022.”

Engcon’s fourth quarter results meant that for the whole of 2022 the company saw an order intake rise of 1%, up from SEK1.96 billion ($188.7 million) in 2021 to SEK1.97 billion ($189.9 million).

2022 net sales also increased by 30%, from SEK1.48 billion ($138.9 million) in 2021 to SEK1.93 billion ($186 million), with profits last year amounting to SEK325 million ($31.2 million) - a rise of 21%.

“Combined with increased economic uncertainty, inflation and interest rates, this led to an expected downturn in Nordic and European markets in the fourth quarter compared with exceptional comparative figures. Despite this, the order intake was at a high level when seen from a long-term perspective.

“The positive earnings and profitability trend during the year is testament to our ability to meet and handle the challenges that result from an uncertain business environment and this is strengthening us for times ahead,” said Krister.

“The continued high activity in the Americas is pleasing to witness. Our overall solution is attracting the US market, where we see considerable growth potential.

“It is worth noting that there was a break in the trend in 2022, with growth markets recording higher order intake than the Nordic region for the first time, thus making us less dependent on the mature market’s more cyclical excavator sales.”

Looking to the future, Engcon plans to continue investing in its third generation tiltrotator system and expand its sales network, with an increase in its production capacity in Poland.

Krister said: “Combined with a strong order book, shorter delivery times and a higher rate of production this provides us with a solid platform for continued growth and stable earnings despite being faced with a market that is difficult to predict.”