Metso sees 14% decline in year-on-year orders
25 July 2024
Metso has published its 2024 second quarter financials, reporting a 14% decline in orders received and a 13% decline in sales, compared to the same period in the previous year.
Metso President and CEO Pekka Vauramo. (PHOTO: Metso)
For the April to June period, the company’s orders received came in at €1.16 billion, compared to €1.34 billion in Q2 of 2023, which reflects a 23% drop in equipment orders and a 6% drop in services.
Similarly, its sales for the period decreased from €1.39 billion in 2023 to €1.21 billion, with the manufacturing saying that the “delayed decision-making” it had seen in the first quarter of this year in the customer market, had continued.
Pekka Vauramo, Metso’s President and CEO, said: “We maintained robust profitability during the second quarter, thanks to our focused actions.
“However, market dynamics evolved as anticipated: customer decision-making remained slow in Minerals, and Aggregates faced challenges in the North American mobile equipment market.
“Consequently, our total order intake declined by 14% year-on-year, primarily due to a decrease in equipment orders. Although the services businesses remained more stable, the aforementioned issues led to a slight decline in services orders, which were further affected by exchange rates.”
Despite the declines there were some positive developments: “Thanks to a healthy gross margin, supported by ongoing cost management and a higher proportion of services in the sales mix, we achieved an adjusted EBITA margin of 16.9% for the quarter,” said Pekka.
“This confirms that we are making progress in fortifying our financial performance against cyclicality.”
Additionally, Metso’s cash flow from operations increased significantly, rising from €62 million in the second quarter of 2023 to €152 million this year.
While the company’s Aggregates segment sales declined 14% compared to the previous year, primarily due to reduced orders in the preceding quarters, the segment did achieve a solid adjusted EBITA margin of 16.6%, “underscoring the effectiveness of efforts made to enhance business resilience”.
Metso’s Minerals division saw similar results. Despite a sales decline of 13% in the quarter, it also reported an adjusted EBITA margin of 17.3%.
“This positive performance can be attributed to the favorable impact of effective cost management and sales mix on the gross margin,” said Pekka.
“Notably, during the quarter, we received a substantial order from India for recycling electronic waste. Our e-scrap solutions offer compelling opportunities for customers by enabling the recovery of valuable metals from waste.”
Although Metso expects market activity in both Minerals and Aggregates to remain at their current levels. Pekka said: “We anticipate that customer decision-making in Minerals will gain momentum during the second half of the year, driven by favorable copper prices.”
The CEO added: “However, in Aggregates, activity is expected to continue at a lower level year-on-year. This can be attributed to the surplus of distributor inventories in the North American mobile equipment market.”
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