The Konecranes’ interim report January-September 2020 showed an increase in its profitability for the third quarter despite the challenges presented by COVID-19 during 2020.
In the third quarter Konecranes reported a record-high quarterly adjusted EBITA margin of 10.4%.
However, despite this port solution order intake remained at a low level in Q3 and this area of the business continues to be impacted by travel restrictions.
Rob Smith, President and CEO, Konecranes, said in a statement that the third quarter of 2020 began in a more positive environment than the second quarter.
“However, it became evident during the quarter that the global COVID-19 pandemic is far from over. This was reflected in the overall market uncertainty. Despite the improving macroeconomic indicators, global demand has not returned to pre-pandemic levels, and our business is known for being rather late cyclical. As a result, our Q3 order intake was approximately 19% lower in comparable currencies versus a year ago, including MHE-Demag,” he said.
Konecranes sales overall improved 11% sequentially in comparable currencies and were down 6.6% versus a year ago.
“The sequential development reflected the generally improved access to customer sites compared to the second quarter,” Smith explained.
“Despite the better overall situation compared to the widespread lockdowns in Q2, completing installments in the midst of ongoing travel restrictions and strict quarantines has been quite challenging.”
Speaking directly about port solutions Smith said, “Customer decision-making continues to be slow and planned investment projects are being postponed. Net sales decreased year-on-year but improved sequentially. Due to the global nature of the business, travel restrictions and quarantines impact Port Solutions the most of our three businesses. Nevertheless, the Q3 project execution was very good and Port Solutions closed the quarter with an adjusted EBITA margin of 7.1%.”
Smith said that the company has reiterated its full-year 2020 guidance. “Based on our current order book and the demand environment, we expect our net sales and adjusted EBITA margin to finish below 2019 levels.”
Finally, Smith commented on the merger with Cargotec which was announced on 1 October 2020.
“The merger is well-aligned with our strategy and our growth ambitions. The merger remains subject to regulatory approvals and other conditions to closing, and the two companies will continue as independent and separate entities until the completion of the merger.”