As Konecranes released its results for the first half 2020 the company said the demand picture remains volatile but longer-term prospects are good overall.
In a statement the company noted that global container throughput has declined due to the impact of COVID-19 and many port operators are postponing decision-making in the current environment. However, long-term prospects related to container handling remain good overall.
The current demand environment within the industrial customer segments is showing signs of improvement in Europe and North America compared to Q2; yet remaining below the year-end 2019 level.
At the moment, the demand environment in Europe is overall less volatile compared to North America. While China’s demand conditions have improved from early 2020, demand environment in the rest of Asia-Pacific is weak.
The order intake from January to June 2020 saw €581.5 million, -29.3% (-28.9% on a comparable currency basis), orders declined in all business areas. Excluding MHE-Demag, order intake declined 32.1%.
Robert Smith, President and CEO of Konecranes said in a statement that, “Konecranes reported strong Q2 results under extraordinary circumstances thanks to excellent teamwork and a performance focus throughout the company.
“Real-time demand-supply balancing and cost flexing, both enabled by our digital telemetry capabilities, as well as progressing our strategic initiatives delivered results in the quarter. With this performance, Konecranes is well positioned for the challenges to come as we continue to deal with the volatility and impact in our markets due to the COVID-19 virus.”
Compared with the first quarter the second ended in a markedly different environment, Smith noted.
“In April, many European countries and North America – our strongest regions – were in the midst of extensive physical restrictions and lockdowns due to the COVID-19 pandemic. Through the quarter the situation improved, as many countries were able to begin to ease their restrictions. In June, order intake in all our three business areas started to recover thanks to the improving overall market conditions, albeit with significant regional fluctuations.”
“Port Solutions ended the quarter with a 6.4% adjusted EBITA margin – a clear improvement compared to Q1. Net sales declined both year-on-year and sequentially due to travel restrictions and site access limitations. Order intake also decreased year-on-year and sequentially.
“While market volatility and declining container volumes have made some port customers more cautious, we continue to consider the long-term positive prospects of the business largely unchanged,” Smith said.
Despite the market volatility, the company has resumed giving guidance for full-year 2020. Based on its current order book and the demand environment, the company expects our net sales and adjusted EBITA margin to finish below 2019 levels.
“In line with our somewhat more positive market sentiment versus a quarter ago, we expect our Q3 net sales to improve sequentially. Given our ability to flex our operations, our adjusted EBITA margin is also expected to grow compared to Q2,” Smith said.