Denmark: FLSmidth’s sales revenue from its cement segment has fallen by 39% year-on-year to Euro199m in the first half of 2016 from Euro287m in the same period in 2015. However, its gross order intake increased by 67% to Euro388m from Euro232m although this fell year-on-year by 33% in the second quarter of the year. The industrial engineering supplier cited ‘widespread’ geopolitical crises as hampering incoming investment.
"Mining companies and most cement producers are postponing large investments and spending. They are focussing on equipment and critical spare parts directly linked to operations, as well as on services that can help to solve immediate problems and improve productivity. Our service activities are well positioned to benefit from these market conditions and we will continue enhancing our customer service offerings to maintain our competitive edge. In the light of a weak market outlook, we will continue with internal cost-reduction activities, such as supply chain and procurement optimisation, as well as management delayering. To further strengthen our revenue, we will invest in increasing our sales capacity," said Group CEO Thomas Schulz.
Specifically for the cement industry FLSmidth said that its priorities vary in different locations with cement producers in North America wanting to maximise production, producers in South America wanting to make cost savings, producers in the Middle East, Sub-Saharan Africa and southern India wanting to use cost efficiency to combat production overcapacity and producers in Pakistan, Algeria Kenya, northern India and northern Europe wanting to minimise downtime and increase production.
Overall, FLSmidth reported that its revenue fell by 19% to Euro1.06bn from Euro1.31bn. Its order intake remained stable at Euro1.29bn. Profit fell by 65% to Euro22.9m from Euro65.3m.
