By Greta Rosen Fondahn
STOCKHOLM (Reuters) -Sweden’s Sandvik reported a jump in quarterly orders on Monday, benefiting from strong demand for its mining equipment amid a run for safe-haven gold, while currency effects dampened its third-quarter profit.
Shares in the company, often seen as a gauge of industrial demand given its broad customer base and short lead times for orders, were up 2.6% at 1225 GMT and up nearly 40% so far this year, after it reported a 16% organic rise for the July-September quarter.
“This is driven by high prices for gold, copper and other metals, which means that our customers have a great need to expand and use our products in their production,” CEO Stefan Widing told reporters.
He said that for now, the company was able to meet the increased demand for equipment.
About 60% of Sandvik’s commodity exposure in its mining business area, its largest business operation, is to gold and copper, which both recorded strong price gains this year.
Operating third-quarter profit before amortisation and items affecting comparability fell 6% from a year earlier to 5.54 billion Swedish crowns ($588.39 million) against a mean forecast of 5.77 billion in an LSEG poll of analysts.
Widing said in a statement Sandvik continued to mitigate the impact of tariffs through surcharges, a strategy it had successfully applied in the previous quarter, but negative currency effects affected its earnings margin.
Last year, the U.S. market accounted for 14% of Sandvik’s revenues.
RBC analysts described the third-quarter report as a “very robust set of numbers”, saying that while revenues and earnings were a “touch below” estimates this was mainly due to currency effects.
($1 = 9.4155 Swedish crowns)
(Reporting by Greta Rosen Fondahn, editing by Stine Jacobsen, Kirsten Donovan and Tomasz Janowski)
