Finnish engineering group Metso (OMX: MEO1V) reported earnings on Thursday. Orders received in 2011 were a new record for the company but a major drop in them during Q4 worried investors. Total orders grew from close to 6 billion in 2010 to nearly 8 billion in 2011. However in Q4 the process industry machinery supplier booked just 1.3 billion of them, which is 12% below Q4 2010 number.
Net sales in Q4 were just under 2.1 billion and earnings per share stood at 0.81. Free cash flow was a mere 45 million. Full-year sales were over 6.6 billion, EBITA exactly 628,5 million and EPS 2.38. Free cash flow was 14% lower than in 2010 at 375 million Euros. Board of Directors proposes a dividend increase of 10% to 1.70 Euros. This is 71% of 2011 earnings. The Board may also propose an extra dividend, situation permitting, at a later date.
Guidance for 2012 reflects the current 4 billion Euros strong order backlog. It is 2013 that the markets are worried about now. On Friday an 80 million Euro order to supply a containerboard machine for Kipas Kagit Sanayi Isletmeleri A.S’s new mill in Kahramanmaras, Turkey provided some relief. Assuming that current economic situation persist, Metso expects 2012 sales grow compared to 2011 and EBITA before non-recurring items to improve.
Mining and Construction Technology segment has been the star performer lately. Underlying demand is expected to remain good although Metso does not expect as many large orders in the beginning of 2012 as last year. Services demand is expected to remain good. Demand for automation products is expected to be good in early 2012 while pulp & paper industry activity is expected to slow down somewhat. Demand for power plants using renewable energy sources should benefit from continuous need to replace old energy sources and new capacity.
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