ENGCON has revealed that an ‘extraordinary order book and stable margins’ has provided a ‘strong’ third quarter for the attachments specialist.
Order intake in Q3 2022 is down 5% but net sales increased by 16%, with organic net sales growing by 11%. Operating profit rose 14% to SEK 104 million and the operating margin was 25%.
For the year 2022 as a whole to date, order intake is up 19%, net sales have increased by 25%, and operating profit has risen by 19%. The operating margin for January to September was 21%.
CEO Krister Blomgren said, “An extraordinary order book and stable margins resulted in a strong third quarter. Demand was lower in the Nordic region while other geographical market regions reported growth. Net sales for the quarter grew organically by 11%, with the increase attributable to the Nordic region and Europe while delivery lead times impacted sales in the Americas and Asia-Oceania.
“Delivery capacity improved during the end of the quarter but was impacted by challenges involving certain components and we are now seeing a stable, higher rate of production with shorter lead times as a result. We expect lead times to be further reduced in the next few quarters even if we continue to be affected by the availability of certain components.
“It was a stable quarter in terms of profitability, with an operating margin of 25% despite higher costs for the ongoing change of group-wide business systems. We view the quarter’s strong gross margin of 45% as a result of our price increases compensating for cost increases and energy surcharges in the supply chain.
“We also believe that the price increases implemented in 2022 will have a further impact in the quarters ahead. To compensate for further cost increases, we announced a new 5% price increase for customers after the end of the year.
“Overall, we are pleased with the earnings and profitability trend in the third quarter. At the same time, there is scope for a higher rate of production and shorter lead times. The prevailing macro and global situation means that order intake in the quarters ahead is difficult to predict. However, we are well equipped to meet future challenges.
“We continue to focus on strengthening our position as an industry-leading innovator of tiltrotators as there is a global and long-term need for more sustainable and resource-efficient digging.”
