* CEO says optimism growing in mining segment
* Q2 order intake stable in mining, down 3 pct y/y
* Book-to-bill positive in mining for second straight qtr
* CEO says still no signs of life in mining exploration
* Shares up 4.4 percent
(Adds CEO comment, Boart Longyear, updates shares)
By Niklas Pollard and Johannes Hellstrom
STOCKHOLM, July 16 Mining equipment and
compressor maker Atlas Copco AB said it had detected
more a more optimistic tone in the mining sector, raising the
prospect of a recovery in the industry from a two-year slump and
sending its shares to a record high.
The Swedish company's mining customers have been retrenching
after a decade of heady expansion, as softer metals prices and
an investor backlash at the scale of investment forced major
players such as Rio Tinto and BHP Billiton to
slash billions of dollars in spending.
But Ronnie Leten, chief of the company which makes mining
gear such as drill rigs and loaders, told reporters there were
tentative signs of a turnaround in operating mines, even though
mining exploration remained depressed.
"The general feeling is that it's more positive. There is
much more optimism on the mining side than what we saw three,
four months ago," Leten told a news conference held in an old
mine beneath its Stockholm headquarters, used to test new
"When it comes to exploration I haven't seen any movement
there. I have not heard anyone talking of ... any signs of
life," Leten said. "So that is really bad."
Atlas Copco shares extended gains to trade up 4.4 percent by
1434 GMT in the wake of Leten's comments. The stock rose as high
as 207.3 crowns, surpassing a previous peak of 199.2 crowns set
earlier this month.
Cutbacks in the mining industry had weighed on equipment
sales at suppliers such as Atlas, which together with cross-town
rival Sandvik accounts for well over half the global
market for underground mining gear.
Atlas's second-quarter operating earnings fell to 4.34
billion crowns ($635.5 million) from a year-ago 4.53 billion,
versus a mean forecast of 4.31 billion in a Reuters poll of
Atlas said order intake in its mining and rock excavation
business had stabilised in the past quarter, if at a low level,
and forecast demand for the group as a whole would rise somewhat
in coming months.
Group order intake, buttressed by brisker business in its
compressor and industrial tools segments, rose 11 percent
compared with a 10 percent year-on-year rise seen by analysts.
Order bookings in its mining unit fell 3 percent on the year
to 6.46 billion crowns, a softer fall than the 11 percent fall
in the first quarter, though still a far cry from the peak of
nearly 10 billion before the mining chill set in.
"If you ask me about mining and rock excavation, what I saw
before was a bit of a flat development, maybe with a bit of a
negative trend. But I would now say it's flat with a bit
positive trend," Leten said.
While weakness persisted in the sector across Asia, Leten
pointed to signs of improvement in Australia and a better
development in North America.
Atlas and Sandvik form part of a cluster of Nordic mining
gear suppliers which also includes Denmark's FLSmidth
and Finnish companies Metso and Outotec,
which have together cut thousands of jobs since the downturn
began two years ago.
Elsewhere in the sector, Boart Longyear - focused
mainly on drilling services and selling gear to the pummelled
exploration segment - saw its shares plunge as it weighed
options stay out of administration.
Atlas Copco is first of the Nordic group to report on the
second quarter, with Sandvik - whose shares were up 2 percent -
due on Thursday.
($1 = 6.8297 Swedish Crowns)
(Additional reporting by Helena Soderpalm; Editing by Alistair