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UPDATE 2-Cargotec sees cost cuts helping towards end of 2013
February 12, 2013 / 10:57 AM / 5 years ago

UPDATE 2-Cargotec sees cost cuts helping towards end of 2013

* Q4 op profit 39.5 mln euros vs 37.5 mln in poll

* Sees 2013 op profit flat, sales slightly down vs 2012

* MacGregor unit op profit 41 mln euros vs f‘cast 30.5 mln

* Shares up around 3 pct (Rewrites first paragraph, adds MacGregor profit, share reaction, background)

By Terhi Kinnunen

HELSINKI, Feb 12 (Reuters) - Cargo handling company Cargotec Oyj posted higher than forecast earnings and offered the prospect of cost cuts boosting profitability later this year, setting a positive tone ahead of next month’s arrival of its new chief.

New CEO Mika Vehvilainen is due to start in March having gained valuable experience in turning loss-making airline Finnair Oyj to profit and is set to increase the pace of change at Cargotec, which is already cutting costs in response to economic uncertainties.

Vehvilainen’s appointment, announced in January, came after Cargotec last year demoted its then CEO Mikael Makinen to head the company’s marine unit MacGregor.

Reporting quarterly operating profit of 39.5 million euros before restructuring costs, down from 48 million a year ago but above an average forecast of 37.5 million, the group said its results had been helped by an improvement at MacGregor, which makes hatch covers and cranes for ships.

An upturn at MacGregor could be particularly significant given Cargotec is considering a flotation of the unit as part of its restructuring efforts.

MacGregor’s fourth-quarter operating profit fell slightly to 41 million euros, but was up on the previous quarter and beat the average estimate of 30.5 million in a Reuters poll.

Cargotec shares were up 3.6 percent at 21.65 euros by 1043 GMT, not far from a four-month high of 22.14 euros set last month.

Cargotec said it expected its 2013 operating profit, excluding restructuring costs, to be at a similar level as in 2012, while full-year sales would be slightly lower. It booked new orders worth 710 million euros in the fourth quarter, down 16 percent year-on-year.

The group set out cost-saving plans last year after cutting its full-year profit margin forecast to 5 percent from 6 percent. It said it would move some production to a unit in Poland, a shift that will result to 106 job cuts in Sweden on top of plans to cut around 105 jobs in Finland.

It said on Tuesday the positive impact of these efficiency measures would be weighted towards the second half of the year.

The group also said it would pay a dividend of 0.72 euros per share, down from 0.99 euros a year earlier but in line with its dividend target of between 30 and 50 percent of earnings per share. ($1=0.7474 euros) (Editing by Mike Nesbit and David Holmes)

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