July 19, 2018 / 10:22 AM / a month ago

Epiroc takes steps to lift capacity as second quarter tops forecasts

STOCKHOLM (Reuters) - Swedish mining equipment maker Epiroc (EPIRa.ST) reported a larger than expected rise in second-quarter earnings and order intake on Thursday and said it was seeing particularly strong demand growth in South America, Africa and the Middle East.

The company, which makes products such as drill rigs, loaders and haulers, said it had ramped up capacity during the quarter, but noted more steps would be needed to bring its delivery capacity on par with demand.

“Customer demand for our equipment and services continued to be strong in all geographic regions,” Chief Executive Per Lindberg said in a statement.

“Also, we note that demand continues to be healthy at the beginning of the third quarter.”

Epiroc, one of the world’s largest makers of underground mining gear, has seen demand boom in recent years as metal prices strengthened.

Epiroc, (EPIRa.ST) reporting its first results since being spun out of engineering group Atlas Copco (ATCOa.ST) earlier this year, said operating profit rose to 1.81 billion Swedish crowns ($202.7 million) from 1.47 billion a year earlier, above the mean forecast of 1.73 billion in a Reuters poll of analysts.

Operating profit included costs of 181 million crowns related to the split from Atlas Copco and a change in provision for long-term incentive programs, Epiroc said.

Order intake at the firm also beat forecasts with organic growth of 18 percent. That was even higher than for top rival Sandvik (SAND.ST) which reported 15 percent quarterly organic growth for its mining unit earlier this week.

Epiroc shares rose on the results and were up 4.1 percent by 1037 GMT.

Reporting by Johannes Hellstrom; editing by Niklas Pollard and Kirsten Donovan

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