(Reuters) - Finnish engineering groups Metso MEO1V.HE and Outotec (OTE1V.HE) said on Thursday the merger of their main mining equipment businesses was on track for a mid-year close, despite a hit to machinery demand from the coronavirus crisis.
Metso said its operating profit for the January-March period fell 27% to 73 million euros ($79 million) as a result of lockdowns of its sites in several countries and lower demand, particularly in its aggregates equipment business, which includes machines like crushers, screens and feeders.
Outotec, which reported its operating profit for the same period dropped 27% from a year earlier to 9.3 million euros, echoed Metso’s comments on the pandemic’s impact.
“Market activity and visibility in the minerals processing and metals refining market have weakened. The timing of larger investments in particular is uncertain,” Outotec said.
Metso said in July 2019 it planned to merge its main minerals unit with smaller rival Outotec, creating one of the leading machinery suppliers to minerals processing companies globally, with annual sales of 4.2 billion euros.
“There are some approvals from competition authorities still pending, but we are working to obtain them so that we could close the transaction in line with the previously disclosed estimate of June 30, 2020,” Metso CEO Pekka Vauramo said.
Shares in Outotec fell 2.8%, while Metso was 1.6% lower.
Reporting by Tarmo Virki in Tallinn; Editing by Alexander Smith