SDVKY Sandvik AB (PK)

   By Dominic Chopping 
 

STOCKHOLM--Swedish engineering company Sandvik AB (SAND.SK) Friday posted a drop in third-quarter net profit after seeing all of its business areas experience weaker order intake.

Sandvik, which makes tools for customers in the mining, construction and energy sectors, said net profit in the three months ended September 30 was 236 million Swedish kronor ($27.9 million), down from SEK1.46 billion in the same period last year. However, included in the most recent quarter is a SEK1.02 billion cost related to the previously announced sale of its Mining Systems unit.

Sales fell 1% to SEK20.75 billion while order intake fell 8% to SEK19.73 billion.

"Operating profit declined by 7% and the operating margin contracted to 11.2%, as the positive impact from changed exchange rates and savings generated by ongoing cost-reducing actions did not off-set the negative impact on operations from lower volumes," said Chief Financial Officer and acting Chief Executive Mats Backman.

In the last few years, Sandvik's profitability has been hit by low demand in the mining sector, and the company said in its second-quarter earnings that mining demand had declined further in Europe and Asia, although it did see some relative strength in North America. Cost saving measures have so far done little to lift margins.

At 0733 GMT shares traded 1.8% higher at SEK78.55.

-Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @WSJNordics

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(END) Dow Jones Newswires

October 23, 2015 03:52 ET (07:52 GMT)

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