- Q2 order intake down 20% at 10 bln SEK
- Alfa Laval sees somewhat higher Q3 group demand than Q2
- 12% miss on orders uptake and 8% miss on adjusted earnings.
- Adjusted core earnings rose to 1.87 billion from 1.70 billion per year yet full earnings to go down by 5%
- Shares down by 6.2% at 192 crowns
In a major development, Sweden’s Alfa Laval announced that they have witnessed a fall in quarterly orders on last Wednesday on weaker-than-expected demand for ship exhaust cleaners and pumping systems, sending its shares sharply lower, reports Reuters.
How has it affected their scrubbers view?
Demand for so-called scrubbers which strip out sulphur from marine fuel has boosted the engineering group as well as Wartsila in the past few years as shipowners prepared for stricter sulphur emissions regulations from next year.
Chief Executive Tom Erixon forecast higher sequential demand for Alfa’s marine unit as well the overall group and said he remained confident about future prospects.
“Our underlying view on the scrubber market and view on the technology has not changed,” said Erixon. “All indications are that the market will maybe grow a little bigger over time… than we had expected.”
The Company Forecast
The company has forecast about 5,000 ships will be retrofitted with scrubbers by 2023. Its scrubbers order book is filled well into the first quarter of 2020, Erixon said.
Scrubbers Outlook Determining Factors
- He said uptake of scrubbers was being impacted by shipowners comparing installing scrubbers with switching to lower sulphur fuels.
- The outlook for scrubbers has also been clouded by a move by several major ports to ban discharges from open-loop scrubbers. One producer, Yara Marine, is up for sale.
How did Alfa Laval Fare?
- Alfa Laval’s second-quarter order intake fell 20% to 10.0 billion crowns ($1.07 billion), while adjusted core earnings rose to 1.87 billion Swedish crowns ($199 million) from 1.70 billion a year earlier, the company said.
- Citi analyst Klas Bergelind said order intake was a 12% miss on expectations and adjusted earnings was a 7-8% miss due to a bigger impact from a divestment.
- He said he now expected full year earnings per share consensus to be cut by 3-5%.
- The maker of machinery such as heat exchangers, separators and ballast water treatment equipment forecast “somewhat higher” demand in the current quarter.
- Alfa shares extended their losses after results and were down 6.2% at 192 crowns at 1242 GMT.
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Source: Reuters
