Epiroc profit, orders beat forecasts

Swedish mining gear maker Epiroc posted on Monday first-quarter earnings and order bookings above market expectations, despite a negative impact on its business in Russia and Ukraine, and forecast strong demand ahead.

The global mining industry has benefited from rising prices for raw materials, a move further accelerated by Russia’s invasion of Ukraine, but is also contending with high overall inflation and rising energy costs.

Epiroc last month suspended all deliveries to its customers in Russia, which accounted for around 6% of the group’s total sales in 2021, after Moscow began what it calls a “special military operation” in its smaller neighbour.

Operating profit at Epiroc rose 41% from a year earlier to 2.63 billion crowns ($272.9 million) against an average analyst forecast of 2.47 billion, according to Refinitiv data.

“Our business was negatively impacted in Russia and Ukraine, mainly in March, as we paused deliveries to Russia and the activities in Ukraine have been very limited,” Chief Executive Helena Hedblom said in a statement.

Epiroc said orders on hand in the two countries totalled around 1.8 billion crowns at the end of March, adding it was uncertain if and when these orders would be delivered and invoiced. It has around 500 employees in Russia but no production.

Order intake rose to 13.8 billion crowns, up 18% organically from the year-earlier quarter and above the 12.4 billion crowns expected by analysts, and Epiroc said it expected demand, both for equipment and services, to remain high in the near term.

Epiroc shares, down 4.2% ahead of the results, fell 1.3% by 0949 GMT.

Sandvik, Epiroc’s top rival, reported earnings last week with its mining unit posting a 22% organic or like-for-like rise in quarterly order intake.