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Lack of automation projects hurts Terex results

Lack of automation projects hurts Terex results

A shortage of automation projects has hit Terex Port Solutions (TPS) with the combined material handling and port solutions (MHPS) business recording a US$102m fall in third quarter net sales.

The backlog of the MHPS segment, defined as firm orders that are expected to be filled within one year, now only stands at US$44m worth of automation projects, down from US$120m one year ago.

Ron DeFeo, Terex Chairman and CEO, said: “The MHPS business saw declines driven by a decrease in port automation sales.”

In a conference call with investors, he added: “Automation orders are hard to come by frankly and difficult to predict – it’s a lumpy business. We continue to see demand for port equipment below expectations.”

Mobile harbour cranes provided one bright spot, with deliveries up from around 35 in 2014 to an expected 62 this year according to MHPS’s president, Steve Filipov.

Filipov added that the outlook for mobile harbour cranes and straddle carriers was positive but “automation is still going to be the big question”.

He also revealed that in September, TPS received a US$15m order for automatic stacking cranes (ASCs) in Europe, adding: “It’s a small one but we’ll take anything we can get at this point.”

The equipment manufacturer has its eye on four potential orders in Europe and the Middle East in the first half of 2016, he added.

However, Terex’s MHPS segment lost two orders in China in quarters two and three of 2015 according to Filipov, who stated: “China is a difficult market to judge what’s going on there. The customers chose a competitor that has never delivered on an automation project.”