Monday , 23 September 2019
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Konecranes cost-cutting delivers profit

Operating profit at Konecranes rose by 2.9% in the first half of the year to €28.9m as the firm reduced costs by laying off workers and reducing its equipment manufacturing capacity.

The adjusted figure for operating profit, excluding restructuring costs and transaction costs related to the Terex material handling and ports solutions (MHPS) takeover, increased by 27.3% to €50.8m.

Between January and June 2016, the Finnish company’s number of personnel decreased by 443 employees, including 165 in the second quarter.

“Equipment has reduced its manufacturing capacity in China, India, Brazil, and the US,” noted Panu Routila, president and CEO of Konecranes.

Furthermore, the firm’s service segment continued to restructure its underperforming units, helping the manufacturer to lower its fixed costs.

The rise in profit came despite a 2.3% fall in sales to €987.4m with equipment sales falling by 4.4%.

Additionally, order intake dropped 10.3% to €905.3m mainly due to lower port cranes orders in the first quarter.

A company statement pointed out that “the decline in the global container throughput has led to slower decision-making among container terminal operators.”

It also noted that companies are “cautious about investing” due to global economic uncertainty while “companies operating in emerging and commodity markets are particularly under pressure to save costs”.