Metso reports stable Q1 2020 financials; declines to make Q2 forecast

Recycling and minerals processing equipment maker Metso Oyj says its sales in the first quarter of 2020 surpassed those in the first quarter of 2019, although the effects of COVID-19-related restrictions began showing in its diminishing orders backlog.

Self-reported (unaudited) figures released by the Finland-based company show a 5 percent increase in the value of orders received in the first quarter of 2020 compared with the same quarter in 2019. Its service business also saw a 3 percent revenue increase.

However, by the end of 2020’s first quarter, Metso’s order backlog figure had declined by 5 percent compared with March 31, 2019.

“The impact of COVID-19 on our financial performance was still relatively limited during the first quarter,” states Metso President and CEO Pekka Vauramo. “In February, our operations in China were impacted by lockdowns, which had some impact on our sales and results during the month.”

Adds Vauramo, “More material implications have resulted from the containment measures that have been quickly enforced around the world since mid-March. The aggregates equipment business has seen the most rapid decline in demand, whereas the mining equipment market has been stable. The services business has been affected by the restrictions relating to travel and workforce mobility that have prevented our experts from carrying out service at customer sites. Our own operations have been affected by lockdowns imposed by authorities in some countries.”

Metso says because of the unpredictability of the COVID-19 situation, it will not make a forecast for the six months ahead. The company does say it expects market activity will continue to be affected by COVID-19 restrictions in the second quarter.

Comments Vauramo, “We have been actively controlling our costs and preserving our cash flow and financial position. Since the escalation of the COVID-19 situation, we have imposed cuts on discretionary spend across the organization.”

The company’s financials play a role in a Metso board-approved proposal to combine the Metso Minerals Business and Finland-based Outotec Oyj to create Metso Outotec. As part of that merger, which will see Metso acquire 78 percent of Outotec’s shares, Metso’s Neles business (formerly Metso Flow Control), will become an independent listed company supplying flow control products and services.

“The transaction will be executed through a partial demerger of Metso, in which all assets and liabilities of Metso that relate to, or primarily serve, the Metso Minerals Business will transfer to Outotec, without [the] liquidation of Metso,” states the company.

The completion of the transaction is expected to take place June 30, “subject to the receipt of all required regulatory and other approvals, including competition clearances.”