Sandvik’s orders jump in 2022 despite Ukraine uncertainty

By Helena Soderpalm

STOCKHOLM (Reuters) -Sweden’s Sandvik reported sharply higher quarterly order bookings on Wednesday, but said the Ukraine crisis left much uncertainty for the future.

However, the maker of metal-cutting tools and mining gear said the pace of daily orders at its manufacturing and machining solutions business had maintained a positive trajectory into the first two weeks of April.

Sandvik’s like-for-like order intake grew 13% to 30.47 billion crowns ($3.2 billion) in the first quarter of 2022, helped by a 22% rise at its mining unit.

“We have of course a more complex geopolitical situation now so we are a bit more careful on forecasts than we were at the beginning of the quarter,” Chief Executive Stefan Widing told a news briefing after Sandvik’s results.

Russia’s invasion of Ukraine, which Moscow calls a “special military operation”, would have consequences on many levels while the macro-economic impact was hard to predict, he added.

Sandvik suspended its operations in Russia, which accounted for 3.5% of sales in 2021, in February. It had no production in there but some 900 employees in sales and services.

“We shouldn’t count on any sales ahead given the current situation,” Widing said, adding that the biggest risk was indirect effects on the world economy.

“So far we don’t see those effects, demand is still high. But the risk is bigger,” he said, adding that he expects supply chain issues throughout this year.

Investment bank Jefferies said in a note that mining orders were stronger than expected, adding that mining capex demand should continue to do well even in a stagflationary environment.

Mining accounts for almost 40% of Sandvik’s sales, while engineering and automotives make up roughly a third.

Among the first major Nordic industrial companies to report its first quarter, Sandvik’s adjusted operating profit rose to 4.73 billion crowns from 3.86 billion a year ago, below a 5.01 billion mean forecast in a Refinitiv poll.

Shares in Sandvik, whose competitors include Epiroc and Kennametal, rose 3.5% at 1114 GMT. They have fallen by more than 20% so far this year.

($1 = 9.4246 Swedish crowns)

(Reporting by Helena Soderpalm; Editing by Niklas Pollard and Alexander Smith)