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Mining gear maker Metso warns on profit, shares drop
[HELSINKI] Finish mining equipment maker Metso said on Monday its quarterly sales, earnings and new orders came in lower than expected, sending its shares more than 10 per cent lower.
The preliminary data gave little explanation for the weaker than expected performance, adding to investors' concerns over the company whose CEO last month said he would leave the company after less than year in the job.
Metso said its fourth-quarter core profit was roughly flat from a year earlier at around 64 million euros (S$103 million), well below a market consensus of 87 million euros, according to Vara Research.
"Profitability of the Minerals segment came in weaker than expected, due to a higher than estimated share of equipment sales compared to services sales and a weak margin of the services business," Metso said in a statement, without elaborating.
Metso's grinding mills and crushers for miners are a lower-margin business than service deals in the sector. The company also makes valves and pumps for the oil and gas industry.
Quarterly order intake was 684 million euros and sales 710 million euros, compared with analysts' average forecasts of 757 million and 737 million respectively.
Shares in the company dropped more than 10 per cent in early trade and were down 9.4 per cent at 27.15 euros by 0830 GMT.
Shares in Finnish peer Outotec also fell 4 pe cent.
"We need more colour than what they gave us ... They have talked about project execution problems in the past quarters, so I guess this has to do with that," said Marcus Almerud, analyst at Kepler Cheuvreux, who has a "reduce" rating on the stock.
Last month, Metso Chief Executive Nico Delvaux said he was leaving the company to become CEO at Sweden's Assa Abloy .
"It was really unfortunate for them ... There's a lack of momentum in the business now because of the top management leaving," Mr Almerud said.