“The market is a little worried when it comes to China” – Swedish Dagbladet

Atlas Copco CEO Ronnie Leten Photo: Magnus Hjalmarsson Neideman

Workshop giant Atlas Copco was the first among the heavy engineering companies to show figures for the fourth quarter. Record sales despite the outlook for 2016 quite gloomy and shares fell 7 percent on the report.

The company offers a mixed picture in which the activities of the service overall is good while the equipment is tougher, especially in the mining, oil and shipbuilding. Here Ronnie Leten no reason to believe a turnaround.

– On Monday, I spoke with three guys in Texas and they said Ronnie, I think we have reached the bottom now (for oil prices, editor’s note) but I said that I have heard before, told Ronnie Leten at Thursday’s press conference in the disused mine under the Group Center in Sickla.

To further describe the tough conditions prevailing described he how it may look in the Group’s largest business area, Compressors.

If you visit a shipyard there may be ten large compressors there and maybe two or three are running.

The result was something worse than expected, operating profit landed at 4.824 billion kronor for the quarter of 2015, which can be set against analysts’ expectations of 5.012 billion crowns.

Order intake decreased of 4 percent, while Asia showed a spigot at 7 per cent and Latin America at 12 percent.

India is very strong, very nice growth in all areas and even in mines, but in China it is tough in the coal, shipbuilding and steel, said Leten.

The sharp price declines for raw materials makes it particularly dramatic in the Company’s mining operations. Order intake and sales fell for the second consecutive quarter, demand for new equipment is weak. Of sale, price pressure is intense.

– Mining companies are hard pressed. I have great respect for those who must negotiate with buyers, said Leten.

in profitability mining operations have gone down but redovisaar still a profit margin of nearly 18 percent, compared with 19 percent for the group.

The company raises dividend by 30 cent to SEK 6.30 per share. Sales landed at 25.6 billion for the quarter, slightly lower than expectations at 25.6 billion. For the full year, Atlas Copco reported sales of $ 102 billion, the first time it reached sales of over 100 billion.

– We report record figures but nobody cares about that. And yes, we have a tough year ahead but there are opportunities. For us it is important to increase our market share, Leten said.

For the rest think Leten that the stock market is hypersensitive terms of bad news from China.

– I think that the market is a little worried when it comes to China. If we get a new devaluation of the Chinese currency, so it will be tough but it is still done business in China, said Leten.

A critical factor for 2016 is the oil price. Ronnie Leten has a good network and should be able to give a reliable forecast as to whether the bottom has been reached.

– Nobody wants to venture on giving any forecast, but $ 30 is the low price, said Leten.