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SKF reports hike in profits after sales boost

Swedish industrial bearings giant SKF has reported an increase in second-quarter profits on the back of higher sales and production on 2009.

“The very good sales development and higher manufacturing level combined with the cost-cutting reduction activities undertaken resulted in a strong result for the SKF group,” group CEO Tom Johnstone said.

He noted this quarter’s results were “a record in terms of operating profit and operating margin” for the company.

SKF, which also makes sealants, is an important supplier to many parts of the industrial processing chain and is therefore regarded as an indicator of activity in manufacturing and machine tooling.

The company posted a profit of 1.45 billion kronor ($196 million) for the April-June quarter.

For the same period in 2009, the firm reported profits of 314 million kronor.

Analysts surveyed by Dow Jones Newswires expected a profit of 1.26 billion kronor for the second quarter.

“There was really no letdown in the report. It was a little bit stronger in every facet than expected,” Handelsbanken’s Peder Frölén told Dow Jones.

The group was positive on its third-quarter outlook, saying it expected “significantly higher” sales than last year.

“All regions and divisions will see good growth even if we expect lower sales to the car industry in Europe,” Johnstone said.

Shares in the Gothenburg-based company fell by 2.64 percent to 143.6 kronor at around 0745 GMT, on a Stockholm Stock Exchange down 0.55 percent.

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REPORT

Swedish banking giants report mixed fortunes

Swedish bank Nordea on Thursday posted falling profits in the second quarter while competitor Handelsbanken announced growing figures for the same period.

Swedish banking giants report mixed fortunes
Handelsbanken CEO Pär Boman. File photo: TT

Nordea's net profit fell by 11 percent to €686 million ($928 million), compared to €771 million a year earlier.

"Interest rates continue to come down and the general level of economic activity as well as volatility is low," Nordea chief executive Christian Clausen said in a statement.

"We have seen continued strong activity in our savings area and in the corporate advisory business."

Revenue was almost stable at €1.368 billion, compared to €1.391 billion for the same period last year.

"Low loan growth and interest rates also put pressure on our net interest income," Clausen said.

The bank said that its cost-cutting plan was "progressing as planned" and that it expects to see the results by the end of 2014 and onwards.

Nordea said it has saved €300 million since the launch of the cost-reduction measures at the beginning 2013.

The second quarter looked better for Handelsbanken, which posted profits increasing by 9.0 percent compared to a year earlier to 4.034 billion kronor ($590 million).

Revenue reached 6.704 billion kronor, slightly above the 6.653 billion kronor the bank posted in the same period of 2013.

The loan loss ratio was 0.07 percent, the same as last year.

Handelsbanken is Sweden's largest bank in terms of deposits.

Between April and June, its liquidity reserves stayed above 800 billion kronor, as the bank continued its expansion in the British market.

"The bank has decided to establish a fifth regional bank in the UK, with its head office in Leeds," Handelsbanken said in a statement, adding that this would start in the first quarter of 2015.

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