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2020-08-19

SinterCast Results April-June 2020

Series production improves throughout quarter - Record installation outlook maintained

Second Quarter 2020
·        Revenue for Period: SEK 18.7 million (SEK 33.5 million)
·        Operating Result: SEK 0.9 million (SEK 12.9 million)
·        Earnings per Share: SEK 0.4 per share (SEK 2.0 per share)
·        Cashflow from Operations: SEK 11.9 million (SEK 7.2 million); due to decreased operating receivables
·        Series production increases from low-point of 1.0 million Engine Equivalents in April to 2.2 million in June
·        System 4000 installation sale completed at WHB foundry in Brazil
·        System 4000 Plus installations on schedule at First Automobile Works in China and at Scania in Sweden
 
2020 Year-to-Date
·        Revenue for Period: SEK 43.3 million (SEK 56.4 million)
·        Operating Result: SEK 8.7 million (SEK 21.8 million)
·        Earnings per Share: SEK 1.3 per share (SEK 3.2 per share)
·        Cashflow from Operations: SEK 21.0 million (SEK 14.4 million)
57 Installations in 14 Countries: 26 (24) fully automated systems, 26 (26) mini-systems and five (five) tracking systems

Series Production*
Series production fell to 1.0 million Engine Equivalents in April, but increased throughout the quarter, reaching 2.2 million Engine Equivalents in June. Annualised series production for the second quarter amounted to 1.6 million Engine Equivalents.  Series production continued to improve in July, reaching 2.7 million Engine Equivalents.

* Annualised average production of Engine Equivalents during the quarter (1 Engine Equivalent = 50 kg)

CEO Comments
 
Series production improves as foundries re-open during the quarter
As a result of the Covid-19 outbreak, and in response to local government lockdown orders, most of the SinterCast foundry customers observed shutdown intervals during the March to June timeframe.  The shutdowns caused the annualised series production to decrease from 3.1 million Engine Equivalents in January and February, to 2.4 million Engine Equivalents in March and further to 1.0 million Engine Equivalents in April.  From the April low-point, annualised series production improved to 1.6 million Engine Equivalents in May, as some foundries resumed production, and further to 2.2 million Engine Equivalents in June as more foundries returned to production.  All of the main SinterCast foundries returned to production before the end of the quarter and series production continued to improve in July, reaching 2.7 million Engine Equivalents, as most customers bypassed the traditional summer shutdown.
 
Annualised series production in the second quarter amounted to 1.6 million Engine Equivalents, corresponding to 47% of the 3.4 million Engine Equivalent run-rate in the second quarter of 2019.  Annualised series production for the first half of the year finished at 2.25 million Engine Equivalents, corresponding to 69% of the annualised series production during the first half of 2019.  The production of 2.7 million Engine Equivalents in July corresponds to 82% of the full-year 2019 run-rate of 3.3 million Engine Equivalents.
 
While the initial recovery continues to evolve positively, the near-term visibility from our foundry customers and OEM end-users remains low.  Many OEMs have declined to give near-term forecasts to the supply community or to give full-year profitability guidance to investors.  However, it is clear that the recent increase in series production is due to a combination of both inventory rebuild and market demand.  The increase in production is encouraging and we maintain the ambition to propose a dividend for the financial results of 2019 to our shareholders at an Extraordinary General Meeting to be convened on or before 20 November.  Liquidity was strengthened during the period, following a concerted effort to secure outstanding receivables during the quarter.  Cashflow from operations increased by 65%, to SEK 11.9 million (SEK 7.2 million), resulting in liquidity of SEK 49.3 million on 30 June. 
 
Positive outlook for installation revenue
Following the System 4000 sale at the WHB foundry in Brazil in May, combined with other capacity and functionality upgrades, installation revenue for the first half of 2020 amounted to SEK 6.5 million.  The full-year installation outlook remains positive, with System 4000 Plus installations scheduled to begin in August at the First Automobile Works foundry in China and in September at the Scania foundry in Sweden.  Series production is scheduled to begin at both foundries before year-end.  The outlook remains for SinterCast to post a second consecutive year of record installation revenue, exceeding the 2019 revenue of SEK 11.9 million.  Considering the positive outlook for installation revenue, the annualised production of 1.6 million Engine Equivalents in the second quarter is approximately equal to the breakeven volume.
 
Discussions are ongoing for CGI process control systems, capacity upgrades, and Tracking Technologies installations in grey iron, CGI and ductile iron foundries; however, many foundries are currently deferring or restricting investment commitments and on-site engineering service. SinterCast is also investigating the development of other unique technologies – within and beyond the scope of thermal analysis – to improve quality and production efficiency in the metals industry, and to broaden our product portfolio and our production base.

Information

Interim ReportsPublication Date
July–September 202028 October 2020
October–December 2020 and Full Year Results 202010 February 2021
January–March 202121 April 2021
April–June 202118 August 2021

 This report has not been reviewed by the company’s Auditors.

The Board of Directors and the CEO certify that the half-yearly financial report provides a true and fair overview of the operations, outlook, financial position and results of the Company and the group, and accurately describes the material risks and uncertainties that the Company and the companies in the group face.

Stockholm 19 August 2020
 

Jan Åke JonssonRobert DoverJun Arimoto
Chairman of the BoardMember of the BoardMember of the Board



Steve GillÅsa KälleniusSteve Dawson
Member of the BoardMember of the BoardPresident & CEO


For further information please contact:

Dr. Steve Dawson
President & CEO
SinterCast AB (publ)
Office: +46 150 794 40
Mobile: +44 771 002 6342
e-mail: steve.dawson@sintercast.com
website: www.sintercast.com

This press release contains information SinterCast AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. This information was submitted for publication, through the agency of the President & CEO Dr. Steve Dawson, at 08:00 CET on 19 August 2020.

SinterCast is the world’s leading supplier of process control technology for the reliable high volume production of Compacted Graphite Iron (CGI). With at least 75% higher tensile strength, 45% higher stiffness and approximately double the fatigue strength of conventional grey cast iron and aluminium, CGI allows engine designers to improve performance, fuel economy and durability while reducing engine size, weight, noise and emissions. The SinterCast technology is used for the production of petrol and diesel engine cylinder blocks and exhaust components for passenger vehicles, medium-duty and heavy-duty cylinder blocks and heads for commercial vehicles, and industrial power engine components for agriculture, marine, rail, off-road and stationary engine applications. SinterCast supports the series production of components ranging from 2.7 kg to 9 tonnes, all using the same proven process control technology.  As a specialist supplier of precision measurement and process control solutions to the metals industry, SinterCast also supplies the SinterCast Ladle Tracker® and SinterCast Cast Tracker® technologies, to improve process control, productivity and traceability in a variety of applications.  With 57 installations in 14 countries, SinterCast is a publicly traded company, quoted on the Small Cap segment of the Nasdaq Stockholm stock exchange (SINT). For more information: www.sintercast.com
 
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Image Attachments


Series Production*

Attachments


SinterCast Results April-June 2020 (PDF)

Författare SinterCast

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