Good increase in revenues however an EBIT loss of EUR -1.6 million
On February 22, 2022, Cavotec signed an agreement to divest 100% of the Airports business to US based investment company Fernweh Group. On July 29, 2022, Cavotec completed the divestment of the Airports business. As a result of the divestment, the Airports business is reported as a discontinued operation.
OCTOBER–DECEMBER 2022 NEW CAVOTEC (EXCL. DISCONTINUED)
JANUARY–DECEMBER 2022 NEW CAVOTEC (EXCL. DISCONTINUED)
OCTOBER–DECEMBER 2022 TOTAL (INCL. DISCONTINUED)
JANUARY–DECEMBER 2022 TOTAL (INCL. DISCONTINUED)
Key events during the quarter
Key events after the quarter
Comment from the CEO
Focus for the coming year is on long term profitability
In the fourth quarter, order backlog and revenues in New Cavotec increased 49% compared to last year. This is a fantastic achievement by all our employees who work hard to sell, serve and deliver to our customers! Whilst we have demonstrated that we can deliver revenues at a much higher level than before, our focus is now on generating satisfactory profitability.
The order backlog in the end of the quarter was EUR 147.2 million, seven million lower than in Q3, due to strong revenue growth in the quarter. Most of the order intake was from Ports & Maritime customers, across our product range. In Q4 we secured a major order to equip one of the World’s busiest cruise terminals (Port of Miami) with mobile Shore Power units worth approximately EUR 6 million. We also won an order for a MoorMaster installation in a ferry terminal in Australia.
The strength of our MoorMaster offer was also demonstrated by signing a refurbishment program for an installation at a large container port in the Middle East. This reaffirms the long-term relationship we can build with our customers, and it is also one of the largest service orders in our history.
I am pleased that we showed a strong quarter in revenue for the Ports & Maritime business, which was mainly driven by high deliveries of on ship shore power products from our facility in Shanghai and MoorMaster from our facility in Milan. In 2022 we have seen a strong order intake in Ports & Maritime, which means we go into 2023 with a strong order book, including more than 500 PowerAMPReels, as well as a significant amount PowerFit units.
Our Industry business continued to develop well. We secured important orders within the mining sector during the quarter and the business has since 2019, i.e., before the pandemic, shown a strong and stable growth. Going forward, we see strong continuing demand for our equipment in underground mining across all geographies. In the after-market demand was strongest within the mining industry in Australia and in ports and maritime and the radio business the US.
Profitability in New Cavotec continued to be unsatisfactory. EBIT amounted to EUR -1.6 million in Q4. The negative result is mainly explained by low margins in certain orders that were delivered during the quarter. Although we have improved the pricing in new orders, longer lead times mean that we have not yet seen the positive impact of that action in our margins. We will increase our supply chain focus to diversify our supply base and bring down our cost of material. During the quarter, we have also completed our localization transition for PowerAMPreels to Shanghai to reduce both cost and lead time.
Our levels of inventory and receivables were higher than previous quarters, resulting in a negative cashflow. This is a natural consequence of the high growth in deliveries and revenue generated.
During the quarter, I have continued to visit customers and attend events, such as BAUMA in Munich, where we received a high level of interest arising from many new potential customers during the launch of our 3 MW MCS connector. There is a strong drive in the construction and mining industry to reduce emissions by shifting from fossil fuels to electrification of heavy vehicles and equipment.
I have also continued to visit our sites and meet face to face with our employees to better understand their local markets and requirements. Making visits to our customers, together with our local teams, gives me valuable insights on how we can improve our product offering and truly build long-term customer relationships.
Looking ahead, we are well positioned on a market at which we see strong demand for our products. We have this quarter proven that we can deliver high revenues. Now we must also turn Cavotec into a profitable organization. I am convinced that we can, and we will, play a vital role in the technological shift to a more sustainable world.
Stockholm, February 22, 2023
Chief Executive Officer
Quarterly Reports on www.cavotec.com
The full report for the period January-December 2022 and previous quarterly reports are available at: http://ir.cavotec.com/financial-reports
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