Series production returns to pre-Covid levels
First Quarter 2021
· Revenue for Period: SEK 24.3 million (SEK 24.6 million)
· Operating Result: SEK 8.5 million (SEK 7.9 million)
· Earnings per Share: SEK 1.0 per share (SEK 0.9 per share)
· Cashflow from Operations: SEK 6.7 million (SEK 9.1 million)
· 3.5 million Engine Equivalents in March; 35% increase above January-February average
· ‘First Iron’ milestone achieved at new Scania foundry in January
· Hyundai Motor Company orders Ladle Tracker for CGI and grey iron production
· Impro Industries orders SinterCast System 4000 for new foundry in Mexico
· Installed Base: 56 installations in 14 countries(25 (26) fully automated systems, 25 (26) mini-systems and six (five) tracking systems)
Following an increase to 3.5 million Engine Equivalents in March, annualised series production for the first quarter finished at 2.9 million Engine Equivalents, equalling the production volume in the first quarter of 2020.
Strong growth in March as one-time burdens begin to ease
Annualised series production in March increased to 3.5 million Engine Equivalents, exceeding the full-year record level of 3.3 million Engine Equivalents established in 2019, prior to the onset of the Covid pandemic. The March volume buoyed the annualised first quarter production to 2.9 million Engine Equivalents, equalling the series production volume in the first quarter of 2020. In perspective, the series production in March was the third highest volume in SinterCast history, equalling May 2019 and only falling short of September and October 2019, at 3.9 million and 3.7 million Engine Equivalents, respectively.
We have known that the market demand – particularly in our largest market in North America – was strong, but we have struggled to show it in the production numbers over the last few months. This was initially due to the cessation of Jaguar Land Rover use of the SinterCast-CGI 3.0 litre V6 engine during the fourth quarter of 2020, followed by a model year changeover of the high-volume F-150 pick-up truck during December and January. These two planned events were compounded by the traditional new-year shutdowns, semiconductor shortages and severe winter weather halting production at one of our main foundry partners in Mexico, making it difficult to show the true demand in January and February. While March may have benefitted from an element of ‘catch-up’ production, we believe that many of the underlying one-off events are behind us. There will still be Covid and semiconductor challenges ahead, but we believe that March is more indicative of the demand than the recent months.
Positive installation outlook
The first quarter also provided a positive start to our 2021 installation campaign. Following the commissioning of the System 4000 Plus at the new Scania foundry during the fourth quarter, the foundry celebrated the significant ‘first iron’ milestone in January. It was very rewarding for both Scania and SinterCast that, after a three-year project, the very first CGI ladle was produced fully in-specification. The initial start-up trials are progressing as the foundry continues to prepare for the start-of-production and initial ramp-up later in 2021.
During March, Hyundai Motor Company, a SinterCast customer since 2005, ordered a SinterCast Ladle Tracker system for grey iron and CGI process control. The Hyundai installation comprises six tracking locations to ensure that every ladle has successfully passed every step of the production process. A first for Ladle Tracker, the installation also records the age of each ladle lining in terms of days, hot metal cycles, and the accumulated time of exposure to liquid iron in order to optimise the scheduling of preventive ladle maintenance and re-lining. The Hyundai installation, planned for the fourth quarter of 2021, represents the sixth global installation of our Tracking Technologies and our first installation in Asia. It also represents the first application of our Ladle Tracker technology for the control of grey iron production, providing SinterCast tracking references in each of CGI, grey iron and ductile iron.
The positive installation momentum continued into the second quarter with Impro Industries ordering a SinterCast System 4000 installation for its new foundry in San Luis Potosí, Mexico. The System 4000 will be installed during the third quarter of 2021 and series production is planned to begin before year-end. The initial CGI production in Mexico will be based on the transfer of two SinterCast-CGI industrial power components that have been running at the Impro foundry in China for the past five years. The Impro installation strengthens our dominance in the Americas, where every major cylinder block and head foundry in North and South America is a SinterCast licensee.
Installation discussions are ongoing for CGI process control systems, capacity upgrades, and Tracking Technologies installations. In addition to these current installation opportunities, 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.
For further information please contact:
Dr. Steve Dawson
President & CEO
SinterCast AB (publ)
Office: +46 150 794 40
Mobile: +44 771 002 6342
This press release contains information SinterCast AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication, through the agency of the President & CEO Dr. Steve Dawson, at 08:00 CET on 21 April 2021.
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 56 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
This information was distributed by MFN https://www.mfn.se/