Outotec President and CEO, Markku Teräsvasara, says the company saw signs of increased greenfield investments in both minerals processing and metal refining technologies in the most recent March quarter, providing the company with a positive outlook for the rest of 2019.

The mineral processing and refining company reported 1% year-on-year growth, to €336.1 million ($370.7 million) in the first three months of 2019, alongside a 22% boost in service order intake (€159.9 million) and adjusted EBIT of €11 million, up from €7 million a year earlier.

While overall sales dipped 11% year-on-year to €254.7 million and the company reported negative net cash from operating activities, Teräsvasara painted an upbeat picture in his statement accompanying these results.

“The overall market sentiment developed positively in the first quarter,” he said. “In addition to brownfield investments, we are seeing signs of increased greenfield investments in both minerals processing and metal refining technologies. Order intake was at the same good level as in the first quarter last year. I am pleased with the 22% growth in service orders and the 19% increase in equipment orders for Minerals Processing.”

He said sales decreased primarily due to fewer plant and equipment deliveries, but there was a clear improvement in profitability, both in absolute and relative terms, due to better gross margins (27.1% in Q1 2019, up from 22.8% in Q1 2018).

Teräsvasara added: “I am pleased with the progress in our must-win battles that further improve our performance. These programs focus on strengthening customer focus, service business, product competitiveness, project competencies and people development.”

He also commented on the ilmenite smelter project that has hit the company’s recent financial results, saying negotiations were ongoing in cooperation with the customer and that the company remained confident “we are provided adequately for the project”.

“We continue to be positive about the current market outlook and reiterate our 2019 guidance for sales (increase from 2018) and adjusted EBIT (increase from €63.8 million in 2018),” he concluded.

After the end of the quarter, Outotec received a €140 million greenfield mineral concentrator and gold processing plant order from Ma’aden in Saudi Arabia.