Epiroc received a large order for its battery-electric underground equipment from Canada in the March quarter, the company confirmed in its latest quarterly results.
The company, in November, launched its second-generation battery-electric solutions in Örebro, Sweden, presenting 14 t and 18 t LHDs, a 42 t truck (MT42) and its mid-sized drilling family including face drilling, production drilling and rock reinforcement rigs.
In the March quarter results, the company did not mention the name of the miner, the site the equipment will be deployed at, or which machines will be used at the operation, but, at a Bauma media roundtable event, President and CEO, Per Lindberg, said of the recent second generation launch: “We can say that the reception has not been worse than expected. It has been better than expected, and we have high expectations.”
And, earlier this month at The Electric Mine conference, in Toronto, Canada, Morgan Rody, Senior Project Manager: Sustainable Intelligent Mining Systems (SIMS), Global Strategic Projects and Alliances, Epiroc, said one of Epiroc’s second-generation battery-electric drill rigs was set to arrive at Agnico Eagle’s Kittilä gold mine, in Finland, in a matter of weeks as part of the SIMS project.
Going back to the mining equipment manufacturer’s Q1 results, the company said orders received came in at SEK 10.06 billion ($1.06 billion) during the quarter, a year-on-year organic decline of 5%, while both revenues and operating profit rose – 19% to SEK 9.79 billion for the former and 27% to SEK 1.93 billion for the latter.
The company’s operating margin went from 18.4% a year earlier to 19.7%, while its basic earnings per share jumped from SEK 0.89/share to SEK 1.14/share.
Lindberg said, during the quarter, the company’s service business continued to grow “healthily”, having a positive impact on the group’s overall profit.
“Equipment revenues increased versus last year, but fell sequentially compared to the very strong Q4, which had a negative effect on our cost efficiency in the quarter,” he said.
“In the Tools & Attachments segment, we are pleased to see that our efficiency actions had a positive effect on the operating profit and margin. Working capital increased in the quarter, and continues to be a focus area for improvement. The operating cash flow was lower than in the previous quarter as a result.”
He said customer demand in the March quarter was “largely in line with our expectations”, with equipment orders at similar levels to the second half of 2018.
“The majority of mining equipment orders are still for expansion in or close to existing mines rather than for replacement,” he said. “The aftermarket business remained strong, reflecting the solid activity in the market, both in mining and in infrastructure.
“While our customers continue to be active and relatively confident about the future, and the mineral prices are at healthy levels, there are still uncertainties related to the economic development.
“We see that our customers primarily invest in lower-risk projects with focus on increased productivity and efficiency. We do not see any clear indications that the current market situation will change and expect that the demand will remain at the current level in the near term.”
During the quarter, the company completed its earlier announced acquisitions of Fordia and New Concept Mining, strengthening its position in exploration and rock reinforcement, and adding some SEK 1.2 billion in annual revenues, according to Lindberg.
On innovations, automation, digitalisation and battery power, Lindberg remarked: “We are pleased to see that we received several inquiries and orders for automation and battery solutions.”
On top of the battery equipment order from Canada, he said orders were booked for Mobilaris Mining Intelligence and, at the Bauma exhibition in early April, the company had presented a number of innovations, including My Epiroc, “a digital tool to help our customers to become more efficient in managing their fleet”, and its new generation SmartROC D65, an automation-ready surface drill rig.
Lindberg concluded: “In 2018, we put a lot of effort into the split and listing of Epiroc. In 2019, we will focus on improving and developing the business further. Besides the continued emphasis on innovation and new product development, a key focus will be on improving efficiency, agility and resilience throughout the company.”
