Series production returns to pre-Covid levels - Positive growth outlook
Second Quarter 2021
· Revenue for Period: SEK 28.2 million (SEK 18.7 million)
· Operating Result: SEK 7.2 million (SEK 0.9 million)
· Earnings per Share: SEK 1.6 per share (SEK 0.4 per share)
· Cashflow from Operations: SEK 8.7 million (SEK 11.9 million)
· Record Sampling Cup shipments
· New installation for product development in Asia
· Semiconductor shortages impact current production; contribute to pent up demand
· Revenue for Period: SEK 52.5 million (SEK 43.3 million)
· Operating Result: SEK 15.7 million (SEK 8.7 million)
· Earnings per Share: SEK 2.6 per share (SEK 1.3 per share)
· Cashflow from Operations: SEK 15.4 million (SEK 21.0 million)
· Installed Base: 55 installations in 14 Countries (25 (26) fully automated systems, 24 (26) mini-systems and six (five) tracking systems)
Annualised series production for the second quarter recovered to 3.2 million Engine Equivalents, double the year-ago volume and corresponding to 97% of the full-year pre-Covid volume of 3.3 million Engine Equivalents.
Positive outlook ahead
Annualised series production increased throughout the quarter, growing from 3.1 million Engine Equivalents in April to 3.2 million in May and 3.3 million in June, providing four consecutive months above the three million Engine Equivalent benchmark. Second quarter production amounted to 3.2 million Engine Equivalents, exactly double the volume of 1.6 million Engine Equivalents at the low-point of the Covid cycle in the second quarter of 2020, and effectively equalling the full-year pre-Covid volume of 3.3 million Engine Equivalents.
The second quarter also provided record Sampling Cup shipments. In total, 73,600 Sampling Cups were shipped, corresponding to an 11% increase over the previous quarterly record set in 2018. While the increase reflects the positive outlook for series production, some of the increase is also undoubtedly related to the uncertainty in global supply chains, with foundries increasing the security of their stock levels. Ultimately, the increases in second quarter Sampling Cup shipments and series production volume were partially offset by lower year-on-year installation revenue and a 13% decrease in the US dollar exchange rate to provide revenue of SEK 28.2 million, corresponding to a 51% year-on-year gain.
The ongoing semiconductor supply challenges have resulted in vehicle production stoppages in some of our key high-volume programmes, and will continue to affect volumes in the second-half of the year. In our largest end-user market in North America, semiconductor shortages have led to all-time low vehicle inventory levels and strong demand for new vehicles. Ultimately, the pent up demand and the need to rebuild vehicle inventories provides the basis for a strong and sustained production outlook that is expected to drive demand into 2023. The production outlook is also buoyed by the pending start of commercial vehicle engine production at FAW in China and at Scania in Sweden, with initial contributions beginning in the second half of the year followed by strong growth in 2022 and 2023.
Positive installation outlook for second half
Influenced by travel restrictions, much of the 2021 installation activity has been deferred to the second half of the year. Installation revenue for the first half of the year amounted to SEK 1.7 million, primarily from spare parts. The second half of 2021 provides a busy outlook, with a Mini-System 4000 installation for product development at an undisclosed industrial power foundry in Asia; a System 4000 installation at the Impro foundry in Mexico; a Ladle Tracker installation at the Hyundai foundry in Korea; and, the final start-up support at FAW in China and Scania in Sweden. Together, these activities are expected to increase the installation revenue toward the historical full-year average by year-end. In parallel with the increased installation activities, a Mini-System 3000 that was sold to an undisclosed Asian client in 2012 for product development was returned to SinterCast following the conclusion of the development programme. The return has no effect on the financial results or the series production outlook.
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 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 18 August 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 55 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