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Why invest in Cargotec
On 27 April 2023, Cargotec's Bopard of Directors decided to investigate and initiate a process to potentially separate its core businesses Kalmar and Hiab into two standalone companies. On 30 May 2024, Cargotec's Annual General Meeting resolved on the partial demerger of Cargotec Corporation in accordance with the demerger plan. On 30 June 2024, the completion of the partial demerger of Cargotec Corporation was registered with the Finnish Trade Register. Read more
Business environment (an extract from Cargotec's half-year report January–June 2024, 8 August 2024)
The business environment in which Cargotec operates is complex, stemming from high interest rates and inflation, growing geopolitical tensions, and sluggish growth estimates. However, the global economy has remained remarkably resilient and the shipping market is in a strong cycle.
Demand for Hiab's solutions is influenced by general economic growth, construction market development and truck sales, among others. Inflation, high interest rates and political instabilities continue to cause challenges1. Decrease in interest rates, easing inflation and overall enhancing economic outlook may boost the customer investment activity, but timing remains uncertain.
According to the International Monetary Fund's (IMF) world economic outlook update published in July 2024, the global economy is projected to grow by 3.2 percent in 2024 and by 3.3 percent in 2025. In the IMF’s advanced economies group (a group of countries which includes several key markets for Hiab, such as the United States, the United Kingdom and Germany), the IMF estimates a 1.7 percent growth in 2024 and a 1.8 percent growth in 2025. The report notes that services inflation, linked to both wages and prices, is hindering the disinflation progress and making the normalisation of monetary policy more difficult.2
The demand for MacGregor’s solutions is impacted by the level of merchant ship and offshore newbuilding contracting at shipyards. By the end of the second quarter, the new ship orders amounted to 898, including also 72 mobile offshore units (Q1–Q2 2023: 683). In 2024, the number of new vessel orders is projected to be 1,879 (FY 2023: 2,114 as per 1 July 2024).3
The shipping market is in a continued strong market cycle with high earnings. Geopolitical disruptions, for example, are driving robust shipping capacity demand growth, along with improving seaborne trade volumes. A tight supply-demand balance has increased freight rates and ship owner earnings are above the ten-year average. However, shipyard capacity is a limiting factor for sector growth and newbuild prices are approaching a record-high level.
1 S&P Global, Q2 2024
2 International Monetary Fund: World Economic Outlook Update, July 2024
3 Clarkson Research, July 2024
