Cargotec to Book EUR 18 Million One-Off Cost in Fourth Quarter due to Inspection and Repair Program of Container Spreaders
12/17/2007 8:58 AM
Cargotec Corporation, Stock Exchange Release, December 17, 2007 at 10:00 a.m. Finnish time
Cargotec has discovered deficiencies related to welding in its Bromma container spreaders resulting in a need for a global inspection program and possible preventive repair in certain types of spreaders. The total number of spreaders that will be inspected is some 1,730 units. A one-off cost reserve of EUR 18 million will be booked in Cargotec's fourth quarter operating profit to cover the cost of required actions.
Bromma is contacting customers to arrange a detailed timetable for the inspection of the welding in the spreaders based on serial numbers that identify a possible risk. As of today welding cracks have been found in 35 spreaders on which repair work is already ongoing. The identified deficiency is not estimated to cause an immediate safety risk when the spreaders are used in normal operating conditions. No load failures or injuries have occurred. However, prompt actions in cooperation with customers are being taken to ensure that safety is not compromised.
Cargotec's fourth quarter is operationnally, excluding this inspection program cost, going according to earlier guidance given in conjuction with the third quarter 2007 interim review. The company continues to estimate that fourth quarter operating profit in euros will improve from the previous quarters before this inspection program cost. The operating profit margin for the fourth quarter before the inspection program cost is estimated to remain at the third quarter level.
Regarding sales Cargotec continues to expect approximately 15% sales growth for the full year 2007. Based on the value of orders received so far in the fourth quarter the earlier issued guidance on order intake growing close to 30% is expected to be exceeded.
Senior Executive Vice President and CFO
SVP, Investor Relations and Communications
For further information, please contact:
Per-Anders Holmström, President, Bromma, tel. +46 8 6200 900
Eeva Mäkelä, SVP, Investor Relations and Communications, tel. +358 40 72 76 766
Cargotec is the world's leading provider of cargo handling solutions whose products are used in the different stages of material flow in ships, ports, terminals, distribution centers and local transportation. Cargotec Corporation's brands, Hiab, Kalmar and MacGREGOR, are market leaders in their fields and well-known among customers all over the world. Cargotec's sales are EUR 2.8 billion. The company employs over 11,000 people and operates in close to 160 countries. Cargotec's class B shares are quoted on the OMX Nordic Exchange, Helsinki.