Record series production; positive outlook for 2018
Building on the recovery of three key high-volume programmes, and new programmes coming on stream, series production increased to the record level of 2.5 million Engine Equivalents in the first quarter of 2018
* Annualised average production of Engine Equivalents during the quarter (1 Engine Equivalent = 50 kg)
Better production, better outlook
Series production increased on all fronts during the first quarter, resulting in record annualised production of 2.5 million Engine Equivalents, corresponding to 25% year-on-year growth. The increase was primarily driven by the recovery of three high-volume programmes, plus the start of production of V8 and V12 cylinder blocks for industrial power applications at the Luitpoldhütte foundry in Germany. The Luitpoldhütte SOP, combined with the continued ramp-up of industrial power production at the Caterpillar foundry in the United States, provided 58% year-on-year growth in the industrial power sector. The production of automotive components other than cylinder blocks and heads also increased during the quarter, with increased turbocharger housing production in China and increased volumes for the bedplate of the FCA 3.0 litre V6 diesel engine. Together, the non-core production of automotive components other than cylinder blocks and heads, plus industrial power production, contributed 125,000 Engine Equivalents to the year-on-year growth. The combined volume accounted for 11% of the total first quarter production, surpassing the longstanding 10% target. The contribution from all sectors culminated in record annualised series production of 2.7 million Engine Equivalents in March, providing a strong start and reinforcing the positive outlook for the year.
The increased series production, plus a 13% increase in year-on-year Sampling Cup shipments, resulted in revenue of SEK 16.6 million and cashflow from operations of SEK 7.7 million for the first quarter. The first quarter revenue is second only to the first quarter of 2015, when three new installations were secured, while the cashflow from operations represents an all-time high for the first quarter. The full-year outlook remains positive, with the anticipated start of production of a new high volume in-line diesel engine for passenger vehicles in the third-quarter, providing further growth potential.
Installation campaign underway
During the quarter, Shanxi Sanlian Casting Co., Ltd, a specialist supplier of automotive cylinder blocks and heads located in Hejin, China, ordered a SinterCast Mini-System 3000 and a wirefeeder. The equipment will be installed during the second quarter of 2018, with the start of series production planned for mid-2018. The SinterCast technology will be used for the production of a 12.7 litre cylinder head for the domestic Chinese market. The Sanlian installation reaffirms the awareness and acceptance of the SinterCast brand, marking our eleventh installation in China and our nineteenth installation in Asia.
Following disappointing equipment revenue of SEK 3.7 million in 2017, derived entirely from capacity upgrades and spare parts for existing installations, the Sanlian order provided a better start to our 2018 installation campaign, with revenue of approximately SEK 1.5 million to be recognised in the second quarter. Installation discussions are ongoing for CGI process control systems, capacity upgrades, and for the new Tracking Technologies in grey and ductile iron foundries, and for other metal processing applications. As production references become established, the suite of Tracking Technologies will begin to contribute to the total installation revenue. In addition to the new tracking 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.
Interims Reports Publish Date
April-June 2018 22 August 2018
July-September 2018 14 November 2018
October-December 2018 and Full Year Results 2018 20 February 2019
January-March 2019 24 April 2019
Annual General Meeting 2018 Date
The Annual General Meeting of SinterCast AB (publ) 24 May 2018
This report has not been reviewed by the company's Auditors.
This information was distributed by Cision http://www.cisionwire.se/