SinterCast Results January-March 2018

Record series production; positive outlook for 2018

First Quarter 2018

• Revenue for Period: SEK 16.6 million (SEK 13.9 million)
• Operating Result: SEK 4.9 million (SEK 2.8 million)
• Earnings per Share: SEK 0.6 per share (SEK 0.4 per share)
• Cashflow from Operations: SEK 7.7 million (SEK 5.4 million)
• Record series production of 2.7 million Engine Equivalents in March
• Record series production of 2.5 million Engine Equivalents in first quarter; 25% year-on-year increase
• Start of production of industrial power cylinder blocks at the Luitpoldhütte foundry in Germany
• Mini-System 3000 order at Sanlian Casting for commercial vehicle cylinder head production in China
• Installed Base: 24 fully automated systems and 21 mini-systems in Europe, Asia and the Americas

Series Production*       

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)

CEO Comments

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.

Information

This report has not been reviewed by the company’s Auditors.

Stockholm 25 April 2018

For further information please contact:

Dr. Steve Dawson
President & CEO
SinterCast AB (publ)
Office:    +46 150 794 40
Mobile:   +44 771 002 6342
e-mail:     steve.dawson@sintercast.com
website:  www.sintercast.com

This press release contains information SinterCast AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication, through the agency of the President & CEO Dr. Steve Dawson, at 08:00 CET on 25 April 2018. 

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, with 45 installations in 13 countries, is primarily 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 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 a suite of tracking technologies, including the SinterCast Ladle Tracker®, Cast Tracker™ and Operator Tracker™, to improve process control, productivity and traceability in a variety of applications.  The SinterCast share is quoted on the Small Cap segment of the Nasdaq Stockholm stock exchange (SINT). For more information: www.sintercast.com

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