SinterCast Results April-June 2019

25% increase in year-on-year series production

Second Quarter 2019

• Revenue for Period: SEK 33.5 million (SEK 26.8 million)
• Operating Result: SEK 12.9 million (SEK 11.0 million)
• Earnings per Share: SEK 2.0 per share (SEK 1.6 per share)
• Cashflow from Operations: SEK 7.2 million (SEK 3.2 million)
• Record annualised series production of 3.4 million Engine Equivalents in second quarter
• Record annualised monthly production of 3.5 million Engine Equivalents in May
• Installation revenue in second quarter surpasses previous full-year average

2019 Year-to-Date

• Revenue for Period: SEK 56.4 million (SEK 43.4 million)
• Operating Result: SEK 21.8 million (SEK 15.9 million)
• Earnings per Share: SEK 3.2 per share (SEK 2.2 per share)
• Cashflow from Operations: SEK 14.4 million (SEK 10.9 million)
• 55 Installations in 14 Countries: 24 (24) fully automated systems, 26 (21) mini-systems and five (three) tracking systems

Series Production*

Series production continued to grow in the second quarter, reaching an annualised record of 3.4 million Engine Equivalents for the quarter and providing 25% year-on-year growth. Series production reached the new all-time high of 3.5 million Engine Equivalents in May.

* Annualised average production of Engine Equivalents during the quarter (1 Engine Equivalent = 50 kg)

CEO Comments

Record production in first half; positive outlook for second half

Benefitting from record series production of 3.5 million Engine Equivalents in May, annualised series production reached 3.4 million Engine Equivalents in the second quarter of 2019, setting a new quarterly record and providing 25% year-on-year growth. In total, four of the last six quarters have established new records for series production, resulting in first-half series production being almost 30% above full-year 2018 and 55% above full-year 2017. The series production outlook remains positive, with strong demand for SinterCast-CGI diesel engines used in Ford and Ram pick-up applications; continued strong demand for commercial vehicle production; and, new programmes coming on-stream throughout the five-year planning horizon.

With revenue derived from both CGI process control and Tracking Technologies, installation revenue for the first half of the year reached SEK 7.1 million, surpassing the historical full-year average of approximately SEK 6.5 million. Together, the increased series production and the strong installation activity resulted in a 30% increase in revenue and a 37% increase in the operating result for the first half of the year. The positive outlook for series production also resulted in an additional SEK 5.3 million of the total carried forward tax losses being taken into the deferred tax asset calculation, resulting in an additional SEK 1.0 million being capitalised as a deferred tax asset.

Positive outlook for installation revenue

The 2019 installation campaign benefitted from a strong second quarter, with five new installations in the field, including the first full installation of the Cast Tracker technology at the Tupy foundry in Mexico and the first Ladle Tracker installation for ductile iron production at the Poitras foundry in Canada. Additional revenue was derived from Mini-System 3000 installations at the China Shipbuilding Industries Corporation foundry for industrial power components and at the Kimura rapid prototyping foundry in the United States; and, from capacity and functionality upgrades of existing System 3000 installations. A Mini-System 3000 was also installed at Jönköping Technical University in Sweden during the second quarter, as part of an in-kind contribution to a long-term university-industry project for the development of Compacted Graphite Iron (CGI), funded in part by the Swedish government. During June, the Motor Castings foundry in the United States ceased operation. The vast majority of the SinterCast-CGI production was transferred to SinterCast foundry partners in the US, Mexico and China, with no adverse effect for SinterCast. Critical components of the SinterCast equipment were recovered and will be refurbished for resale.

With ongoing installation discussions, and new leads established at the GIFA World Foundry Trade Fair in June, the outlook for full-year installation revenue is positive, with the opportunity to challenge the previous record of SEK 10.1 million set in 2013. Building on the System 4000 Plus installation at the new Scania foundry in Sweden, scheduled for mid-2020, the outlook for full-year 2020 installation revenue is equally positive. 

Several other installation discussions are ongoing for CGI process control systems, capacity upgrades, and Tracking Technologies installations in grey iron, CGI and ductile iron foundries. 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.

Information

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

The Board of Directors and the CEO certify that the half-yearly financial report provides a true and fair overview of the operations, outlook, financial position and results of the Company and the Group, and describes the material risks and uncertainties that the Company and the companies in the Group face.

Stockholm 22 August 2019

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 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 22 August 2019.

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 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.  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

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