Trelleborg reports growth amid oil & gas woes

Trelleborg, Sweden – Trelleborg AB has reported a 14% year-on-year growth in earnings (EBIDTA) at SEK4.7 billion (€456 million) in the first nine months of 2018.

Sales increased 7% for the period to SEK25.6 billion compared to the year before, the Swedish rubber group announced 31 Oct.

In the third quarter, sales grew 14% to SEK8.3 billion, with earnings up 18% up at SEK1.46 billion.

Commenting on the third quarter results, Peter Nilsson, president and CEO said the growth in sales was due to “improved demand” in most market segments and geographies.

Project business, which mainly comprises offshore oil & gas-related deliveries, however, remained weak during the quarter, despite strengthened order intake. This, explained the Trelleborg boss, is mainly due to the fact that the deliveries will be made next year.

According to the Trelleborg boss, several orders that were expected to be delivered in the current year have been postponed until 2019 in the project business.

The company expects Trelleborg Offshore & Construction business area to generate a loss for the final quarter of the year.

“But [it] is expected to see an earnings improvement with positive results in 2019, particularly during the second half of the year,” said Nilsson.

In general, profitability and order intake improved in ‘most Trelleborg operations’ compared to last year, with contribution from previously-acquired businesses, Nilsson noted

The company also announced three acquisitions during the three-month period, of which two have been finalised.

These include US-based medical parts supplier Sil-Pro, LLC, New Zealand tire distributor TRS Tyre & Wheel Ltd and another US company Laminating Coating Technologies, Inc. (Lamcotec).

In terms of revenues, sales to general industry continued to grow in the third quarter.

Deliveries to other market segments, such as the automotive and aerospace industries, also developed “favourably”, according to Nilsson.

In the tire segment, demand for the agricultural sector, as well as for industrial and construction vehicles, continues to grow, mainly as a result of increased deliveries of agricultural machinery to OEMs.

The Trelleborg boss also noted that the market outlook was “associated with greater uncertainty than previously”, with trade policy decisions potentially having further consequences for global economic development.