Metso-Outotec merger on track despite COVID-19 impacts

Finnish engineering firms Outotec and Metso said a merger of their mining equipment businesses remained on schedule for a mid-2020 completion despite operational impacts resulting from COVID-19 lockdowns around the globe.
Metso-Outotec merger on track despite COVID-19 impacts Metso-Outotec merger on track despite COVID-19 impacts Metso-Outotec merger on track despite COVID-19 impacts Metso-Outotec merger on track despite COVID-19 impacts Metso-Outotec merger on track despite COVID-19 impacts

Metso Outotec aims to leverage the strengths of both companies

Metso said in an interim report covering the March quarter 2020 that its aggregates equipment business had faced the biggest COVID-19 related impacts, while its mining equipment sector had continued in line with expectations amid "healthy demand" for spare and wear parts.

The company reported a 5% rise in the value of orders received in the quarter to €1 billion (US$1.07 billion) and a 3% rise in services orders to €535 million. Sales were unchanged at €832 million while operating profit fell 27% to €73 million.

Outotec said in its results report for the same quarter COVID-19 impacts had caused uncertainty in the global operating environment in the period, leading to sourcing challenges, travel restrictions and site closures.

Customers delayed decisions on larger projects, causing a 28% fall in order intake to €240 million, although the minerals processing segment, smaller equipment orders continued at a good level. There was a 23% decline in service orders to €120 million and operating profit fell 27% to €9.3 million.

Both companies said the merger of Metso's Minerals business and Outotec to form Metso Outotec is on track for completion at the end of June, as is the demerger of Metso's Flow Control business to form Neles Corp.

"Metso's financial position continues to be good and we have further increased our funding facilities available to help us navigate through this challenging situation," said Pekka Vauramo, Metso president and chief executive. "Despite these exceptional circumstances, we have made good progress in the Metso Outotec transaction."

When merged, the new company will have 15,600 employees, and had illustrative 2018 combined sales and adjusted EBITA of €3.9 billion, according to company statements. Metso shareholders will own 78% and Outotec shareholders 22% of the combined company.