Workers wait for the arrival of South Africa’s President Cyril Ramaphosa ahead of the launch of the new Sandvik Khomanani manufacturing site, at Khomanani, in Kempton Park, Johannesburg, South Africa September 9, 2022. REUTERS/Siphiwe Sibeko/File Photo Acquire Licensing Rights

STOCKHOLM, Oct 23 (Reuters) – Swedish metal-cutting tools and mining equipment maker Sandvik (SAND.ST) on Monday posted a smaller than expected rise in third-quarter core profit and a decline in order intake.

The company’s quarterly adjusted operating profit grew to 5.82 billion Swedish crowns ($527.81 million) from 5.52 billion a year earlier but lagged the mean forecast in an LSEG poll of analysts of 5.97 billion crowns.

Sandvik said it continued to see solid, broad-based demand in aerospace, with stable development in the automotive sector. However, the demand in general engineering was subdued, it said, pointing to a softer market and de-stocking dynamics.

“We have seen weakening market dynamics in some of our customer segments leading to lower volumes,” CEO Stefan Widing said in a statement.

Order intake for the quarter fell by 1% to 28.93 billion crowns from 29.23 billion a year ago, excluding acquisitions the orders declined by 7%, Sandvik said.

Jefferies said the quarterly order intake was a 5% miss compared to the consensus, noting that mining demand was normalising.

The company shares fell over 3% initially, to trade 1.5% lower at 1016 GMT at 182.4 crowns per share.

The CEO said in a call to journalists that the company had managed to offset rising inflation so far, but expected it to continue to be a challenge in the following year and also saw higher labour costs for 2024.

($1 = 11.0266 Swedish crowns)

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