However, net profit for 2003 was down to SEK2.79 billion from SEK3.4 billion the previous year, with company chief executive and president Lars Pettersson citing the negative impact of currency rate changes – which produced a SEK700 million hit for the year – as the main cause of the slide.

Operating profit in the fourth quarter (SEK805 million) was also adversely affected by nonrecurring expenses in the form of writedowns of goodwill and restructuring costs linked to US subsidiary Precision Twist Drill.

Pettersson said the attainment of stronger positions in the group's key markets, combined with cost reduction and other business improvement measures implemented across the organisation, had Sandvik well placed for continued profitable growth.

Sandvik's core businesses include Sandvik Mining and Construction (SEK14.3 billion invoiced sales in 2003, up 9% on the previous year), Sandvik Tooling (SEK18.09 billion, up 3%) and Sandvik Materials Technology (SEK12.47 billion, down 4%).

Pettersson said SMC sales were buoyed by strong demand for equipment, parts and services from the mining industry. "Increased demand for raw materials and higher mechanisation resulted in increased sales of machinery, tools and service," he said.

"Demand in the construction industry remained stable in Europe and an increased activity was noted in (the) NAFTA (region)."

Overall, the group's order intake was up 13% in Asia/Australia (SEK10.5 billion), and Africa/Middle East (SEK3.08 billion); up 16% in South America (SEK2.1 billion); down 3% in the NAFTA countries (SEK10.08 billion); and up 1% in Europe (SEK24 billion).

"Activity in the general engineering industry stabilised in the EU and remained favourable in eastern Europe," Pettersson said. "Demand from most customer segments in NAFTA stabilised or increased somewhat." www.ConstructionEquipmentNews.net