Orders a joy

WITH a record order book for its underground business, Joy Global took orders of $US870 million and made sales of $640 million during the first quarter of the 2008 fiscal year.
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Joy shows off one of its shearers in China.

Angie Tomlinson

The new orders were the second highest ever for the entire business, with underground equipment leading the way.

Joy attributed the 54% rise over the comparative 2007 quarter to the strength of international markets and an improved outlook in US coal.

Joy's original equipment orders were up more than fourfold while aftermarket orders grew 16%. The original equipment orders included major longwall projects in Australia and Russia.

“The current orders take our order bookings for the last four quarters to $3.2 billion and support our view that the industry's growth will stay stronger for longer," said Joy president and CEO Mike Sutherlin.

Although the underground order rate for original equipment had improved significantly, the order to delivery lead time has delayed the impact on shipments into subsequent periods.

During the quarter Joy recorded spending increases, including costs to bring on line new manufacturing capacity in China and costs to expand aftermarket service and support capabilities in several markets.

Joy said it expected new acquisition Continental Global to add about $260–280 million in partial year revenue during fiscal 2008, with operating margins of about 7%.

The company was positive in its outlook, predicting it to take several years and significant investment for capacity to catch up to demand.

“Against these supply constraints, demand continues to grow. Korea is building 10 new coal-fuelled power plants, the UK has permitted its first coal-fuelled power plant in 20 years, and Europe's announced plans to build up to 60 gigawatts of coal-fuelled power to reduce its dependence on Russian natural gas,” Joy said.

“Coal exporting countries, including Indonesia, Russia and Vietnam, are building coal-fuelled power plants that will increase domestic demand and reduce export capacity."