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Jungheinrich reports Q3 slowdown, confirms 2023 margin forecast

EditorAmbhini Aishwarya
Published 11/10/2023, 06:08 AM
© Reuters.

Jungheinrich, a key player in the forklift truck manufacturing industry, reported its third-quarter financial results. The company experienced a slowdown in business growth compared to the first half of the year. Despite the challenging economic environment, Jungheinrich's incoming orders saw a near 5% increase to €1.2 billion and net sales rose 14% to nearly €1.4 billion year-over-year. This growth, however, was at a slower pace than the strong increase seen in the first half.

The MDax-listed firm faced higher personnel and material costs which contributed to a 1% drop in earnings before interest and taxes (EBIT), landing at €103 million for the quarter. This figure met analysts' expectations and came alongside a decline in after-tax profit by 4.5% to €68.2 million. The company's operating margin slightly dipped in Q3 but has maintained an overall rate of 8.4% for the year, within its forecast range of 7.8%-8.6%.

In response to rising costs, Jungheinrich has increased prices for its forklift trucks. However, there is speculation that the company may have offered discounts due to softening demand in what is currently a sluggish economy.

Additionally, shares of Jungheinrich fell by 6.4% as the market reacted to a significant decrease in Q3 forklift orders, reflecting weaker demand. The decline in orders contrasted with an overall increase attributed to the acquisition of Storage Solutions Group. Despite these challenges, the group's revenue climbed by 14%, indicating some resilience amid broader market pressures.

Jungheinrich's efforts to navigate through economic headwinds while maintaining its profitability targets show a strategic balancing act amid unpredictable global market conditions. The company's confirmation of its operating margin forecast for 2023 suggests a cautious optimism that it can weather the current economic challenges.

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