STOCKHOLM -- Swedish ball bearing manufacturer SKF (IW 1000/449), a barometer of global manufacturing, returned to profit in the first quarter of 2014, the company said on Tuesday citing rising sales.
SKF is the world leader in the industrial bearing business and its products are widely used in industrial processes, the automotive sector and engineering.
Hence, its results are a good indicator of the global industrial activity and the trend of the economy.
Demand from the automotive industry was particularly strong in Asia, and Europe performed much better than in 2013.
The group finished 2013 on severe fourth-quarter losses due to a multi-million provision to cover a fine for infringements of European competition law. The fine from Brussels amounted to 315.1 million euros, slightly below the 330-million-euro provision made by the group, and will be payed in June, which "will impact cash flow in the second quarter the second quarter", according to SKF.
Net profit in the first quarter rose by 56% compared to a the figure a year earlier to 1.238 billion kronor (US $188 million).
Almost half of the revenue increase -- a 10% rise to 16.734 billion kronor-- came from the acquisition in late 2013 of U.S. bearing manufacturer Kaydon for $1.25 billion.
"Sales developed well in the first quarter compared to the low first quarter last year," chief executive Tom Johnstone said.
"We expect demand to develop positively both sequentially and compared to the second quarter last year," Johnstone said.
"Manufacturing will be higher year on year and slightly higher compared to the first quarter."
Copyright Agence France-Presse, 2014
