Three new high volume orders received in second quarter
Second Quarter 2025
· Revenue for Period: SEK 31.1 million (SEK 35.1 million). Recurring revenue accounted for 92.3% (95.6%) of the revenue, influenced by higher installation revenue
· Operating Result: SEK 11.2 million (SEK 13.1 million), yielding 36.1% (37.4%) operating margin
· Earnings per Share: SEK 1.24 per share (SEK 1.48 per share)
· Cashflow from Operations: SEK 9.1 million (SEK 16.6 million), primarily due to the increase in accounts receivable and prior-year operating liability increase
· Dividend Payment: First instalment of SEK 3.50 per share (SEK 24.7 million) paid on 27 May 2025
· New commercial vehicle orders received for more than 500,000 Engine Equivalents per year
· Scania launches new 11 litre engine with SinterCast-CGI cylinder block and cylinder head
· First installation in India commissioned; positive outlook for second-half installation activity
Year-to-Date 2025
· Revenue for Period: SEK 58.1 million (SEK 67.3 million). Recurring revenue accounted for 95.2% (95.5%) of the revenue
· Operating Result: SEK 21.4 million (SEK 20.5 million), yielding 36.8% (30.5%) operating margin.
· Earnings per Share: SEK 2.33 per share (SEK 2.35 per share)
· Cashflow from Operations: SEK 21.4 million (SEK 31.8 million), primarily due to strong reduction in prior-year accounts receivable
· Dividend: Ordinary dividend of SEK 6.00 per share (SEK 5.50 per share) and extraordinary dividend of SEK 1.00 per share (SEK 0.60 per share), equivalent to SEK 49.5 million (SEK 43.1 million), to be paid in two equal instalments
· Installed Base: 58 (56) installations, 26 (25) fully automated systems, 24 (24) mini-systems and eight (seven) tracking systems in 13 (12) countries
CEO Message
Series Production up 10% in the second quarter; positive long-term outlook
Series production in the second quarter finished at 3.4 million Engine Equivalents, up 10% from the first quarter volume of 3.1 million Engine Equivalents. The increase was primarily due to the continued ramp of the Traton Group 13 litre cylinder block and head, as series production for MAN increased through the quarter. Ford Super Duty pick-up truck production was also strong during the quarter. However, slow commercial vehicle sales in Europe and North America, and a slow start for commercial vehicle production at First Automobile Works in China limited the gains compared to the first quarter.
Year on year, second quarter production was down 15%, from 4.0 million Engine Equivalents, due to the combined effects of the stoppage of a high volume programme in September 2024 and slow market demand for commercial vehicles. The decline was comprised of approximately 520,000 Engine Equivalents from the stoppage programme, 350,000 Engine Equivalents from temporarily low commercial vehicle sales, and a combined increase of 270,000 Engine Equivalents from all other series production programmes.
Sales of the consumable Sampling Cup were strong during the second quarter, with 58,050 (56,700) units shipped. Overall, Sampling Cup shipments for the first half of the year amounted to 103,950 (101,300) units. The strong consumables sales contributed to year-to-date revenue of SEK 58.1 million (SEK 67.3 million), with 95.2% (95.5%) of the total revenue accounted for by recurring revenue. The recurring revenue is derived from the Production Fee levied for each Engine Equivalent, consumables and software licence fees. Benefitting from proactive cost reduction activities and currency revaluation gains primarily related to the longstanding US dollar hedge strategy, the year-to-date operating result finished at SEK 21.4 million (SEK 20.5 million), providing an operating margin of 36.8% (30.5%).
The second quarter also saw positive overall market development, with the announcement of three new high volume series production programmes. At mature volume, the combined contribution from these three programmes is forecast to be more than 500,000 Engine Equivalents per year. Specifically, Scania launched the 11 litre version of the current-production 13 litre commercial vehicle engine. The two engines boast 85% common components, including Compacted Graphite Iron cylinder blocks and heads produced using the SinterCast process control technology. In parallel, the Tupy foundry secured two new contracts to supply CGI cylinder blocks for 13-litre commercial vehicle engine programmes, one in Brazil and one in North America. Together with the programmes that are already in the ramp phase, these new programmes provide the building blocks for reaching the five million and six million Engine Equivalent milestones, while delivering on our projection that all commercial vehicle OEMs will adopt Compacted Graphite Iron before the end of this decade.
Tariffs and Emissions Legislation
The recent changes in international tariffs on vehicles and auto parts have created considerable uncertainty in the automotive sector. In the specific case of SinterCast, there are no cast iron cylinder block and head foundries in the United States. All cast iron cylinder blocks and heads are therefore imported, with the main sources being Mexico and Brazil, with some components coming from Europe and none, as yet, from Asia. As the US must import 100% of its cast iron cylinder blocks and heads, the tariffs are not expected to have a direct effect on the SinterCast series production volume. However, if new or future tariffs lead to a reduction in automotive sales, the decreased volume can have an indirect impact on SinterCast.
On 6 August, the Trump administration introduced new unilateral tariffs on many Brazilian goods. The new tariffs apply to goods that were either not addressed by previous tariffs or not included in specific exemption lists. As a result of the new tariffs, auto parts for passenger vehicles and pick-up trucks are currently subject to a 25% tariff while commercial vehicle parts are subject to a 50% tariff. Tupy, with its main manufacturing site in Brazil, has publicly commented on the potential to move some production to its foundries in Mexico or Portugal, which also have SinterCast installations. It is still too early to know how the tariffs and reactions will evolve; however, imbalanced tariffs can affect Tupy's competitive position.
On 13 June, the United States Environmental Protection Agency (EPA) proposed new Renewable Fuels Standards to increase the domestic production and export of liquid biofuels. The proposals set the highest ever requirements for net-zero renewable fuel volume and provide certainty for new investment into renewable fuel production in the US. In parallel, the new EPA proposal removed electricity as a qualifying renewable fuel. The proposed standards will reduce the need for fossil based fuels by 150,000 barrels per day, eliminating approximately 24 million tonnes of CO2 per year by the end of 2027. The proposal reinforces the contribution that clean fuels can make to CO2 savings today, and the importance of focussing on the fuel rather than the powertrain in order to provide cost-effective and sustainable transport solutions for the future. It is widely expected that the EU will also embrace net-zero liquid fuels in the Sustainable Transport Investment Plan (STIP) scheduled to be published this autumn.
The improved strength of CGI enables increased combustion temperature and pressure in engines. This increase improves fuel efficiency, horsepower and torque. When using CGI, heavy-duty commercial vehicles typically achieve 5-10% improved fuel efficiency, providing significant CO2 savings. With approximately 13 million SinterCast-CGI vehicles on the road today, the SinterCast technology reduces CO2 emissions by approximately 10 million tonnes per year. We remain on pace to reach our goal of 100 million tonnes of cumulative CO2 reduction by 2028.
Installation campaign underway; intensified field activities in the second half
The second quarter marked the start of the 2025 installation campaign, with installation revenue of SEK 2.1 million (SEK 1.3 million). The second quarter benefitted from the 29 June installation acceptance at the Saroj foundry in India and strong aftermarket sales of spare parts. Installation activities are scheduled to intensify in the second half of the year, with firm orders already received from Maringá Soldas in Brazil and Qingdao Surefire (formerly Xu Ruifeng) in China. Discussions are ongoing for other new installations and for capacity upgrades, representing potential installation revenue of more than SEK 20 million. At the mid-year point, we are confident to exceed our historical full-year average installation revenue of SEK 8 million. However, because of the current economic uncertainties, it is not yet possible to determine if SinterCast will be able to secure and commission enough of the installation opportunities before year-end, in order to beat the SEK 11.4 million posted in 2024.
For further information please contact:
Dr. Steve Dawson
President & CEO
SinterCast AB (publ)
Office:+46 150 794 40
Mobile:+44 771 002 6342
e-mail:steve.dawson@sintercast.com
website:www.sintercast.com
Corp. Id. 556233-6494
This press release contains information SinterCast AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. This information was submitted for publication, through the agency of the President & CEO Dr. Steve Dawson, at 08:00 CET on 20 August 2025.
SinterCast is the world's leading supplier of process control technology for the reliable high volume production of Compacted Graphite Iron (CGI). Stronger, stiffer and more durable than conventional iron, CGI enables the development of smaller, lighter and more fuel efficient engines in passenger vehicle, commercial vehicle and industrial power applications. The use of SinterCast-CGI currently contributes to the reduction of approximately ten million tonnes of CO2 per year. With 58 installations in 13 countries, SinterCast provides sustainable solutions for manufacturing and transportation to the global foundry and automotive industries. SinterCast is a publicly traded company, quoted on the Small Cap segment of the Nasdaq Stockholm stock exchange (SINT). For more information: www.sintercast.com
