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Markets News

UPDATE 1-Takeover target Neles meets profit forecasts but uncertainty lingers

* Reports quarterly adjusted EBITA of 23 mln euros

* Organic order intake dips 15% year on year

* Company in midst of takeover battle (Adds detail, background)

STOCKHOLM, Oct 28 (Reuters) - Finnish valves maker Neles reported a fall in third-quarter core earnings on Wednesday, in line with market expectations, and stuck by a mixed outlook for demand in its key markets amid continued pandemic-related uncertainty.

Neles reported quarterly adjusted profit before interest, tax and amortisation (EBITA) of 23 million euros ($27.2 million), against 28 million euros a year earlier and the 22.8 million euros seen in a poll here of analysts commissioned by the company.

The company reported a 15% decline in like-for-like order bookings in the period. Though customers’ operations had returned to a more normal footing compared with the crisis-hit second quarter, most large maintenance projects have been postponed, Neles added.

“The ongoing COVID-19 pandemic continues to create uncertainties and risks of abrupt changes in all markets,” CEO Olli Isotalo said in a statement.

Neles is in the midst of a takeover battle in which Sweden’s Alfa Laval is bidding for the group while the biggest Neles stakeholder, Valmet, is instead pushing for a merger of the two Finnish companies.

Finnish engineering group Valmet, which owns nearly 30% of Neles, repeated calls for approval of its merger proposal after it posted forecast-beating earnings on Tuesday.

“During the third quarter, there has been considerable debate about, and public interest in, the ownership situation,” Isotalo said.

“In the midst of this, management and employees have been focusing on daily business, serving customers and executing the growth strategy.” ($1 = 0.8461 euros)

Reporting by Niklas Pollard and Johannes Hellstrom Editing by David Goodman

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