July 24, 2019 / 7:33 AM / 2 months ago

UPDATE 1-Swiss pump maker Sulzer raises full-year sales guidance

(Adds detail, CEO comments)

ZURICH, July 24 (Reuters) - Swiss pump maker Sulzer AG defied the gloomy global industrial outlook by lifting its full-year sales forecast on Wednesday after a big jump in sales to the oil and gas sector.

Chief Executive Greg Poux-Guillaume expects large investments by oil and gas companies to continue next year, having a positive impact on Sulzer’s sales and profits.

“People have this doom and gloom mentality currently, but in oil and gas we are still at the beginning of the investment cycle,” Poux-Guillaume said after Sulzer reported a 28% incease in first-half sales to the sector.

“We see healthy markets in oil and gas this year and next.”

Sulzer’s pumps are used to extract, transport and process oil and gas. They are also used in the water purification and power generation industries.

The company on Wednesday stuck to its operational EBITA margin target of about 10% for 2019, a figure Poux-Guillaume expects to increase in future.

Profitability on orders for its pumps for the oil and gas sector have increased every quarter since the first quarter of 2018 and were now 7 percentage points higher, he said.

This has been achieved through being able to achieve higher prices for its products as well as being more selective about what orders to accept.

“The increase in order volume bodes well for sales volume next year, which bodes well for profitability,” Poux-Guillaume said.

“I certainly expect to increase profitability next year,” he added, declining to say by how much.

First-half orders rose 8.7% to 1.93 billion Swiss francs ($1.96 billion) while sales rose 13% to 1.77 billion francs.

Net profit for shareholders rose to 65.1 million francs from 57.9 million francs a year earlier.

Sulzer said it now expects orders for the full year to increase by 6-9%, up from its previous view of a 2-5% increase. Full-year sales growth expectations, when adjusted for currencies and acquisitions, are now 7-9%, up from its previous range of 3-5%. ($1 = 0.9865 Swiss francs)

Reporting by John Revill Editing by David Goodman

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