MUNICH (dpa-AFX) - Construction equipment manufacturer Wacker Neuson expects weaker results in the coming months after a strong start to the year. Company CEO Karl Tragl still expects the first quarter to be the strongest of 2023. He confirmed the full-year forecast on Tuesday. The supply chains remain formative for day-to-day business, the company announced in Munich on Tuesday. Although the situation had improved slightly, "we are still a long way from a normalization of the situation," said CFO Christoph Burkhard. Investors reacted with profit-taking.

The SDax-listed share was recently down around 3.3 percent. Despite the price setback, however, the gain since the low at the end of September still amounts to around 70 percent. Martin Comtesse from Jefferies praised the quarterly results, which exceeded the expectations of market experts.

Due to supply chain issues, Wacker Neuson continues to hold increased inventories in order to secure growth, according to the company. However, this strategy ties up a lot of capital, which has also been weighing on free cash flow for around a year. In the first quarter, the level of work in progress improved somewhat. It remains volatile, but is now back below its former highs, it said.

At EUR 62.4 million, Wacker Neuson's bottom line in the first quarter was more than twice as high as a year earlier. The company also benefited from a positive one-off effect, the sale of a property.

In addition, management was able to reduce costs for administration, sales and research and development. The margin for earnings before interest and taxes (Ebit) improved from 7.5 percent to 13.2 percent. This was better than analysts had expected and Wacker Neuson also delivered a positive surprise in terms of growth.

Revenue rose by more than a quarter to EUR 667 million, driven by strong demand in Europe and North America. Overseas in particular, the Munich-based company continued to expand its affiliated dealer network and benefited from strong demand from key accounts. By contrast, Wacker Neuson's third business region, Asia-Pacific, suffered from a drop in revenue in China, but still posted an overall increase.

For the year as a whole, management is targeting revenue of between EUR 2.3 billion and EUR 2.5 billion. The operating margin is expected to be between 9.5 and 10.5 percent./lew/mne/stk