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Engineering group Alfa Laval's profit hit by Russian provision

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STOCKHOLM (Reuters) -Swedish engineering group Alfa Laval reported lower quarterly operating profit than expected on Tuesday and predicted somewhat lower sequential demand for the second quarter.

First-quarter operating profit at the maker of products such as heat exchangers, pumps and filters slid to 1.28 billion crowns ($132 million) from a year-earlier 1.34 billion. Analysts polled by Refinitiv had on average forecast an increase to a 1.71 billion crown profit.

Alfa Laval, which has paused taking new orders in Russia, said sanctions meant it had cancelled orders amounting to 602 million crowns from its order book in the quarter, mainly in its Marine division.

"In addition, provisions to a value of 327 million crowns have been booked to cover for various costs related to existing contractual obligations concerning Russia," it said.

Shares in the company were down 5% at 1115 GMT.

Operating profit before amortisation, the provision and other items affecting comparability, was 1.82 billion crowns, up from 1.53 billion a year earlier.

($1 = 9.7317 Swedish crowns)

(Reporting by Anna Ringstrom; Editing by Simon Johnson and Niklas Pollard)

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