The largest detractor to performance for the quarter was Outotec (OHEL:OTE1V, Financial), a Finnish provider of technology and equipment for the metals and mining industries. Mining companies around the world have reduced capital expenditures budgets in the wake of commodity price declines. During the past few months, Outotec has not experienced any further reduction of customer demand from an already low level, but the company has seen some additional project delays in copper and other base metals. Management has undertaken several cost-cutting initiatives in recent quarters, including job reductions, which appear to be progressing well. During the quarter, we met the new CFO and expect him to implement continuous improvement procedures so that the company can increase profitability and reduce variability across its businesses. We also expect that Outotec will benefit from a renewed focus on its service business and an eventual improvement in end market demand.
From David Herro (Trades, Portfolio)'s Q3 Oakmark International Small-Cap Fund commentary.
