The firm said earlier this week that it planned to cut 500 jobs in Germany at its Schuler subsidiary, which specialises in automotive systems and tooling.

Andritz' shares rose as much as 7.2% in early trade, having lost around 13% since the beginning of the year to underperform the MSCI Europe Capital Goods index <.MIEU0CG00PEU> by around 35% and Finish rival Valmet by 10%.

The company, which also supplies plants and systems to the pulp and paper and metal manufacturing industries, reported earnings before interest, tax and amortisation (EBITA) of 94.7 million euros (£76.7 million) in the three months to the end of June. That was little changed from 94.6 million a year before.

Cash flow from operating activities was at 216 million euros in the second quarter after a cash outflow of 78 million the previous year. Order intake grew 18% to 2.05 billion euros.

"While EBITA fell 7% short of consensus, a strong beat for orders, a maintained full year outlook for sales and profitability and very strong cash flow stand out positively," JP Morgan analysts said in a note.

"Cash conversion has been a key issue in recent years and it’s good to see progress here with the initiatives of the company starting to pay off," the note said.

Order intake at its pulp and paper unit, which generates nearly half of group sales, increased 55% in the period.

"We are very pleased with the development of order intake and expect continuing good project activity in the coming months, especially in the pulp & paper business area", said Andritz' Chief Executive Wolfgang Leitner in a statement.

The group's metals unit, which supplies the car industry with products such as hydraulic presses and coil feed lines, reported a 3.6% drop in order intake.

Leitner said he was confident that the company could achieve a competitive cost structure and solid profitability in the medium term.

The group confirmed its guidance, expecting a largely unchanged operating margin on EBITA for the full year.

(Reporting by Kirsti Knolle; Editing by Jan Harvey and Kirsten Donovan)

By Kirsti Knolle