22.07.2010

Improvements all round at Genie

Genie revenues for the first half of 2010 were up just over three percent to $448.1 million. Invoicing edged up in the second quarter rising almost 12 percent on the same quarter last year- (9% without currency factors).

Terex says: “While rental customers in the North America and Europe continue to age their aerial fleets and defer the purchase of new products, selective buying patterns have begun to emerge. Additionally, it appears that the de-fleeting of inventory at rental locations has slowed.”

“Developing markets remain a strong growth component as demand for large
booms, light towers and telehandlers continues to steadily improve in markets like South America and South East Asia.

The business made a six month operating loss of $22.6 million, compared to a loss of $71.9 million last year. For the quarter it was better with a loss of $2.3 million compared to a loos of $32.4 million in the same quarter 2009.

Genie/Terex AWP ended the period with an order book of $188.7 million - 38 percent higher than this time last year. However it was down six percent on the quarter.

Terex Corp

The Terex business as a whole recorded revenues for the six months of just over $2 billion an improvement of around six percent. While pre-tax losses of $149.5 before exceptions such as the $595 million gain on the sale of disposals such as the mining business- compared to a loss in the first half of 2009 of $275.1 million.

The loss in the second quarter was $35.3 million compared to $138.6 million last year.

Chief executive Ron DeFeo said: “We have just completed a challenging first half of 2010, but many of our businesses have seen their recent results show improvement off of trough levels experienced during 2009. We are cautious, but positive, about our prospects for continued improvement. Backlog in three of our four segments indicate slightly improved near-term prospects. Our factories have returned to more regular work schedules and production output. These improving business conditions are the basis for our cautious optimism
about the balance of 2010 and lay the foundation for what we feel will be a positive business environment in 2011 for most of our product categories.”

“Operationally, we view our results as being consistent with previous guidance.
We continue to expect break-even operating profit for the full year 2010 before interest and taxes. Due to the divestiture of the Atlas business and the negative effect of currency exchange rate changes, we now expect full year 2010 sales to be in the range of $4.5 to $4.6 billion. While clearly a challenge, our objective remains to return to profitability in the fourth quarter of 2010. Longer term, we continue to view 2011 as a profitable growth year. Assuming a return to a more normalized economic environment, based on the historical performances of our businesses, we believe doubling our revenue, with net income of approximately $6 per share, is achievable by 2013.”

Chief financial officer Phil Widman, said: “In the second quarter, we invested approximately $28 million in financing receivables as part of our initiatives to provide solutions to our customers and help accelerate the growth of our businesses. We have indicated that acquisitions could be a likely use of cash; however, it remains difficult to predict the timing of potential transactions. Absent actionable near term acquisitions, we expect to repay some debt this year, while maintaining sufficient flexibility to capitalise on market opportunities.”

Vertikal Comment

While there are some mixed messages within these numbers, they do show stability returning to the market and some promising signs for the rest of the year. Order intake trends remain unstable but rental fleets are now beginning to show significant aging signs which will force new investment, helped by drastically reduced debt at most larger rental cmpanies.

Genie is as well placed as any of the big four/five to benefit from the upturn, as it begins to gather pace, probably next year. With capacity constraints likely to bite quite early in the recovery the business should see a rapid return to profitability.