31.10.2010

Cramo up 4.4%

Finnish based international rental company Cramo has reported a positive third quarter with year to date revenues up 4.4 percent.

Revenues for the nine months to the end of September were 345.7 million, an increase of 4.4 percent on 2009. The year to date results remained in the red though with a loss of €3.5 million, compared to a loss of €6.7 million at the same stage last year.

The quarter was far more positive though, with revenues up over 13 percent to €130.3 million, with a pre-tax profit of €7.2 million compared to a profit of €2 million in the same quarter last year.

Finland, Sweden Norway all posted respectable gains in revenue and operating income, while Central and Eastern Europe saw a strong rise in revenues, but remained in negative territory in terms of profitability, only Denmark continued to decline on both counts. The trend is positive though in all of the company’s operations.

Cramo says that the construction and equipment rental service markets are expected to grow in all of its market areas in the fourth quarter and into 2011. It also expects more contractors to move from owning equipment to renting it in 2011.

The company spent €33.2 million on what it calls capital expenditure compared to €25.1 million last year, however €8.2 million of this year’s spend was on acquisitions, rather than the purchase of new equipment. It says that it expects total capital expenditure on new equipment to be in the region of €40 million for the full year.

It added that a balance between demand and supply of rental equipment was achieved in almost all of its markets in the third quarter, which provides a solid starting point for business development.

Chief executive Vesa Koivula said: “An upturn has occurred in the market as expected. Residential construction in particular has picked up in several markets. Thanks to improvements in demand and the adjustments we have made, the utilisation rates of Cramo's fleet have substantially improved”.

“Our experiences in Finland and Sweden show that changes in the equipment rental market follow the changes in construction activity with some delay. Although the first signs of recovery in the construction market already appeared in the first half of the year, an upswing in equipment rental only occurred in the third quarter. Because of the positive outlook in construction and the economy, similar developments can be expected in all of Cramo's market areas.”

“We have concluded several outsourcing agreements and acquisitions in the Nordic region within the past six months. Interest in fleet outsourcing is a new trend among not just major construction companies but mid-sized operators as well. This change in the operating method offers particular growth opportunities for large companies - such as Cramo - which are able to provide even major customers with all of the equipment and services they require. As the outlook improves, we will continue to investigate growth opportunities based on acquisitions,”