05.11.2010

Losses deepen at Essex

Essex crane the US based crawler crane rental company has posted its third quarter results, which show a further decline in revenues and higher losses, but sees an improving trend.

Total revenues for the nine months to the end of September fell 39 percent to 26.1 million, creating a pre-tax loss of $9.6 million, compared to a profit of $2.6 million in the same period of 2009.

Third quarter revenues fared better and were down 21 percent to $8.75 million, while the pre-tax loss was $3.2 million, compared to a loss in the same quarter last year of $1.5 million.

The company says that it is beginning to see some improvements come through, with utilisation in the quarter picking up from 38.6 percent last year to 40.2 percent this year. However average monthly rental rates fell from $20,716 in the third quarter of 2009 to $16,137 this year.

Essex chief executive Ron Schad said: "Third quarter results were consistent with our expectations, and we continued to see some of our end markets recover and, accordingly, demand for our heavy-lifting equipment increase. During the quarter, we witnessed the continued stabilization of rental rates. However, our average monthly rental rate declined marginally, primarily due to the mix of cranes on rent.”

“More importantly, on a sequential quarter basis we experienced a meaningful increase in utilization rates when compared to the three months ended June 30, 2010."

"Rental related revenues increased sequentially by 18.5 percent, or $1.3 million, to $8.6 million for the three months to the end of September, from $7.3 million for the three months to the end of June. We are optimistic that the benefit of the cyclical upturn that we are experiencing will exceed the slight seasonal downturn usually experienced during the fourth quarter.”

“We have significant projects scheduled to start in November which provides some assurance that utilisation will continue to climb through the fourth quarter, which would put the company in a position to substantially increase utilisation as the spring construction cycle begins in early 2011."

"Our outlook for the remainder of this year and for 2011 is upbeat as we expect utilisation rates to continue their upward trend and we believe that they will reach levels that will allow us to achieve higher rental rates in the foreseeable future.”

At the same time Essex announced that it is actively bidding to acquire the assets and business of Coast Crane which filed for chapter 11 bankruptcy in September. Essex will sell 3.3 million new shares at $4.30 per share, raising $14.2 million for the purchase if it is successful.

Click here to see Coast Crane decision expected soon