11.11.2010

Palfinger on the rise

Palfinger has reported a 41 percent growth in third quarter revenues and a strong pickup in profitability.

Revenues for the nine months to the end of September were €464.9 million 19.9 percent higher than at the same time last year. Pre-tax profits were €19.4 million compared to a loss at the same point in 2009 of €10.7 million.

Growth in the third quarter was even stronger with revenues growing 41 percent to €167.5 million, roughly 30 percent of the growth is attributed to acquisitions the rest from organic growth largely in the Americas. Pre-tax profits were €7.5 million for the quarter compared to a loss of €2.1 million last year. It now looks as though the third quarter 2009 was the low point in the current economic cycle for the company.

This year’s third quarter revenues were below that of the previous quarter, due to the three week annual vacation, but the underlying trend was still positive. Palfinger says that the European crane business, which is by far its most profitable sector, is now showing solid growth again, while the truck mounted aerial lift business declined both year to date and quarterly.

The group managed to cut its net debt by €11 million to €150.5 million in spite of the acquisitions it made during the period, which included US Access business ETI and Dutch marine crane company NDM.

Chief executive Herbert Ortner said: “After an extremely weak 2009, the past quarters were marked by a continuous positive market trend. In addition, the positive effects of the structural and process-related measures implemented in 2009 were felt. On this basis, we were able to seize market opportunities and to continue our strategic activities in a targeted manner in the past few months. The results have not yet reached pre-crisis record levels, but we are nevertheless satisfied with the milestones reached.”

Palfinger also announced that last week it concluded an agreement with former competitor Ross & Bonnyman in Scotland to take over its service business for commercial tail lifts. Ross & Bonnyman will discontinue operations in this sector passing it over to Palfinger. Its revenues in 2009 were €2 million.

The deal is subject to approval from the competition authorities, assuming there are no problems with the approvals, the agreement will be completed in January 2011.

Vertikal Comment

This is another excellent set of results from Palfinger, and shows what we have been hearing for some time now, that the loader crane business is beginning to bounce back. The slowing of the truck mounted business, particularly for medium to larger units is also affecting the industry as a whole. But Palfinger also benefited last year when this sector was still strong and the crane business was hitting the depths.

Palfinger looks set to benefit substantially from the crane business growth and should also see a stronger tail lift result now that its restructuring efforts are just about complete. It still has work to do in the access sector both in Europe and in the USA where it now has a base which it needs to organise into a dynamic and cohesive single business unit.

It says that it is currently restructuring its European access operations and expects to see the benefits in 2011. It also needs to regain the commercial high ground in what has become a very dynamic market in terms of product development.

Given that German based 3.5 tonne truck mounted lifts struggle to compete with Italian built products in many markets, the company could do well to consider an acquisition on the other side of the Alps. From what we hear there might be a bargain or two to be had as we head towards year end? The timing of which would be ideal in terms of the economic cycle.