16.02.2011

Ramirent up 19%

Finnish based international rental company Ramirent has posted its full year results for 2010 which show revenues increasing by 19 percent in the fourth quarter.

Full year revenues were up 5.7 percent to €531 million keeping the company firmly in position as Europe’s second largest equipment rental company after Loxam, some €40 million ahead of fellow Finn Cramo. Pre-Tax profits for the year were €29.7 million up almost four percent on last year.

The fourth quarter continued the strong upward trend that has occurred in the second half, with revenues climbing 19 percent to €150 million while pre-tax profits came in at a solid €11.2 million compared to a loss of €3.6 million in the same period of 2009.

Net Debt was cut during the year by almost 15 percent to €176.6 million, this after allowing for capital expenditure of €62 million- compared to just €17.5 million in 2009. The company also sold off €16.9 million worth of older rental inventory. The company says that it will increase speinding on its fleet still further in 2011.

In regional terms revenues in Finland were up two percent to €135.2 million, Sweden up 13.6 percent to €144.5 million, Norway up 4.8 percent to €113.7 million and Central Europe up 2.4 percent to €65.4 million. At the same time Denmark declined by 17 percent to €32.9 million and Eastern Europe by 16.8 percent to €39.5 million.

Chief executive Magnus Rosén said: “Fourth-quarter activity remained strong through increased construction activity in most of our markets. Sales increased strongly in the fourth quarter compared to last year but profit level is unsatisfactory. Rental rates are improving, but pricing continues to weigh on gross margin. In addition, costs are increasing, as the Company is preparing to meet increased market demand.”

“Our focus in 2011 will be on further development in line with our strategy and on profitable growth. We are looking for growth primarily in our existing market areas, which offer additional potential. We are also determined to further strengthen synergies within the company and development of our personnel, while maintaining the entrepreneurial mind-set that is characteristic of Ramirent.”

“We continue to monitor and assess acquisition cases in the market and continue to see interest from customers to discuss fleet outsourcing arrangements. In addition, healthier market demand will be met by increased capital expenditure to support organic expansion in selected product groups and customer segments.”

“The rental industry is experiencing positive growth in most of our operating countries, and we expect the trend to continue and strengthen in 2011. We anticipate higher activity levels in infrastructure, residential construction and renovation construction.”

Vertikal Comment

This is not a bad result at all from Rami and in spite of Magnus Rosé’s comments on poor margins and profitability, the company is well ahead of many of its direct competitors such as Cramo.

If the company could improve margins in Norway and Central/Eastern Europe, bringing them up closer to the levels of Finland or even better Sweden the situation would be transformed.

What will be of interest in 2011 is how the two big Finnish companies compare, Cramo is making a comeback with very strong fourth quarter growth and has now added a major acquisition in Germany. The question is will Cramo overtake Rami in 2011 or will Rami’s policy of focusing on what it has, along with some more modest acquisitions within current markets keep it out in front?

Watch this space.