20.05.2011

Powered access up 96.5% at Mills

Brazilian based rental and industrial services company Mills has reported a 96.5 percent rise in powered access revenues.

Total revenues at the company were up 25 percent to R$145 million ($90.2 million) – although this is six percent lower the fourth quarter due to a substantial drop in Formwork sales and rental. Profits after tax was up 18.8 percent to R$22.2 ($13.8 million).

Of the total, rental revenues - for scaffold, powered access and formwork etc..- was R$96.8 million ($60.2 million) -29.6 percent higher than a year ago. Capital expenditure was R$184.6 million ($114.8 million), compared to R$58.7 million ($35.9 million) in the same quarter of 2010. Net debt climbed from R$132 to R$157 million ($82-$97.6 million).

The company’s Rental division which is dedicated to powered access and which opened 10 new branches in 2010 saw revenues climb 96.5 percent to R$33.7 million (21 million), this was 9.6 percent up on the fourth quarter. The division generated an operating income of R$18.9 million ($11.7 million) - 93 percent up on the same period last year. During the quarter it spent R$42.4 million ($26.4 million) on new equipment of a planned R$128.9 million ($80.2 million) for the year as it opens five more locations.

Vertikal Comment

This is all very ‘heady stuff’ with an amazingly rapid ramp up into powered access as some parts of the business appear to be struggling. As long as the Brazilian economic surge continues at its current pace all will be well and this will become a major powered access market.

However in most other markets surges such as this, as the powered access market develops, have historically tended to rapidly overshoot the growing demand, resulting in reduced rental rates and a stall in growth while the machine population waits on the underlying demand to catch up.

Will things be different in a world where powered access is now reaching the outer edges of maturity in places like the USA? I doubt it. Contractors do not all switch from traditional access equipment to powered access overnight – major construction projects will and have certainly pushed up usage massively and that will seep out into the wider market but this current surge is likely to see a correction – the question is when?