20.07.2011

Revenues jump 92% at Genie

Terex AWP/Genie has published its half year results which show revenues climbed 92% compared to a year ago.

Revenues for the first six months were $860.9 million, 92 percent up in the same period in 2010, while operating income was $34.2 million compared to a loss of $22.6 million last year.

The second quarter picked up the pace set in the first quarter with revenues jumping 108.3 percent to $484.1 million compared to the same quarter last year. Meanwhile operating income was $28.2 million compared to a loss of $2.3 million in 2009.

The order book at the end of June was up 137 percent on a year ago to $447.8 million – roughly the same as it was at the end of the first quarter.

The company says that the North American and Brazilian markets continue to
show strong growth, while demand in Western European demand has continued to strengthen since the end of March. The sales surge was led by sales of booms and telehandlers, although significant growth was seen across all product lines.

Revenue growth was also assisted by price increases although most of the benefits of this are expected to be seen in the second half of the year. The sale of the remainder of the company’s utility rental fleet also made a contribution.

Terex as a whole saw revenues grow by 36 percent to $2.74 billion, while pre-tax profits were $26.7 million compared to a loss in the first half of last year of $149.5 million.

Chief executive Ron DeFeo said: “We have made progress during the first six months of 2011, but there is still significant work in front of us. We had strong performance in terms of order and sales activity in the second quarter but supplier constraints on component deliveries and other operational challenges caused operating margins to be below expectations. Our sales grew by 38 percent over the prior year period and 18 percent over the first quarter of 2011."

“Our Aerial Work Platforms segment made progress, but not at the operating margins we expected. AWP costs, both material and headcount, caused some disappointment in our margin performance for this segment. Our previously announced 4.5 percent price increase in AWP should begin helping our performance in the second half of 2011. Now that the net sales and order rates have moderated somewhat we think the stability of the workforce can be driven to higher productivity.”

“Our suppliers have struggled in some areas to keep up with our requirements. This was particularly an issue for our Construction segment, but deliveries from component suppliers had improved by the end of the quarter.”

"The Demag Cranes purchase offer has met our expectations and progressed well. At the end of the extended offer period, preliminary results indicate that approximately 82 percent of the outstanding shares were tendered for purchase or are already owned by Terex."

The addition of Demag Cranes AG is expected to add approximately $1.7 billion annually in net sales with a strong footprint in Europe and emerging markets. The completion of the offer still remains subject to merger control clearance by the European Commission. We expect that this transaction will close in the third quarter of 2011."

“We anticipate that our full year performance will be near the top of our range for net sales. Our prior expectation for full year 2011 was for net sales to be between $5.2 billion and $5.5 billion, resulting in EPS, excluding restructuring and other items, between $0.60 and $0.75. Current expectations are for full year 2011 net sales to be between $5.4 billion and $5.6 billion.

Vertikal Comment

This is an excellent result from Terex/Genie while the market for both aerial lifts and telehandlers is good at the moment, the company has managed to outperform some of, if not all of its peers. This in spite of some of its consolidation or corporatisation decisions/strategies having initially caused some strong negative reactions among some of its customers.

The company has done well though to react effectively when it knows that it has pushed a bit too far and calmed those who have ….. struggled with some of the policy changes, adapting as necessary to reassure. On top of this it does of course have some excellent products that in many sectors are still the ones that end users ask for then renting.

A great result and positive indicator for all.