05.08.2011

Cramo back in the black

Finnish based international rental company Cramo has reported a 42% rise in revenues for the first half of 2011, taking the company back into profitability.

Total revenues for the first half were €305.4 million 41.8 percent up on the same period last year, organic growth -without counting acquisitions made during the year – was still a healthy 27.6 percent. Pre-tax profits were €1.8 million compared to a loss of €10.7 million in 2010.

Profitability gained pace in the second quarter with revenues climbing 41 percent to €161.1 million and pre-tax profits growing to €5.8 million from a loss of €4.2 million last year.

Profitability improved in all of the company’s regions except Norway where rental demand increased more slowly than expected, in addition to which unprofitable projects were recognised in the second quarter. In Denmark and Eastern Europe the result was negative but was clearly better than last year. All other regions were positive and improving...

Capital expenditure – excluding acquisitions – was €71.4 million in the six months, compared to $16.1 million in the same period of 2010.

Cramo chief executive Vesa Koivula, said: “The second quarter of 2011 developed in line with our expectations. The demand for rental services and the price levels continued to develop favourably. Construction activity continued to increase and profitability improved in Finland and Sweden, our largest market areas. New housing starts are at a good level in Finland and in Sweden, and the outlook for office and commercial construction is improving.”

“I am particularly pleased with the improved performance of our Central European business segment, which was formed in connection with the acquisition of Theisen Group. In Germany and Austria, business developed according to our expectations. It seems that the acquisition occurred at the right time.”

“Our Danish and Eastern European operations continued to improve their performance, and our objective is to achieve a positive result in the second half of the year. I also expect to see the Norwegian operations to turn back into profit.”

Vertikal Comment

This is a surprisingly strong set of results from Cramo, it was clear that the Thiesen acquisition would have a major impact, however the underlying revenue improvements from the rest of the business show strong organic strength and growth potential.

Cramo has struggled a little through the recession and has posted more red ink than its main rivals, but is now coming out with ‘all guns blazing’. The Thiesen acquisition is already beginning to look as though it could be a ‘transformational deal’, helping add more economic cycle diversity to the group, while taking the business to a new level.

Watch out Loxam!