12.08.2011

Ramirent lifts revenues 18%

Finnish based international rental company Ramirent has reported first half revenues up 18.1 percent on last year with a strong improvement in profitability.

Total revenues for the six months were €283.9 million -18.1 percent higher than in the same period of 2010. Improvements were seen across all of its operating units, with East Europe leading the way with a 32 percent increase, this was followed by Sweden where revenues jumped 30 percent to €83.4 million making it the group’s largest business.

Finland was up four percent, Norway 13 percent, Denmark 6.6 percent and Central Europe 19.3 percent. Pre-tax profits for the group leapt from €78,000 in the first half of 2010 to €12.4 million this year. Profitability improved in all regions although Denmark, East Europe and Central Europe remain just below the break-even point.

The second quarter saw a continued upward trend with total revenues up 16 percent to €149.5 million. While pre-tax profits more than doubled to €12.5 million.

Capital expenditure in the first half was €76.5 million, more than double that of last year and higher than the €62 million total investment for 2010. €68 million of the first half expenditure was for new rental equipment, with just under €9 million of older kit being sold. Net debt surprisingly climbed 14 percent to €238 million.

Chief executive Magnus Rosén said: “Activity levels continued to improve in the second quarter contributing to net sales growth in all our segments. The growth was fastest in Sweden, Europe East and Europe Central. Profitability improved also due to the higher business volumes and efficiency improvements from relocation of fleet capacity and expansion of the outlet network. However, profitability is still burdened by unsatisfactory price levels. Our priority therefore remains on raising price levels as the demand is returning to our various product groups.”

“During the quarter, we succeeded in finalising several important acquisitions that strengthen our product offering as well as our presence in important customer sectors. In Norway, we signed an agreement to acquire Rogaland Planbygg, the leading provider of high-class rental accommodation and office modules to the oil and gas industry in Norway. In Sweden, we signed an agreement to acquire Hyrman i Lund, which strengthened our presence in the high-activity region of southern Sweden. In Finland, we acquired Suomen Sääsuoja. This acquisition reinforced our position in the growing weather protection market in Finland. In the Czech Republic, we continued to build our network by acquiring the equipment rental business of two construction equipment companies.”

“While the activity levels in our markets have improved, we maintain a cautious stance on the market recovery due to the current macroeconomic uncertainty. Our focus remains on continued operational development, maintaining a strong financial position and we have contingency plans in place to manage changes in the market situation.”

Vertikal Comment

This is another solid performance from Ramirent which should gather pace as it goes into the second half and starts to benefit from its recent acquisitions. Given the company’s strong position in many of the markets in which it operates it ought to be capable of leading rental rates up to more economic levels.

It is always interesting to compare Ramirent with its fellow Finnish based rental giant Cramo. Cramo has now taken the lead in terms of revenues, thanks to its Thiesen acquisition, however Rami has outperformed in terms of profitability throughout the slow-down and these latest results show that it is in fact opening up the gap still further.

An excellent set of results.