09.11.2011

Profits triple at Ramirent

Finnish based international rental company Ramirent has released its third quarter numbers with show a strong recovery in all of the markets in which it operates.

The results for the nine months to the end of September show revenues growing 21.5 percent to €463 million, while pre-tax profits more than tripled from €12.1 million at this point last year to €38 million this year.

Looking at the third quarter revenues climbed by 27.2 percent to €179.2 million while pre-tax profits more than doubled to €25.65 million.
The upward trend of the year picked up substantially in the quarter with revenues in all regions growing, the slowest was Europe Central at 9.4 percent while Norway grew 44 percent, although around half of this was due to acquisition of Rogaland Planbygg, Europe East was up 39 percent, all from organic growth/market improvement.

All six regions, Finland, Sweden, Norway, Denmark, Europe East and Europe Central, were also profitable in the third quarter. Year to date gross capital expenditure totalled €196.3 million compared to €43.9 million at this point last year. Most of it being in the Nordic markets.

Chief executive Magnus Rosén said: “The demand for Ramirent’s equipment rental was strong in the third quarter, which typically is the seasonally strongest quarter of the year in the equipment rental business. Our net sales grew 27.2 percent in July-September on the comparison period and our profitability continued to improve primarily thanks to the good fleet utilisation rates.”

“Net sales growth was strongest in the Nordic segments and Europe East based on good construction activity levels. Healthier balance between supply and demand has also gradually been improving the price levels in our markets.”

“We have further expanded our network, totalling now 412 rental outlets. We have successfully integrated the six acquisitions and two outsourcing deals we have made during the year and they are positively contributing to our growth and profitability.”

“The impact of the global economic turmoil was not evident in our operations in the third quarter; rather the general demand continued to be positive in all our segments. Nevertheless, visibility on the markets remains low and we continue to carefully monitor the development of our market environment. We maintain a high preparedness to act upon possible changes in market conditions. We will keep capital expenditure and costs under strict control.”

Vertikal Comment

This is an excellent result from Ramirent and subject to the overall economy diving, it bodes well for 2012. The company has fallen slightly behind its Finnish competitor Cramo in terms of revenues, but remains considerably more profitable.

The challenge for both companies now will be to make solid strategic decisions with fleet renewals and expansions in an overall economic environment that is highly uncertain and nervous. Both may decide that spending on acquisitions is a safer bet?

However a solid fleet renewal and update policy for its existing operations is what will make the difference between these two over the medium term. Another encouraging set of results.