07.08.2012

Essex up 16%

Essex Crane, the US based crawler crane rental company and owner of Coast crane has reported a 16 percent rise in first half revenues.

Revenues for the first six months were $50.9 million 16 percent higher than for the same period last year, of this rental revenues improved four percent to $21.4 million much of the rest of the improvement came from sales of used equipment – primarily aerial lifts and telehandlers. In spite of the revenue growth the company remains in the red with a pre-tax loss of 11.3 million, compared to $14.4 million last year.

In the second quarter total revenues were up 21.7 percent to $27.2 million of which rental was £11.1 million up nine percent. The pre-tax loss for the period was reduced to $4.47 million compared to a loss of $7.36 million in the same period last year.

Regular crawler utilisation cranes increased to 39.4 percent in the second quarter, compared to 34.8 percent last year. Utilisation of Rough Terrain cranes increased from 54.8 to 67.6 percent in the same period. Heavy tower crane and hoists

Total debt decreased by $7.9 million due in part to the disposition of excess rental equipment at an average of 108.2 percent of Orderly Liquidation Value.

Chief executive Ron Schad said: "We are satisfied with the results achieved during the second quarter of 2012 and believe that the results represent a validation of our decision to broaden our equipment portfolio to include rough terrain cranes, boom trucks and tower cranes as well as add predictable business lines such as third party aftermarket parts and service sales. Much of the increase in earnings on both a sequential quarter and year over year basis is as a result of operating improvements that have been implemented over the last six months.”

“Utilisation continues to improve gradually, albeit off a low base. Specifically, in the second quarter of 2012 we experienced sequential quarterly increases in utilisation for crawler cranes, rough terrain cranes and large tower cranes, which are our three largest equipment types as measured by original equipment cost. Rental rates are trending higher across many of our primary equipment categories. We were pleased with the level of rental fleet asset sales, particularly of non-core assets including aerial work platforms and forklifts that were acquired as part of the Coast acquisition. Proceeds from these sales were used to reduce debt."

Vertikal Comment

Essex continues its steady progress back towards profitability but is seeing a slump in its new equipment distribution business showing a trend towards the Coast Crane operations depending more on rental and product support for its revenues and profitability.

With debt now beginning to come down and utilisation and rates rising the company should bounce back into the black by the end of the year, if not before.