12.05.2005

Profits double at Palfinger

Palfinger’s revenues, for the first quarter 2005 rose by 41 percent to €121.7 million compared to the same period last year. Some of this increase was due to the integration of Bison, like for like revenue numbers are not available as we go to press.

Profits before Interest and Tax rose by a dramatic 184 percent, to €17.2 million equaling the half year profits for 2004! After interest, the increase is even more dramatic with pre tax profits up by 209 percent to 17.1 million,

Some of this disproportionate increase in profits, is due to the poor results in the first quarter of 2004, when major restructuring caused shipment delays and temporarily reduced capacity.

However the company’s move of cylinder and other component production to Bulgaria is clearly now providing benefits.

Palfinger reports a significant improvement in its backlog during the quarter especially in the Cranes, Palift, and Crayler divisions. Some of the component/fabrication plants have now reached capacity limits thanks to both the higher level of orders and the integration of Bison’s components to these locations. Palfinger says that it will invest in the expansion of these “bottle neck” facilities, especially in steel construction.

In the meantime the lead time for of some crane models has become extended.

Management Outlook
Based on the outstanding results of the first quarter and high order backlog, Palfinger’s management anticipates further increases in revenue and earnings in the second quarter, with double-digit growth rates in both revenue and earnings for the 2005 financial year. The greatest risk to this forecast being materials supply and the ability of the company to bring its capacity expansions on stream

Vertikal Comment

Palfinger is clearly “on a roll”, yes the markets in which it operates are strong, making revenue growth relatively simple, but the steps that company has taken to lower its cost base and the efforts it has made to develop its geographic coverage, are all beginning to pay off.
The Bison acquisition is also likely to prove a much safer and sure entry path in to the truck mounted platform market than its initial strategy to start from scratch. With very low gearing, an excellent global presence and a strong brand image Palfinger is likely to go from strength to strength.