08.08.2012

Ramirent up 17%

Finnish international rental company Ramirent has posted its half year results with revenues up 17.6 percent and strong growth in profitability.

Total revenue for the first six months was €334.1 million while pre-tax profits jumped almost 250 percent to €30.6 million. Apart from Europe Central, which includes Poland, Hungary, Czech Republic and Slovakia - which posted a fall of 14 percent for the half and 19 percent for the quarter – all regions posted revenue gains ranging from 15 percent for Denmark to almost 30 percent for Norway.

In the second quarter revenues increased by a more modest 13.5 percent to €169.7 million, while pre-tax profits grew 81 percent to €22.7 million. All divisions were in profit, while all apart from Europe Central turned in operating profit growth.

Chief executive Magnus Rosén said: “Our first half has progressed well. Margins have developed positively over the period and in the second quarter we delivered EBIT of 13.4 percent on net sales of 169.7. Growth in net sales slowed during the second quarter compared to the first, due to a smaller positive effect from previous year’s acquisitions and slower underlying organic growth. Like-for-like, growth in net sales amounted to 4.9 percent in the second quarter compared to 12.4 percent in the first.”

“Both net sales and profits improved in the Nordic countries and in Europe East segment where market conditions continued to be favourable. In Europe Central, where the market activity weakened further, we saw a decrease in net sales and profit to unsatisfactory levels. Actions have been and will be taken to restructure operations to improve cost efficiencies and synergies across the four countries Poland, Czech Republic, Slovakia and Hungary.”

“We reached all our financial targets during the second quarter and our cash flow after investments was positive. As we enter the second half of the year, we continue to carefully monitor the development of our market environment due to the uncertainty in the general economy. Visibility remains low, so we maintain a high preparedness to manage changes in market conditions. Our priority is operating on cautious capital expenditure, strict cost control and on maintaining a strong balance sheet. We will also continue to strengthen our competitiveness by developing our common Ramirent platform and providing customers enhanced efficiency through integrated solutions.”

Vertikal Comment

Not a bad result from Ramirent but clearly things are not well in Europe Central, and this is not all down to the market. The business clearly needs a close look and some changes in strategy. Hopefully Ramirent will not fall in the trap of constant restructuring every six months driven by the stock market commentary rather than the business.

All in all Ramirent continues to do well, if it can sort itself out in central Europe and keep Denmark on the right path it could be ‘singing’ by the end of the year.