14.02.2013

Losses up at Harsco Infrastructure

Harsco’s results for 2012 show that its access business Harsco Infrastructure made larger losses on lower revenues.

Revenues for the 12 months were $937.3 million, a fall of over 15 percent on 2011. At the same time the business reported an operating loss of $368.7 million almost triple last year’s loss of $125.6. The higher loss was due entirely to a $265 million non-cash goodwill impairment charge taken in the fourth quarter.

Looking at the fourth quarter revenues were $235 million, a fall of over 11 percent, while operating losses totalled $284.7 million compared to a loss of $99.7 million in 2011 due largely to the previously mentioned impairment charge. Both results also include on-going restructuring charges.

The company blamed lower revenues on a number of issues, including the fact that the company has ceased operations in certain countries, lower industrial maintenance services activity in North America, reduced equipment sales in Europe and continued softness in the global commercial construction markets.

Harsco as a whole saw revenues fall 13 percent to $2.34 billion while last years pre-tax profit of $41.7 million was converted to a loss this year of $218.5 million.

Harsco chief executive Patrick Decker said: “We are encouraged that, despite further deterioration in the metals markets in the quarter, we grew adjusted operating income five percent and delivered adjusted earnings per share at the mid-point of our guidance.”

“As we move forward, we expect to see continued volatility in our end markets and certain geographies. As a result, we will heighten our focus on the elements of our business we can control. Improving cash flow and cash returns through disciplined capital allocation and increased operational efficiency will remain a key priority.”

Vertikal Comment

This year’s results show that Harsco Infrastructure continues to struggle and contract. Looking at the fourth quarter does show some underlying improvement, which would suggest that IF the business could see some stability, the marginally improving markets could put it back into the black, at least on the operational level.