05.03.2013

Mills Rental up 44%

The Aerial lift rental division of Brazilian services company Mills has reported its fourth quarter and full year numbers for 2012.

Rental division revenues were up 44.5 percent for the 12 months to R 253.5 million ($128.5 million) a new record. Over 98 percent of the growth came from the larger rental fleet, boosted by a R158.1 million ($80.2 million) investment in new JLG and Genie lifts, and the opening of new locations. Profits from the division after finance costs amounted to R61.8 million – 55 percent higher than in 2011.

The company says that it also benefited from increased sales of “semi-used” equipment, which we assume refers to young equipment from its rental fleet.

In the fourth quarter rental division revenues were R 74.2 million ($37.6 million) over 35 percent up on the same quarter in 2011. The growth all came from the addition of new equipment, while maintaining utilisation levels. EBITDA grew at a slower pace of 20 percent to R36.9 million ($18.7 million) due to higher costs involved with current and planned geographic expansion. The company plans five more new depots this year.

The group as a whole reported revenues for the year of R879.3 million ($445.8 million) just under 30 percent up on the year, with pre-tax profits of R210 million ($106.4 million) almost 62 percent higher.

Chief executive Ramon Vazquez said: “In 2012 Mills maintained its strong growth trend with rates above 30 percent in the Heavy Construction, Jahu and Rental segments, despite the weak performance of the Brazilian economy, showing the potential penetration of our services that aim to increase productivity in the civil construction industry, such as Heavy Construction and Jahu, and in several other industries, such as Rental “.

Vertikal Comment

Another good set of numbers from Mills, which is expanding its aerial lift fleet at a breakneck pace. It is unlikely though that it can maintain this level for too much longer without at least a short pause for breath. As markets for aerial lifts develop the supply often runs ahead of growth in demand, causing a drop in utilisation and rates while demand, for what is a new way of doing things, catches up.

Brazil is of course a massive country which is looking to embrace new methods more rapidly than most other developing markets. However at the pace the powered access market has been growing it will be healthy for it to slow a little so that the relatively low utilisation levels can grow, without depressing rates.

Quite when this will occur is hard to say given so many variables at the moment. It will be very interesting to see how it pans out. With another massive year of fleet additions planned 2013 utilisation levels at year end will be very interesting.