09.05.2013

Harsco Infrastructure remains in doldrums

Harsco Infrastructure the scaffold, formwork and mastclimber specialist has released first quarter results with revenue down just over nine percent to $216 million.

The company’s operating loss was reduced from $18 million last year to $12 million this year – both numbers exclude one-off restructuring costs which totalled $35.6 million in the first quarter of 2012.

The on-going decline was due some of the closures made last year and lower industrial maintenance business in its European operations. This was partially offset by an improvement in equipment rental activity in some countries, which played a significant role in the bottom line improvement.

The group as a whole saw revenues fall five percent to $715.4 million, while last year’s pre-tax loss of $24.8 million converted to a profit this year of $14.4 million.

Chief executive Patrick Decker said: “We delivered better-than-expected financial results despite challenging industry dynamics in our two largest businesses. While we face headwinds in certain markets, we also have many opportunities to grow in key emerging markets and to serve our customers with our innovative products and services. We will remain steadfast in our commitment to continuous improvement, disciplined capital allocation and enhanced cash returns.”

Vertikal Comment

It is hard to understand Harsco’s long term strategy for its Infrastructure business, it expects this year the current quarter to be similar to last year and does not appear to hold out too much hope of anything better for the rest of the year. One has to assume that it believes the business is now well structured to benefit when activity improves?

We understand that the powered access and mast climber businesses, which the company pools under mechanical access, is performing well now that it has been allowed to operate more independently from the contract scaffolding business. However the product offering varies substantially from country to country making the business a tough one to market.

The business has some tremendous skills and resources with a great deal of potential, but whether they can be forged into a slick homogeneous operation operating across 32 countries, while competing against strong locally owned and managed operations is the key question.