25.07.2013

Genie jumps 20%

Terex AWP/Genie has reported first half sales up 20 percent with strong profits and backlog.

Total revenues for the first six months were $1.12 billion, 20 percent higher than in the first half of 2012, operating income for the period was $173.6 million, up 48 percent. The backlog at the end of June was $497.3 million, 38 percent up on the year, but 14 percent down over the six months.

Looking at the second quarter, sales improved 17.5 percent to $606.6 million, while operating income was almost 30 percent higher at $101.2 million. As far as geographic split, Western Europe remained stable at 13 percent of the total, while North America slipped from 71 to 68 percent, Asia also dropped slightly from nine to seven percent, while South America jumped from four to nine percent of the total.

As a result of the strong trends in the aerial lift business, Terex has increased its expectations for the operation for the full year to 2.1 - 2.3 billion – five percent up on its initial forecasts.

The Terex group as a whole saw revenues slip five percent to $3.63 billion for the first half, with pre-tax profits dropping 47 percent, due to challenges in some of the business and the charges for restructuring previously announced.

The company has also announced the purchase of a further 14 percent of the shares of Terex Material Handling & Port Solutions AG (Demag Cranes AG) and now owns over 95 percent of the company. It has initiated a ‘squeeze-out’ process that will lead to its owning 100 percent of the business.

Chief executive Ron Defeo said: “As we communicated in mid-June, the marketplace overall has softened compared to what we originally anticipated for 2013. The second quarter results reflect this lighter order environment overall, as our Cranes, Construction and Material Handling & Port Solutions (MHPS) segments all experienced lower revenues than originally expected. However, we do continue to see strong performance from our Aerial Work Platforms (AWP) business, and good operational execution by our Materials Processing business in a challenging environment."

"Overall by geography, North America continues to improve, but now at a slower pace. Europe remains challenging, particularly for our Cranes, Construction and MHPS segments, and the markets in the rest of the world remain mixed.”

“As a result, and as previously previewed, we took substantive actions in the second quarter to further adjust the cost structure of the MHPS, Cranes and Construction organisations. While these actions are difficult, the benefits to our stakeholders are expected to have a meaningful impact on our future results, particularly in 2014 and beyond. We expect stronger MHPS performance in the second half of 2013 as we begin to deliver increased revenue from their large backlog. These actions provide us with confidence in the near-term execution of our revised plan, and are necessary as we pursue our longer term goals.”

“Terex remains focused on improving profit through continued vigilance on pricing and operating costs. We are working to more thoroughly integrate our businesses and consistently generate free cash flow. We reiterate our earnings per share outlook of 2013 to be between $1.90 and $2.10 per share, excluding restructuring and other unusual items, on net sales of between $7.5 billion and $7.7 billion.”

Vertikal Comment

Another very impressive set of results from Genie there is very little to add in terms of a comment as the numbers clearly speak for themselves. The European operation has done well to keep up with overall growth in the business, South America, particularly Brazil has also been very good and a major contributor to the second quarter– although this market is vulnerable to overheating.

All in all very positive news for Terex and the industry as a whole.