09.08.2013

Strong first half at Bronto

Finnish truck mounted lift manufacturer Bronto Skylift has posted a strong first half in terms of revenues and profits.

Total revenues for the first six months were $67.1 million up just over three percent on the same period last year. At the same time operating income jumped 64 percent to $4.1 million. Order intake for the period declined just over six percent to $72.6 million reducing the backlog by three percent to $87.3 million.

Looking at the second quarter revenues grew by 12.5 percent to $37.5 million, while orders declined five percent due to 38.3 million due to a $7.6 million fall in US orders mostly offset by higher order intake in Europe and Asia. Operating income for the period doubled to $3.4 million thanks to a good product mix and improved production efficiencies, as well as the higher volumes.

Bronto is owned by US based conglomerate Federal Signal, it posted half year revenues of $422.4 million an increase of around 5.5 percent. Pre-tax profits improved over 13 percent to $15.5 million.

Chief executive Dennis Martin said: "This was a very strong quarter, with both our Environmental Solutions Group and our Fire Rescue group (Bronto) performing nicely. Sales increased and operating margin expanded to 8.2 percent. This is also our first full quarter benefiting from our debt refinancing, which helped reduce interest expense by 62 percent compared to our first quarter this year."

“The Fire Rescue group (Bronto) turned in an unusually strong quarter, with a spike in deliveries that helped drive higher operating margins and operating income. The Safety and Security Systems Group implemented an ERP system in the U.S. during May, and while the system will provide efficiencies as we move forward, it clearly disrupted their second quarter. The good news is that SSG bounced back with strong shipments in June, and transitional expenses should continue to reduce during the third quarter."

Vertikal Comment

Another strong set of numbers from Bronto which show how its wide geographic and mixed product coverage has helped it avoid any major peaks and troughs. Its ongoing investment in its production facilities is also paying off and is particularly visible in quarters when shipments are high.

The challenge for the company is how to expand further as pressure from more Italian producers moving into Bronto’s market sector applies pressure- either directly , or more likely indirectly. The company still has markets to penetrate and others where it might improve market share, both of which are probably more attractive than trying to compete at the smaller high volume end of the market.

All in all a very credible result