13.08.2013

Cramo on the turn

Finish international rental company Cramo has reported a mildly upbeat second quarter as profits jump and utilisation picks up.

Looking first of all at the six months to the end of June, total revenues were down four percent to €308.6 million, although much of this was due to the divestment of its Finnish modular space business and the transfer of its Russian business to Fortrent - the joint venture with Ramirent. Pre-tax profits for the period dropped eight percent to €7.8 million.

Moving on to the second quarter, revenues were down €1.3 million to €160.1 million, while pre-tax profits leapt 65 percent to €10.1 million, with improvements across the board, but particularly in Norway, Central Europe and Denmark where the business moved into the black.

Capital expenditure on equipment during the first half of the year was almost half that for the same period last year at €37.3 million.

Chief executive Vesa Koivula said: “After the difficult first months of the year, the demand for equipment rental picked up in the spring, as expected. At the same time we continued the implementation of our strategy, that is: the roll-out of a uniform business model and efficient processes. When combined with cost savings and efficiency measures completed earlier, this improved our profitability in the second quarter.”

“It has been good to see that our customers have welcomed our revised Rental Concept warmly and that our staff has been able to achieve many accomplishments in the challenging market situation.”

“After the quiet first months of the year, our fleet utilisation rates started to improve quickly halfway through the period and rose to a good level towards the end of the period. However, it is still too early to estimate whether we reached the low point of the business cycle in our main markets at the end of the winter season.”

“Our aim is to improve profitability in all of our markets but especially in Norway, Denmark and Central Europe. Development during the first months of the year shows that we are on the right track.”

Vertikal Comment

Overall this is an upbeat set of numbers, in that Cramo appears to have stemmed the downward spiral that it seemed to have entered after acquiring the Theisen Baumaschinen in Germany. German acquisitions have proven a challenge too many for a good number of companies in the past and so it looked at one point for Cramo. While the story has yet to run its course, the second quarter does suggest that it may well be on the way to digesting it.

Given Cramo's grim first quarter and then a slightly ‘shaky’ first half report from fellow Finn Ramirent earlier this month, these second quarter numbers from Cramo are very encouraging and hopefully a further sign that the overall European economy is on the up.