30.10.2013

Cramo lifts profits on lower sales

Finnish international rental company Cramo, has reported further declines in revenues, while profits continue to improve.

The company achieved revenues for the nine months to the end of September of €482.2 million, 4.3 percent down on the same period last year, largely due to the disposal of its modular space and Russian business, offset by the Lambertsson and Kranpunkten acquisitions in Norway. Pre-tax profits for the period were up 5.3 percent to €33.9 million.

Looking at the third quarter revenues slipped nearly five percent, to €173.6 million, while pre-tax profits jumped 10 percent to €26.1 million. In terms of revenues only Norway and Central Europe posted gains, although Central Europe – which is largely Germany – continues to post an operating loss. Capital expenditure, for the nine months - without the acquisitions - fell 30 percent to €69.3 million. Cramo has said that given the on-going weakness it now expects revenues for the full year 2013 to come in at levels below those of 2012.

Chief executive Vesa Koivula said: “In this year’s challenging market situation, we have continued our strategy of rolling out a uniform business model. We have also put a heavy emphasis on operational efficiency. Together with cost savings and those efficiency measures completed earlier, we improved our profitability in the third quarter.”

“We will keep our cost level low for further profitability as markets improve and sales increase. We will specifically emphasise improvements in Norway, Denmark and Central Europe, but we will also keep a keen eye on all our other markets. Development this year shows that we are on the right track.”

“We have already seen the first signs of increasing demand for equipment rental. Market forecasts for 2014 support a cautious optimism for many markets. Rental services, however, is a post-cyclical sector.”

“I am happy to report that our strategy work has proceeded well in all Cramo countries and that our personnel and customers have welcomed the changes. This will strengthen our competitiveness both in the near future and in the long term.”

Vertikal Comment

Cramo still has a number of issues to sort out, including its troublesome operations in Germany – the Theisen Baumaschinenbusiness it acquired in 2011. However it appears to be sorting these out and constructing a decent foundation from which to move forward. While it has much to do it ought to be helped along in 2014 by economic improvements, and a more stable market place.

Acquisitions or mergers might look like an increasingly attractive option though.