13.02.2014

Profits rise at Cramo

Finnish international rental company Cramo has reported higher profits in 2013 with slightly lower revenues.

Total revenues for the 12 months were down four percent to €657.3 million, mostly due to the disposal of its Finnish temporary accommodation operation and the transfer of its Russian business into Fortrent. At the same time pre-tax profits climbed 17.4 percent to €51.9 million. Capital expenditure for the period was €100 million, compared to €125 million in 2012.

Looking at the fourth quarter revenues dropped 5.1 percent to €175 million, while pre-tax profits jumped 50 percent to €18 million.

Moving on to regional performance, Finland, Sweden, Denmark and Eastern Europe saw revenue and operating profit declines in both the quarter and the full year. Norway was up eight percent for the year, but saw a decline of almost five percent in the fourth quarter, however operating profits improved in both periods.

Central Europe, which is largely the Theisen business in Germany, had a good year for revenues, improving 11.5 percent for the year and 14.5 percent in the quarter but this translated into substantial declines in operating profit.

Chief executive Vesa Koivula said: “Our work to improve operational efficiency in recent years is showing results. Despite the decrease in sales and the weak economic situation, our relative profitability improved in 2013 particularly in the second half of the year. After a strong expansion in earlier years, efficiency improvement has primarily taken the form of uniform business practises and efficient processes across the group. In 2013, we made good progress in the implementation of consistent operating methods in all of our countries of operation, and our reformed range of services was well received among customers.”

“We will continue to develop our operations particularly in Norway, Denmark and Central Europe. In addition to operational development, adjustments of fixed costs and capital costs that were started already in 2012 have improved our EBITA margin. After a slow first half of the year, demand began to develop more favourably after the summer. Market forecasts for 2014 are optimistic for many of our markets, but the growth rate is likely to remain moderate. I am expecting the rental market to resume growth in the second half of the year at the latest.”

“Cramo celebrated its 60th year of operation in 2013, which puts us among the oldest European companies in our sector. Established in the small market of Finland, we have developed into one of the largest equipment rental companies in Europe. I believe that, combined with our experience, our strong desire to develop into an even more flexible and advanced operator lays an excellent, we will continue our work to achieve the group’s profitability goals.”

Vertikal Comment

This is a pretty good set of numbers for Cramo, all things considered, the most important factor is that the Thiesen business in German appears to have turned the corner and this alone could transform the business over the longer term.

While 2014 may not be a dramatic year, Cramo should see a steady improvement through the year placing it in a good position as it moves into 2015.