19.05.2014

Mixed first quarter for Cramo

Finnish international rental company Cramo has reported a 5.6 percent fall in revenues while cutting its pre-tax loss.

Total revenues for the first quarter were €140.3 million, with the reduction due to the transfer of its Russian activities to Fortrent and low demand for heating equipment, due to the mild winter. However this was offset by better conditions in Central Europe, which suffered badly in 2013. Last year’s first quarter pre-tax loss of €2.3 million was reduced this year to €1.6 million.

Gross capital expenditure excluding acquisitions almost doubled from a low of €15 million last year to €27.3 million this year. Net debt increased almost three percent to €375.5 million.

Chief executive Vesa Koivula’s said: “After a challenging start of the year, our performance started to improve in March. As a result of the mild winter in January and February, the demand for heating services was exceptionally low, which affected our sales in the Nordic countries. However, it seems that, because of the mild winter, construction got off to a good start already in March – slightly earlier than usual. I expect the situation to develop favourably towards the end of the year, particularly in Sweden and Germany, where the growth forecasts for 2014 are good. In addition, there are positive signs in our other markets that growth will resume in 2014.”

"Our result for the first quarter of 2014 did not entirely meet our expectations, but I believe that Cramo Group will reach its full-year performance goals.”

“In order to ensure favourable profit development, we adjusted our costs, particularly in Sweden and Norway. Over the past few years, we have developed a flexible operating model which enables rapid adjustments for example in the use of hired personnel. In addition, we optimised our depot network. In Germany, we continued to implement our transition program, which I believe will bring results during the rest of the year.”

“My favourable full-year outlook for 2014 is based not only on market forecasts, but also on our determined operational development over the past few years. We will continue to strengthen our customer focus in all of our countries of operation. We have also developed our pricing models and solutions, so that we will be able to make use of opportunities as soon as the rental market resumes growth.”

Vertikal Comment

While there are some positive aspects to these numbers we would have expected the Theisen business to have bounced back more robustly, since the comparison is with a dreadful winter last year.

Cramo is definitely making solid progress but has some way to go even to catch up with a struggling Ramirent. The second quarter will possibly be more telling.