06.08.2014

Weaker second quarter for Mills

The aerial lift and telehandler ‘Rental’ division of Brazilian based Mills has reported record revenues but a slip in profits for the second quarter.

Total revenues for the six months were R195.9 million (86.3 million) up over 17 percent on the same period last year. Pre-tax profits for the division were R57.7 million ($25.3 million)– roughly the same as last year.

Looking at the second quarter, revenues were up 9.4 percent to R98.6 million ($43.4 million) compare to last year thanks to some solid sales and service revenues, including the sale of Genie ZX135/70 boom lifts. Rental revenues suffered from lower utilisation due to the World Cup and a slower economy, and were down on the first quarter . Pre-tax profits also slipped more than 14 percent to R25.6 million ($11.3 million). The division opened
two new branches in the quarter, one at Três Lagoas, in Mato Grosso do Sul and another at Belém, in Pará, taking the total number of Rental division outlets to 28.

Mills said that 3,000 new aerial lifts and telescopic handlers were imported by Brazilian rental companies in the first half of the year, an increase of 11 percent compared to the end of 2013, bringing the total number of aerial work platforms and telescopic handlers with Brazilian rental companies to 32,800.

Vertikal Comment

Whenever there is a massive sporting event such as the World Cup or the Olympics, the period during the event is almost always weak, thanks to a cessation of work on construction for it, combined with disruptions caused while it is being held. This would appear to explain the slower second quarter. In spite of this the company has done very well and perhaps with the Worls Cup gone and the Olympics still some two years off, the business can take a little time to stabilise and absorb the massive and rapid growth the company has managed so far.

In spite of this the company is still very profitable and clearly way out in front in market share terms.