Ramirent revises forecasts
International rental group Ramirent has further revised its estimates for 2014 and confirmed some restructuring and other 'one off' costs.
As a result of the worsening outlook in some markets the company is also cutting its capital expenditure by 10 percent.
Chief executive Magnus Rosén said: “Due to the accelerating impact on our main markets of geopolitical uncertainty combined with rapidly declining oil price, we anticipate a moderate decline in the net sales level in the fourth quarter compared to fourth quarter 2013. As a result, our investments in the rental fleet are held back. In addition, we are taking further measures to improve the performance. Restructuring measures and write-downs are expected to have a €4 million negative effect on fourth quarter 2014 EBITA.”
The previous Ramirent outlook was:
“The economic growth in 2014 is expected to be modest and construction market demand remains mixed in our core markets. Ramirent will maintain strict cost control and, for 2014, capital expenditure is expected to be around the same level as in 2013. The strong financial position will enable the group to continue to address profitable growth opportunities.”
This is more abut lowering expectations before year end and warning of further restructuring costs than anything else. The situation in Russia, where Ramirent and Cramo operating a joint venture – Fortrent - will of course have had negative implications on the business, exaperated by the falling rouble cutting any potential receipts on a daily basis.
The capital expenditure cuts will have already been made some time ago, as if it has not already been achieved it is now too late - so unlikely to be news to any suppliers. Rami is of course most heavily exposed the Finnish market which has a higher level of trade with Russia than most other economies and is therefore likely to have a negative effect over and above what happens with Fortrent.