18.02.2015

Challenging year for Genie

The Genie/Terex AWP business has reported lower profits for 2014, on higher overall revenues for the year.

Full year revenues were $2.37 billion, up over 11 percent on 2013, but operating profits fell seven percent to $302.8 million. The backlog at the end of the year leapt from just $294.4 million at the end of 2013 to $698.4 million this year, and up by a similar amount in the quarter.

Looking at the fourth quarter results, revenues fell almost three percent to $468.2 million, while profits were almost halved to $38.7 million from $71.5 million a year ago. This is apparently due to productivity issues and higher material costs, particularly steel.

Terex as a whole saw revenues increase over three percent to $7.3 billion, with a pre-tax profit of 297.2 million just over two percent up on the year. Net debt was cut by around $258 million to $1.3billion.

Chief executive Ron DeFeo said: “Terex continued to improve in 2014 despite a more challenging operating environment than anticipated entering the year. We have streamlined our business portfolio, reduced our cost structure, introduced innovative new products, and simplified operations. There is more work to do, but overall we are pleased with the progress we have made and the momentum of our internal improvement initiatives”.

“Operationally, performance was mixed during 2014, and the fourth quarter was no exception. Our Cranes and Materials Handling & Ports Solutions (MHPS) segments had meaningful adjusted operating profit increases in the fourth quarter, while our Aerial Work Platforms segment was substantially below the prior year. During the fourth quarter of 2013, AWP performance was particularly strong as we focused on producing equipment during that traditionally softer demand period to capture incremental demand in the quarter, as well as level the production load on our factories. Conversely, in the fourth quarter of 2014, we curtailed production to align our product build schedules more closely with actual demand and machine configuration in our order book. Importantly, however, AWP backlog increased 137% when compared with the prior year, giving us confidence that 2015 will be another solid year for this segment.”

Vertikal Comment

This is a slightly disappointing result from Genie, although it did increase revenues on the year and has started 2015 with a far healthy order book. The productivity issues are now apparently resolved and the company is looking forward to a decent year in 2015.

While these numbers may be a little lacklustre compared to recent performances, revenues of almost $2.4 billion and over $300 million of profits is not too shabby.