12.02.2016

Strong pick up for Rami

Finnish international rental company Ramirent has reported a strong improvement in the fourth quarter with profits almost double that of last year.

For the full year revenues were €635.6 million, 3.6 percent higher than in 2014, while pre-tax profits improved 10.4 percent to €46.9 million. Capital expenditure for the year was €139.2 million, almost four percent lower in than the prior year. Net debt at the December was €280.9 million 23.7 percent up on the year.

It was the fourth quarter that perked the year up, with revenues rising 6.1 percent to €170.5 million - almost eight percent higher in constant exchange rates - while pre-tax profits almost doubled to €12.7 million.

Chief executive Magnus Rosén said: “Ramirent’s fourth quarter sales growth was driven by strong service sales and good demand in general rental in most of our markets. A higher relative share of sales of services in the business mix, price pressure in Finland and Norway, as well as internal reorganisations hampered our profitability in 2015. We have now harmonised our operational model ‘One Ramirent’ to be more efficient and flexible, and we will continue to focus on controlling costs and improving profitability”.

“In the fourth quarter, we saw in Finland both good growth and profitability despite a challenging market. In Sweden growth continued, fuelled by excellent market conditions, however profitability was still burdened by organisational development costs. In Denmark, sales grew and profitability continued to improve based on successful turn-around of our operations and an improved underlying market. In Norway, our performance weakened further and the new management is executing a turnaround plan to adapt to the market which has weakened by the slowdown in the oil industry. In Europe Central, all markets improved both in terms of good sales growth and improved profitability. Also our performance in Baltics was solid, with a small growth and a good profitability level maintained”.

In the fourth-quarter, we increased capital expenditure to €42 million to capture growth opportunities. To drive growth and profitability, we updated our long-term financial targets and strategic focus themes. We are targeting further growth by developing our group business mix through three distinct business areas: General Rental, Solutions and Temporary Space. Ramirent sees further opportunities to support profitable growth by realising the synergies of the ‘One Ramirent’ platform as well as by optimising the flow, efficiency and service level in its fleet management and supply chain. Based on our solid financial position, Ramirent can also accelerate growth with selected outsourcing transactions and acquisitions”.

“In 2016, we expect to see stable and fair overall market conditions yet varying between the different geographical markets. I am therefore cautiously optimistic as we set out to pursue profitable growth in 2016 backed by accelerated capital expenditure, more common processes in Ramirent, a strong financial position, strong positions in our markets, and a highly capable and committed team.”

Vertikal Comment

This is a solid finish for Ramirent that appears to put it back on track to regain its mojo. Many of the markets in which it operates are improving and the company is still well placed to benefit from that. Hopefully its return to a more streamlined senior management reporting structure will hopefully position it well to grow in 2016, in both revenues and profitability.

The situation is still a little fragile, but it looks very promising for the year ahead.