15.02.2016

Solid upturn for Cramo

Finnish international rental group Cramo has reported a strong fourth quarter as it ended the year with a surge in profitability.

For the full year revenues were €667.9 million, 2.5 percent up on 2014, thanks mostly to strong improvements in Sweden and Finland. Pre-tax profit for the period was triple that of the year before at €63.8 million. Capital expenditure for the year was around 20 percent higher at €165.2 million.
Revenues grew by 6.4 percent in Finland, 5.9 percent in Sweden (8.9 in local currency)and 1.8 percent in Eastern Europe. Sales in Norway, Denmark and Central Europe all declined, although Denmark posted a small gain in the fourth quarter.

The Fortrent joint venture in Russia grew in terms of local currency but translated into a significant decline when converted to Euros.

Looking at the fourth quarter revenues increased 3.6 percent to €187.2 million, while the previous year’s loss of €8.1 million was converted to a profit of €21.3 million in 2015. This after around €2 million of restructuring costs associated with the change in chief executive and some restructuring in Central Europe. The company managed to reduce total debt by 4.4 percent to €368 million.

Chief executive Leif Gustafsson said: “Profitability improved in all markets and product areas except in Eastern Europe where profitability was at last year’s level. The best profitability was achieved in Finland and Sweden. In Central Europe, full-year EBITA still remained negative but improved towards the end of the year and we completed restructuring in the fourth quarter. A specific highlight of both the fourth quarter and full year was the improving cash flow. Despite higher investments, our balance sheet strengthened. This provides room for growth investments going forward”.

“During the year, we increased the efficiency of our operations. In line with our strategy, we continue performance improvement actions to further enhance our productivity. It is specifically positive that our modular space business has got off to a good start in Germany. In the fourth quarter we signed significant customer agreements and announced a minor business acquisition in December within modular space. Going forward, I believe Cramo has great growth possibilities in the modular space area”.

“My first weeks with Cramo have been inspiring. It is an honour to get the opportunity to continue steering and developing Cramo towards becoming the role model in rental services. I would like to thank my predecessor Vesa Koivula warmly for his efforts in developing Cramo and in making it a leading European rental company. My task is now to listen carefully to our customers, shareholders and colleagues and to ensure that we, as a team, continue to develop the company and the value it generates to our stakeholders. Based on current outlook, I expect rental markets to gradually strengthen in 2016. This creates a good foundation for further profitable growth.”

Vertikal Comment

An excellent set of numbers from Cramo, following closely on the heels of a strong report from co Finnish based rental group Ramirent. Cramo has managed to maintain is lead over Rami and should feel happy with its overall financial performance compared to its peer.

It is good to see the company picking up capital investment to help keep the fleet refreshed and up to date. The projections for 2016 are also very encouraging, although the company is still struggling with its German operations if we are to read between the lines.

All said and done a good result with great promise for 2016.