17.02.2016

Firmer fourth quarter for Genie

Terex AWP/Genie has reported a modest improvement in the fourth quarter but ended the year in negative territory.

Total revenues for the year were 6.5 percent lower at €2.21 billion, while operating profits fell 11 percent to €269.3 million. However the order book at the end of the year perked up considerably from the third quarter, almost doubling to $567.5 million or just under 19 percent lower than a year ago.

Moving on to the fourth quarter revenues were three percent down on the same period last year at $455.3 million, but operating profit was over 10 percent higher at $42.7 million.

Terex as a whole saw full year revenues fall 10 percent to $6.54 billion, while pre-tax profits fell 24 percent to $226.6 million. Net debt at the end of the year was up marginally at 1.36 billion.

Chief executive John Garrison said: “The macro operating environment in the fourth quarter was challenging. Global economic volatility has made our customers more cautious overall, resulting in fourth quarter order activity that was below expectations in most business segments and product categories. On a positive note, free cash flow for the year came in at a strong $290 million, nearly double our 2015 net income. Cash flow generation will be a primary focus going forward.”

“Looking ahead to 2016, we do not see market conditions improving. We anticipate lower fleet replacement from North American aerial work platform rental customers. The oil and gas and commodity market decline will continue to impact demand across many of our products. We are developing and implementing plans to align our cost structure with these market realities. We expect 2016 net sales to be about 10 percent lower than 2015.”

Vertikal Comment

While not a fantastic result for Genie, the situation in the fourth quarter certainly looks a little rosier than in the third quarter. However there is still much uncertainty over the future direction of the overall economy and this is likely to keep a brake on demand for at least they nest couple of quarters. However there is every chance that this will improve as we move through the summer.

All in the year has ended slightly more upbeat than we feared it might, with improved profitability in the final quarter an unexpected bright spot.