04.08.2016

Profit boost for Cramo

Finnish international rental company Cramo has published its half year results, showing a strong surge in profits.

Revenues for the six months were up 8.5 percent to €334.5 million, generating a 76 percent jump in pre-tax profits to €31.5 million. Some of this spectacular increase is explained by one off restructuring costs last year, including over two million on changing out the chief executive. Capital expenditure totalled €95.4 million in the first half, 14 percent higher than last year.

In the second quarter revenues improved 11 percent to €179.1 million, with strong increases in Finland, Sweden, Denmark and Central Europe, partially offset by declines in Norway and Eastern Europe. Pre-tax profits jumped 74 percent to €22.7 million.

Chief executive Leif Gustafsson said: “The demand for equipment rental and modular space has developed favourably this year, and we have succeeded in capitalising on the improved market situation. Our sales grew in local currencies by 9.3% in January–June and by 11.9% in the second quarter. Sales grew in all markets, with the exception of Norway and Eastern Europe. Our profitability continued to improve overall and in Finland, Sweden, Denmark and Central Europe. It is encouraging that the result for Central Europe turned positive in the second quarter. It is also worth noting the strong year-on-year profit improvement in Sweden and of the whole equipment rental product area.”

"We are continuing the implementation of our focused strategy this year. At the same time, we have started the preparation of Vision 2020. On the basis of the current outlook, I expect the demand for equipment rental and modular space to stay on a good level during the remainder of the year. Over the long term, the demand for rental services is supported by several megatrends, such as urbanisation and efforts to achieve sustainable development. Cramo is in a good position in most of its markets to capitalise on the opportunities created by the market”.

Vertikal Comment

This is an excellent result from Cramo which is really picking up steam and outpacing its big local rival Rami, in terms of revenue growth and profitability. Of particular note is the final turnaround in Central Europe which is largely based on the Theisen acquisition it made in 2011. The business has been a struggle, which is often the case for outsiders who take over a German company.

Hopefully the move into positive territory will grow and improve rather than lapse back into a loss and can often be the case. Cramo appears to have some real momentum now that is very promising for the year as a whole.