15.08.2006

Ramirent sees profits treble

Ramirent the Helsinki based rental company has reported sales of €222 million for the first six months of 2006, an increase over 2005 of 28.4 percent.

Operating profits (EBIT) climbed by 71 percent to €72 million, or 20 percent of revenues. Profits before tax increased by 177 percent to €40 million. Net debt nudged up by just over one percent to €190 million, resulting in significantly reduced gearing.

Net profits more than tripled, from €10.5 million last year to €32 million.

Rami says that the equipment rental market has grown in all Nordic countries. It has also continued to grow strongly in the Eastern and Central European countries, including Russia, the Baltic States, Poland, Hungary, the Ukraine and Czech Republic.

Looking at sales by market, Ramirent Finland rose by 22 percent to €45.1 million, Sweden by 22 percent * to €61.1 million, Norway by 26 percent to €58.1 million, Denmark by 15 percent to €21.8 million, and Ramirent Europe by 76 percent to €36.3 million. The majority of the growth in 2006 has been organic.

*Sweden’s sales included a one off disposal of certain properties.

In terms of profitability, Norway was the most profitable, with a 22 percent operating income, Sweden matched this, although only due to an exceptional gain on the property disposals, underlying profitability was lower. Finland and Ramirent Europe both posted operating incomes of around 20 percent while Denmark was the odd one out with only 10 percent.

Ramirent as a group, invested €93.3 million, almost 50 percent more than in the same period of 2005, of this €91.7 million was spent on machinery and equipment.

Significant events during the period included the expansion into the Czech Republic via a Greenfield start up and the purchase of the outstanding 25 percent holding in its Polish business.

Today the company also announced that it had acquired Konevuokraamo P. Salminen Oy (KPS) in Finland. KPS rents and sells compaction equipment throughout Finland from one outlet in Orivesi. It employs four staff who are expected to remain with the business which will be combined into Ramirent.

KPS has been purchased by the issuing of 30,000 new Ramirent shares.


Vertikal Comment

RamiRent’s performance over the past 10 years has been exceptional, it has arguably mastered the art of exporting equipment rental services more than any other company. It is one of the few companies whose home market is not its first or second largest. By 2007 Finland is likely to be down to its fourth largest market in terms of both sales and profits.

It has become a very international business, albeit in a homogenous part of the world. However its early forays into the east and its determination to stay the course through challenges that would have seen off most rental companies, is now beginning to pay off handsomely as this part of the world outperforms Western Europe.

There is a strong possibility that if it maintains its current progress it could exceed revenues of €500 million for 2006. Putting it ahead of Hewden making it the second largest rental company in Europe. It could also have overtaken Loxam this year, had it not been for its acquisition of van Spreeuwenberg in May. Perhaps it will save that honour until next year?

Vertikal Forecast
RamiRent will be Europe’s largest rental company in terms of revenues by the end of 2007.

(Ashtead is the largest European based company, but the majority of its revenues come from the USA).