14.02.2018

Fourth quarter boost for Genie

Genie/Terex AWP has reported a very strong fourth quarter, with higher revenues and a substantial boost it profits.

Starting with the full year numbers, revenues were five percent higher at $2.07 billion, while operating profits slipped four percent to $170.3 million, due to costs incurred earlier in the year. The order book/backlog at the end of the year was 51 percent higher than at the same point in 2016.

Moving on to the more positive fourth quarter, sales were 18.5 percent higher at $449.4 million, while operating profits jumped by more than 66 percent to $30.73 million, thanks to the higher volumes and greater production efficiencies.

President Matt Fearon said: “We enter 2018 with clear signs that markets are improving for the first time in several years and we believe the Genie business is well positioned for the improving market.”

The Terex group as a whole reported total revenues of $4.36 billion for the year, just under two percent down on 2016. The previous year’s pre-tax loss of $270.7 million however, was converted into a pre-tax profit of 112 million for 2017. In the fourth quarter revenues were 3.5 percent higher at $1.06 billion, with a pre-tax profit of $25.4 million, compared to a loss in the same quarter of 2016 of $309 million.

Terex chief executive John Garrison said: “The fourth quarter marked an excellent finish to an important year for Terex. We increased operating margins, bookings and backlog in every segment and significantly improved earnings per share.”

“We delivered on our commitments in 2017. The sales of port handling and the remaining Construction businesses concluded the focus element of our strategy and created substantial value for our shareholders. We continued to simplify the company by executing our footprint rationalisation plan, exiting 12 manufacturing locations totalling 2.6 million square feet. We reduced administrative expenses while increasing investment in innovation, strategic sourcing and commercial excellence. We fundamentally improved our capital structure by executing our disciplined capital allocation strategy, reducing debt by $583 million, refinancing at the lowest interest rates in the company’s history, and returning capital to shareholders by repurchasing $924 million of Terex stock.”

“By implementing our strategy, strengthening the company and increasing backlog by 56 percent, we are well positioned for what we expect to be an improving global market environment in 2018. We expect to increase revenue and improve operating margins in every business segment. We will continue to implement the Simplify and Execute to Win elements of our strategy and follow our disciplined capital allocation strategy. We expect to deliver 2018 earnings per share of between $2.35 and $2.65, excluding restructuring, transformation investments, and other unusual items, on net sales approximately 10 percent higher than 2017.”

Vertikal Comment

This is an excellent result from Genie and no surprise, having firmly regained its equilibrium it is now benefiting from a strong and rising market and perhaps a more focused Terex.

The company is well placed to make further strong gains in 2018 as markets around the world gather pace and it benefits from the changes that it has put in place over the past year or two, and a more customer focused management strategy.

Another positive set of numbers as we near the end of the 2017 reporting season.