14.03.2018

Further declines at Mills

The Rental division of Brazil Mills has reported further revenue declines, but a stronger fourth quarter. While CFO Gustavo Zeno has resigned.

Full year revenues were 15 percent lower than in 2016, at R181.3 million ($55.6 million) with an operating loss before depreciation of R3.5 million ($1.1 million) compared to a loss last year of R11.6 million ($3.6 million). Rental revenues declined 13.6 percent to R150.6 million ($46.2 million) and used equipment sales 22 percent to R20.4 million ($6.3 million).

After several years of buying zero investment coupled with fleet reduction, the company spent R9.5 million ($2.9 million) on capital equipment in 2017. According to Mills the rental fleet comprises 5,800 machines, of which 98 percent are aerial lifts and the balance telehandlers.

Fourth quarter revenues were 24 percent higher at R50 million ($15.3 million), although the operating losses before depreciation increased to R2.1 million ($6444,000) compared to a loss of R1.5 million ($460,000) last year
Chief executive Sergio Kariya said: “For the year 2018, the Management of Mills exercised several alternatives to seek the balance of the result of the period. Our greater focus will continue on the commercial strategy, the reduction of delinquency and preservation of cash.”

“For the Rental business unit, our strategy will be: 1. to support the strategy of penetration in the non-construction sector with increased market coverage, 2. continuous price recovery and availability of machines that are under maintenance, and 3. the market exit of manipulators (telehandlers) due to low profitability and frustration of the strategy of entering the work first with this type of equipment, through the sale of the remaining 137 units with a book value of approximately R 7.7 million ($2.3 million) To conclude, in 2018 we expect to sustain the price recovery and EBITDA margin initiative in the Rental unit and achieve the break even of the construction business unit in the next 18 months.”

“We thank our employees for their dedication and commitment, and the support of our customers, suppliers, shareholders, advisors and partners.”

At the same time Mills has announced the resignation of chief financial officer Gustavo Zeno, following the presentation of the 2017 fiscal year results later today.

His duties will be handled temporarily by chief executive Sergio Kariya, alongside his current duties. Renata Vaz, currently financial planning manager, will take the role of general manager of finance and continue the current administrative and financial management of the Company, reporting directly to Kariya.

Vaz joined Mills in 2010 and has extensive experience in financial planning, budget and controls and corporate finance, having worked with companies, such as Log-In Logística Intermodal and Vale in the financial planning departments.