10.05.2018

Profit surge for Rami

Finnish international rental company Ramirent has posted a strong jump in profits on modestly higher revenues.

Total revenues for the quarter were €176.2 million, up seven percent on this time last year, with Sweden and Eastern Europe contributing the most growth at 13.7 and 12.6 percent respectively. Finland grew by a more modest 4.4 percent, while Norway and Denmark saw sales fall by 3.4 and 6.6 percent respectively. Sweden and Finland make up around 65 percent of Rami’s total revenues while Norway and Denmark account for around 21 percent.

Pre-tax profits jumped more than 77 percent to €19.2 million, thanks to strong contributions from Sweden, Finland and Eastern Europe. Although all countries posted positive operating profits and growth.

Capital expenditure in new machinery and equipment increased 37 percent to €49.1 million, with sales of older equipment totalling €6.1 million – down from €7.8 million this time last year. The company has already committed a further €46.6 million to more equipment purchases as of the end of March. Finally, net debt increased 3.3 percent to €351.7 million.

Chief executive Tapio Kolunsarka said: "We had a strong start to 2018 with continued growth momentum and strong profit improvement. Our performance was solid on a broad basis with all segments improving their EBIT for the second consecutive quarter. Despite the timing of Easter, we achieved 10.5 percent comparable organic net sales growth driven by strong development in both rental and service sales. Growth was supported by continued growth investments and available fleet capacity due to the seasonally low utilisation that is typical to the business in the first quarter.”

“In Sweden, we saw excellent growth in both rental and service sales resulting in strong profitability improvement. In Eastern Europe, strong sales growth continued with excellent profitability development and in Finland our performance was also good. Denmark and Norway also continued to improve their EBIT. We also saw improvement in internal operations in all segments as per our targets. In summary, I am very pleased with our team's execution of our game plan in the quarter.”

“The market outlook for 2018 looks favourable across our customer base. With our team's record high engagement and strong execution momentum, we are in a good position to continue to grow capital efficiently while improving our internal operations to serve our customers even better."

Vertikal Comment

A reasonably good set of numbers from Rami particularly impressive as it compares with a good quarter last year. It continues to build on the bounce back the company achieved for the full year 2017 which appears to have given it renewed confidence as illustrated by the way it is stepping up its fleet additions.

The company really does appear to have regained its ‘mojo’ and should manage a record year in terms of both revenues and profits. If all goes particularly well it might even breach the €800 million level for annual revenues?

Yet another set of positive numbers.