01.08.2018

Genie forges ahead

Terex has posted its half year results with a strong performance from Genie in terms of profits and revenues.

Looking at the year to date Genie achieved revenues for the six months of $1.39 billion a 31 percent increase on the same period last year. Operating profits for the period almost doubled to $161.8 million. The company is now forecasting full year sales to increase 23 percent on last year, its earlier full year guidance was 18 percent growth, a 23 percent improvement would take full year revenues to more than $2.5 billion.

Looking at the second quarter revenues were 26.5 percent higher at $751.1 million, with operating profits up 67 percent to $101.7 million. The backlog/order book at the end of June was 11 percent higher than a year ago at $553 million- but down 38 percent on quarter.

The Terex group as a whole saw revenue rise 22 percent to $2.66 billion with a pre tax profits almost five times the level of last year at $143.8 million. Net debt more than doubled to $717.1 million due to substantially lower cash on deposit.

Terex chief executive John Garrison said: “Terex significantly improved its second quarter, as adjusted, earnings per share compared to last year. These strong financial results reflect operational improvements, the considerable benefit of executing our disciplined capital allocation strategy and broad-based improvements in our global markets.”

“Aerial Work Platforms and Materials Processing continue to execute very well. Our Cranes segment improved as expected compared to the first quarter but continued to be impacted by material shortages.”
“We made progress implementing our Execute to Win business system across our three priority areas: Commercial Excellence, Lifecycle Solutions and Strategic Sourcing. The initial benefits of Commercial Excellence are positively impacting our current performance. We will start to see benefits from Strategic Sourcing in the second half of 2018.”

“We remain committed to our Disciplined Capital Allocation Strategy. During the quarter we repurchased 2.9 million shares for $116 million. Over the past 18 months we repurchased approximately 34 million shares, or roughly one third of our outstanding shares. In addition, we recently announced a new $300 million share repurchase authorisation.”

Genie president Matt Fearon added: “Quarter two was another strong quarter for our Genie brand, driven by solid operational performance and continued global demand for aerial work platforms and telehandlers. Rental fleets are growing, they have high utilisation and their outlook for the second half of 2018 and 2019 remains positive.”

Vertikal Comment

This is another excellent result in terms of revenues, but particularly profitability. There are some second quarter concerns though, with lower order intake and a steep fall in the order book from the end of March. The company has yet to explain this, but is hosting a conference call to discuss results tomorrow.

Otherwise the performance stacks up very well against JLG in terms of revenue growth and profit levels.

All in all a very good set of results with every chance that the company will exceed its new updated guidance, as long as order intake keeps well ahead of production.