21.08.2018

Tough quarter for Alimak

Swedish international mast climber and hoist manufacturer and rental company Alimak has reported lower revenues and profits.

Looking at the first half, revenues in the six months were five percent down on the same period last year at SK2.1 billion (€199.6 million) led by a steep fall in sales of Construction equipment, partially offset by higher sales of Industrial equipment and steep rises of After Sales and Rental revenues. Pre-tax profits declined six percent to SK183 million (€17.4 million) due to lower profits in Construction and Industrial divisions partially offset by higher profits from After Sales and Rental.

Moving on the second quarter, sales declined seven percent to SK1.1 billion (€105.6 million) due to a steep fall in Construction revenues and slightly lower Industrial and After Sales revenues, while Rental improved substantially. Pre-tax profits were 7.5 percent lower at SK112.2 million (€10.7 million), with steep falls in profits at the Industrial division and lower Construction profits, with flat revenues from After Sales and Rental. Net debt at the end of the quarter was SK1.1 billion €103.6 million)

Chief executive Tormod Gunleiksrud said: “With two exceptions, the second quarter was a solid quarter for Alimak group. The group as well as most of the business areas reported sequential improvements over previous periods. Construction Equipment, After Sales and Rental delivered solid numbers across the board and volumes are picking up within Industrial Equipment. However, the profit level of this business area is too low. The challenges within the BMU project business have led to lower earnings and are contributing to negative cash flow in the quarter.”

Vertikal Comment

Alimak is in a state of transformation, having expanded rapidly through acquisitions of businesses in areas, that while related in terms of overall technology, are completely different in terms of market and mentality. The company has a good stake in each of the markets in which it operates, however bringing such diverse operations together was never going to be easy. Future success or failure will rest on how well the company manages this process over the next year or two.

If it gets it right it will have a range of businesses that ought to protect it well from economic and regional market cycles. However, as a public company reporting quarterly it might feel ‘jockeyed’ into taking bold actions, when patience and a less noticeable transformation might be the right strategy for long term success.

Time will tell – watch this space