Solid gains for Manitowoc
Manitowoc Cranes has posted its full year results with solid gains in both revenues and underlying profitability.
Total revenues for the full year were $1.85 billion, 17 percent higher than for 2017, thanks mostly to a strong market in the USA, particularly in the energy sector. Order intake for the year ran slightly ahead of shipments at $1.91 billion up three percent on the year, leaving an order book at year end of $670.6 million, 11 percent higher than at the same time last year. The company has though posted a pre-tax loss for the year of $71.7 million, almost double that of 2017. However this is due entirely to an $82.5 million write down of goodwill, compared to just asset impairments of just $100,000 last year. Without taking this write down, the company would have posted a profit of $10.8 million compared to the loss in 2017 of $39.5 million.
Moving to the fourth quarter, sales totalled $515.3 million, up seven percent on the same period of the year in 2017, thanks to gains in North America, partly offset by slower sales in the Middle East and Benelux regions. Order intake dropped 22 percent to $485.7 million. The net result was a pre-tax loss of $75.1 million - given that the write down was taken at year end - with the impairment removed the company would have generated a pre-tax profit of $7.1 million for the fourth quarter compared to a loss in 2017 of $4.6 million.
The company is expecting revenue growth in 2019 to range from flat to five percent with profits rising between 10 and 25 percent prior to restructuring costs.
Chief executive Barry Pennypacker said: “The Manitowoc team again delivered excellent results in the fourth quarter, marking the seventh consecutive quarter of year over year adjusted EBITDA percentage improvement. For the year we delivered a double digit increase in sales, a 157 basis point improvement in adjusted EBITDA margin, while increasing our cash by nearly 20 percent in a challenging market. Our strategy is driving continued, measurable improvement in our performance. While we encountered significant headwinds and tough comparables during 2018, the team successfully rose to the challenge and I am extremely proud of the results.”
“Our results and outlook demonstrate how our strategic priorities are delivering ever improving results. We will continue to provide our customers with the type of cranes they need to increase their return on invested capital. This will be evident with our new product introductions at the bauma trade show in April. By continuing to focus on the fundamental principles of The Manitowoc Way, we are well positioned to deliver strong results in 2019 and beyond.”
Given the current global crane market and economic uncertainty this is a pretty good result from Manitowoc, and likely to be better than several of their peers - possibly the best among the four major manufacturers in terms of percentage revenue growth, placing them firmly in the second largest crane manufacturer spot behind Liebherr.
The company has a good deal going for it, with some really good new products from Potain, which are doing well, with three more new models set to launch at Bauma. Grove has also done quite well but faces tougher challenges and greater competition from the other three producers. While Potain has established some solid momentum Grove is still in the ‘getting there’ mode. The new products are good, and it has some real winners in its stable, but perhaps needs to spark up some of its sales and marketing operations?
Manitowoc has a tougher challenge as it faces Kobelco in the small to medium crawler cranes, and Liebherr and Terex/Demag in the medium to large crane market. It is a strong brand and its new smaller cranes have been well received, while its mid to large variable counterweight models were widely acknowledged as ‘game changers’ when launched. There is great additional potential for the Manitowoc brand, but developing a big new crane model is costly and the market exceptionally tough, making it a hard one to call in terms of future strategy for the brand.