29.04.2020

JLG half year results

JLG has seen revenues and profits slump as the Covid-19 crisis bites.

Total revenues for the first half of the company’s fiscal year to the end of March were 22 percent lower at $1.41 billion. This was made up of aerial lift sales of $579.7 million, down just over 28 percent, telehandler sales of $419 million, a reduction of 29 percent, and other revenues – mostly parts, service and used equipment – of $412.2 million, down just three percent on the same period last year. Operating profits were 25 percent lower at $139.8 million.

Moving on to the second quarter, total sales slumped almost 30 percent to $693 million, made up of aerial lift sales of $273.7 million, a drop of 41 percent, while telehandler sales declined 32 percent to $217.6 million. Other revenues however were just over one percent lower at $201.7 million. The company said that the “decrease in sales was due to lower market demand, due in large part to the global economic shutdown as a result of Covid-19 and, to a lesser extent, rental company customers slowing down their capital expenditures after two years of strong fleet growth”. Operating profit for the quarter was $70.8 million, down 41 percent on last year.

Parent company Oshkosh reported half year revenues of $3.5 billion, eight percent down on last year, while pre-tax profits were 35 percent lower at $204 million.

Chief executive Wilson Jones said: “The Covid-19 pandemic has affected the daily lives of people around the world, and I am proud of the way our team members have continued to safely manufacture our products that are used by so many front line professionals. We delivered adjusted earnings per share of $1.25 on sales of $1.8 billion during a challenging period for all companies. We remain committed to delivering mission-critical fire trucks, defence vehicles, refuse collection vehicles, concrete mixers and access equipment for those everyday heroes that build, serve and protect communities around the world.”

“Oshkosh delivers essential products and services and we have large customer backlogs in both our defence and fire & emergency segments, providing good visibility for these businesses well into fiscal 2021. Despite excellent visibility in these two segments, we are facing uncertain demand in the access equipment and commercial segments as well as potential disruptions with supply chain continuity and team member availability in all of our segments. Our integrated supply chain is collaborating across the world to pursue alternatives with our supply partners and communicate frequently with our people to mitigate these risks.”

“We quickly responded to uncertainties caused by Covid-19 to our customers, our suppliers and our business as well by reducing production levels and implementing a companywide cost reduction plan that targets $80 million to $100 million in savings for the second half of fiscal 2020.”

“We believe these are the right actions for our company as we stay nimble and close to our team members, customers and suppliers. Our balance sheet is strong and our liquidity of approximately $1.2 billion at March 31 positions us well to navigate through the global pandemic. I am confident that Oshkosh will emerge stronger as we work to get to the other side of this global crisis.”

Vertikal Comment

All said and done this is a reasonably respectable result from JLG, although it is seems that the market was already slowing a little before the Covid-19 crisis struck. The business appears to remain strong and will probably see things picking up a little during its fourth quarter.

As with many manufacturers JLG will be looking to survive 2020 without posting serious losses and then focus on 2021.