18.03.2020

Better year for Mills

Brazilian rental company Mills has published its full year results, with improved revenues and smaller losses, thanks mainly to the acquisition of Solaris in May.

Total revenues for the rental division – now more than 81 percent of the business – improved 7.7 percent to R357.5 million ($69.6 million) while operating profit was R17.4 million ($3.4 million) compared to a loss this time last year of R8.5 million ($1.66 million)
Total group revenues were R439.5 million ($85.6 million) up seven percent, while last year’s pre-tax loss of R139.2 million ($27.1 million) was reduced to R57 million ($11.1 million).
The company statement said: “We are pleased to present Mills’ results for the fourth quarter of 2019 and the year. The information refers to the sum of Mills and Solaris results for the specified period. We made progress in creating value for the new company through initiatives such as: (i) increased focus and consolidation in the rental market, which is still a market with low penetration; (ii) teams' efforts to integration in order to capture synergies and (iii) strengthening the Company by developing a new organisational culture, taking advantage of the best practices of both companies.”

"Even with positive indicators and economic activity in Brazil showing improvements in 2019, this is still gradual and slow process. Even so, the Rental business unit reached a combined Adjusted EBITDA of R147.2 million in the year, 42 percent higher versus 2018. This year, we made progress in our commercial strategy for recovering prices and increasing market coverage.”

Vertikal Comment

The Solaris merger has certainly helped Mills but it is far from turning the corner, it has a long way to go before it gets back to any form of financial health and will have to face up to a massive fleet renewal issue along the way. The big question is will it be the main beneficiary of the eventual resumption in growth of the Aerial lift rental market, or will an outsider zoom in and take the prize? Perhaps it will be the target for an inward investor?