Steep decline for Genie
Terex has published its first half results which show a sharp decline in revenues.
Terex now comprises just two division: AWP – Genie which includes the Terex Utilities and Terex Service operations; and Material Processing which also includes the rump of the crane business - Tower cranes, Rough Terrain cranes and the Franna Pick & Carry articulated cranes.
Genie/ Terex AWP
First half revenues at Genie dropped 58 percent to $935.6 million due almost entirely to the ongoing pandemic. While the business generated a loss of $10.9 million, compared to a profit last year of $145.9 million. The backlog/order book at the end of June was $509 million compared to $746 million at this point last year and was at a similar level at the start of the year.
In the second quarter - entirely affected by the pandemic - revenues were just 52.5 percent lower at $413.9 million, perhaps reflecting a small pick up in June, while the operating loss was $5 million compared to a profit in the same quarter last year of $86.3 million.
It is impossible to see crane sales anymore, but the Material Processing division was not quite as hard hit, with sales in the first half down 31.5 percent to $579.2 million, with an operating profit of $48.4 million, 62 percent below the same point last year. In the second quarter sales declined 39 percent to $253.6 million with an operating profit of 23.4 million, down 64.5 percent on the year.
Terex as a while posted total revenues of $1.52 billion for the six months, with a pre-tax loss of $31.7 million, compared to a pre-tax profit of $177.1 million last year.
Terex chief executive John Garrison said: "We continue to vigilantly follow the necessary Covid-19 safety protocols to protect the health and safety of our team members and their families, while safely serving our customers. Our commitment to a Zero-Harm Safety Culture is resolute and I am proud of our team members' rigor in following the necessary safety protocols."
"While the Covid -19 pandemic continues, global economic activity has gradually recovered but remains below pre- Covid-19 levels. In response to lower customer demand, we are closely aligning our production plans."
"Aerial work platforms rapidly reduced aerials production in response to lower customer bookings in North America and Europe but saw commercial demand return in China. In addition, the Utilities team has moved into its new, state of the art facility, which will improve production efficiency and enable future growth.”
"Materials Processing demonstrated strong execution by delivering high single digit operating margin despite significantly lower demand in commercial end markets. It continues to position its business for future growth by expanding into new geographies and delivering innovative, new products."
“While the economic outlook remains uncertain, by producing in-line with customer demand and aggressively managing costs, Terex is confident it will successfully navigate these challenging times."
While these declines are steep they are not entirely surprising. It is what we are seeing and hearing from other self-propelled aerial lift manufacturers, most of which are reporting sales reductions in the 50 to 60 percent bracket, partially due to holds being placed on capital expenditure, and partly due to plant closures disrupting shipments.
There are some tentative indications that the market is beginning to pick up a little, and with many rental companies having done considerably better than manufacturers we might see the aerial lift market bounce back quite quickly in the fourth quarter, or early next year?
Let’s hope for a ‘V’ shaped recovery