28.10.2020

Situation eases at Terex/Genie

Terex has reported its third quarter results which indicate a slow but steady return towards pre-Covid performances.

Terex as a whole reported nine month revenues 34 percent lower than for the same period last year at $2.29 billion. Last year’s pre-tax profit of $245 million was converted to a loss of $10.8 million this year.

In the third quarter sales were just over 25 percent lower at $765.6 million, with an operating profit down 70 percent to $20.9 million. The group’s tower and Rough Terrain crane results are now hidden within Material Processing so not visible, although that is not the case for Genie.

Genie recorded total sales for the nine months of $1.37 billion, 37.5 percent lower than in 2019. Operating profits were $2.4 million compared to $191.8 million this time last year. Looking at the third quarter, total sales came in just 29 percent lower at $445 million, while the operating profit declined 70 percent to $13.3 million.

Terex chief executive John Garrison, said: "Our ability to execute and safely serve customers during this uncertain time drove sequentially stronger financial performance. Our results demonstrate the progress we are making to align our cost structure with the current customer demand environment. We are strategically reducing spending and consolidating our company wide footprint. These actions will enable us to maintain a competitive cost structure and position us for growth."

"Aerial Work Platforms improved its operating performance delivering three percent operating margin reflecting the gradual sequential improvement in business activity. In addition, both Genie and Terex Utilities are seeing improved utilisation levels of their equipment."

"Materials Processing continued its strong performance by delivering a 12.9 percent operating margin. It is a diversified and consistently strong performer, even in these challenging times, with team members intently focused on profitable growth and serving its customers globally."

"Finally, I am very proud with how our global team is managing through this challenging year. We are on the path to enter 2021 as an even stronger company,"

Chief financial officer John D. Sheehan, added: "Terex's third quarter results demonstrate our ability to offset challenging macroeconomic conditions by focusing on levers within our control. We mitigated these headwinds with disciplined cost and working capital management to generate $54 million of positive free cash flow in the quarter. Our free cash flow performance reflects steady improvement in our businesses and strong execution."

Vertikal Comment

This is another set of reasonably encouraging results, with the company suggesting that the market has stabilised and is gradually moving back to normal. It also expects the full year results to come in roughly where it expected the might when it changed its prognosis at the mid year point.

A great deal will depend on the 'second wave' of the pandemic but overall things are looking a great deal more positive than they did six months ago.