Genie back in the black
Genie and Terex have reported positive results for the first quarter.
Genie’s revenues for the quarter - including Terex Utilities - were down 6.5 percent on the year, at $476.7 million, but in spite of this it managed to turn last year’s operating loss of $5.9 million into a profit of $26.6 million this year. Order intake jumped dramatically pushing the backlog/order book up 82 percent to $1.3 billion. As a result, the company is forecasting revenues for the full year of $2.12 billion.
Cranes are no longer reported separately and are now part of the Material Processing division which saw revenues improve 20 percent to $378 million, while operating profits almost doubled to $49.1 million. Order intake also jumped dramatically to $713 million, an increase of 162 percent. Full year sales are now expected to exceed $1.5 billion.
Terex as a whole saw revenues improve four percent to $864.2 million, with a pre-tax profit of $47.4 million. Due to improving market conditions Terex has increased its full year revenue forecasts to $3.7 billion. Net debt was cut from $503.7 million to $401 million.
Terex chief executive John Garrison said: "Our first quarter results reflect a strong start to the year, as the global markets recover from the pandemic. I am proud of our team members as they continue to overcome the disruptions caused by Covid-19 and deliver improved performance.”
"Our portfolio of specialised machinery businesses will benefit from the global economic expansion. We are committed to aggressively implementing our 'execute, innovate and grow' strategy to improve margins and grow Terex."
"The aerial work platform business continues to improve its execution and operating margins, while meeting strong customer demand. Material processing had another excellent quarter with strong performance across its portfolio of businesses."
Chief financial officer John Sheehan added: "Through aggressive working capital management, we generated $40 million of free cash flow in the quarter. Our strong financial results and liquidity enabled us to prepay $196 million of term loans. We will continue to use our liquidity to fund future growth opportunities, such as the recent announcement of our new Monterrey, Mexico AWP facility."
"The company refinanced a large portion of its capital structure, including its revolving credit facility and $600 million of bonds, to take advantage of the availability of favourable interest rates. Our strong cash flow generation positioned us to obtain lower interest rates and extend debt maturities to the end of the decade."
This is the last quarter where the prior year comparison is with a pre-Covid era period. So, it is good to see that sales picked up as the quarter progressed and have now returned to pre-Covid levels. More crucially the strong improvement in order intake and order book provides a great deal of optimism that the worst impacts of the pandemic are behind us and a strong bounce back is now likely.
The strong improvement in profitability is interesting and is probably due to improved pricing as well as lower costs, which have led to a strong pick up in margins.
Another upbeat result.