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Profit boost for Alimak

Hoist, mast climber and building maintenance unit/platform manufacturer Alimak has reported its half year results.

Total revenues for the six months to the end of June declined five percent to Sk1.8 billion (€175.8 million), due mostly to currency fluctuations, and the phasing out of the internal wind turbine access market. Order intake was a little more positive coming in two percent lower at Sk1.99 billion (€195.4 million). Pre-tax profits though jumped 60 percent to Sk188.4 million (€18.4 million) thanks to a cut in operating expense and finance costs.

Second quarter revenues were 2.5 percent lower at Sk951 million (€93 million), but order intake dropped five percent to Sk915 million (€89.5 million). Pre-tax profits increased 64 percent to Sk105.5 million (€10.3 million).

The construction division, which includes mast climbers and hoists, remains the largest part of the business, representing 30 percent of revenues (compared to 26 percent for the Building Maintenance Unit operations). Sales improved substantially, increasing almost 19 percent in the quarter and six percent year to date, boosting operating profit by 83 and 46 percent respectively.

Chief executive Ole Kristian Jødahl said: “In the quarter, currency translation effects continued to impact our reported order intake, revenue and earnings negatively. Organically, order intake and revenue continued to recover. Service continues to be a main contributor. We see clear signs of increased business activity in most of our segments and expect demand to continue to gradually improve in the coming quarters. Margins improved across all divisions in line with plan.“

“Organic order intake for the group was up one percent in the quarter and with an underlying organic growth of five percent, excluding the effects of our exit from Tower Internals in Wind. We saw strong order development in Industrial, up 24 percent organically in the quarter and with organic growth also in the BMU division. In Construction, orders were at the same level as last year with solid order intake of new equipment sale and spare parts, while for Rental order intake was softer after a strong Q1.”

“In Wind, the core business, except China, remained stable. Revenue increased four percent organically and with an underlying organic growth of eight percent, excluding the effects of our exit from Tower Internals. Construction showed strong growth of 24 percent driven by Equipment sales together with increased rental activity in Europe and Australia.”

“Our main focus for the year is to secure margin improvements and start implementing our divisional strategies to drive profitable growth. Our updated financial targets and sustainability target, presented in June, reflect the value creation potential we have identified and our contribution to workplace safety, reduced climate impact and social responsibility. We saw margin improvements in all divisions supported by our cost reduction measures launched in 2020, improving factory production results and lowering SG&A expenses. This gives us a good base for further profitability improvements as volumes increase. I am pleased to see that BMU showed a positive result in Q2 as planned, and we continue to execute on our planned activities to further lift the margin. In Wind, one-off costs were taken in the quarter to mitigate the effects of decreasing volumes in Tower Internals, that will continue for the rest of the year.”

“We expect markets to continue to improve going forward, supported by trends like urbanisation, digitalisation, sustainability and increased focus on safety. We are well on track to set the foundation for sustainable profitable growth and are highly committed to deliver on our targets.”

Vertikal Comment

A decent set of numbers from Alimak, which is gradually morphing more into a service company than a manufacturer. What impact that might have in the long term is hard to calculate and depends on whether it can increase the number of other manufacturers equipment that it can hold contracts for.

All in all, it is a positive start to this year’s round of half year results.