26.05.2022

Higher sales lower margins for Snorkel

US based aerial lift and telehandler manufacturer Snorkel achieved first quarter revenues of $41.7 million, almost 33 percent higher than in the same quarter last year. However, the gross margin slipped from 6.4 to 4.1 percent, this, plus higher Selling General & Administration costs resulted in a net loss of $4 million, up from a loss of $3.2 million in the first quarter of 2021.

The results were revealed in a statement from Tanfield which owns a disputed 49 percent stake in the business.

Vertikal Comment

While these numbers reflect the improving sales figures, and possibly - given the rising component and material costs the decline in margins - the SG&A and net profit numbers are less meaningful, given that there is an ongoing legal battle between Tanfield and Ahern, which does not exactly encourage high or even improving profitability. On the contrary it could be argued that higher spending on sales marketing and R&D during this period, with an eye towards longer term benefits when the legal battle is complete, is advantageous to the majority shareholder.

What the numbers do show is that this is the best first quarter since the start of the pandemic.