03.08.2022

Profit slump at Genie

Terex / Genie has reported higher revenues but lower margins in its second quarter and half year results.

First Half
Total revenues in the first half were 7.2 percent up on the same period in 2021 at $1.15 billion with order intake of $1.67 billion - roughly the same as last year. Operating profit however slumped from $91.8 million to $78.7 million, a fall of more than 14 percent. The backlog/order book at the end of June was $2.33 billion, roughly a year’s worth of business and more than 60 percent up on the year. The company is maintaining its full year revenue forecast of $2.3 to $2.4 billion with an operating margin of 7.8 to 8.5 percent.

Second Quarter
Revenues in the second quarter were marginally higher at $598 million, although if foreign exchange fluctuations are taken out of the equation they improved by four percent. Order intake in the quarter dropped significantly from $747 million to $558 million, a decline of more than 25 percent possibly due to the substantial backlog and record first quarter bookings. Margins declined from 11 to 7.7 percent helping create a 29 percent decline in operating profit for the period.

Terex Corp
Terex as a whole - which also includes the Material Processing division of which the crane Rough Terrain and tower crane business is a part - saw revenues rise by more than nine percent to $2.08 billion, while pre-tax profits improved almost 15 percent to $153.4 million. Net debt increased 41 percent to $575 million.

Chief executive John Garrison said: "We are pleased with our solid financial performance in the quarter as a result of continued execution of our strategy and relentless focus on delivering for our customers and dealers. We grew sales nine percent when adjusting for FX rates and ended the quarter with a backlog of $3.5 billion, an increase of 51 percent year over year, emphasising sustained strong demand from our customers."

"We are proud of our execution this quarter amidst global supply chain disruptions and significant inflationary pressures. As a result of the strong performance in the first half of the year we are raising our full year EPS outlook to $3.80 to $4.20. We remain focused on executing our multi-year growth plan and continue to invest in new technologies and products. We were first in the industry to introduce an all-electric bucket truck, supporting aggressive sustainability goals at electric utilities. We acquired ProAll, expanding our concrete product offering, and invested in Acculon Energy, accelerating and further advancing Genie battery technology and electrification offerings. Our industry leading and innovative new products, steady backlog, recognised brands and strong balance sheet position us well to navigate the near term macro challenges to deliver long term value."

Vertikal Comment

Genie has struggled with the same supply chain issues, rising costs and production line impacts as other major manufacturers, although the second quarter sales and order intake will have been disappointing. The company goes into the second half though with a very strong order book, assuming the supply chain eases up a little as many expect it stands a good chance of reaching the top end of its forecasts for the full year or even exceeding it. Terex as a whole did better thanks to the MP division where a different supply chain and strong demand allowed it to improve margins along with revenues.

Not a great quarter for Genie, but nowhere near the worst it has experienced in its history, and in step with most publicly held aerial lift manufacturers.