17.08.2022

Strong pick up at Mills

Brazilian rental company Mills has published its first half and second quarter results.

Focusing on the Rental division, which is mostly made up of aerial lifts and telehandlers and now makes up 87 percent of total revenues, the balance being Formwork and shoring.

First Half
Total revenues increased 47.1 percent to R417.9 million ($82 million) thanks to improved rates, product mix and utilisation. Most of the growth came from equipment rental, with a contribution from other revenues, while equipment sales declined, mostly due to supply chain issues. Operating profit more than doubled to R139.2 million ($27.3 million) as a result of the previously mentioned growth factors.

Second Quarter
The growth trend continued in the second quarter with revenues improving 41.6 percent to R215.5 million ($42.3 million) while operating profit jumped 83.2 percent to R69.9 million ($13.7 million).

Capex
Capital expenditure on rental equipment for the six months to the end of June was R66.1 million ($13 million) compared to R23.6 million ($4.6 million) in the same period last year. Of this R39.2 million ($7.7 million) occurred in the second quarter and was spent entirely on aerial work platforms, boosting the total fleet by 16 percent to 9,237 units. However, the average age of the fleet at the end of the period was around 9.1 years - positively geriatric by most large rental fleets. However, utilisation for the period was 64.1 percent and Mills claims that good maintenance and repair programmes keeps its aging fleet competitive.

The company is also acquiring earth moving equipment rental company Triengel Locações e Serviços and plans to spend R225 million ($44.1 million) on expanding the earthmoving fleet. See: Mills enters earthmoving sector

Mills group
The company as a whole reported first half revenues of R482.7 million ($94.7 million) up 48.1 percent on the year, while pre-tax profits more than tripled to R129.7 million ($25.4 million).

Chief executive Sergio Kariya said: “We are confident with our unique positioning in the machinery and equipment rental market. We will move forward on our journey of transformation and strong growth with discipline in capital allocation. We aim to take Mills' commitment to excellence to increasingly relevant markets, always with a view on maximizing positive impacts for our customers, employees and investors, consolidating our commitment to ‘enchant, grow and transform’.”

Vertikal Comment

Mills has been going through a very positive recovery period and looks to be gathering some real momentum, both through organic growth and acquisitions. The aging fleet is an issue though, created by the tough years following the 2008/9 economic crisis and almost certainly needs to be reduced before another meltdown starts to have an impact.