19.08.2007

Cramo profits up 70%

Cramo, the Finnish based company that includes Cramo of Sweden and RK of Finland, has reported record first half revenues and profits.

The company achieved first half revenues up by 24 percent to €223.7 million.

The geographic breakdown of revenues as a percentage of the total was: Finland -17.3 percent down one percent, Sweden - 51.8 roughly the same as last year, Norway and Denmark 18.4 Percent, down 1.5 percent on 2006 and Eastern Europe 12.4 percent, an increase of 2.3 percentage points.

The equipment rental business represented €191.4 million of total sales, an increase of 25.7 per cent. Modular space makes up the balance of the revenues.

First half profits before tax leapt 70 percent to €29.8 million. Capital expenditure on new equipment increased by a similar percentage to €93 million.

According to the company: “Sales were boosted by continuing favourable market conditions, positive price development, a higher rental equipment utilisation rate and successful equipment investments in the main market areas.”

Second-quarter performance was boosted by a capital gain of €4.0 million from the sale of the Dutch business operations this extraordinary gain was partially offset by one-off costs associated with the adoption of the Cramo brand across all parts of the group, which totaled €2.9 million.

As a result of the strong first half and second quarter results, Cramo has revised the Group's financial targets upwards. The earlier forecast of 10 percent revenue growth for the full year has now been raised to 18 percent. With EBIT targets lifted from 15 percent to 18 percent.

Vertikal Comment

Cramo is clearly following the strong trend set earlier in the week by fellow Finn, Ramirent. While the results are first class Cramo is currently seeing Rami opening the gap between the two as it expands at a faster pace.

However:- The Cramo and RK merger was completed barely 18 months ago, and a good deal of restructuring has occurred since then. Caterpillar and Pon only fully exited the business at the end of 2006.

Now that the business is free and independent, expect to see its growth gather pace, particularly in Eastern Europe where the company has invested heavily in its powered access fleet.

Full year revenues should hit €500 million this year, although the company is only predicting €475 million.