Ramirent to implement cost savings
Ramirent, the Finnish based international rental company has issued a bulletin this morning saying that it expects “a rapid deceleration in 2009 construction volumes in the markets it covers, resulting in a rental market clearly below 2008 levels.”
The company which operates throughout the Nordic countries, Russia, the Baltic stats and most of Central/Eastern Europe, says that it is taking actions to realise annual fixed cost savings of €50 million.
These include a reduction in its workforce by a total of 600 people. The restructuring cost is estimated at €25 million and will be taken in the fourth quarter of 2008.
Contingency plans have also been developed to address the risk of further market decline and it expects that investment in any expansion of fleet capacity will be minimal in 2009
Ramirent's outgoing chief executive Kari Kallio said: "The equipment rental business is structurally attractive in the long-term. While Ramirent will continue to execute its long-term growth strategy, the company is prepared to weather this downturn with its strong balance sheet and solid cash generation. Measures to streamline cost structure and a minimum need for investments in fleet capacity will safeguard cash flow and improve our competitiveness. We will focus on re-allocation of our modern fleet capacity to optimise utilisation and defend price levels".
It says that the impact on the personnel will become clear in each country oncenegotiations have been finalised. The company estimates it needs to reduce its workforce by 600, out of a total of 4,000 employees.
Ramirent's full year 2008 guidance remains unchanged. For the full year 2008, the company expects net sales growth to continue, while pre tax profit will fall below 2007 levels.