22.04.2009

Terex AWP down 65%

Terex Aerial Work Platforms, largely Genie, has reported a 65 percent decline in first quarter revenues to $228.5 million.
The business generated an operating loss of $41 million during the quarter compared to $109 million for the same period last year.

The order book declined by 81.3 percent, compared to the end of March 2008, and decreased 13.5 percent compared to the end of December.

The company says that demand is stable for its large booms in excess of 80 feet and for its Runabouts range, while mid-size booms, scissor lifts and telehandlers remain weak.

“During the past twelve months, demand has dropped by up to 70 percent in some markets such as certain countries in Western Europe. Demand has begun to exhibit some indications that stability has been reached in end markets, although at a low level. Due to continuing economic uncertainty, customers are ordering equipment when needed, rather than planning purchases in advance as they did in prior periods, resulting in minimal levels of backlog.”

Manufacturing spending levels were reduced by $51 million or 46 percent however, due to the significant reduction in production volumes, net manufacturing unabsorbed cost for the period increased by approximately $24 million.

Terex Group

Terex as a whole reported revenues down by 45 percent for the first quarter to $1.3 billion while posting a pre-tax loss of $98 million, compared to a profit of $238 million last year.

Ron DeFeo, Terex chairman and chief executive said: “The turmoil from the global credit crisis and economic slowdown has quickly and deeply impacted sales for our industry, with certain sectors down almost 75 percent from year ago levels. In response, we are aggressively reducing costs, with manufacturing spending in the first quarter of 2009 down 39 percent from the peak spending level in the second quarter of 2008 and down 16 percent sequentially, and selling, general and administrative spending both excluding restructuring, down 26 percent and 14 percent, respectively, for the same periods.”

“Combined, this results in a $208 million quarterly spending reduction, and we expect to exceed a $300 million per quarter spending reduction by year end. We continue to operate at reduced production levels, in many instances at levels well below our current demand, with a primary objective to reduce inventory where we saw progress in the quarter with a solid reduction in raw material deliveries. The short term goal is to focus on the loss making businesses to achieve a breakeven or profitable level, while being cash flow positive for the overall Company, even at these trough levels.”