23.07.2009

Genie down 70%

Terex AWP/Genie has reported half-year revenues down almost 70 percent compared to 2008, and 72 percent for the second quarter, but the company reports that the situation is stabilsing. Although it does not expect the business to be profitable again until this time next year.

In the first six months to the end of June sales were $438 million compared to $1.42 billion in the same period last year. Gross margins during the period slipped to just 3.6 percent compared to over 26 percent in the first half of 2008 an operating loss of $74 million compares with a profit of $240 million last year.

The second quarter was slightly weaker again in terms of revenues, with sales down 72.2 percent to $210 million however profitability improved a touch – compared to the first quarter, with a loss of $32.8 million however in the same period last year the company generated a profit of $131 million.

Genie’s order book at the end of June was 73 percent lower than at the same time last year and down seven percent on the quarter.

Terex Group

Revenues for Terex as a whole were $2.6 billion, down 51 percent on 2008, while the net result before tax was a loss of $207 million, compared to a profit of $601 million in the first half of 2008.

Sales in the second quarter were down 55 percent to $1.32 billion while pre tax loss was $108 compare to a profit of $354 million last year.

Ron DeFeo, Terex chief executive said: “The turmoil from the ongoing recession continues to deeply impact sales for our industry, certain markets have stabilised, but at low levels, such as Aerial Work Platforms and Materials Processing.

Other markets, such as Mining and large capacity cranes, have begun to weaken, but at less dramatic rates. We are responding by aggressively reducing costs.

Manufacturing spending in the second quarter of 2009 was down 49% from the second quarter of 2008 and 16% sequentially from the first quarter. When combined with further reductions of selling, general and administrative expenses, these actions resulted in a $246 million quarterly run-rate spending reduction in the second quarter of 2009 versus spending levels in the second quarter of 2008. We continue to target a $300 million quarterly run-rate reduction by year end. We are still managing the company for cash, and we made good progress this quarter.”

Vertikal Comment

There is not much to say about these results, we expect all of the four largest aerial lift companies to be in a similar position as they report. One thing to say about Genie though, is that a year ago it looked as though it was loosing its way commercially, becoming overly ‘corporate’ and customer unfriendly, just as JLG under Oshkosh improved its game and became more responsive.

However in the past three months or so there have been signs of the old Genie spirit re-surfacing. If this continues the company could come out of this recession in at least as strong, if not stronger than when it went in.