05.11.2009

Palfinger drops 36%

Crane and access manufacturer Palfinger has reported nine month revenues of €387.9 million, 36 percent lower than for the same period last year. The fall resulted in a pre-tax loss of €10.9 million compared to a profit of €73.3 million last year.

Revenues for the quarter – the first in which the comparison includes Wumag - were €118.7 million just over 35 percent down on 2008. The operating loss for the quarter was €2.4 million compared to a loss of €2.1 million last year.

Nine month crane sales, typically the powerhouse behind Palfinger, declined 48 percent to €208.4 million or 55 percent on a like for like basis – without Omaha Standard. The division posted an operating loss of €807,000 compared to a profit of €75.5 million in the same period last year.

Hydraulic services which includes the access and tail lift businesses fared a little better in terms of revenue, with sales slipping 13.6 percent to €179.5 million while posting an operating loss of €2.68 million compared to a profit of €970,000 in 2008.

Wumag is included for the third quarter only, and indications for the company suggest that Palfinger Platforms posted a positive result for the period.

Palfinger says that indications are that the market for most of its products appears to have bottomed out since mid year and that it is in good shape to take advantage of an upturn when it kicks in.

Chief executive Herbert Ortner said: “At first the markets contracted significantly and since the second quarter they have remained at this low level. Palfinger had a strong position at the beginning of this economic crisis and reacted to downturns within the crisis quickly and remained on target. We are pleased that this has already been reflected in a gradual improvement of our earnings. And of course our service approach is also proving of value now."

“We are known among our present customers as well as our potential customers as a long-term reliable partner. This has proven to be an immense advantage over our competitors, in particular in uncertain times."

Vertikal Comment

There are no surprises here, Palfinger has weathered the storm relatively well and been able to remain focussed on its long term expansion and diversification plan which even now is beginning to look like a sound strategy.

As the world’s economy begins to recover and confidence returns its streamlined tail lift division should not only see revenues grow but this time round it ought to be in a position to generate decent profits from it.

Its leading position in the crane market and the work it has done since the slow down started ought to allow it to emerge in better shape that its two big competitors Hiab – which is going through a merger with Kalmar and Fassi which has been hit hard by the downturn.

In the access market it now has a very strong position in the large truck mounted lift market where there is still a good deal of pent up demand. There will be a number of acquisition bargains emerging over the next three to six months and rumours are already circulating that Palfinger is picking over the better ones.

It would certainly benefit from adding a lower cost manufacturer of smaller truck mounted lifts – possibly in a country to the south.

While it is still having to deal with red ink, Palfinger is seeing an improving profitability trend and is likely to emerge more quickly than most.