28.01.2010

Harsco Infrastructure down 25%

Harsco Infrastructure – SGB, Hünnebeck and Patent Scaffold has reported full year results with revenues down 25 percent to $1.16 billion and an operating income of $68.4 million, 63 percent lower than for 2008.

The fourth quarter showed a leveling off in revenue declines, with sales down just 15 percent, but profits plummeted 93 percent to $2.2 million.

Harsco says that the three companies that make up the Infrastructure group – principally scaffold and formwork -are struggling with lower levels of work and steep pricing pressure.

The company does not see any improvement until the second half of 2010 at the earliest. As a result it is accelerating its restructuring plans and is moving rapidly ahead with the integration of the three businesses into a single unit.

As a result the three brand names will go, replaced by the Harsco Infrastructure brand which will soon appear on the company’s aerial work platforms and mast climbers as well as buildings, delivery vehicles etc…

The Harsco group as a whole reported revenues down by 26 percent to just under $3 billion, while pre-tax profits slumped almost 53 percent to $118.9 million.

Harsco chief executive Salvatore D. Fazzolari said: “We are encouraged by the company’s overall results in the fourth quarter, with four of our five business platforms reporting year-on-year growth in earnings. While a number of crosscurrents occurred in the quarter, we were able to modestly exceed our previous guidance.”

“Still, there remain many challenges ahead of us as we enter 2010, particularly in regard to the timing of the end-market recovery of our Harsco Infrastructure Segment.”

“Regarding Harsco Infrastructure, the first half of 2010, and in particular the first quarter, will continue to present a very challenging end-market environment. The lack of any meaningful activity in many of the non-residential construction markets served by the Company, especially in the U.K., Ireland, other parts of Europe and the U.S, poses near-term challenges that include further pressure on pricing.”

“These lower levels of activity have recently been exacerbated by some extreme winter weather conditions across many parts of Europe and the U.S., which will also have a negative impact on operating results as we enter 2010.”

“Nevertheless, our outlook for Harsco Infrastructure for the full year remains modestly positive. We are accelerating and aggressively reducing our cost structure. We have strengthened our management team, are successfully integrating three recently-announced mid-sized acquisitions and further developing newly-established joint venture opportunities, while refocusing our value-added services on higher-return end markets.”

“We remain confident that the combination of these initiatives will begin to be evident in our results for the second half of 2010 and into future years.”