03.02.2010

Manitowoc Cranes see pick up

Manitowoc cranes has reported its full year results with revenues down 42 percent to $2.3 billion, while operating income fell 74 percent to $145 million.

Fourth quarter revenues dropped 49 percent to $480.2, but were at similar levels to the previous quarter, while operating income fell 84 percent to $18.3 million. meanwhile order intake has begun to pick up with the order book on the full year down just 14.1 percent to $573 million.

Glenn Tellock chief executive said: "The percentage decline in backlog diminished in the fourth quarter as the net positive order flow trend that began in March continued through December. The trend in our orders reflects improvement in current demand levels, most notably from Asia, Latin America, Africa, and the Middle East. We believe our strong position in emerging markets, as well as the global restructuring that we have been implementing should enable us to restore Crane segment revenue and earnings growth as the market improves."

The group as a while saw full year revenues fall by 16 percent to $3.8 billion thanks to a stronger food sector after the Enodis acquisition. The group posted a pre tax loss of $705 million although this included a goodwill write down of $549 million and other one off exceptional costs. With these removed the group posted a small pre tax profit.

"Although we continue to be faced with a challenging business environment, we are encouraged by recently improving metrics and trends for 2010. We clearly exceeded our adjusted targets for cash flow and debt reduction, foodservice margin targets were achieved, and crane segment revenue was maintained at third-quarter levels. We also expect that 2010 will see increasing benefits from the operational efficiencies, process improvements, cost reductions, and synergies that we implemented in 2009” said Tellock.

"Our cash flow from operations was $159.5 million during the fourth quarter, enabling total debt reduction of approximately $475 million for the full year, exceeding our $450 million target. Considering the challenging economy, especially in the heavy equipment markets, this was a remarkable achievement representing solid performance by the entire Manitowoc team.”

Vertikal Comment

While these results are clearly not fantastic, given the current state of the economy and the crane market they are far better than they might have been and are looking somewhat positive for 2010.

Manitowoc crane has benefited from the group/Holding company being led by someone who fully understands the crane business and its cyclical nature. As a result the company has played its hand well so far and looks set to exit the recession ahead of those competitors who have focussed on the immediate rather than the longer term.

The company is pressing ahead with new products and services and continuing to build its brand around the world. It looks set to firmly cement its position as the world's second largest crane manufacturer and will have its sights set on catching up with the market leader.