30.07.2015

Genie bounce back begins

Terex has issued its half year results which show a better quarter for the Genie/AWP business, although it is still off from the same period last year.

Total revenues for the six months were $1.18 billion around nine percent lower than in the same period last year mostly due to the challenges faced in the first quarter. Operating profit for the period was $147.2 million down almost 25 percent, again largely due to the first quarter.

In the second quarter sales were $677.1 million just over five percent lower than a year ago, while operating profits fell just over eight percent to $103.9 million. The order book/backlog at the end of the June was $436.3 million up 4.3 percent on last year.

Terex as a whole reported revenues for the half year of $3.32 billion just over 10 percent lower than a year ago. Pre-tax profits declined around 24 percent to $129.4 million, while net debt increased 20 percent to $1.57 billion, relating to a number of issues including several bolt-on acquisitions for the Materials processing business.

Chief executive Ron DeFeo said: “The second quarter was a solid quarter in terms of financial performance. Our AWP segment operating margin returned to the mid-teens as anticipated, benefiting from increased productivity and seasonally strong sales. We are encouraged by our AWP backlog which is higher than the prior year level and expect improved performance for this segment in the second half of 2015 as compared to the second half of 2014. We are seeing pricing pressure in the marketplace, but to date that has been mostly offset by reductions in material input cost.”

“Although we had a solid second quarter performance, given where we are in the year and the challenging environment we are operating in, we now believe we will be in the low end of our previously announced earnings and revenue guidance for the full year 2015. As a result, our guidance is now for earnings per share for 2015 of between $1.9 and $2.1, excluding restructuring and other unusual items, on net sales of between $6.1 and $6.4 billion.”

Vertikal Comment

While the comparisons with last year’s numbers are still negative, this is a strong bounce back for Genie, following major disruption during the first few months of the year from west coast port strikes and other factors, including exchange rates reducing the dollar values of European sales and a slightly softer US market in the quarter.

We would expect this to gradually improve over the next two quarters, given that we are still at an early stage of the economic recovery. And given a likely improvement in the replacement market in Southern Europe, while other markets continue to see improved market penetrations for aerial lifts and telehandlers.