30.07.2015

Terex Cranes on plan

Terex cranes has reported a fall in first half revenues and profit compared to last year, but remains in line with its forecasts.

Total revenues for the six months were $850.7 million just over five percent down on last year, while operating profit fell just over 10 percent to $26.2 million, mostly due to a weaker product mix in terms of margins.

Looking at the second quarter revenues were almost eight percent lower at $463.8 million, while operating profits fell 24 percent to $22.6 million. The backlog/order book at the end of June was $540.2 million, over 18 percent lower than a year ago and four percent down on the quarter.

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 Cranes segment performed generally in line with our expectations, but with a weaker product mix. The overall market for cranes remains challenging and we are not anticipating any near term improvements. The Construction segment was slightly profitable, with pressure on operating results continuing to come from the European and Indian compact construction and material scrap handling businesses.”

“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 this is in line with expectations and not dissimilar to that reported by Manitowoc, Terex Cranes is probably more susceptible to exposure to the oil & gas business than some of the others, which is likely to have knocked sales of Rough Terrain cranes and boom trucks hard, while the market for big lattice cranes may well be looking a little fragile.

It is also facing tough competition in the All Terrain market, with both Grove and Tadano making a stronger effort at the same time as Liebherr does all it can to hold on to its market share.
As Ron Defeo says the situation looks set to remain at similar levels for some time.