20.10.2015

Genie profits bounce back

Genie / Terex AWP has reported another challenging quarter in terms of revenues, but managed a substantial improvement in profitability.

Total revenues for the nine months were $1.76 billion a fall of around 7.5 percent on the same period last year. Operating profit for the period was $226.6 million almost 15 percent lower than in 2014. However in the third quarter revenues were just over four percent lower at $573.8 million while operating profits improved over 16 percent to $79.4 million.

The order book at the end of September was $298.4 million up 39 percent on the same point last year, but down from $436.3 on the quarter.

Terex as a whole reported year to date revenues of $4.96 billion down almost 10 percent on last year, while pre-tax profits fell 20 percent to $206.3 million. Net debt increased from 1.31 billion to $1.6 billion.

Terex chief executive Ron DeFeo said: “Our marketplace remains challenging. We had another good performance in our Aerial Work Platforms business which delivered year over year improvement in profitability in the third quarter as increased productivity and lower material cost more than offset lower sales, mainly in the North American telehandler product category”.

“The Cranes and Construction businesses continue to experience relatively soft market conditions overall, with customers remaining cautious with their equipment purchasing patterns. The Material Handling and Port Solutions business saw declines driven by a decrease in port automation sales.”

“As mentioned last quarter, we are seeing pricing pressure in the marketplace, which to date we have been able to mostly offset by reductions in material input costs. We continue to execute very well against the cost saving initiatives that we have previously communicated. We also continue to make progress towards the completion of the merger with Konecranes Plc, which when combined with the improvements already underway creates a compelling financial improvement story in an otherwise flat market.”

“Given where we are in the year and the challenging environment we are operating in, we believe we will be at or near the low end of our previously announced earnings guidance for the full year 2015.”

Vertikal Comment

While the year to date number remain disappointing this is a better result than many had feared, and the bounce back in profitability is good news. The order book while falling during the quarter is substantially better than this time last year and more typical for the season.

On the face of it this looks like a reasonable and encouraging result.