05.05.2016

Manitowoc edges up

Manitowoc Cranes saw a five percent improvement in first quarter revenues, although reported profits tanked due to debt rescheduling.

Total revenues were $427.4 million for the quarter five percent higher than in the same period last year, thanks to strong Potain tower crane sales and new products such as its latest GMK models. Although order intake was down at $417 million and the backlog plunged 35 percent to $502 million. The pre-tax loss increased from $32.9 million last year to $78.5 million this year, although $72 million was due to the early extinguishment of its debt, which did slash the quarterly interest cost. A further $4 million plus is due to restructuring costs, largely headcount reductions at US production facilities.

Chief executive Barry Pennypacker said: “We made great strides in the first quarter transitioning to a stand-alone Crane business. We have begun to establish a new culture based on The Manitowoc Way, focused on driving Innovation and Velocity throughout all of our business processes. In the first quarter, we experienced continued momentum in our tower business, fueled by residential and non-residential construction. As anticipated, demand for mobiles remains soft. Our full-year outlook remains unchanged”.

“As we move forward, we will focus on four key elements. First, we will utilise our lean expertise to increase the flexibility of our manufacturing footprint globally. Second, we will reinvigorate our development process to introduce new products and services that deliver enhanced productivity to generate greater return on investment for our customers. Third, we will focus on gaining market share as a result of our improved competitive position. Fourth, we will take advantage of our strengthened balance sheet to allocate capital to the most accretive options available at that time. These four actions are supportive of our long-term stated goal to achieve double-digit margins”.

Vertikal Comment

The positive revenue numbers are pleasant surprise, although it is being compared to very bad first quarter 2015 when Rough Terrains and boom trucks tanked. In spite of this it is still very positive. In terms of profits the underlying position is surprisingly strong, with higher gross margins, lower sales and general administration costs and substantially lower interest charges. All in all this looks like a pretty good start as a stand along company in uncertain times.