28.07.2016

Slow down for Alimak

Mastclimber and hoist manufacturer Alimak has reported lower first half revenues, but higher profits thanks to lower debt

Revenues for the first six months were three percent lower at SK980 million ($113.5 million), with order intake down seven percent to SK1.2 billion ($139 million). Pre-tax profits however almost tripled to SK136.9 million ($15.9 million) due to lower operating costs and substantially lower financing costs- related to the flotation of the company since last year- which essentially replaced debt with equity.

Looking at the second quarter total revenues were five percent lower at SK525 million ($60.8 million) with order intake dropping 18 percent to SK543 million ($62.9 million) most due to lower sales in the industrial division relating to substantially lower activity with its oil & gas and mining customers, which also reduced after sales service revenues, these reductions were only partially offset by higher sales into the construction sector and higher rental revenues. Pre-tax profits however more than doubled to SK88.9 million ($10.3 million) for the same reasons as in the half year.

Chief executive Tormod Gunleiksrud said: “The overall business environment continues to be challenging with weak demand in the Oil & Gas and Mining segments, and additional uncertainty in the European markets as a result of the Brexit referendum. I feel confident that our strategic initiatives are well underway and thus I expect our profitability to remain on the same level as in Quarter two during the second half of 2016.”

Vertikal Comment

This is not a great set of numbers, but given the slower markets for energy and raw material, it is no great surprise. It does though make the decision to float the company look eminently sensible. The company is making some solid progress in the construction market and doing better with its rental operations, both of which still have ample room for growth.

Overall the company is in a pretty good place with plenty of opportunities on the horizon.