04.08.2016

Profits dip at Ramirent as revenues rise

Finnish international rental company Ramirent has reported positive first half revenue growth, along with a dip in profits.

Revenues for the first six months were €315.4 million, up 5.1 percent on the same period last year, however pre-tax profits fell 13.4 percent to €14.2 million, due apparently to one off items, including a cost of €1.2 million for changing the chief executive. Gross capital expenditure was 55 percent higher at €110.5 million.

In the second quarter revenues climbed 6.3 percent to €169.4 million, while pre-tax profits crashed 33.6 percent to €11.1 million as costs and depreciation increased. The improvements were driven largely by Finland and Sweden, both of which posted strong growth, while Denmark edged up and Norway, Europe East and Europe Central all posted second quarter declines in both revenues and profits.

Outgoing chief executive Magnus Rosén said: “Ramirent’s second-quarter net sales grew by 8.2% at comparable exchange rates based on growth in all segments, except for Europe East. On a rolling 12 months basis return on equity improved to 12.6 percent (11.5%), which was above our long-term financial target of 12 percent per fiscal year. We maintain high focus on improving cost efficiency and developing our operating models to enhance profitability. Especially in Sweden, where comparable EBITA is unsatisfactory, many of these developments are taking place and EBITA started to improve towards the end of the quarter.”

“In General Rental, growth in net sales was driven by improved demand especially in the Nordic construction sector. In Solutions, large construction and industrial projects continued to support sales growth especially in Sweden, Finland and Poland.”

“Since this is the last quarterly report that I publish as CEO of Ramirent, I would like to take this opportunity to thank all our customers, employees, shareholders, and other parties with whom I have had the pleasure to share this exciting journey. The equipment rental market provides interesting growth opportunities and possibilities for differentiation. Ramirent is well-positioned to take advantage of this development.”

Vertikal Comment

It is good to see revenues increasing and the company back on a positive trajectory, although there are worrying signs in half of the regions. Magnus Rosén, an ex Cramo man, has been at the help of Rami since 2008, shortly before business began to get really tough. So it will be interesting to see what direction the new man, Tapio Kolunsarka, takes. There is much to be done.