27.10.2016

Mixed quarter for Palfinger

Palfinger has reported record third quarter revenues, but lower profits, although year to date still looks positive.

Total revenues for the nine months were a record €996.5 million, almost 11 percent higher than this time last year. Pre-tax profits were 12 percent higher at €76.9 million. The ‘Land’ business which is predominantly loader cranes and aerial lifts improved 11.5 percent to €861.2 million or 86 percent of the total, the balance being ‘Sea’ or the marine business.

The company said that the Land division saw higher sales in all the regions except South America. In Europe, the acquisition of the Spanish distributor MYCSA to create Palfinger Iberica helped, while restructuring in North America is progressing well, promising greater productivity, the company has also invested heavily in product development for the region. The partnership with Sany is said to be helping in Asia, while the joint ventures in Russia allowed ongoing growth in spite of the challenging economic environment.

Looking the third quarter revenues were over 13 percent higher at €331 million, but pre-tax profits slumped 10 percent to €18.1 million due to higher R&D spending, higher distribution and administration costs, partially offset by lower ‘other costs’.

Palfinger says that order intake gives it reason to expect a record fourth quarter, and therefore year, while the acquisition of the Harding group and restructuring - particularly in North America will impact negatively on fourth quarter earnings. Although it anticipates that profits for the full year will remain above that of 2015.

Chief executive Herbert Ortner said: “The first nine months were characterized by revenue growth and an increase in operating profitability. Right now we are investing in restructuring processes in North America and the marine business in order to raise margins significantly there. We are striving to continue our long-term growth, particularly in the marine business, which we are going to develop into the strong second mainstay of the group, we will achieve this through further acquisitions.”

Vertikal Comment

Another good result from Palfinger, although the higher costs in the third quarter do suggest that it has some underlying issues to get sorted. It will almost certainly strive to get these behind it by year end in time for a clear year in 2017, when we can expect further acquisitions in its marine business, possibly with one or two closing before year end?