08.11.2019

Manitowoc gathers pace

Manitowoc Crane has reported a strong third quarter in terms of profitability, although revenue growth has slowed.

Looking at the nine month year to date numbers, total revenues were three percent higher than at this time last year, at $1.37 billion. Pre-tax profit however jumped from just $3.4 million last year to $47.6 million this year and would have been even higher had there not been a charge for the early retirement of some long term debt in the first half.

Moving on to the third quarter total sales were down slightly in dollar terms to $448 million, although if the currency factor - strengthening dollar – is taken out sales were actually 1.5 percent up on last year. Pre-tax profits for the quarter leapt from just $800,000 in the same quarter last year to $21.2 million this year, with improvements in almost every area, from gross margins, to expenses and interest costs. Order intake has though been declining this year, leaving the order book/backlog at the end of September down 33.4 percent at $466.5 million.

The company is now projecting full year sales of $1.85 to $1.88 million, roughly the same as last year. However last year the company made a thumping pre-tax loss, mainly due to the write down of some goodwill, but this year should be substantially better.

Chief executive Barry Pennypacker said: “Manitowoc delivered solid third quarter results through continued operational improvements, and we achieved our tenth consecutive quarter of year over year adjusted EBITDA margin expansion. Our application of the lean principles of The Manitowoc Way continue to reflect favourably in our financial results. With this solid year to date performance, we have raised the midpoint of our 2019 full-year adjusted EBITDA guidance while also reflecting current market conditions in our revenue outlook.”

“Our results prove that we can effectively deliver on our commitments despite challenging market conditions. Through the transformation of Manitowoc over the past three years, we are better positioned to generate positive returns to our shareholders throughout the cycle while maintaining adequate liquidity.”

Vertikal Comment

Overall an excellent set of numbers from Manitowoc, especially in terms of profitability gains and earnings quality. The Demag sale to Tadano ought to throw up some excellent growth and market share opportunities for Manitowoc, especially for its Grove All Terrain product line, however it could benefit from further investment in key markets outside of North America in order to raise and polish the brand image for its All Terrain cranes. The company has some class leading models in its range, but they are not always seen as equals to Liebherr or Tadano in terms of quality or reliability, unfairly perhaps, as much of this relates to perception, rather than fact.
While sounding a little on the negative side, it does in fact indicate that there is plenty of further growth potential out there, in spite of a slowdown in overall market growth.

No matter how you look at it this is a very positive and encouraging set of numbers from Manitowoc.