25.04.2025
A bounce back?
Austrian loader crane and aerial lift manufacturer Palfinger, has released its first quarter results which include some positve news and a very positive forecast.
Revenues The company saw total revenues fall 4.5 percent to €552.5 million, due to the weak order book at the start of the year, however Europe bounced back, at least in terms of orders and activity, while North America and Asia/Pacific were sluggish at best.
The revenues are broken down as follows:
Europe, Middle East & Africa - 60% = €331 million
North America - 26% = €143.65 million
South and Central America - 5% = €27.6 million
CIS countries - 4% = €22.1 million
Asia Pacific - 5% = €27.6 million
In the
European region, the company says it has seen a recovery in order intake in its core markets, which began towards the end of last year. The trend has spurred on an increase in production capacity in Europe.
In
North America however, demand has “remained subdued” possibly due to “the lack of clarity with the US tariff policy which continues to cause market uncertainty.”
saw a modest upward trend, particularly Brazil and Argentina where production capacity has also been increased.
In the Asia Pacific region the company says it is seeing signs of recovery, particularly in China, while India is beginning to emerge as a market for Palfinger products , which has encouraged plans for a €25 million investment in an assembly plant there.
The company also reported that revenue and earnings in its Marine Division remain at a high level, driven by continued growth in the service business and strong demand for offshore cranes.
Order Intakefor the period was in the region of €617 million, significantly higher than in the previous quarter and back to levels not seen for almost 12 months.
The order book/backlog at the end of March was 11.2 percent lower than this time last year, at €1.03 billion, but more than seven percent higher than at the start of the year. 19.6 percent of the backlog also relates to service work, compared to 17 percent this time last year.
Pre-tax profit slumped 30 percent to €31.5 million, due to the lower revenue not offset by a similar drop in production costs, and higher distribution costs.
Net Debt was cut by 8.5 percent to €639.7 million.
Full year outlook The company is forecasting total revenues for the full year of €2.7 billion, with a 10 percent EBIT margin. In terms of revenue, if achieved it would be 14.5 percent higher than in 2024 and a new record, yet the company that if it achieves its target it would be its second best year to date – one assumes that this must relate to profit and cash flow.
Chief executive Andreas Klauser said: "The strong demand in the first quarter 2025 gives us confidence, allowing us to expect a positive earnings trend from the second half of the year onward. We are on the right track for further growth with our products, solutions and strategy,"
“Thanks to the recovery in order intake in core European markets, we expect strong earnings development from the second half of the year onward. On this basis, the company is aiming for year on year growth in both revenue and EBIT in 2025, targeting the second best financial year in our history.”
Vertikal Comment
Second best year, sounds a bit like William Shakespeare’s bequest to his wife of his second best bed - not great, at least on the surface - it was apparently their marital bed so it had a high sentimental value.
If the company does meet its revenue targets and the higher margin service revenues continue to grow at current levels, and it contnues to reduce its net debt still further, Palfinger will have a very good year indeed.
The challenge it faced in the first quarter, was that the cost of sales, understandably did not fall in percentage terms as much as the decline in revenue. However, if is now ramping up production in a number of key regions, whcih should resolve that, while the higher costs of distribution, are probably unlikely to come down any time soon, and might in fact rise still further.
Palfinger does not release the minutiae of its results, on a quarterly basis, but the trend is most definitely positive, and with a fair wind behind it, will have a very decent year in spite of the global challenges in the current environment.
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