07.05.2008

Strong first qarter crane sales at Palfinger

Loader crane and truck mounted lift manufacturer, Palfinger has reported another strong quarter with revenues up by nearly 29 percent on the back of strong crane sales and the addition of MBB tail lifts.

Pre-tax profit lagged, growing just 11 percent, due to the absence this year of €2.5 million income from associated companies and high interest charges. Earnings before interest and investment income grew by 23.7 percent.

Crane sales generated all of the group’s profit, with sales rising by 21.9 percent to €143.7 million while crane profits grew by 28.7 percent to €31.4 million. The company says that while sales in Europe were up across the board, it did particularly well in France, Germany, Russia, Eastern Europe and Scandinavia.

Palfinger says that it has reduced its delivery times by asking its distributors to reconsider all their orders and remove what they call ‘wildcard orders’ in other words speculative stock orders driven by the group’s extended delivery times. It now says that crane lead times are roughly in line with availablity of large trucks.

On the access front the Bison truck mounted lift division failed to meet its forecast revenues due to a shortage of boom components, however performance improved on the same period of 2007. Bison is part of the Hydraulic Systems division which includes most non crane production including the tail lift business.

Revenues increased by 46 percent, due largely to the addition of MBB tail lifts, while the operating loss increased from -€256 to -€1.1 million, some of this is related to the transfer of Palgate tail-lift production to the MBB plant. The space vacated will be used to add increased crane production capacity.

Outlook
Palfinger is forecasting full year revenue growth of 15 percent, half coming from the addition of the MBB acquisition and half from organic growth.

During the quarter Palfinger established a new division Palfinger Ventures, which is a pure cost centre, costing around €700,000 over the period. It is charged with building up new fields of business and continuing market development both geographic and product based along with taking all strategic initiatives to their conclusion. A “pool of employees will be set up for the strategic activities with a view to ensuring the availability of sufficient personnel in order to meet Palfingers’s growth targets”.

Chief executive -Wolfgang Anzengruber said: “Our record revenues and earnings underscore Palfinger’s strong market position as reflected by our crane business in Europe and the high capacity utilisation in production. Currently the economic environment is very mixed, which is to say that some of our markets are declining while other markets, especially Eastern Europe, South America, and Asia, show great potential. All in all we are still satisfied with the demand situation even though the economic climate is no longer as overheated as in previous quarters.”

Vertikal Comment

Palfinger continues to go from strength to strength with crane sales thriving as the company outpaces many of its competitors. While the addition of MBB may have depressed the recovery of the other products division, it is almost certain to pay off in the medium term.

Changes to the Bison business also look set for a turnaround as it starts to ship its new 3.5 tonne models and the restructuring of production begins to pay off.

In summary the company appears to have made a great start to what looks like being another record year of growth.