09.05.2008

Flat first quarter for Skyjack

Linamar, the parent of Skyjack has released its first quarter results, they show that the group’s driveline division has bounced back with a seven percent increase in revenues and a 47 percent increase in operating profits.

Skyjack, which makes up most of Linamar’s Industrial division, saw revenues edge up by just over half a percentage point to C$130.3 million ($124 million). Operating profits though slumped by almost 21 percent to C$18.8 million ($18.5 million).

The company says that the poor first quarter result is down to a number of factors, including:
- A change in product mix with additional launch sales of its new boom and telehandler product lines;
-Lower sales of reconditioned and refurbished equipment..
-Lower sales in Europe, compared to the same period in 2007.
- Higher costs involved with the marketing and launch of its new boom and telehandler products.
- Increased Research and Development costs ...and
- Increased raw material costs.

Vertikal Comment

These results are a little surprising, although as they only cover three months they hardly represent a trend.
Linamar does not mention the fact that the Canadian dollar has appreciated strongly against both the US dollar and Sterling, probably its two largest markets.

The effect of the currency factor would have understated its sales volume terms, when transferred back into Canadian dollars. It would also have depressed margins and therefore profits.

Within the markets that the company operates it is likely to have done as well as most, and better than some. Linamar does not provide this information in its quarterly reports.