02.11.2012

Ramirent up 12%

Finnish international rental company Ramirent has reported third quarter results which show a slowing of growth in the third quarter.

However revenues for the nine months grew 12.3 percent to €519.9 million, while pre-tax profits for the period jumped 54 percent to €58.6 million. The company cut back its capital expenditure during the period from €196.3 million last year to €87.2 million this year.

Looking at the third quarter revenues grew more slowly, rising 3.7 percent to €185.9 million, while pre-tax profits increased 8.9 percent to €27.9 million.

Looking over the various country divisions Finland, while up over 11 percent year to date, slipped back one percent in the third quarter - although profits continue to grow. Sweden, Norway and Europe East all saw strong revenue and profit improvements, while Denmark and Europe Central moved back into profit during the third quarter but the latter has seen substantial revenue declines – 17 percent in the quarter and 15 percent year to date.

Chief executive Magnus Rosén said: “Overall activity levels held up fairly well in our Nordic countries as well as in our Europe East segment. But as expected, the third quarter was difficult for our Europe Central business. Growth in the group’s consolidated net sales slowed further as anticipated in the third quarter compared to the second quarter. Like-for-like, growth in net sales amounted to 1.3 percent in the third quarter compared to 4.9 percent in the second quarter. Group EBIT decreased slightly compared to previous year to €29.7 (30.5) million.”

“Profitability remained stable in most of our segments due to good utilisation levels and price discipline, except for Europe Central, where we continued to scale the operations to reflect to the weak market conditions prevailing in the segment’s four countries Czech Republic, Hungary, Poland and Slovakia.”

“Our cash flow after investments continued to be positive, amounting to €23.7 (-36.8) million in the third quarter, due to good cash flow generation from operations as well as cautious capital expenditure.”

“Looking ahead, we continue to carefully observe the market activity and adjust our operations to signs of activity slowing down. Our priority remains on cautious capital expenditure, cost and risk control. We continue to improve our competitiveness by developing our common Ramirent Platform and providing our customers with enhanced efficiency through integrated solutions.”

Vertikal Comment

Overall a strong result again from Ramirent, it has now moved ahead of its Finnish rival Cramo in terms of both revenues and profitability. Both companies are seeing a significant slow-down though in their home market of Finland, something they expect to continue over the next year or so.

However with the rest of the Nordic region growing the business looks set to continue to do well, and we understand that the company might have relaxed this year’s tight hold on capital expenditure a little as it moves towards year end and 2013 suggesting a confident outlook if this is so.

It will be interesting to see how the merger of its Russian and Ukrainian operations with Cramo will work out. It should have little effect on 2013 revenues and profits but should result in some stronger growth as the new venture pulls together towards 2014.

In the meantime it will free up resources to expand and develop its other regions. Ramirent has done well in recent years and looks well placed to continue that success and growth of recent years