29.04.2015

Slow start for Manitowoc Cranes

Manitowoc Cranes has reported a 13% fall in first quarter revenues while profits were more than halved.

Total revenues for the quarter were $406.7 million, 13 percent lower than in the first quarter of 2014, due to lower boom truck and Rough Terrain crane sales in North America, as well as the weak euro resulting in lower dollar sales from the European operation. Operating profits plummeted from $22.6 million to $9.7 million.

Order intake was $439 million compared to $733 million in the same quarter last year and $686 million in the fourth quarter 2014. First-quarter orders included $200 million for Variable Position Counterweight (VPC) crawler cranes for delivery in the second half. The backlog at the end of March was $770 million up 8.6 percent on this time last year and 4.3 percent on the quarter.

Group revenues fell over 11 percent to $752.1 million, while last year’s pre-tax profit of $8.6 million dropped to a loss this year of $9.5 million. The loss is largely due to lower revenues, but additional costs include $1.5 million separation costs, associated with the plan being pushed by Carl Ichan to split the crane and food equipment business.

Chief executive Glen Tellock said: “During the quarter, we witnessed pockets of strength in certain product categories, including all-terrain market share growth, as well as year-over-year growth in the Middle East and Asia/Pacific regions. However, global weakness continued to negatively impact our rough-terrain and boom truck markets. In spite of the challenging market conditions, we have not wavered in our commitment to improve the agility of our business, which led to a significant reduction in working capital and free cash flow improvements during the quarter. In addition, we were pleased to see our technological leadership in the market place validated by the ITC’s recent final determination that underscored the clear differentiation of our patented Variable Position Counterweight technology. We anticipate an improving second half will enable us to reach our full-year expectations for the business, in spite of lack-luster market conditions.”

“We remain confronted with a challenging operating environment, in spite of positive indicators in certain areas of the business. While our first-quarter results for Cranes were largely in-line with our expectations and historical seasonality, Foodservice was negatively impacted by under-performance in our KitchenCare business amplified by reduced capex spending by large chains. We have taken decisive, corrective actions to improve execution within Foodservice, and continue to focus on the areas within our control to drive growth as market conditions recover. Although our results for the first quarter were disappointing, we are confident in our revised full-year 2015 expectations as we anticipate improving performance moving forward, particularly in the second half of the year.”

Vertikal Comment

A disappointing, although predictable first quarter for Manitowoc, the numbers hide the fact that the company is making solid gains for sales of its mid-range Grove All Terrain cranes, but as this business is all in Euros, it is converting to fewer dollars due the weak Euro and strong dollar.

The company is likely to bounce back in North American construction market as will the Southern European operation. Expect the situation to improve by the half way point.