Strong quarter for Rami
17. February 2017 | Comments (0)
For the year as a whole revenues were 4.6 percent higher at 665.2 million, with a strong improvement in Finland where sales were up almost 13 percent, and Sweden up six percent, the two of which between them represent 62 percent of the total group revenues. All other markets were slightly higher in local currency terms apart from Denmark was marginally lower. Pre-tax profits however plunged 40 percent to 28.1 million, due to write offs and other issues earlier in the year.
Capital expenditure was 37 percent higher at 190.8 million of which 165 million covered new equipment and machinery for the rental fleet 31 percent higher than in 2015. Net debt at the end of December was 23 percent higher on the year at 345.8 million.
In the fourth quarter revenues were almost six percent higher at 180.5 million with Finland up almost 15 percent, Sweden 1.2 percent, Norway 4.3 percent in local currency, Europe East 5.9 percent, Europe Central 4.8 percent, while Denmark posted the only decline, falling 7.6 percent. Pre-tax profit soared almost 28 percent to 16.2 million.
Chief executive Tapio Kolunsarka said:For the full year of 2016, our sales grew at comparable exchange rates by 6.1 percent, our full-year result was impacted by one-off asset write-downs and reorganisation costs related to profitability improvement actions announced in October 2016. In the fourth quarter, thanks to overall good market and weather conditions, net sales grew at comparable exchange rates by 7.3 percent. Our sales grew in all markets except for Denmark and we were pleased to see that we achieved a good sales mix in most of our segments during the quarter.
Sales growth was fastest in Finland supported by a strong market, but profitability improved only slightly due to higher costs and a higher share of service sales. In Sweden, profitability improved driven by net sales growth, stabilising costs and a higher share of General Rental in the sales mix. In Norway, overall market demand for General Rental was fair and we managed to stabilise our Temporary Space business. In Denmark, the improving trend in profitability also continued. In Europe Central, the previously announced reorganisation actions started to improve profitability already during the quarter. In Baltics, demand was stable and a good level of profitability was maintained.
Looking ahead to 2017, we expect our business environment to remain largely favourable and will concentrate on delivering improved profitability. Our focus in 2017 lies on turning around non-performing units, improving the sales mix, increasing cost efficiency, fleet productivity and developing pricing. We have a lot of work ahead of us to improve our performance and I would like to thank the employees of Ramirent for their engagement and contribution during a challenging 2016.
With our strong market positions and financial strength there are plenty of possibilities to develop our business in the long-term. Rental is a future-proof business and we continue to be well positioned to benefit from the trends of outsourcing non-core activities, resource efficiency and increasing demand for productivity in construction. A comprehensive strategy update will be completed during 2017.
This an encouraging set of numbers from Ramirent which has been floundering for a few years, hopefully the company has regained its Mojo and will see the positive fourth quarter blossom into a strong year in 2017.
The company has also lifted its capital investment which is good as it has some catching up to do. All in all it looks as though the company will post a decent recovery this year.