08.05.2017

Challenging quarter for Manitowoc

Manitowoc Crane - which also includes Grove mobile cranes and Potain tower cranes- has reported a substantial drop in first quarter revenues, but also a significantly reduced loss.

Total revenues for the quarter were $305.8 million, 28 percent lower than in the same period last year, while last year’s pre-tax loss of $85.8 million was cut to $10.8 million. The positive news is that order intake picked up considerably in the quarter rising 17 percent on the same quarter last year, pushing the backlog/order book to $506.3 million - up 56 percent on the quarter and slightly higher than in the first quarter last year. The company is maintaining its forecast for full year revenues to come in between eight and 10 percent below 2016.

Chief executive Barry Pennypacker said: “In the first-quarter, we were pleased by the strong customer reception of our new products, many of which were highlighted at ConExpo. Nearly half of our equipment orders in the quarter were for products introduced since becoming a stand-alone crane company last year, which drove year-over-year and sequential orders up by 17 and 40 percent, respectively. Although the market has not shown signs of a sustained recovery, we are encouraged by the increased orders we booked in the quarter, and at this time reiterating our full-year financial guidance.”

“Our first-quarter revenue was negatively impacted by the low level of backlog entering 2017, mainly due to historically low levels of crawler crane demand. In addition, our mobile crane business remains soft in the Americas and the Middle East as a result of continued low rental rates, weakness in used equipment prices and low oil prices, notwithstanding the increased activity in some of the American shale basins. Our Tower crane business performed in line with our expectations, reflecting market share gains in key product lines.”

“Despite the challenging market conditions, we remain focused on the things we can control. The relocation of our crawler crane production continues to proceed as planned, on time and within budget. Through judicious working capital management, we delivered improved cash flow from operational activities versus last year and ended the quarter with no outstanding borrowings on our ABL credit facility. This was mainly attributable to utilizing the principles of The Manitowoc Way throughout the organisation. Our overall long-term objectives remain unchanged, that is targeting double-digit operating margins by 2020, and being a market leader in lifting solutions.”

Vertikal Comment

While we all know how tough the US and Middle East market is at the moment, this is still a surprisingly large drop in revenues. It is possibly due to disruption caused by the shift in crawler crane production from Manitowoc to Shady Grove, along with the fact that the order book was looking thin at the start of the quarter.

It looks as though the company and the market will see a more positive trend in the months ahead, and hopefully this will continue and gain pace in 2018.