08.08.2017

Manitowoc back to black

Manitowoc Crane has posted a profitable second quarter on lower revenues but improved order intake.

Starting with the results for the first six months, total revenues were $700 million just over 20 percent down on the same period last year. The pre-tax loss for the period was cut from $89.3 million last year to $31.5 million this year.

Moving on to the second quarter, total sales were just under 14 percent lower at $394.6 million, with most of the decline due to lower crawler crane shipments in the Americas - last year saw the shipment of a good part of the long-standing backlog for the new MLC650s. Rough Terrain crane shipments in the Americas and the Middle East were also lower. Order intake however improved nine percent to $379.5 million, taking the backlog/order book at the end of June to 491.2 million, 25 percent higher than at the same point last year.
More importantly perhaps the company reported a pre-tax profit of $3 million for the quarter, compared to a loss last year of $4.3 million.

Finally the company has improved its full year forecasts and now expects revenues to come in five to seven percent lower than in 2016 with an EBITDA of $59 to $69 million, compared to the original forecast of revenues eight to 10 percent lower with an EBITDA of $41 to $59 million.

Chief executive Barry Pennypacker said: “We are very pleased with our second quarter performance as we made considerable progress in consolidating our manufacturing footprint and reducing the cost of our organisational structure. Considering our year to date performance and future market outlook, we have improved our full year 2017 guidance. This underscores that our team can deliver improved results using the principles of The Manitowoc Way. The relocation of our crawler crane production is complete, on time and under budget.”

“In the second quarter we have seen order improvement in most product categories except lattice boom crawler cranes. We have experienced pockets of improved demand in specific markets like the Permian and Eagle Ford basins in North America. European markets continue to experience moderate growth, mainly in residential and non-residential construction markets, partly offset by continued weakness in the Middle East."

“While we remain cautiously optimistic in the near term, we continue to focus on delivering value through innovative products that provide superior return on invested capital for our customers. In these challenging times, we are maintaining our disciplined adherence to The Manitowoc Way, positioning us to achieve our long-term target of double digit operating margins by 2020 and becoming the leading global crane company as the market recovers."

Vertikal Comment

This is a very encouraging quarterly result and gels with what we have seen elsewhere this quarter. Manitowoc still has a lot to do and changes are ongoing as we saw yesterday with the resignation of Larry Weyers. Having a stronger market, improving profitability and stabilising revenues are essential for any company to turn the corner so that it can start rebuilding and expanding again.

To regain market share, Manitowoc still has to battle with the fact that it has a very strong Rough Terrain competitor in Tadano and very strong crawler crane competition from Kobelco, Terex and Liebherr. However Manitowoc does still stand tallest in the tower crane market with Potain. Recapturing a similar position in the Rough Terrain and All Terrain markets, not to mention the crawler crane market, will be a real challenge. But everything is possible with the right attitude and customer focus.

While all that is ahead of us, the picture today is looking a good deal brighter for Manitowoc and encouraging for the crane market as a whole.